Mixed response to risky federal budget
Read this article for free:
or
Already have an account? Log in here »
To continue reading, please subscribe:
Monthly Digital Subscription
$1 per week for 24 weeks*
- Enjoy unlimited reading on winnipegfreepress.com
- Read the E-Edition, our digital replica newspaper
- Access News Break, our award-winning app
- Play interactive puzzles
*Billed as $4.00 plus GST every four weeks. After 24 weeks, price increases to the regular rate of $19.00 plus GST every four weeks. Offer available to new and qualified returning subscribers only. Cancel any time.
Monthly Digital Subscription
$4.75/week*
- Enjoy unlimited reading on winnipegfreepress.com
- Read the E-Edition, our digital replica newspaper
- Access News Break, our award-winning app
- Play interactive puzzles
*Billed as $19 plus GST every four weeks. Cancel any time.
To continue reading, please subscribe:
Add Winnipeg Free Press access to your Brandon Sun subscription for only
$1 for the first 4 weeks*
*$1 will be added to your next bill. After your 4 weeks access is complete your rate will increase by $0.00 a X percent off the regular rate.
Read unlimited articles for free today:
or
Already have an account? Log in here »
Hey there, time traveller!
This article was published 31/03/2023 (892 days ago), so information in it may no longer be current.
When it comes to government budgeting, risk can come in many different forms.
Manitoba’s Progressive Conservative government demonstrated its appetite for risk recently with a budget featuring both whopping tax cuts and healthy spending increases. With inflation and interest rates still high, and the global economy veering dangerously close to recession, this wasn’t a budget that acknowledged the peril that surrounds us.
With its budget, Canada’s federal Liberal government has, in its own way, demonstrated a similar affinity for risk, although it has taken a slightly different route to get there.
The federal budget, tabled this week, claims to strike a balance between meeting the needs of Canadians and observing fiscal responsibility. There was money to expand a national dental-care program, a new one-time grocery rebate for low-income Canadians, and a rash of new tax credits aimed at triggering clean power and manufacturing innovations. This budget also reflects significant increases in funding transferred to the provinces to support health care.
However, the budget also includes an increased deficit projection for the next five years, which means significant increases to the national debt. The Liberals have tried to offset these with efforts to curb government spending and a new tax hike for Canadians on the uppermost rungs of the income ladder.
SEAN KILPATRICK / CANADIAN PRESS FILES Minister of Finance Chrystia Freeland and Prime Minister Justin Trudeau
Does this budget achieve the Liberals’ dual goals: more of what we need, delivered in a framework of fiscal responsibility? The early returns on those assertions, from economists and media pundits, are quite mixed.
The Conservative party, as opposition parties do, lambasted the budget for both increasing the deficit and debt, and not doing enough to address the affordability crisis facing Canadians. Tory Leader Pierre Poilievre hasn’t enunciated exactly how he would accomplish both of those things simultaneously, but such is the luxury enjoyed by opposition leaders.
The NDP, meanwhile, are actually celebrating the budget as a victory. Thanks to its agreement with the Liberals to provide political support in exchange for specific budget measures, NDP Leader Jagmeet Singh has largely adopted the budget as his own. “We get things done for people,” Mr. Singh said.
Outside of federal parliament, opinions are even more diverse.
Tasha Kheiriddin, a conservative-minded opinion writer for the National Post, called the budget a “bloated, gratuitous plan” that isn’t doing enough to curb spending.
Similar notes were sounded by some of Canada’s influential bank economists. “The idea that you’re not even getting to a balanced budget within this budget horizon is, in my mind, not fiscally responsible,” said TD bank director of economics James Orlando.
Related Articles
Federal budget shows no end in sight for deficits
Others, such as former parliamentary budget officer Kevin Page, were a bit less negative. In an op-ed commentary for the Globe and Mail, the head of the Institute for Fiscal Studies and Democracy notes that while this year’s deficit, and those projected for the next five years, are higher than previously forecast, the country’s debt-to-equity ratio — the measurement of total national debt as a percentage of economic output — will decline. “The 2023 budget gets a thumbs-up.”
However, Mr. Page acknowledged that issues beyond the government’s control — inflation, interest rates and their impact on economic growth — will largely determine the riskiness of this budget. “Fiscal credibility has to be earned budget by budget,” Mr. Page wrote.
There is definitely risk at play in both budgets. However, the only way to determine whether these budgets are too risky is to wait, watch and then judge them against real-world conditions. In the meantime, Manitobans and indeed all Canadians would be well advised to cross as many fingers and toes as they have.
