The Liberals built a dare to their Conservative opponents into Finance Minister Bill Morneau’s pre-election budget: Go ahead and campaign against spending.
Tuesday’s budget was a coda to four years of Liberal government. After three years of spending increases, Mr. Morneau argued there’s still a need for more government to do more things – and that Ottawa not only can afford to do it, it can’t afford not to.
Amid repetitive slogans about investing in the middle class, there were some real forward-looking measures, such as benefits to help people retrain for changing labour markets in mid-career. There was a novel new interest-free loan to help first-time buyers afford modest homes. There was the first building block for a major new social program, national pharmacare.
But there was also more. More of pretty much everything. The budget book listed more than 130 new measures, many smallish in cost, mostly new spending on programs or benefits or breaks.
For young people, there were student-loan breaks that will cost $345-million a year in 2020-21. For millennials, an expansion of the RSSP Home Buyers Plan and those loans to help some first-time buyers help lower mortgage payments. For middle-agers there is a new mid-career training credit and EI benefits ($528-million in 2021-22). For seniors, the guaranteed income supplement was tweaked so they can earn more income without losing benefits ($466-million a year in 2021-22).
Did they miss anyone? It was high-school-to-retirement-home coverage.
Deficits? They’ll get a little smaller, but not much. The promise to balance budgets eventually is forgotten. Once again, Mr. Morneau beat his deficit targets, then used that as an opportunity for more spending.
Yet Mr. Morneau’s annual budget deficits are small enough that they don’t worry bond-raters, or most economists, or spell automatic disaster if there’s an economic downturn.
That makes it a bit harder for Andrew Scheer’s Conservatives to campaign with warnings that the Liberals’ ever-expanding spending will lead Canada’s public finances off a cliff. They can argue for smaller government, for throwing less money at fewer things – but there isn’t a real, imminent fear that deficits will lead to a fiscal meltdown.
The fiscal argument now is not over whether Ottawa can keep spending, but whether it should. Mr. Morneau’s answer was yes.
His budget was a blunt political statement, and a dare to their Conservative opponents.
The Liberals want people to see them as a government that’s putting money on them – and they want the Conservatives to say they’d stop it. “They would like to have cuts and austerity that will worsen the situation for families,” Mr. Morneau told reporters.
Of course, the Liberals can’t simply dictate how the national political debate is framed. The first part of Mr. Morneau’s budget speech was drowned out by a racket made by Conservative MPs who protested the Liberal’s move to shut down the Commons justice committee’s hearings into the SNC-Lavalin affair. Mr. Scheer interrupted, the led Conservative MPs in a walk-out. It was yet another day when the Liberals struggled to move past the SNC-Lavalin affair and onto their agenda.
But some of this budget spending will grab attention. Some of its key measure won’t be easy to oppose.
No party will fight benefits for seniors in an election year. Neither the Tories nor NDP will gain from opposing break for first time home-buyers. Those mid-career retraining benefits are at the very least an innovative attempt to address the insecurity of a future in which technology will rapidly change the nature of jobs.
The modest starter steps toward national pharmacare were still significant, including a Canadian Drug Agency that will be a single buyer with the negotiating power to beat down drug prices – which the Finance Department claims will eventually save $3-billion a year – and $500-million a year, starting in 2022-23, to cover expensive drugs for rare diseases.
NDP Leader Jagmeet Singh will complain that doesn’t go far enough – but Prime Minister Justin Trudeau will undoubtedly promise a more complete pharmacare plan in the Liberal election platform.
In the meantime, Mr. Morneau’s fourth budget has reasserted the notion that they’re for government doing more. This time, it comes with programs that hit people where they live: buying a house, paying off a student loan, keeping a job, affording retirement. It’s a blunt argument that spending is good for people, and there’s room for more. They’re daring Mr. Scheer to campaign against that.
The federal budget includes new spending in a range of areas including support for first-time homebuyers, ensuring seniors are enrolled in CPP and the further advancement of reconciliation.