In 1978, Jean Chrétien became the first finance minister to read a budget speech before his Parliament Hill colleagues and a live television audience. Cameras had come to the House of Commons about six months earlier, in October, 1977, when Globe and Mail columnist Bruce West predicted that “the experiment of televising the proceedings of the House is going to be a success” (though he also noted Canadians could now see their MPs yawning behind the finance minister’s back).
The question of how we define “success” 45 years later is perhaps a matter of personal opinion, but certainly the effect of televising House proceedings – and the budget speech in particular – has been to turn it into a public messaging tool as much as an airing of the government’s balance sheet. Paul Martin’s 1995 budget came with tough-love messaging to Canadians about the cuts the Liberal government had to make to restore long-term fiscal responsibility. Jim Flaherty delivered his 2008 budget in resoled shoes instead of new ones, to signal the hard times that would be reflected in an austere document.
It thus goes without saying that the budget tabled by Finance Minister Chrystia Freeland Thursday is as much – or more – a political instrument as an economic ledger. (This is a government, after all, that once saw branding opportunities in Prime Minister Justin Trudeau going for a jog.) And it’s clear that the message this government wants to convey, at a time when Canadians are expressing divergent concerns amid deep economic and geopolitical uncertainty, is this: We hear you, and we’ll take action – even if that action, in practice, is unlikely to address the matter of concern in the first place.
We hear your concerns about being unable to afford a home, this government says as the first pillar of its budget. “Young people cannot imagine being able to afford the house they grew up in,” adding that Canada’s efforts at seducing foreign talent will be futile if they cannot find reasonably affordable places to live. Quite right. But the budget’s proposed remedies suggest the government isn’t exactly listening.
It has proposed a ban on foreign buyers (with some exceptions), though Statistics Canada data show non-resident ownership in the Toronto area, for example, made up just 2.6 per cent of properties in 2019. And on the matter of pressing municipalities to change zoning laws, which is at the root of the supply crunch in major Canadian cities, the budget is decidedly vague: $4-billion over five years for a new Housing Accelerator Fund that is “designed to be flexible” with a “focus” on increasing supply.
We hear your concerns about health care after two years of a truly devastating pandemic, this government added. And where it has so clearly erred – in allowing its pandemic early-warning system to fall apart, and its stockpile of critical supplies to expire – it has allocated dedicated funds: $436.2-million over five years for the former, and $50-million for the latter.
But despite the fact that doctors, health care experts and hospital administrators have all been pleading for meaningful reform to Canada’s disjointed and inefficient system (and what better time than when the entire country has seen the folly of operating a system enduringly at its brink?) this budget offers more of the same: an increase of 4.8 per cent in transfers to the provinces, additional funds for foreign-trained medical professionals to receive accreditation and greater incentives for doctors and nurses to move to underserviced areas. We heard what you wanted, the government says; here’s something else.
This government has also heard the complaints from our allies and from domestic defence experts that we have been neglecting our Armed Forces for too long. But new funds – about $8-billion over five years – still leaves Canada way off of NATO’s 2-per-cent-of-GDP target. It has heard the worries from business leaders about the government’s unconstrained spending and lack of long-term growth planning and international competitiveness, and then unveiled … more spending … on a new innovation and investment agency (which perhaps is supposed to do what its supercluster program has not).
This budget talks the talk of fiscal prudence, and does offer some new revenue possibilities (with, for example, investment in critical mineral extraction), but most of the measures involve bigger government and more spending, which is precisely what Canadian business leaders were worried about. Indeed, despite high energy prices and better-than-expected revenue through corporate and personal income taxes, the combination of old and new spending promises are now expected to leave Canada in a $52.8-billion deficit for 2022-23.
As a political instrument, this budget was clearly designed to make Canadians feel heard – just as long as they switch off the TV after Ms. Freeland’s speech and don’t try to parse the fine print. If you’re worried about housing, or health care, or defence, or innovation, sure, there’s something in this budget for you. But somewhere in the budget’s 300 pages, you’ll find out it’s not at all what you actually asked for.
Federal budget 2022: What it means for you
Personal finance columnist Rob Carrick highlights how the budget seeks to counter inflation, what it offers for dental care and how a new tax-free savings account aims to give first-time homebuyers a boost.
The Globe and Mail
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