POLITICS
03/20/2019 07:53 EDT | Updated 03/20/2019 17:51 EDT

Morneau's Pre-Election Budget Targets Key Groups Who Helped Liberals Win In 2015

Liberals are also taking baby steps on pharmacare, a key NDP priority.

Prime Minister Justin Trudeau and MPs applaud as Finance Minister William Morneau rises to deliver the federal budget in the House of Commons in Ottawa on March 19, 2019.
Sean Kilpatrick/CP
Prime Minister Justin Trudeau and MPs applaud as Finance Minister William Morneau rises to deliver the federal budget in the House of Commons in Ottawa on March 19, 2019.

OTTAWA — Finance Minister Bill Morneau sprinkled a little government funding on nearly everyone Tuesday, including key Liberal constituencies — young people, women, and seniors — who helped deliver the Grits their victory in 2015.

In his pre-election budget, Morneau announced $26.7 billion in new spending since the fall economic statement — nearly all of the $27.8 billion in additional revenues the government brought in since the November update and is forecast to bring in over the next four years.

For young people, many of whom voted for Prime Minister Justin Trudeau in droves last time and are now about to, or just starting to, pay off their student loans, Morneau announced that their interest rates would be slashed and a six-month interest-free grace period adopted.

For students taking time off to deal with medical emergencies, parental responsibilities, or mental health issues, the government said it would also offer up to 18 months of interest-free, payment-free leave.

Watch: Morneau discusses his spending plan

The Liberals pledged to spend more money to help encourage students to enter the skills trades, while also instituting a pilot program that would allow students to gain more international work experience.

For millennials concerned they'll be shut out of the housing market, the Liberals proposed the Canada Mortgage and Housing Corporations help with down payments — a type of interest-free loan payable when the home is sold. They also announced measures that allow first-time home buyers who have saved in their RRSP to use $35,000, up from the current $25,000 towards their down payment.

The Liberals' gendered budgeting lens was noticeable in a new measure that allows couples who split to use the first-time home buyers plan towards a second dwelling, after the collapse of their relationship. Granting student researchers paid parental leave is another measure aimed at women voters.

Seniors, who public opinion polling suggests voted for the Liberals in greater numbers in 2015, received $1.86 billion — most of it directed at low-income seniors through a program that would allow them to keep more of the money they earn in part-time jobs without seeing their Guaranteed Income Supplement clawed back.

The Liberals also pledged $100 million over five years for seniors programs and promised to begin payments to Canada Pension Plan contributors automatically at age 70 to ensure that no one misses out on money owed to them.

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For Canadian pensioners, such as those at Sears or Nortel, who saw their companies go bankrupt and their benefits vanish, the government offered to make tweaks to the law — giving courts a greater ability to review executive compensation and to clarify in federal law that if a pension plan is terminated its participants must still receive the same benefits as when it existed. The measures, however, are a far cry from what the New Democrats champion.

Another NDP priority that was ignored in the budget is the party's call for a universal pharmacare program.

The Liberals announced baby steps. A new Canadian Drug Agency would attempt to buy in bulk and lower drug prices, all the while setting up a national formulary. By 2022, an annual $500-million strategy would see the federal government assist with buying expensive drugs for rare diseases.

Mostafa Askari, chief economist at the Institute of Fiscal Studies and Democracy at the University of Ottawa, said he thinks the government has given itself some room to make a pharmacare announcement this summer.

"I assume that is the case. Whether they have the fiscal room or not, that is a different issue," he said. "It doesn't look like there is a lot of fiscal room if they want to stay in their current deficit track."

Some proposals are building blocks

Some of the Liberals' flagship budget proposals, such as the new Canada Training Benefit, also seem designed as building blocks towards a larger program.

The Canada Training Benefit offers Canadians aged 25 to 64 an annual $250-a-year credit, to a lifetime limit of $5,000, to put towards half the cost of taking a course. The program, which is planned to begin in late 2020, would guarantee workers the right to take time off to train with the knowledge that their job would be secure. Employees would also be allowed to collect employment insurance for up to four weeks that can be used over four years to help pay for everyday necessities while away from work.

"This is the first time in the history of our country where Canadians actually have training now as a right," Hassan Yussuff, the president of the Canadian Labour Congress, told HuffPost Canada. People won't have to wait until they lose their jobs to access training, he said. "I think this will fundamentally change the psychology of how people view training and, more importantly, hopefully, take advantage of it."

The budget is peppered with hundreds of millions of dollars of new money for veterans and their families, the arts, Canada's military, international development assistance in the Middle East, the fight against opioid addiction and other health measures, as well as research and development and another $554 million more to fix Phoenix, the federal government's problem-plagued payment system for public servants.

However, the Liberals want Canadians to know about a few more programs they plan to pitch at people's front doors.

Liberals make pledge on high-speed internet

The first is a pledge to bring high-speed internet to every part of the country by 2030. The Liberals have talked about this; they've already invested in bringing high-speed internet to rural areas; and now they say they'll do it, in three electoral mandates.

The second, to make good on their promise that Canada will be selling only zero-emission vehicles by 2040, the Grits are ponying up $300 million over three years to give Canadians who purchase an electric battery or hydrogen fuel cell vehicle a $5,000 rebate on purchases under $45,000. The Liberals also plan to invest $130 million over five years to deploy recharging and refuelling stations across the country — in urban and remote locations — so Canadians aren't stranded when they use their green cars.

Two other big ticket items reflect government priorities, electoral considerations, and a rare admission that the original implementation suffered from insufficient pick-up, or, in the case of measures for Indigenous, Métis and Inuit Canadians, insufficient money.

"What we've seen is we've not been able to get as many projects done in some places, places like Ontario, Saskatchewan, Manitoba, New Brunswick, as we'd like," Morneau said, in explaining a one-time $2.2 billion top-up to municipalities to ensure that "more [infrastructure] projects get done across our country."

The Liberals' 2015 election platform hung on a pledge to invest heavily in critical infrastructure, roads and water treatment plants, for example; green infrastructure, such as expanded transit; and social infrastructure, such a daycare spaces and social housing.

Watch: Former budget watchdog Kevin Page weighs in on spending plan

Approximately one-fifth of the total budget, $4.7 billion, is new program spending for Indigenous, Inuit and Métis. It includes, for example, $739 million over five years, increasing to $185 million annually after that, to address repairs to vulnerable water systems, operator training and for other programs to ensure First Nations communities can have safe drinking water. The Liberals have spent $2 billion since 2015, but with the new money say they are on track to eliminate all water advisories by March 2021.

The Liberals are also pledging $1.2 billion over three years to implement "Jordan's Principle" to ensure First Nations children can access health, social and educational services they need, when they need them.

When asked if the Liberals' budget focus on reconciliation had anything to do with the backlash from Indigenous communities after one of their leaders, Jody Wilson-Raybould, the former attorney general, voiced concerns about Trudeau's handling of the SNC-Lavalin affair, the finance minister said no.

The Liberals have already spent $11 billion focused on Indigenous peoples and with this budget would be spending $17 billion by 2021, Morneau said.

"It's not a personality driven thing. It's driven by the fact we know that in this country we need to get this right. We've got a lot of work to do, and we're going to stay on it," he said.

Sean Kilpatrick/CP
Prime Minister Justin Trudeau and Finance Minister Bill Morneau speak as they walk to the House of Commons in Ottawa, Tuesday March 19, 2019.

One promise that is out the window — and has been since the Trudeau Liberals' first budget in 2016 — is the balancing of the books by the time the next election rolls around. The budget plans for a $19.8 billion deficit next year, which is forecast to fall to $9.8 billion by 2023-2024. The Liberals have planned for an annual $3 billion contingency cushion.

Morneau sidestepped questions about why the Liberals had made that pledge if they didn't intend to live by it.

"We believe that making investments in the middle class, it's the way to go," he told reporters.

The Liberals' Canada Child Benefit, for example, which costs more than $20 billion annually, has helped lift 278,000 children out of poverty, according to Statistics Canada figures.

Spending, or, as Morneau prefers to call it, investing, versus cutting is the wedge the Liberals are hoping to create against their Conservative counterparts.

"We're going to continue with the approach of investing in middle class Canadians," Morneau pledged Tuesday. "We're not going to take the proposed approach of the Conservatives, the idea that cuts will lead to a better situation."

Tories call budget an 'expensive coverup'

Conservative Leader Andrew Scheer and his finance critic, Pierre Poilievre, did not offer a substantive criticism of the Liberals budget Tuesday. Instead, the party accused Trudeau of engaging in an "expensive coverup" by using the budget announcement to distract from Liberal attempts to block Wilson-Raybould from testifying again at the justice committee.

The former attorney general testified at a Commons hearing last month that individuals in the Prime Minister's Office and in Morneau's office had tried to put pressure on her and her staff to direct the public prosecution service to offer a plea deal to SNC-Lavalin. The company faces fraud and corruption charges related to dealings in Libya.

Trudeau and his former principal secretary, Gerald Butts, have denied any wrongdoing. Butts resigned in February, citing the need to defend his reputation. Michael Wernick, the clerk of the Privy Council Office, announced this week that he also plans to resign.

Last month, Wilson-Raybould resigned from the cabinet days after her allegations emerged in the media. Former Liberal cabinet minister Jane Philpott also resigned, saying she could no longer defend the government's actions publicly after hearing Wilson-Raybould's testimony, and had lost confidence in how the issue had been dealt with.