The impulse when government tables its budget is to jump to immediate reaction about what was or was not done to help the economic fortunes of citizens. In some ways, major components of Tuesday’s federal budget are wait-and-see initiatives that will be open for further discussion.
The government’s work to legislate pay equity in federally regulated industries is admirable, but the legislation is still in the very early stages. It’s hard to know what the government will define as equal work and how employers will react. One hopes it will provide equity and a chance for prosperity for more workers, but if the strokes are painted too broadly and the deadlines are too tight for employers, it could actually serve as an impediment to hiring and growth.
The implementation of a national pharmacare plan will also be the subject of much discussion as former Ontario health minister Dr. Eric Hoskins leads a task force studying that issue — and it will likely become an election plank for 2019. Many Canadians do struggle to afford prescription drugs now, but there is debate about what would be included in such a plan, how it would work with existing provincial and private coverages, and whether there are other ways to improve the system by changing the way we collectively buy medicine. Any plan is going to come with a cost.
A pledge to invest almost $4 billion in research and innovation over the next half decade is an encouraging step in this budget, provided that research can lead to jobs and growth in Canada, rather than setting the table for other countries to take its brightest and best talent. Money for tech and for start-ups — particularly those headed by female entrepreneurs — is budgeted, but there’s a worry, particularly here in Ontario, high energy, labour, and taxation costs might force talent and job creators to other jurisdictions. The impact of recent tax cuts in the United States and the uncertainty of trade deals in North America and abroad likely add cause for concern. One positive footnote was money earmarked for the improvement of rural broadband infrastructure, which could allow areas of the country to be much more competitive than they had been.
In the short term, one element of the budget that can be debated is the government’s decision to run a deficit of $18.1 billion this year and to project further deficits that likely won’t fall below $10 billion until 2022-2023. While finance minister Bill Morneau says Canada is lowering its debt-to-GDP ratio, some eight per cent of budget spending this year goes to servicing the debt. With economists suggesting the growth in the economy is going to slow in the coming years, it’s likely that number could continue to grow and there may be some difficult decision to make as the social programs the Liberals discussed in this budget and infrastructure needs will require funding and taxpayers and businesses will be looking for a break from rising bills. It will be interesting to see the public perception after the 2015 election promise to get keep deficit budgeting in check. Hopefully, the government will be correct that its measures will bring growth through greater participation of women in the economy. They’ll need to be.
Canadians will be watching to see where the government heads with these initiatives with an election a year away.