Prime Minister Justin Trudeau looks on as Deputy Prime Minister and Finance Minister Chrystia Freeland responds to a question during a news conference on Parliament Hill in Ottawa, Tuesday, Aug. 18, 2020. THE CANADIAN PRESS/Adrian Wyld

Prime Minister Justin Trudeau looks on as Deputy Prime Minister and Finance Minister Chrystia Freeland responds to a question during a news conference on Parliament Hill in Ottawa, Tuesday, Aug. 18, 2020. THE CANADIAN PRESS/Adrian Wyld

Expectations high as Trudeau Liberals get ready to unveil first pandemic budget

The Liberals will look to thread an economic needle with Monday’s budget

The Liberals will look to thread an economic needle with Monday’s budget, while dealing with a minority Parliament where the document’s defeat would topple the government.

It has been more than two years — and two throne speeches — since the Liberals delivered a federal budget, having not done so last year due to what the government said was economic uncertainty created by COVID-19.

The Liberals have promised to lay out a plan to green the economy, create a national child-care system and help displaced workers improve their skills.

Provinces will be looking for more health-care cash, small businesses for an extension of emergency aid, and credit-rating agencies for certainty that historic deficits and debts will be tamed over time.

And opposition parties will be scrutinizing the document as they consider whether to support the fiscal blueprint, with the Liberals needing at least one major party’s support to survive a confidence vote on the budget.

Expectations on the budget are sky-high, said Elliot Hughes, a one-time adviser to former finance minister Bill Morneau, which he added is something to be avoided in politics.

“They haven’t exactly minimized expectations themselves,” said Hughes, now with Summa Strategies.

“So we should expect it to be quite the day in terms of, I think, the breadth of policy that they cover and the depth of the spending that they commit to.”

Spending is already at historic levels after the treasury pumped out aid over the last 12 months, sending the deficit at last estimate to over $380 billion. Next week’s budget will say how deep it is now, how far over $1 trillion the debt has gone and offer an accounting of emergency spending.

More red ink is in store for coming years as the Liberals have promised between $70 billion and $100 billion over three years in stimulus.

Since November when that promise was made, jobs figures and the economy have fared better than expected. The parliamentary budget officer recently suggested the government rethink how much stimulus it plans to spend.

The change in outlook could mean the government finds between $12 billion and $15 billion in extra spending room this year, said RBC senior economist Josh Nye.

What the Liberals need to do with any spending is focus on areas and items that improve longer term growth prospects, said Robert Asselin, a former Trudeau budget adviser now with the Business Council of Canada, using the example of skills-training programs to better connect job-seekers and employers.

“This idea that just spending, spending, spending is good for everything, I think is a false premise,” he said. “I’m just worried that we’re using this crisis to do all kinds of stuff that in normal circumstances we wouldn’t do.”

One area of overlap appears to be child care.

Business groups have joined long-time advocates noting the economic need for child care as mothers in particular with young children have lost income and hours through the pandemic, leading to what has been dubbed the “she-cession.”

“I don’t think we’ll see the economic growth we want in this country and the productivity we want until we have this program in place,” said Jennifer Reynolds, CEO of Toronto Finance International.

“We need women working. Women are over 50 per cent of the university graduates, they’re highly educated, and we’re not taking advantage of that talent pool in a way in which we should.”

Spending on child care may end up paying for itself in the long run as the labour force boost translates into more tax revenue to federal coffers, Nye said. He warned that spending will be highly scrutinized by international credit ratings agencies and investors wanting to see a federal plan to keep the debt from spiralling out of control.

Canadians appear equally concerned. An online survey conducted by the firm Leger for The Canadian Press found that seven in 10 respondents were worried about what the deficit would mean for future government spending.

The online survey of 1,504 Canadians took place between April 9 and April 11, and cannot be assigned a margin of error because online panels are not considered random samples.

The survey also found that nearly three in 10 respondents would prefer an election this fall, and a further four in 10 preferred a vote later than that. Only six per cent of Liberal supporters in the poll wanted an election this spring; some 60 per cent preferred a vote after this fall.

The budget will have to speak to people’s ongoing concerns about the pandemic, and keep enough Liberal voters happy so they don’t migrate to the New Democrats or Greens should the budget fail to live up to expectations, said Kathy Brock, a professor at Queen’s University’s school of policy studies.

“It’s almost inevitably going to be a disappointment to a lot of the core constituencies unless someone like Chrystia Freeland can find that magic balance point,” Brock said. “And that’s going to be critical right now going into an election.”

This will be Freeland’s first budget since being thrust into the position in August after Bill Morneau’s sudden resignation exposed a rift over spending priorities that can often exist between a prime minister and finance minister.

“One of the most important questions will be what this says about where the Liberal government is positioning itself,” Brock said of the budget, “and the power balance that exists within the government itself.”

Jordan Press, The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

federal government

Just Posted

Student-nurse Kendra Waterstreet administers the Pfizer vaccine to Litia Fleming at the Waneta Plaza vaccination clinic in the old Zellers buiding. Photo: Jim Bailey
Trail vaccination clinic readies for adults age 40+

B.C.’s state of emergency is extended through the end of day on May 25

For something a little different this week, Trail Blazers is featuring an historical image from the Kootenay Boundary. This rough and tumble photo shows the Forshaw Ranch near Phoenix, B.C, circa 1914. Photo Credit: Boundary Heritage Facebook Page (via Grand Forks Gazette)
Trail Blazers: Home, home on the range

Trail Blazers is a weekly historical feature

” … the carbon cycle is of absolute necessity to all life on earth.” writes Thorpe Watson. Photo: Nagy Arnold on Unsplash
Letter: Another important message for our teachers

Letter to the Editor from Thorpe Watson, Warfield

The elevator has been broken in Waneta Manor, a three-story building with a basement level for parking, since Feb. 18. Photo: Trail Times
Broken elevator should have been fixed a long time ago

Letter from Kathryn Oliphant, Trail

Kimberley Cutler to weave Rossland’s mountain mindscapes into 7S promotional stickers. Photo: Submitted
Learning Centre sticks to Trail talent and invests in a collaborative future

Trail artist Kimberley Cutler and Seven Summits alumna partners with former school

From the left: Laura Greaves, Kyle Whyte and Steve Bigelow rescued a poisoned eagle Sunday, May 9. Photo: Laurie Tritschler
West Kootenay residents, Conservation Service Officer save poisoned eagle

CSO Kyle Bueckert released the eagle into the wild Thursday, May 13

A COVID-19 patient receives oxygen outside a hospital in Jammu, India, Wednesday, May 12, 2021. (AP/Channi Anand)
B.C. donates $500K to Red Cross COVID-19 relief efforts in India

The money will provide oxygen cylinders and ambulances for patients in communities grappling with the virus

Superintendent Aaron Paradis, community services officer with the Surrey RCMP, during a media availability about a recent drug bust in Port Coquitlam. (Photo: Lauren Collins)
Police seize 13 million ‘potentially fatal doses’ of pure fentanyl at B.C. drug lab

The evidence was seized at large, illicit drug manufacturing site in Port Coquitlam

B.C. Public Safety Minister Mike Farnworth debates the province’s latest measure to control crime, March 10, 2021. The legislation allows police to impound vehicles used to transport weapons and further restricts sale of vehicle and body armour. (B.C. legislature video)
B.C. seeking ways to ‘name and shame’ gangsters, minister says

Mike Farnworth appeals to family members to talk to police

Jonathan Prest had to climb way up to the top of a dead red cedar tree to rescue a terrified cat, but he made it up and down successfully. (Facebook photos)
Tree cutter rescues cat stuck 100 feet up a dead and dried-out cedar

Jonathan Prest put himself in extreme peril to get a terrified cat out of a dangerous situation

The Greater Victoria School District continues to face backlash over its wording and approach to Indigenous learners in its 2021-2022 budget talks. (Black Press Media file photo)
School district’s approach to Indigenous learners leaves Victoria teachers ‘disgusted’

Backlash grows over ‘pattern of colonial thinking permeating the leadership’

Italian-Canadian prisoners at the Kananaskis prisoner of war camp in Alberta. (University of Calgary/Contributed)
Italian moved to Okanagan with hope; he ended up being sent to a WWII internment camp

Raymond Lenzi shares his grandfather’s story ahead of Canada’s planned formal apology to Italian-Canadians

A new coalition has formed to call upon the government to make fundamental legislative changes to prioritize protecting fish, wildlife and their habitats. Doug Turner photo.
Wildsight joins coalition calling on government to prioritize wildlife and habitat protection

The Fish, Wildlife and Habitat Coalition is comprised of more than 20 groups

Then-minister Rich Coleman, escorted by Victoria Police, makes his way to the east wing amid a protest blocking the legislature entrances before the throne speech in Victoria, B.C., Tuesday, Feb. 11, 2020. THE CANADIAN PRESS/Chad Hipolito
B.C. money laundering inquiry testimony ends today with reappearance of Rich Coleman

Responsible for the gaming file off and on from 2001 to 2013, Coleman been recalled after his initial testimony to the Cullen Commission last month

Most Read