Federal budget overview

Photo: Canadian Press

Finance Minister Chrystia Freeland delivers the 2021budget.

This week, the Liberal government tabled its first budget in more than two years.

In her budget speech, the Finance Minister stated that we must build "a more resilient Canada: better, more fair, more prosperous and more innovative.”

This raises the obvious question.

Who has been governing Canada for the past five years and made it so un-resilient, so un-fair, so un-prosperous and lacking in innovation?

This is generally the pattern of Liberal budgets and this one is no exception.

This budget promises a massive level of spending, all told some $143 billion during the next six years.

Where is it all going?

Despite promises not to use omnibus budgets, this Liberal budget comes in at more than 700 pages, so it is only possible to highlight some of the proposed spending areas.

Thirty billion dollars has been earmarked for daycare and early learning during the next five years.

This will require partnerships with the provinces to fully implement.

Ultimately, the goal is to provide $10 a day daycare.

Eighteen billion is promised spending during the next five years in an effort to close the gaps between Indigenous and non-Indigenous people.

The government promises to spend $17 billion in future years on the promotion of what it has termed the “green recovery effort.”

There is also a $12-billion promise to extend COVID business aid programs as well as other income support measures.

Another $12 billion over five years is slated to increase the OAS benefit that includes a one-time bonus payment of $500 expected at some point later this year.

I should also add this is not a tax-and-spend budget.

Many speculated this budget would include a “wealth tax” or other significant tax increases.

From my read of this budget so far, while there have been some minor increases in places, there are no significant tax increases.

How does all this spending get paid for?

While there is no actual debt-reduction plan, the Liberals indicate that the levels of spending will decrease over time as many support programs will be wound down and that, combined with economic growth, will offset this spending.

What is ignored in this budget?

Surprisingly, there is no significant increase to federal health transfers, compared to what was requested by provincial premiers.

I say surprisingly as this is the most significant priority request from provincial governments with healthcare system under significant pressure right now.

For those hoping for a universal basic income or a national pharmacare program, these items are left out of the budget.

Also given that this budget takes Canada to a debt-to-GDP ratio of roughly 50%, there is limited fiscal capacity to potentially add these programs.

My question this week:

• Based on what you have read here, and likely heard reported elsewhere, what are your thoughts on this budget?

I can be reached at [email protected] or call toll free 1-800-665-8711.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.