The Liberal government has set April 19 as the date for the first federal budget in over two years and Conservative Leader Erin O’Toole says in a letter to the Prime Minister that the government must bring in a clear plan for reopening the Canadian economy.
Mr. O’Toole’s prebudget letter also challenges the government to drop plans to raise the federal borrowing limit to $1.83-trillion from $1.17-trillion, which is contained in a bill currently being studied in committee.
“We need a road map to reopen, and we need it now,” Mr. O’Toole wrote in the letter, a copy of which was provided to The Globe and Mail.
Finance Minister Chrystia Freeland confirmed the budget date Tuesday in the House of Commons.
The current gap without a budget is the largest in Canadian history. A federal budget can be tabled at any time when the House of Commons is sitting, but it is normally released in February or March. The Globe reported early this month that the government had ruled out March or early April for releasing the 2021 budget.
Ottawa’s plans for a later-than-usual budget is fuelling speculation that the Liberals are at least weighing the possibility of a late spring election campaign that would use the budget as a form of policy platform. The Liberals lead a minority government, meaning they need the support of at least one other party to survive votes on confidence matters such as a budget.
Mr. O’Toole is coming off a weekend policy convention in which he said the Conservative Party must embrace new policies if it is to attract the larger number of voters needed to form government in the next election. Mr. O’Toole promised to unveil a substantial new environmental plan, but his message was undercut when party supporters rejected a policy resolution that stated “climate change is real.”
Next month’s budget will be Ms. Freeland’s first since becoming finance minister in August, when she replaced Bill Morneau after he left politics to campaign unsuccessfully for the leadership of the Paris-based Organization for Economic Co-operation and Development.
In her November fall economic statement, Ms. Freeland said the 2021 budget will unveil a plan to spend up to $100-billion over three years on measures to help the economy recover from the COVID-19 pandemic. It also projected the federal deficit for the fiscal year ending this month would be nearly $400-billion.
The budget is expected to unveil the government’s approach to raising new tax revenue from large digital corporations such as Facebook Inc. and Alphabet Inc., parent company of Google. It is also expected to include details on the government’s pledge to support a national child-care program.
The fall update showed the federal debt rising to $1.1-trillion in the current fiscal year, before increasing to $1.38-trillion in 2025-26.
During Question Period on Tuesday, Ms. Freeland pointed to a recent confirmation of Canada’s triple-A credit rating by DBRS Morningstar as a sign of confidence in the federal government’s handling of public finances.
“Canada’s triple-A ratings are underpinned by the country’s considerable fundamental strengths, including its sound macroeconomic policy frameworks, large and diverse economy and strong governing institutions. I thank Canadians for working so hard to get through this pandemic,” she said.
But Mr. O’Toole’s letter to Prime Minister Justin Trudeau challenges the government’s claims of fiscal prudence.
“As Conservatives have stated, you have asked Canadians for a blank cheque without presenting a budget to show how or when you plan to use that additional borrowing capacity,” Mr. O’Toole wrote. “I note that this historic and massive increase in our country’s debt also includes $100-billion for additional stimulus measures. Despite repeated requests for you to explain how, when and where this money will be spent, you have refused to be transparent about your plans.”
The letter restates the Conservative Party’s call for federal pandemic support programs to target badly hurt sectors such as hospitality, tourism, charities and airlines. The Liberal government has signalled it intends to continue support for such sectors.
Other requests highlighted in Mr. O’Toole’s letter include calls for the budget to avoid new taxes, incentives for attracting business investment and a fiscal anchor, or target, for managing the federal debt and reducing the size of the annual federal deficit. Mr. O’Toole vowed during the weekend that a Conservative government would erase the deficit in 10 years.
The NDP has said its budget priorities include child care and pharmacare, as well as new tax hikes on the wealthy and large corporations to fund the additional permanent spending.
NDP Leader Jagmeet Singh announced last month that his party will not trigger an election while the country’s focus remains on the COVID-19 pandemic. That means the government is unlikely to be defeated when the 2021 budget is put to a confidence vote in the minority Parliament.
The Prime Minister can go to the governor-general at any time to request an election. Supreme Court of Canada Chief Justice Richard Wagner is fulfilling the duties of the governor-general on a temporary basis after Julie Payette resigned from the position in January.
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