The government of Prime Minister Mark Carney recently unveiled its new federal budget; one it says is aimed at boosting the economy and helping Canadians with affordability.
Over the weekend, Carney and the finance minister François-Philippe Champagne traveled to various parts of the country to defend the $142.1 billion financial plan.
It includes new tax incentives, spending and other measures to take effect over the next five years.
"The focus of the budget is being masters of our own destiny," Carney said. "I think it tells you about our approach. We’re focused on affordability. We’re focused on opportunity. We’re focused on sovereignty for Canada — more independence so we can live our lives as we choose."
For this fiscal year there is a projected deficit of just over $62 billion — lower than projected in the spring — but critics say it's still too high.
The main thrust of this budget is to simulate the economy. Government revenues are higher, and the Carney government has decided to spend the extra money rather than save it. The lion’s share of the spending will be on tax incentives to spur growth. There will also be measures to help Canadians with affordability, such as more money for grocery rebates, and infrastructure money for Indigenous communities.
But some, like Sahir Khan of the Institute of Fiscal Studies and Democracy, call it a gamble.
"So this government is making a big bet on a combination of that investment plus the money they’re borrowing to kind of jump start this economy and get it off of this anemic footing it’s been on for a while," Khan said.
Arlene Dickinson, the founder of District Ventures Capital, said she likes what what she sees in the new budget.
"I feel very confident about it," she said. "I feel like it is the right move at the right time with the right strategy. I’m not blind to the challenges that are ahead of us. There are things that are going to be very difficult to make sure happen. Execution’s going to be everything. But I think if we don’t take this right now. This is our moment. This is our time. This is our opportunity."
Big corporations likely will favor the mega deduction — $36.1 billion over five years and the most expensive new measure. It’s aimed at encouraging investment at home by allowing businesses to write off some new capital investments.
Avi Lewis, the leader the New Democratic Party, said the budget is too heavily weighted towards business and not enough for Canadians.
"It doesn’t deal with the price of food at all," Lewis said. "It just redistributes a very small amount of money, $4 billion compared to the tens of billions in business incentives. It’s a Christmas-came-early-for-the-billionaires budget. That mega deduction is the single biggest measure in the entire budget and it doesn’t address the affordability crisis at all."
Economist Don Drummond of Queen’s University is also skeptical about the claim of boosting affordability for Canadians.
"It’s kind of surprising, the finance minister said before the budget there’s going to a lot of things on affordability. There’s not really," Drummond said. "There’s $40 billion a year of actions in this budget and very little of it affects households. The vast majority of that is geared towards business and trying to get investment going."
Opposition parties in parliament are united in their criticism of the budget, saying Canadians can’t afford it, there isn’t enough in it to help everyday Canadians, and there’s no mention of climate preparedness or incentives to help grow a clean economy.
The budget is a shift away from the Justin Trudeau era and is focused on growth, by investment and building. The challenge now is for Carney to achieve the results he’s promised — and has bet so much on.
