Carol Hughes says it’s not enough for the North
OTTAWA—The first Liberal budget under the watch of Justin Trudeau is projecting a $29.4 billion deficit on a $290 billion spending plan that is projected to rise to $323 billion in the next five years.
The budget, delivered to the House of Commons by federal Finance Minister Bill Morneau on March 22, is billed as a “bold and transformative” kickstart to the sluggish Canadian economy.
The 2016 federal budget broke a few promises, but delivered on many of the commitments made during the 2015 election, if only in part. The document contained promises of funding for low- and middle-class families with children, aboriginal communities, seniors, public transit riders, unemployed workers and students.
“This budget puts people first and delivers the help Canadians need right now,” said Minister Morneau in his first budget speech. By people, read those in the low- to-middle income brackets, as the tax rates of those earning more than $200,000 have risen to 33 percent. The budget also undoes some of the former Conservative government’s targeted tax breaks, including tax credits for tuition and textbooks and children’s fitness and arts costs and income-splitting for families with children.
But there is plenty of good news for families with children, including a total of $3.74 billion in new and tweaked tax measures aimed at the middle classes and families with children, including the introduction of a Canada Child Benefit. Under the new streamlined Canada Child Benefit, families with children under age six will receive an annual tax-free benefit of up to $6,400 per child and those with children between the ages of six and 17 will receive up to $5,400. Families with annual net incomes below $30,000 will receive the maximum payment. As incomes rise, however, this benefit will be clawed back and eliminated entirely for households earning more than $190,000.
The $4.5 billion net cost of this program for the coming year is partially offset by the elimination of the Conservatives’ income splitting for families, a measure that would have cost the treasury $1.9 billion. Tax credits for children’s fitness and arts expenses also are being phased out over two years, with maximum eligible expenses cut in half for 2016 and eliminated entirely in 2017.
Seniors were also on the big ticket list, with $3.4 billion dollars over five years allotted to increase Guaranteed Income Supplement top-up benefits for low income seniors. The government will also restore the eligibility age of Old Age Security to age 65.
For indigenous people there will be a total outlay of $8.374 billion over five years to improve education, build new schools, strengthen the child welfare system, housing, water and waste water treatment facilities—that tops the last Liberal government of Paul Martin’s Kelowna Accord (disavowed by the Harper Conservatives) by more than $3 billion. The indigenous component includes $40 million over two years toward the National Inquiry into Missing and Murdered Indigenous Women and Girls, putting fiscal teeth to a promise already launched by the Liberals.
For culture and arts, there will be $1.9 billion over five years to support Canadian arts and culture organizations and cultural infrastructure, including $675 million over five years for the Canadian Broadcasting Corporation and its French arm Radio-Canada, as well as $550 million to the Canada Council for the Arts over five years.
While the federal government backed away from re-implementing indexed pensions for veterans, there is $5.6 billion over six years to increase disability awards for injured veterans and to enhance other financial benefits. In addition, the Liberals have committed to re-opening veteran services offices that had been closed by the Conservatives.
On the climate change and air pollution front there is $2.9 billion over five years, along with a number of infrastructure-focused spending programs, both for mitigating the impact of climate change and to adapt to the new realities presented by climate change.
On the education front, there will be $2 billion over three years to support infrastructure projects at post-secondary institutions and an additional $95 million per year on an ongoing basis to granting councils—the highest amount of new annual funding for discovery research in more than a decade.
In addition, the grants received by Canadian students will rise to $3,000 from $2,000 for low-income students, to $1,200 from $800 for middle-income students and to $1,800 from $1,200 for part-time students. That increase will total $1.53 billion over five years.
National Defence comes up a big loser in this budget, however, as much of the procurement spending allocated for the military has been pushed back until after the next election.
There are also no increases to federal transfers to the provinces for health care spending, surely a big disappointment to those premiers who were hoping for some relief in the strain on their budgets being placed by Canada’s aging population.
Advertising agencies, media outlets and the army of consultants who inhabit the Ottawa bubble are also probably saddened by this budget, as the federal government has committed to annual cuts of $221 million in government advertising, contracted out professional services and travel. The previous government had come under steady fire (and some ridicule) for its use of government dollars in thinly disguised (and sometimes undisguised) partisan advertisements. Most of those cuts will come from the use of external consultants, which spiraled upwards over the last 10 years.
Algoma-Manitoulin-Kapuskasing MP Carol Hughes said that she was disappointed in the budget, particularly in light of the “promises made by Mr. Trudeau. We said he could not keep those promises, and we were right.”
Ms. Hughes maintained that the budget has “shortchanged the First Nations,” asserting that there is “no funding for education.” Although there is more money in the budget for education, Ms. Hughes points out that First Nations children will “still be shortchanged.”
She asserted that the shortfall in services to Native children will still top $130 million.
She described the budget as “a missed opportunity.”
Ms. Hughes went on to list the lack of specific mention of FedNor (while there is a significant increase in funding for economic development agencies such as FedNor, there is no mention of that agency in the budget as there has been in the past). “For us in the North, there is not a lot contained in this budget,” she said. Ms. Hughes also slammed the lack of targeted funding for agriculture and small business (small business is one of the larger “losers” in this budget, as a promised cut to the small business corporate tax rate was much less than promised).
Sudbury MP Paul Lefebvre disagreed with Ms. Hughes’ assessment of the budget’s impact on the North. “Budget 2016 offers immediate help to those who need it most, and lays the groundwork for sustained, inclusive economic growth that will benefit Canada’s middle class and those working hard to join it,” he said in a news release.
“I’m particularly proud that we have fulfilled our promises to seniors, students, our First Nations and to cities in need of support to rebuild crumbling infrastructure. This is an excellent budget for Northern Ontario.”
Mr. Lefebvre listed a number of North-positive items contained in the budget, including supports for the mineral exploration efforts of junior mining companies by extending the 15 per cent Mineral Exploration Tax Credit for an additional year until March 31, 2017; an indigenous component in the proposed social infrastructure investments totaling some $1.2 billion over five years including housing in indigenous and Northern communities and early learning and child care; indigenous components in the proposed green infrastructure investments, totaling $2.2 billion over five years and including water and waste water treatment and waste management; expansion of Nutrition North Canada to all northern isolated communities in Ontario, providing $64.5 million over five years starting in 2016-17 with $13.8 million per year thereafter; an investment of $25 million over five years to support economic development for the Métis Nation; the extension of EI benefits by five weeks to all eligible claimants and to provide up to an additional 20 weeks of EI benefits to long-term tenured workers in several economic regions, including Sudbury; as well, regional economic development agencies, including FedNor, will share in $150 million in new funding.
Mr. Lefebvre said the regional economic investment in the budget would “support projects to renovate, expand, and improve existing community and cultural infrastructure in all regions of the country to celebrate Canada’s 150th anniversary in 2017.”
The Federation of Northern Ontario Municipalities (FONOM) also announced that they were happy with a number of items in the budget, particularly the $120 billion over 10 years the budgets commits to infrastructure such a public transit, social infrastructure and green infrastructure in two phases.
FONOM notes that the first phase of funding “will immediately invest in urgent repairs and rehabilitation of public transit, water and wastewater systems, affordable housing and protecting infrastructure from the effects of climate change” while the second phase “will be a long-term plan that will be more broad in nature and focused on building a cleaner economy and integrated transportation networks.”
“We have been calling on all levels of government to commit to addressing the infrastructure deficit across the country,” said Kapuskasing Mayor Alan Spacek, president of FONOM. “The significant commitments that were made to both maintain and rehabilitate existing infrastructure as well as develop a long-term plan to build new infrastructure was welcomed by municipalities.”
FONOM noted that the federal government “also made commitments to supporting our First Nations neighbours, students, seniors, as well as addressing rail safety and climate change. Budget 2016 also proposed to extend Employment Insurance regular benefits to regions that have faced economic challenges, particularly resource based economies, which include Northern Ontario. We look forward to the federal government fulfilling their commitments announced in Budget 2016.”
