Justin Trudeau’s Liberals have 3 budgets under their belts. Are they keeping their promises?
All of it was announced without any plan for a balanced budget in the foreseeable future, even if the Liberals are re-elected.
The budget marked the last one that the Liberals will deliver before Canadians go to the polls on Oct. 21.
So now seems an appropriate time to look at what the Liberals have promised over their time in government — what they pledged when they were campaigning, what they said they would spend in their first budget, and see which ones they kept or didn’t manage to achieve over their time in office.
Here are some commitments that the Liberals made in the 2015 election campaign, their first budget in office, the most recent one, and how they’ve panned out for Canadians:
Campaign: In its 2015 campaign platform, the Liberal Party envisioned a fiscal approach with two anchors: balancing the budget by 2019 and reducing the federal debt-to-GDP ratio to 27 per cent. They expected a “modest short-term deficit of less than $10 billion in each of the next two fiscal years — less than half the average [Stephen] Harper deficit of over $20 billion per year.”
Budget 2016: The deficit promise was pretty much abandoned out of the gate, with Budget 2016 unveiling a plan to remain in the red for the foreseeable future. Far from balancing the budget, the Liberals expected to run a deficit of $29.4 billion in 2016-17 , which would reduce to $29 billion in 2017-18, finally falling to $14.3 billion by 2020-21 — thoguh it’s not clear whether these figures include a contingency reserve. From 2016 through 2018, projected deficits were eventually expected to run well above the averages seen when Harper was prime minister — a time in which Canada was grappling with a global recession. By the time of this budget, the government had pledged to ensure that the “hard-fought gains attained in the 1990s and 2000s” were preserved. The new numbers — for deficit, too — were based in downward projections in a survey of private sector economists that was conducted in 2016, compared to another one that was conducted two years prior.
Budget 2019: The latest budget betrayed no expectation to put Canada back in the black. It showed a more modest deficit than was expected for 2017-18 — $14.9 billion vs. $29 billion — but estimates are higher for future fiscal years. While the 2016 budget projected that the deficit would hit $17.7 billion in 2019-20, now the Liberals expect it to hit $19.8 billion. There’s a similar story for the years 2020-21 — initially pegged at $14.3 billion, the deficit is now expected to hit $19.7 billion before falling to $9.8 billion in 2023-24. In other words, the Liberals expect to keep Canada in deficit right up to the end of their second term, if they win re-election.
Verdict: Unachieved, citing new economic projections.
Federal debt-to-GDP ratio
Campaign: The Liberals’ election platform cited federal debt-to-GDP ratio as the second of its two fiscal anchors, pledging to reduce it to 27 per cent. “In every year of our plan, federal debt-to-GDP will continue to fall,” it said.
Budget 2016: Like the deficit, this pledge was also essentially abandoned in the government’s first budget. The promise to reduce the ratio to 27 per cent became a projection that it would remain above 30 per cent for six years. The government noted, however, that Canada’s federal debt-to-GDP ratio remains the lowest among G7 countries.
Budget 2019: Like the deficit, the latest budget doesn’t foresee the debt-to-GDP ratio falling to 27 per cent in the foreseeable future. The ratio is expected to remain above 30 per cent up to 2022-23, when it’s projected to fall to 29.3 per cent and then 28.6 per cent the following year.
Verdict: Unachieved, citing new economic projections.
Canada Child Benefit
Campaign: The Liberals pitched a Canada Child Benefit (CCB) as a replacement for Stephen Harper’s Universal Child Care Benefit (UCCB). The new benefit, tied to income, would provide a typical family of four with an extra $2,500 in tax-free help each year, and help to lift 315,000 Canadian children out of poverty, the platform said.
Budget 2016: The government’s first budget introduced the CCB, pledging to target it to low- and middle-income families that needed more help, while those with higher incomes would receive fewer benefits. The budget estimated that nine out of 10 families would receive more in child benefits than under the existing system. The CCB would leave about 300,000 fewer children in poverty in 2016-17 compared to 2014-15.
Budget 2019: The government cited the “income-boosting effects” of the CCB for helping to achieve a targeted 20 per cent reduction of poverty “three years ahead of time.” This included pulling 278,000 children out of poverty in 2017, as compared to 2015 — a statistic in line with the projection in the 2016 budget. Bloomberg noted that the CCB helped to drive poverty to “new lows,” with child poverty alone reaching its “lowest level in at least a decade.”
Verdict: Reports indicate that there are, indeed, fewer Canadians under 18 living in poverty following the introduction of the CCB.
WATCH: Federal Budget 2019 — Morneau says ‘our work is not done’
Campaign: The Liberals pledged a 10-year federal investment in infrastructure of $125 billion, up from $65 billion. This pledge included investing $20 billion more in public transit and $20 billion more in Canada’s “social infrastructure,” which refers to projects that help make communities “good places to live.”
2016 budget: The government’s first budget unveiled a plan to invest over $120 billion in infrastructure, in an effort to deliver “sustained economic growth for years to come.” This investment would “modernize and rehabilitate” public transit, as well as water and wastewater systems, help to protect infrastructure against the effects of climate change and provide affordable housing.
2019 budget: The government cited the approvals of over 33,000 infrastructure projects in various communities and said the “vast majority” are already underway. “More than $7 billion of the $19.9 billion committed to projects” within communities had been “fully invested” in infrastructure such as “new highways, bridges, buses, water treatment plants and community centres.” The latest budget now said the government was investing more than $180 billion over 12 years to “build infrastructure in communities across the country,” with additional investment expected to support as many as 42,000 jobs by 2020-21. However, the infrastructure program was criticized in a March 2018 report by the Parliamentary Budget Officer (PBO), which said that half the money set aside for its first phase hadn’t been linked to any project. The PBO found that, out of $14.4 billion that had been budgeted for Phase One, only $7.2 billion had been committed to a project. Further spending had been pushed to future years, the PBO noted. In December, Infrastructure Minister Francois-Philippe Champagne said the government was overhauling how it approved funding for projects.
Verdict: A decade has not yet passed, but there are questions about how the infrastructure money is being spent.
© 2019 Global News, a division of Corus Entertainment Inc.