The Liberals campaigned on an extensive and detailed platform last fall, and their first budget, tabled on Tuesday, definitely touches on the big promises.
There is fresh money for infrastructure, tax cuts for the so-called middle class, lots of investment in First Nations, and cash infusions for veterans, seniors and even the Canadian Space Agency.
Federal Budget 2016: 5 years of budget deficit
Still, this budget also includes some striking omissions, and a few last-minute adjustments to plans that were seemingly set in stone just a few weeks ago.
Here’s a look at what we didn’t see.
The Liberals campaigned on the legalization of marijuana and its possible role as a cash-cow for the federal government, much like alcohol or cigarettes. The drug is not factored into any fiscal projection in the budget document, however.
There is definitely infrastructure money coming down the pipe — a total of $11.9 billion spread over the next five years. But instead of flowing out of Ottawa in large chunks right away, the majority of the government’s promised $60 billion in new investment is back-loaded, ramping up only after 2020-2021.
The initial promise of just over $5 billion in infrastructure spending for 2016-17, for example, is now reduced to around $3.7 billion. Another surprise was that so much of the infrastructure money over the next five years is going to First Nations reserves, instead of to major cities. Toronto’s public transit needs alone have been pegged in the tens of billions for the coming years.
Economists who spoke with Global News suggested that the back-loading changes were likely made in order to keep the deficit from ballooning to over $30 billion.
Speaking of putting things off, Tuesday’s budget will defer $3.7 billion in funding for defence procurement (CF-18s, maritime warships, etc.) from 2015-2021 to after 2021. While the Liberal platform states that the Liberals will “not lapse military spending from year to year,” the deferral of some military spending in this budget is being defended by the government.
“We know that it’s important that we have the appropriate strategy for the country moving forward,” said Finance Minister Bill Morneau on Tuesday, adding that by the time Canada is ready build and buy, the money will be there.
The budget documents echo Morneau’s statements.
“This will ensure that funding is available for large-scale capital projects when it is needed,” they read. “Funding is being shifted into future years to align with the current timing of National Defence’s major equipment acquisitions.”
Granted, a balanced budget was never in the cards for the coming fiscal year, with the Liberals acknowledging that they would run “modest” deficits as far back as the election campaign. But they did originally pledge to get Canada back into black within their mandate, in time for 2010-2021. By February, that was looking increasingly unlikely as the economy continued to struggle.
Federal Budget 2016: 5 years of budget deficit
Tuesday’s budget has a deficit projection for 2020-21 of $14.3 billion, twice the size it was a month ago. Government officials told Global News on background that about $6 billion of that is “contingency” – meaning Ottawa is giving itself some wiggle room. That still leaves a sizable budgetary hole, however.
“We believe this budget is making important investments for the future of Canada,” said Morneau. “We hope we can get to a balanced budget over time.”
Specific funding to support palliative care and home care was absent in the budget, in spite of an election platform promise to invest $3 billion over the next four years “to deliver more and better home care services for all Canadians.”
It’s possible that the funds will be included in a future budget, however.
There was little to no mention of more funding for Canada’s national police force and security agencies. The omission was especially striking as the budget landed the same day a series of major terror attacks were carried out in Brussels.
Morneau said his government expects “to make a real difference in this area over the course of the next year” and that Public Safety Minister Ralph Goodale has taken “important first steps” in that direction.
No federal money has been allocated yet for the struggling aerospace company, which has publicly asked for help from Ottawa to prop up its CSeries program. Quebec’s provincial government has already invested heavily in Bombardier, but there has been little indication that the federal government is preparing to do the same.
“We have nothing more to say right now on Bombardier but we will continue our due diligence to review the file,” said Morneau.
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