What to expect from Canada’s federal budget
On Tuesday afternoon, Finance Minister Bill Morneau is expected to table his government’s third federal budget in the House of Commons.
The fiscal roadmap for the coming year comes at a challenging moment. South of the border, the ongoing re-negotiation of the North American Free Trade Agreement (NAFTA) has produced more than the usual amount of economic uncertainty for Morneau’s department.
On top of that, the white-hot economic growth of 2017 is showing signs of cooling, leading the country’s top economists to advise caution – not spending with abandon.
“The government’s going to be tabling a budget which I think is going to be relatively modest,” said Craig Alexander, chief economist at the Conference Board of Canada.
“Next budget will be before an election, and so the government might not to make large-scale announcements (in this one) given that the next budget is the one where they’ll probably want to make the biggest gains in terms of new programs before they go back to the electorate.”
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Some things are certain. There will need to be some money set aside to support the upcoming legalization of marijuana, for instance, and there’s no virtually chance that we’ll be seeing a budgetary balance.
Other things are just rumours.
So here, in no particular order and with no guarantee of accuracy come budget day, are our predictions.
Tax credit changes
Last year, the Liberals decided to axe several “boutique” tax credits, including the public transit credit and breaks on things like the cost of textbooks. Their argument was that the credits were inefficient and disproportionately benefited the wealthy.
But as the cost of administering some of its programs rises (indexing the Canada Child Benefit to the cost of inflation is going to cost upwards of $5.6 billion all by itself), the government is again looking for fresh sources of revenue.
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Enter the leftovers: the volunteer firefighters’ amount, the employment credit meant to help people with work-related expenses like uniforms and computers, and the first-time homebuyers tax credit, to name a few.
Experts say they expect at least some of these to be on the chopping block. So claim ’em while you can.
On the flipside, Ottawa is reportedly also planning an expansion to the Working Income Tax Benefit, dedicating $500 million more to the program starting next year.
A focus on women
This is basically a done deal, with The Canadian Press reporting last week that the budget will include a big push to increase women’s participation in the workforce.
“Of course, if you remove barriers to women, you know that’s going to impact a lot of middle-income households in Canada, and I think that’s going to be the theme,” Alexander predicted.
“I think that’s going to show up in a whole variety of different ways.”
What this might mean in practice is cash to back up the government’s promised (but still untabled) pay-equity legislation, making it easier for female entrepreneurs to access capital, or opening up more funding opportunities for female scientists.
This will also be the first federal budget to scrutinize all its commitments through a gender-equality microscope.
Time off for dads
This one ties into the focus on women in the workforce.
“Woman have an expectation laid on them that they will be much more involved in raising kids,” Prime Minister Justin Trudeau told students at the Indian Institute of Management in Ahmedabad last week.
“I’ve talked about not just maternal leave, but parental leave, with potentially leave that can only be taken by the second parent – in most cases the father.”
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It’s not the first time Trudeau has floated the idea of providing dedicated time off for new dads – mirrored on the system currently in place in Quebec – but his remarks came close enough to budget day to raise eyebrows. Last year’s budget gave parents the new option of taking 18 months off work instead of 12.
Nora Spinks, chief executive officer of the Vanier Institute of the Family told Global News that she “wouldn’t be surprised” if paternity leave was part of budget 2018. The government offered no comment.
(UPDATE: The Canadian Press reported over the weekend that a dedicated, five-week leave for new fathers or second parents will, in fact, be included in this budget.)
Responsibility for the new era of legal marijuana, now expected to begin late this summer, falls largely to provinces and municipalities. But Ottawa has promised millions for programs to support education, awareness and enforcement.
Anything beyond that will be worth watching for. There may, for instance, be money set aside in this budget to study edibles, which will remain off the shelves for now.
With online threats – both at home and abroad – increasing in severity and frequency, the government is reportedly getting set to invest up to $1 billion in cybersecurity in this budget.
CBC News reported on Thursday that the money has been requested by a number of federal departments and agencies, and Elections Canada in particular will be getting new funding to protect against attacks ahead of the 2019 federal election.
In a recent interview with Global News, Foreign Affairs Minister Chrystia Freeland said the government is closely monitoring “the homefront” as alleged Russian interference in the American political process continues to make headlines.
No-fly list fix
It’s been over two years since a group of Canadian children and their families began complaining about being held up at airports simply because their names matched – or almost matched – names on the no-fly list.
After a one-on-one meeting late last week with Morneau, representatives from the No-Fly List Kids group said they were very optimistic that this budget would include money to build, and administer, a new system that will finally end their travel woes.
How much money? Upwards of $70 million.
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Just about every federal budget ever conceived has contained something unexpected.
The axing of the penny, the elimination of Canada Savings Bonds and even a surprise $10-billion surplus have all made headlines on budget day in recent years, without much foreshadowing.
– With files from Erica Alini, Eric Sorensen and The Canadian Press
© 2018 Global News, a division of Corus Entertainment Inc.