Budget will show how far Morneau will go to put money where Trudeau’s mouth is

Finance Minister Bill Morneau is planning a gender budget, putting federal money behind Justin Trudeau's declaration that he's a feminist prime minister.

It will include money to pay the costs of agenda-setting pay-equity legislation for employees in the federal government and federally regulated sectors, and will go beyond that into measures to encourage the participation of women in the workforce, in leadership roles and in science, a government source indicated.

Just how far Mr. Morneau will go to to put government money where Mr. Trudeau's mouth is won't be known until Feb. 27, when the Finance Minister delivers his third budget.

But it is intended to carry a common political thread that Mr. Trudeau's government will stick with through 2018. The Prime Minister declared a focus on gender issues at a speech at the World Economic Forum in Davos in January. In July, he is to host the G7 summit of major industrialized nations, which is to revolve around five themes including "gender equality and women's empowerment."

In between, Mr. Morneau's budget is to include a package of measures that are supposed to portray gender measures as the next phase in the Liberal economic agenda – the agenda they have sold as "inclusive" growth aimed at improving the lot of the middle class.

In 2018, with economic growth in Canada strong but uncertain, Mr. Morneau might have chosen several other themes. Some economists and business leaders are pushing him to cut Canadian taxes to keep them competitive with the United States after President Donald Trump and Republican allies pushed through a bill to slash taxes for corporations and high-income individuals.

Mr. Morneau isn't planning to go there just yet – instead he is expected to signal that Finance Department officials will watch how the U.S. cuts impact the economy, and investment in Canada, to determine if there is a need to respond.

Politically, the Liberals have made a decision to steer left, to appeal to a "progressive" political audience by underlining inclusion and gender equality, rather than trying to mirror Mr. Trump's cuts or to slash the deficit. The emphasis on gender is also in line with the Liberals' electoral calculations: they consistently hold a lead in opinion polls because of much higher support among women than the second-placed Conservatives.

While there will be many other elements in the budget, gender will be a thread through several sections, according to a source.

There will, for example, be measures to promote women in science, according to one source – and science in general will be another theme of the budget. A government-appointed panel headed by former University of Toronto president David Naylor last year called for a revamp of research funding and an additional $1.3-billion in spending.

In his speech in Davos, Mr. Trudeau argued that increasing women's equality can be a key driver of economic growth, citing a study by McKinsey & Co. that concluded that measures to advance the place of women in the economy could add $150-billion to GDP in the year 2026, or 0.6 per cent to annual GDP growth. The Prime Minister also promised to deliver legislation "to ensure equal pay for work of equal value at the federal level."

That won't directly cover most Canadian women, because most employment law comes under the jurisdiction of the provinces, but it is intended to set a pay-equity agenda that pressures others to follow. Because of the cost, including a study to determine what work is of equal value to other work, and pay increases for underpaid employees, the legislation can't really go ahead without money in this month's budget.

That legislation alone isn't likely to make a major impact on the so-called gender gap, which sees Canadian women earn 87 cents for every $1 earned by men. Mr. Trudeau suggested as much in his Davos speech that it wasn't just an issue of mandating equal pay for similar work.

"When we peel back that outer layer, we see that there are a whole host of barriers facing women in the workplace," he said then. "Removing these barriers will take effort, leadership and a willingness to change the nature of work as we know it."

There's no way the treasury allows for that kind of sweeping change. It's unclear how far Mr. Morneau will go to fund social policies to encourage greater participation of women in the work force. Last year's budget set aside $540-million to expand child-care spaces, so it seems unlikely there will be more this year, though some argue a national daycare program is key to increasing the workforce participation of women. But Mr. Morneau, and Mr. Trudeau's Liberals, have picked the budget's political message.