The federal budget unveiled Monday takes a gradualist approach, crafted by a Liberal government fearful of appearing spendthrift ahead of an expected election.
In essence, Monday’s budget proposes to spend as much as $100 billion on what it calls a pandemic recovery program. The program will ensure that Canada’s economy “will come roaring back” after the health crisis, Chrystia Freeland, the federal finance minister, said in her parliamentary budget address.
Freeland will be held to those words, of course. And she may come to regret them, as economists are divided on how strong the economic recovery will be.
And her own government’s investments, modest in size and scattershot in nature, will not place the rocket under the Canadian economy that Freeland would have us think they will.
That $100 billion, for instance, rolls out over three years. It doesn’t even start until mass vaccination has been achieved.
And so, Budget 2021 is actually a post-pandemic recovery plan. One that picks up where Ottawa’s prodigious current pandemic spending leaves off.
Even the budget’s signature proposal, a first-ever national child care and early learning scheme, is merely words on paper. If history is a guide with this decades-old promise that Grits have twice failed to achieve, it may end up a dead letter.
Freeland describes the child care proposal as a breakthrough.
“I want us to raise a generation of superkids,” Freeland said earlier this month at the Liberal Party’s annual policy conference, “who have the best education possible in their early years.”
But on Monday, Freeland provided no deadlines, costing, or detailed blueprint for getting that done. Alas, that vagueness describes many of the proposals in this budget.
Freeland said that “five years from now, Canadian parents should have access to $10-a-day child care.” That proposal would be the “historic achievement” Freeland called it in the Commons on Monday if it took effect over the next two years. That’s a reasonable amount of time to create the new child care services needed now.
Another example of the budget’s go-slow approach is its proposal to lift about 100,000 Canadians from poverty into the middle class, with the budget’s expanded Canada Workers Benefit and a federal minimum wage of $15 an hour.
Again, and alas, that program rolls out over six years. The NDP will not be alone in arguing that low-income Canadian workers, disproportionately toiling in at-risk jobs, need that assistance immediately.
Almost everything in Budget 2021 is contingent.
Meaning, “It depends.”
It depends on how much more damage is inflicted on the economy and the federal treasury by the continuing pandemic.
It depends on the strength of an economic recovery that Freeland concedes will not begin until “deep into 2021.”
And in the case of universal child care, it depends on buy-in from the provinces.
It would be foolhardy to bet on when and whether that might ever happen.
For about two decades, Quebec has benefited from one of the world’s most affordable, highest-quality child care programs. And in all that time no other Canadian jurisdiction has copied it.
The pandemic caused what Freeland describes as “an incredibly dangerous drop” in the rate of female participation in workforce.
She is describing what economists long ago labelled a “she-cession,” an economic malaise that has inflicted its greatest harm on women, due largely to pandemic-shuttered daycares and schools.
With that indisputable fact in mind, Freeland insists the pandemic has “opened a window of political opportunity” for universal child care.
Many of Freeland’s Liberal and New Democratic colleagues in Parliament agree.
Indeed, many of them would extend that principle to pharmacare; universal basic income, or UBI (in which the feds have been engaged since the outset of the pandemic); rebuilding our largely decrepit long-term care sector; and universal paid sick days on the European model.
But before anyone says, “Not so fast,” the Grits are already reconciled to a painfully gradualist approach on these and other needed reforms.
Monday’s budget reveals that.
Like most budgets, this one offers a potpourri of measures that seem to touch on every aspect of life.
But the measures are incremental – on affordable housing, employment insurance reform, mental-health supports, skills training, and other budget items.
And almost all the budget’s major initiatives require joint action by Ottawa and the provinces.
Recall that the provinces balked at participating in the national rebuilding project intended by Prime Minister Justin Trudeau’s infrastructure bank.
They weren’t willing to pony up their portion of the shared-cost projects to replace pre-Confederation bridges and schoolhouses.
Chances of intergovernmental collaboration have narrowed further as provinces cope with pandemic deficits.
And so, long promised pharmacare, an intergovernmental project, remains on the back burner. And UBI is a talking point, nothing more.
Sometimes you can take the mood of the times from a single comment.
Given the high COVID-19 death toll in long-term care (LTC), it would seem obvious that our largely antiquated LTC facilities, which were not designed to stop viral spread and were deficient long before the pandemic, must be replaced.
Not so, says Blaine Higgs. The New Brunswick premier recently declared, “I don’t want to build a whole bunch more nursing homes.”
That stalemate in the federation explains why Budget 2021 provides just $3 billion to the provinces and territories for LTC upgrading. What’s obviously needed is a megaproject to replace most of the LTC system, rather than more Band-Aid upgrades to hopelessly outdated facilities.
It is incongruous, to say the least, that Ottawa has $14 billion to build the Trans Mountain Pipeline but just $3 billion to fix an LTC system that is a national disgrace.
Freeland, who issued a rare Commons apology to seniors (“We have failed so many of those living in long term facilities … I am so sorry”) is not the problem here. It’s a system that holds national ambitions hostage to provincial prerogatives.
Fact is, Freeland’s moment of political opportunity has not arrived.
The same polling in recent months that shows Canadians remain supportive of deficit-financed pandemic measures also says they want to hold the line at that. With a federal deficit in the $400-billion range by this time next year, Canadians are wary of genuine reforms with big price tags.
A Canadian PM once was condemned for “doing by halves what he couldn’t do by quarters.”
This budget is crammed with initiatives whose impact can be measured by eighths and sixteenths.
But everything is contingent.
If the Grits win back a majority in an election expected this year, if government coffers overflow with revenue from a post-pandemic economic boom, and especially if Canadians demand to be in the vanguard of social progress, then good things are possible in the only country in the Western Hemisphere with universal health care.
For now, though, Canadians have the status quo budget we appear to want.
David Olive is a Toronto-based business columnist for the Star. Follow him on Twitter: @TheGrtRecession