Budget 2018: Boosts for women in the workforce, Indigenous services, science funding
The 2018 fiscal blueprint builds on the priorities laid out by the Liberals in their previous two budgets and promises of goodies to come.
|Report an Error|
Share via Email
OTTAWA—The Liberal government has unveiled another free-spending budget that doubles down on a progressive agenda with measures to boost women in the workforce, lots of cash for a more feminist foreign aid agenda, Indigenous services and record funding for science and innovation.
The 2018 fiscal blueprint — revealed by Finance Minister Bill Morneau on Tuesday — builds on the priorities laid out by the Liberals in their previous two budgets and eyes next year’s election with fuzzy promises of goodies to come such as a national pharmacare program.
It’s titled “Equality Growth” — a fiscal and economic plan that Morneau says will lift workplace barriers to women, Indigenous people and youth and leverage their economic potential.
Topping this year’s priority list is Ottawa’s effort to get more women in the workforce — and ensure they are paid at the same level as their male counterparts. Morneau called it an “economic no-brainer.”
What’s not in the budget is, once again, any timeline to balance the budget, nor any specific fund to backstop Canadian industries, workers or government revenues in case North American free trade talks collapse.
Morneau said the government will study any needs due to NAFTA as they arise, but intends to stay at the negotiating table as long as it takes to get a deal. The government’s strategy is to ensure Canada’s economy is strong so negotiators have a strong case to make at the negotiating table that this remains a good place for international partners to invest, he said.
Morneau’s budget projects this year’s deficit will be lower than foreseen, coming in at $19.4 billion (half a billion less than projected in the fall) and annual deficits dropping at a faster rate over the next five years. The Liberals finally predict the deficit will fall below $10 billion in 2022 — the magic number that was in their 2015 election promise that was supposed to lead to balance in 2019/20.
Morneau says Canada’s economy is strong. Its debt load, relative to its economy, will continue to drop — the only measure he says really counts and shows Canada is better off than most other countries.
“We’ve shown to Canadians that making investments in them, that allow more Canadians to be working, has exactly the positive impact that we expected,” he told reporters.
Throughout the budget document and his speech to the Commons, Morneau highlighted contributions of women in the workforce, saying they boost family incomes, which means fewer children living in poverty.
But he told the Commons there continue to be “persistent barriers that hold too many women back.”
Those barriers include wage inequality and the demands of caring for children and older parents, which Morneau said disproportionately fall to women.
As Prime Minister Justin Trudeau had hinted, the budget unveiled additional parental leave — an extra five weeks of leave for two-parent families who share the leave — making it easier for women to return to work.
The government will introduce pay equity legislation — equal pay for work of equal value — for federally regulated sectors, a move hailed as “long overdue” by Canadian Labour Congress president Hassan Yussuf. Details — such as whether it will include an independent pay equity commission — remain sketchy, but Yussuf said the Liberal promise to extend pay equity to federal contractors bidding for jobs worth more than $1 million, along with regulating pay equity in broad influential sectors such as banking, telecommunications and transport is a significant step.
And the document provided new details on an important measure for poor working families. In the fall update, Morneau had promised a $500 million boost to the Working Income Tax Benefit. That benefit is getting a new name — the Canada Workers Benefit — but more importantly, the government will be paying out a lot more in benefits to more families starting next year.
Overall, the 367-page document proposes $21.5 billion in new spending over the coming five years, up dramatically from last year’s modest budget, which had $5.7 billion in new spending.
The budget opens up the taps on funding for research, pledging almost $4 billion over five years which includes $1.7 billion for granting councils and research institutes and $1.3 billion for labs, equipment and infrastructure. That funding builds on the recommendations by a review panel last year led by David Naylor that called for federal investments in fundamental science.
Ottawa is pledging an additional $2.3 billion over five years for foreign aid with most of the funding earmarked to support the Liberals’ recently announced “feminist” international assistance efforts, aid that is focused on helping women and children.
The budget has a separate chapter titled “Reconciliation” that details almost $5 billion in new funding for Canada’s Indigenous people in the areas of skills development, housing and child and family services.
Other spending measures are a grab bag of wide-ranging initiatives such as cracking down on tax cheats ($90 million), fighting the opioid crisis nationwide ($231 million) and improving the no-fly list ($81.4 million), in part to reduce the number of children unfairly targeted.
It signals Ottawa’s interest in a national pharmacare plan, with the appointment of Dr. Eric Hoskins — who on Monday stepped down as Ontario’s health minister — to chair an advisory council that will recommend options to “move forward” on the issue.
For all its claims of taking on big business, the Liberal government gave in to loud protests within the business community, and scales back Morneau’s attempt last year to target passive income sheltered in private corporations.
Morneau ditched what was seen as an overly complex scheme and now plans to allow small businesses to shelter up to $50,000 of passive income untouched within their corporations. The government will instead only start clawing back the benefits of low corporate tax rates in line with how much wealth a business has accumulated as passive income above $50,000.
Combined with a measure to prevent corporations from “sprinkling” income among family members to benefit from lower business tax rates, the more targeted plan will take in $925 million a year, when fully implemented. Morneau says more than 90 per cent of that tax take will come from business owners whose household income is in the top 1 per cent.
As for cleaning up messes in its own workplace, the Liberal government says it will spend another $453 million over six years to try to fix the Phoenix federal payroll system which has proved disastrous. That money includes money to hire new staff, help workers address tax issues that have arisen and to develop a whole new pay system. It all comes on top of what the Phoenix system originally cost under the Conservatives to develop — more than $309 million — and on top of the $460 million Ottawa has already spent to resolve problems, with little success.
There is an old-style revenue grab — the Liberals will increase tobacco taxes by hiking the excise duty on a carton of 200 cigarettes by $1 per carton, with corresponding increases on other tobacco products.
But the Liberals say they will cap the federal tax take that comes from the eventual legalization of cannabis at $100 million a year for the first two years. The feds also promise more spending — about $82 million over five years — on public education campaigns, and research into the mental health and addictions impact of cannabis legalization.
In his Commons’ address, Morneau touted the strength of the Canadian economy — exports are up, unemployment is at 5.9 per cent, near its lowest level in years and major sectors are growing. But there are uncertainties, including the likelihood of rising interest rates and the uncertain fate of the North American Free Trade Agreement, which is currently being renegotiated, and Washington’s move to cut corporate taxes.
“We know there are challenges in the immediate term, and we are responding to those challenges,” Morneau said.