(This column originally appeared in the Toronto Sun on March 24th, 2017)
Finance Minister Bill Morneau unveiled the Trudeau government’s second budget this week, and in many ways it wasn’t a new budget at all, but just a clarification of many measures from last year.
In some ways, that’s a relief, because last year was a veritable spending spree, with Morneau plunging the country into a $23 billion deficit (a far cry from the Liberals’ promise of three years of ‘modest’ $10 billion deficits) and didn’t even provide a plan on how they would climb out of it—ever. One can be forgiven for bracing for yet another multi-billion increase in the deficit.
But not pouring any fuel on the fire doesn’t change the fact the feds already have a five-alarm fiscal fire on their hands. Even with a lid on spending increases, our federal debt is now projected to leap from $637 billion to $756 billion in just five years. Just the interest payments on that will cost an eye-watering $143 billion over the same timeframe. Talk about mortgaging our kids and grandkids’ future.
More troubling is that the government doesn’t seem to know what it’s doing with its own ‘innovation’ agenda, which is supposed to help boost economic growth (while the Canadian economy isn’t in recession, growth is projected to be weak). Instead the agenda seems to be nothing more than the same old corporate welfare programs that have failed time and again.
There are handouts for politically-favoured industries like clean tech. And for powerful special interests like aerospace and automobiles. There will be a new “platform” called—surprise—Innovation Canada which will develop six “Economic Strategy Tables” (which will also be linked with the existing
Department of Innovation). In a final bold stroke of innovation, the government even decided to combine a bunch of different corporate welfare funds into one, and call it the Strategic Innovation Fund!
If you were looking for tax relief in this budget, forget it: aside from a few small boutique measures, it’s mostly the status quo. There are even a few sneaky tax hikes. Excise duties on alcohol are going to rise by 10% over the next five years. And with some expansions to Employment Insurance accessibility for groups such as home caregivers, EI premiums will be going up as well. And then of course there’s the federal carbon tax, which will be imposed on the provinces whether they like it or not.
There are a few bright spots. The government is taking a Canadian Taxpayers Federation recommendation to review expenditures department by department to help kill wasteful programs and root out inefficiencies. There’s also a commitment to expand free trade within Canada—something that could benefit all Canadians.
But overall, this year’s budget is big on words and short on details. It claims to help the middle-class—without explaining who counts as ‘middle class.’ It says it’s focused on innovation—but with new (and recycled) corporate welfare funds designed to throw money at favoured industries and companies, there’s not much innovative about it.
With this budget, Morneau had an opportunity to explain how he would get the books into balance and start to tackle our massive federal debt. He took a pass. As a result, future generations of Canadians will pay a hefty price.
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