The new Liberal government delivered its budget Tuesday. In an effort to spur economic growth after almost a decade of fiscal restraint the Budget will add more than $100 billion to the federal debt over the next five years.
There’s billions in new spending on infrastructure, Aboriginal Peoples, and transfers to middle and lower income Canadians. The Liberals claim their budget will create 100,000 jobs and boost national economic growth, as measured by gross domestic product, by half a percentage point per year.
During last year’s campaign, the Liberals promised “modest deficits” of no more than $10 billion over the course of their mandate and to balance the books by 2019-20. However, the Liberals are now projecting a $29.4-billion deficit in 2016-17, followed by a $29-billion shortfall the following year and almost $23 billion in 2018-19. The Budget projects a $14.3 billion deficit in 2020-21 – after the next scheduled federal election.
The budget promises new studies and commissions to develop more innovative economic policy, presumably with future price tags on top of the many funding announcements in the current budget. These include:
- $8.4 billion over five years to help indigenous communities, including $2 billion on water and wastewater systems in First Nations and $2.6 billion over five years for primary and secondary education on reserves.
- $10 billion more over two years for a new Canada child benefit, absorbing and replacing both the Canada child tax benefit and the universal child care benefit.
- $6.6 billion over two years for infrastructure, less than the $10 billion promised in the Liberal election platform.
- $3.4 billion over five years to increase the guaranteed income supplement top-up benefit for single seniors, and restore the old age security eligibility age to 65 from 67.
- $2 billion over three years for a new strategic investment fund for infrastructure improvements at colleges and universities.
- $2 billion over two years for a low-carbon economy fund, beginning in 2017-18.
Is the Federal Budget good or bad for you? Good or bad for Canada?