The 2017 budget is here and it’s obvious the federal Liberal government isn’t planning on balancing Canada’s books anytime soon.
Despite a campaign promise to have the country in the black by 2020, Budget 2017 will actually increase the federal deficit to 28.5 billion dollars
But Alex Hemingway, a public finance policy analyst with the Canadian Centre for Policy Alternatives, says increased government investment is not necessarily a bad thing.
“It does make sense to make those outlays and not get too hung up on the deficit issue. As long as we are keeping our debt in line with our GDP – keeping that debt to GDP ratio down – that should not be a huge concern to us.”
According to the government’s predictions, the federal deficit will decrease to 18.8 billion by 2021-22.
The budget is titled “Building a Strong Middle Class.” BC MP Nathan Cullen is calling the name misleading, saying most of the budget’s tax breaks benefit the wealthy.
Hemingway says government inaction in the budget will also benefit the rich
“One striking thing that we didn’t see in this budget is taking on some of the big tax loopholes that benefit the richest Canadian compared to everyone else there had been talk that we might see increase in taxes on capital gains there had been a promise to deal with stock options tax credit.”
And which Canadians lost the most? According to Hemingway, it’s women.
“The analysis of the gender issue is very strong but unfortunately we see relatively little action on the gender front. For example, the federal Status of Women agency has its funding on changed.”
According to the Organisation for Economic Cooperation and Development, Canada’s gender wage gap is the 7th largest of 35 countries, lagging behind the US, UK, Australia and New Zealand. We come out ahead of Turkey, Japan, Estonia and the Netherlands.
While the budget does include $7 billion in funding for childcare, that amount is scheduled to be spent over 10 years and Hemingway says, when you consider it will be spread across 10 provinces and three territories, the funding won’t go as far as many would hope.
The budget also shows that federal spending on health care will be scaled back from increases of about 6% per year to less than 3% in some cases.
Overall, Hemingway says the 2017 budget looks much like its predecessor with spending on social and infrastructure priorities remaining the same.
(Files from Shannon Waters with MYPRINCEGEORGENOW)