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

Armstrong Regional Co-op board members Brett Kirkpatrick (left) and Robbie Hoyte (right) flank Scott John of the Okanagan Screen Arts Society. The co-op donated $2,500 to the society for its Save the Towne Theatre campaign. (ARC photo)
North Okanagan-Shuswap cooperative contributes to Vernon theatre campaign

Armstrong Regional Co-op kicks in $2,500 for Okanagan Screen Arts Society’s Save the Towne Theatre campaign

Sicamous RCMP Sgt. Murray McNeil and Cpl. Wade Fisher present Cody Krabbendam of Ranchero with an award for bravery on July 22, 2020. (Contributed)
Shuswap boy receives medal of bravery, scholarship for rescue at Sicamous beach

Last summer Cody Krabbendam jumped into the lake to save another boy from drowning

A young Sicamous Canada Day parade-goer is awed by a colourful float filled with beloved Disney characters during the July 1, 2020 community event. (File photo)
Editorial: Now is the time for Sicamous to shine

Shuswap community might be just what people who work from home are looking for

Greyhound Canada announced May 13 it was closing operations permanently after more than a century of operation. (Black Press file photo)
COLUMN: Goodbye to a never forgotten friend

Greyhound bus trips played a big role in columnist’s life

Someone or something is vandalizing birdhouses built and erected along Salmon Arm’s Foreshore Trail, much to the chagrin of a Shuswap biologist who looks after the houses. All but one of 32 along the trail are occupied. (Facebook photo)
Ongoing birdhouse vandalism rocks Shuswap trail, groups

Eight more boxes were destroyed Saturday, May 15

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

Brandon Messier of Messier’s Concrete and Landscaping has added some unique, glowing features to his front yard at 28 Huth Ave. (Submitted)
PHOTOS: Glowing boulders popping up in the Okanagan

Local landscaper Brandon Messier also brought the Lost statue to its new home

Coldstream Fire Department is on-scene Sunday, May 16, battling a fire in a Matner Lane orchard just up the hill from the firehall on Aberdeen Road. (Jennifer Smith - Morning Star)
Okanagan fire crew tackles orchard blaze

Fire broke out just before 2 p.m. on Matner Lane, which is just up the hill from the Coldstream firehall on Aberdeen Road

A drug bust on Government Street in Duncan on Tuesday, March 30, led to a "substantial seizure" according to the North Cowichan/Duncan RCMP. (File photo)
Search continues for diver who went missing in Okanagan Lake

Emergency crews continue to search for the 52-year-old who didn’t resurface Saturday

A vial of AstraZeneca vaccine is seen at a mass COVID-19 vaccination clinic in Calgary, Alta., Thursday, April 22, 2021. Dr. Ben Chan remembers hearing the preliminary reports back in March of blood clots appearing in a handful of European recipients of the Oxford-AstraZeneca COVID-19 vaccine. THE CANADIAN PRESS/Jeff McIntosh
Science on COVID, VITT constantly changing: A look at how doctors keep up

While VITT can represent challenges as a novel disorder, blood clots themselves are not new

Poached trees that were taken recently on Vancouver Island in the Mount Prevost area near Cowichan, B.C. are shown on Sunday, May 10, 2021. Big trees, small trees, dead trees, softwoods and hardwoods have all become valuable targets of tree poachers in British Columbia as timber prices hit record levels. THE CANADIAN PRESS/Jen Osborne.
Tree poaching from public forests increasing in B.C. as lumber hits record prices

Prices for B.C. softwood lumber reached $1,600 for 1,000 board feet compared with about $300 a year ago

A man and woman, both 33 and from Kelowna, were arrested on Postill Lake Forest Service Road in possession of two stolen vehicles Friday, May 14, 2021. (File photo)
Kelowna duo arrested with stolen vehicles after ‘brief’ bicycle getaway attempt

A man and a woman were arrested on a forest service road on numerous pending charges

On Friday, May 14 at Meadow Gardens Golf Club in Pitt Meadows, Michael Caan joined a very elite club of golfers who have shot under 60 (Instagram)
Crowds at English Bay were blasted with a large beam of light from an RCMP Air-1 helicopter on Friday, May 14. THE CANADIAN PRESS/Marc Grandmaison
Police enlist RCMP helicopter to disperse thousands crowded on Vancouver beach

On Friday night, police were witness to ‘several thousand people staying well into the evening’

Most Read