The making of the Liberals’ first budget was driven by a strongly held view that Canada’s business class had been richly rewarded over the past decade and it was now time to put money into the pockets of struggling low-income families.
The shape of this budget was influenced just as much by Prime Minister Justin Trudeau’s personal desire to improve the lives of Canada’s indigenous people and to protect victims of sexual violence.
Full budget coverage: Read Laura Stone's breakdown of the highlights
A senior official briefed The Globe and Mail on the crafting of the first progressive budget since 1993, when Jean Chrétien swept to power on a platform loaded with spending promises to create jobs.
At the first cabinet meeting on the budget in January, Mr. Trudeau outlined the government’s key priorities based on campaign promises of infrastructure and social-housing spending and help for the middle class.
Despite the slowing economy and rising deficit, top of the budget list was to give a helping hand to working Canadians. Mr. Trudeau told the cabinet “taxes for business have been cut dramatically over the past 15 years … but people in lower income brackets haven’t been given enough support to get out and into the middle class,” the official said.
Finance Minister Bill Morneau and Jean-Yves Duclos, the Minister of Families, Children and Social Development, were given the task of designing a new Child Care Benefit and enriching the Guaranteed Income Supplement for the elderly poor. Together, those measures would help more than 1.2 million Canadians.
“We went through a long period of supply-side economics, which is this view that the best way to grow the economy was to make wealthier people wealthier,” the official said. ‘The signal we are sending is that the growth rates are better when the middle class are doing well.”
Weeks after he was sworn in as Prime Minister, Mr. Trudeau went to an Assembly of First Nations meeting in Gatineau and promised to build a new relationship. At the time, Mr. Trudeau had already been told by government officials that the Conservatives had left a $1.25-billion shortfall in the aboriginal budget.
Mr. Trudeau has a deep personal conviction that First Nations have been allowed to become an underclass that blighted Canada’s self-image and needed to be corrected regardless of the cost, the official said.
Mr. Trudeau’s principal secretary, Gerald Butts, acted as a point man with AFN National Chief Perry Bellegarde as they worked with the Finance Minister and other cabinet colleagues to put together an $8.4-billion package to close the education gap, improve on-reserve housing and provide clean drinking water.
One surprise in the budget – $112-million for women’s shelters – came as a result of conversations with Status of Women Minister Patty Hajdu, who ran a homeless shelter in Thunder Bay before she was elected. She told him about the rundown conditions of so many women’s centres across the country.
The Prime Minister immediately jumped on the idea and asked Infrastructure Minister Amarjeet Sohi to find the money.
“He [Trudeau] really wanted to do that. Sexual violence is an issue he has been working on since he was a student at McGill University. The first thing he ever volunteered for on campus was a sexual-assault centre at McGill,” the official said. “He wanted to send a really strong message to women who are facing intolerable abuse at home that they have a support network.”
Cabinet held off on major infrastructure spending in this budget for fear the money would be rushed out the door for projects that wouldn’t benefit the economy and could end up as boondoggles. On the advice of Mr. Sohi, a former Edmonton city councillor, cabinet decided to spend money in this budget on shovel-ready municipal projects, the official said.
Some promises had to be put off, such as the small-business tax cut and improved pensions for veterans, because of the cost, the official said, but noted that next year’s budget will focus on innovation and infrastructure geared to growing the economy.
Unlike past budgets that were largely the handiwork of the Finance Department and the Prime Minister’s Office, the official said the full cabinet was involved in almost every aspect. Ministers were asked to present implementation plans for program spending under their department.
“We had a full cabinet-committee process. Every member of cabinet was involved in the construction of this budget. It was very, very different from the way things were done in the past,” the official added.
Mr. Trudeau met 20 times with Mr. Morneau to go over budget details that later would be presented to cabinet for final approval.Report Typo/Error