Federal Finance Minister Bill Morneau hits the road next week to sell the Liberal government’s first budget under Prime Minister Justin Trudeau – and the first federal budget in a generation to embrace unbridled deficits as the key to economic prosperity.
Mr. Morneau’s office said he will meet with business groups in and around Montreal on Tuesday, in New York City on Wednesday, then travel to London, England, to speak with financial sector and other business leaders there, including Canadian banks and pension funds. The purpose is to talk up Tuesday’s budget, which projects a $29.4-billion deficit in the 2016-17 fiscal year and sizable deficits past the next election.
Stops are planned for Mr. Morneau the following week in all four Atlantic provinces as well as Kitchener-Waterloo and Toronto, where he will speak to a combined Canadian Club of Toronto and Empire Club breakfast on April 8. He will crisscross Canada for the rest of April, visit Chicago and attend the International Monetary Fund and World Bank Group spring meetings in Washington, D.C.
“Clearly, I want to get out to talk to Canadians about our budget so they can understand what we’ve done,” Mr. Morneau said in an interview on Thursday about a budget aimed at improving the lot of middle-class Canadians. “I want them to really understand how it’s going to make a difference in their day-to-day lives.
An Abacus Data poll published on Thursday found that 49 per cent of Canadians thought the budget was better than those under the previous Conservative government, while 27 per cent said it was worse. “Most people seem to feel they got the budget they expected from this government,” Abacus chairman Bruce Anderson said in a statement about the poll of 1,500 people. “The deficit is larger than was promised, but most have concluded that this was acceptable, given the circumstances.”
A spokesman for Mr. Morneau said the roadshow “is about going out and showing that Canada really did break away from an economic approach that hadn’t been working.”
Other ministers have already been talking up the budget across Canada, and Mr. Trudeau will return to Washington for the second time this month to address the U.S. Chamber of Commerce this Thursday.
On Friday, the opposition Conservatives continued to shell a budget they have called a “nightmare scenario.” Defence critic James Bezan and associate critic Pierre Paul-Hus criticized the decision to shrink defence funding by billions of dollars as the government delays plans to buy new fighter jets and ships. “The unfortunate decision to postpone military spending puts the safety and security of Canadians at risk,” they said in a release. “It appears the Liberals have returned to their old ways of slashing Canada’s military spending.”
Many of the budget’s key points are repudiations of the previous government’s fiscal approach, including decisions to cull boutique tax credits, restore funding for the Canadian Broadcasting Corp. and freeze planned tax cuts for small businesses.
The government did abandon an election campaign pledge to increase taxation of stock options after startup chief executives warned that it would harm their ability to recruit.
Also, Mr. Morneau ignored the Liberal-dominated finance committee’s recommendation to explore the idea of providing guaranteed minimum incomes, which Ontario is looking into. “It’s not part of our plan,” the minister said.
Pollster Darrell Bricker said that while his firm, Ipsos Public Affairs, has not yet surveyed Canadians about their views on the budget, “my expectation based on our prebudget polling is that to the extent the public was paying attention, they were tentatively positive but confused. While the direction of having a deficit was signalled in the campaign, they were likely nervous about one as big as $30-billion. Also, since 1993, they’ve been told by successive governments that deficits are bad things. This one has asked them to reverse their thinking.”
Bank of Montreal chief economist Douglas Porter said that, while the budget was intended “to relatively quickly address or even fulfill much of the government’s election platform” and provide a short-term spending boost, “I think the main weak point is that it did little to move the dial on the medium-term growth outlook for Canada.
“While there was much talk about enhancing productivity and growth, I’m afraid that most of the budget measures will just provide a one-off boost to spending, and not support longer-term activity. In fact, some may suggest it did the opposite, since the near-term deficit boost at some point will have to be repaid.”Report Typo/Error
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