OTTAWA — Finance Minister Bill Morneau tabled a federal budget Tuesday that charts a clear course for the Liberals to the 2019 election, an aspirational road map designed to ensure that no woman, scientist or national wildlife area gets left behind.
"It is a plan that puts people first — that invests in Canadians and in the things that matter most to them," Morneau told the House of Commons in his budget speech.
The document, which details a $18.1-billion deficit, including a $3-billion adjustment for risk, also shows the Liberal government is doubling down on the idea that spending money — even borrowed money — is good for the long-term future of Canadians.
Once again, there is also no timeline for getting back to black.
"We've shown to Canadians that making investments in them, making investments to allow more Canadians to be working, has exactly the positive impact that we want it to have," Morneau told a news conference Tuesday when pressed on that point.
The Liberals are making that argument most strongly when devoting those dollars to causes near to their progressive hearts, as well as to those of Canadians who might be thinking about casting a ballot their way in October of next year.
The budget, as expected, puts a large emphasis on gender equality, particularly with efforts to increase the participation of women in the workforce as part of a longer-term plan to grow the economy and prepare for the consequences of an aging population.
"We know that the way to best impact our long-term demographics is to get every Canadian with a real and fair chance not only work, but to have really good work, and we start with women," Morneau said before the budget was tabled.
"If half of our population are held back, we're just not going to be as successful."
One big part of that plan is to introduce up to five weeks of leave — with employment insurance benefits that come with a starting cost of $1.2 billion over five years — for new fathers, as a way to help break the pattern of mothers automatically taking on the greater share child-rearing responsibilities, and losing earning power as a result.
"The Fundamental Science Review told us how important it is to invest in the people behind the next big new ideas to advance Canadian businesses and Canada's long-term competitiveness." pic.twitter.com/8nYjUrNV9g
— Bill Morneau (@Bill_Morneau) February 27, 2018
It also includes measure to boost the number of women entrepreneurs, as well as those in the trades and the fields of science, technology, engineering and math.
The budget, for the first time in Canadian history, also went through a full gender-based analysis, which involved thinking about how every single measure would impact men, women, boys and girls in different ways, while taking other intersecting factors such as age, ethnicity, income and disability into account.
The Liberals are also promising legislation that would enshrine gender-based analysis in the budget-making process, forcing themselves — and, technically, future governments — to repeat the exercise every year and continue tracking their progress on equality.
Throughout the budget, the Liberals also declared a goal of getting better at collecting the data required to do a deeper dive.
There was no additional money for child care this year however, although the Liberals feel they dealt with that in the previous budget: $7.5 billion over 11 years for bilateral deals with the provinces and territories.
Economist Armine Yalnizyan said that since the wages of women of child-bearing age reached a plateau a decade ago, bigger investments in child care spaces would likely have the biggest impact on the stated goal of increasing the participation of women in the workforce.
"It's really frustrating that they want women to help with economic growth, but they won't help women — this year," Yalnizyan said.
That overarching theme of gender equality aside, the budget is also a smattering of smaller measures, with the long, scattershot list at the back of the 367-page document including everything from money to repair and maintain the graves of veterans and expanding the tax credit for service dogs to help people with post-traumatic stress disorder.
Equality and Growth. These are the next steps in our plan for a Strong Middle Class. Watch live: https://t.co/E7bhhShs0G
— Bill Morneau (@Bill_Morneau) February 27, 2018
Still, other themes emerge, including major investments in science, the environment and reconciliation with Indigenous Peoples, which are all areas Prime Minister Justin Trudeau's government sees as part of its progressive vision for the country and the world.
It also allows the Liberals to continue telling a story that sets them up in contrast to the Conservatives.
That includes $3.2 billion over five years for investing in Canadian scientists and researchers, as well as $1.3 billion over five years to help Canada meet a United Nations commitment to protect at least 17 per cent of its land and inland waters by 2020.
The budget also announced the creation of an advisory council — to be chaired by Dr. Eric Hoskins, who resigned Monday as Ontario health minister — to begin exploring options for a national pharmacare plan, although Morneau did not promise that would be ready in time for the 2019 vote.
That will be one way for Trudeau to try to outflank NDP Leader Jagmeet Singh, who has made bringing Canadians universal access to affordable prescription drugs a top priority.
LIBERALS PROMISE EXTRA LEAVE TIME FOR TWO-PARENT FAMILIES AFTER BIRTH OF CHILD
OTTAWA — The Trudeau Liberals took baby steps in their bid to reshape the social safety net Tuesday with a new, "use-it-or-lose-it" leave option for new parents and a modest increase in the value of a rebranded tax benefit for low-income workers.
The government's third budget — coming on the heels of two that created an income-tested child benefit and a long-term funding commitment to child care — promised new parents the ability to share either five or eight additional weeks of leave following the birth of a child, provided they also share the job of caring for the baby.
Measures proposed Tuesday would give parents five additional weeks if they've opted for the traditional 12-month parental leave, or eight weeks under the new 18-month option introduced late last year. The benefit would be also be available to couples that adopt.
"When it comes to renewing the relationship between Canada and Indigenous Peoples, we have a responsibility to do better, and to do more. This budget will help us live up to that responsibility."
— Bill Morneau (@Bill_Morneau) February 27, 2018
There won't be any boost in benefits for the extra weeks off, unlike the higher benefits provided under a similar program in Quebec. Nor will eligibility rules be changed to follow Quebec's lead, as experts had urged the Liberals to do.
The government hopes the measures will push more non-birthing parents to take more time to care for a newborn, allowing mothers to get back into workforce sooner. The budget document notes that women accounted for 92 per cent of parental benefits paid through EI during the 2015-2016 fiscal year, the most recent numbers available, suggesting a wide gender divide when it comes to caring for an infant.
How many non-birthing parents take the leave may be small given how the Liberals have set up the program, said Angella McEwen, an economist with the Canadian Labour Congress.
The option isn't expected to come into effect until June 2019, just ahead of a federal election where parties will be currying political favour with middle-class families trying to foot the bill for raising children.
The budget also promises to allow new mothers and those on sick leave to keep more of their employment insurance benefits if they work just a few hours every month.
The government doesn't expect the working-while-on-claim provisions — long a pilot project that the budget makes permanent — to change the number of Canadians working while on maternity leave. The budget document says the measure is targeted at low-income households facing a financial squeeze that requires them to work.
"Canada's future success rests on making sure that every Canadian has an opportunity to work, and to earn a good living from that work. That includes Canada's talented, ambitious, and hard-working women." pic.twitter.com/asZLbVBan5
— Bill Morneau (@Bill_Morneau) February 27, 2018
The Liberals are also targeting low-income workers with a rebranded benefit — dubbed the Canada Workers Benefit — that will enrich and expand eligibility at a cost of $1 billion. For workers earning at or below the poverty line, the changes will mean an extra $170 a year to a maximum of $1,355 for unattached workers, and $2,335 for couples or single parents.
The Liberals estimate that 300,000 more workers will take advantage of the benefit, but not until the 2019 tax year, meaning the refunds won't actually arrive until 2020.
But the measure lacks real teeth to make a serious dent in poverty rates, said economist Armine Yalnizyan, who noted that the changes may affect how much families receive in provincial and housing benefits. The tax refund will also be delivered annually — a potential problem for low-income families that often budget month-to-month.
"It definitely doesn't lift that many people above the poverty rate," Yalnizyan said. "You definitely can't call it an anti-poverty measure."
Workers are targeted in other areas of the budget: Extra benefits to employees who lose out on pay, vacation and severance when an employer files for bankruptcy; a promise to review the rules around protecting pensions; $90 million over three years to speed up processing of EI claims; and an extra $127.7 million over three years to make sure Canadians with EI questions can get through to someone at a call centre.
Paying for all the new measures will mean a bump in EI premiums paid by both employers and employees. The increase will come into effect in the fiscal year beginning in April, and continue an upward trend after taking into account new measures in Tuesday's budget.
FEDS TIGHTEN TAX RULES FOR SMALL BUSINESSES AND PASSIVE INCOME IN BUDGET
OTTAWA — The Liberal government moved to tighten the tax rules for small businesses in the federal budget Tuesday as it fine tuned the changes that prompted an uproar last year.
However, Finance Minister Bill Morneau still faces the challenge of corporate tax cuts in the U.S. that have prompted worries that companies will choose to invest there instead of Canada.
In the budget, Morneau opted to hold the line on corporate taxes in Canada, choosing to help businesses in other ways, including with spending to help women-led businesses grow, innovation and diversification of trade.
"We know businesses are concerned about the outcome of North American Free Trade Agreement talks and tax changes in the United States," he said.
"We will be vigilant in making sure Canada remains the best place to invest, create jobs and do business — and we will do this in a responsible and careful way, letting evidence, and not emotion, guide our decisions."
The minister faced a backlash over his initial plans to change small business taxes last year before backing down on some of the proposed changes and reviving a promise to reduce the small business tax rate.
The government had pitched the changes as a way to prevent wealthy Canadians from gaining an unfair advantage and paying less tax, but small businesses said the changes hurt the middle class.
With @JustinTrudeau as we prepare to share #YourBudget2018. This budget will build on our plan to invest in communities, the economy, and most importantly, people. pic.twitter.com/D9sWQkWDtA
— Bill Morneau (@Bill_Morneau) February 27, 2018
In the budget this year, Ottawa moved to gradually eliminate the amount eligible for the preferential small business rate as the amount of passive income rises above $50,000 with the small business deduction limit reduced to zero at $150,000. It also moved to limit the advantages that some businesses can obtain when they pay certain dividends.
The changes, which will apply starting with tax years that begin in 2019, are expected to bring in $925 million a year by the 2022-23 fiscal year.
"We are changing the rules for three per cent of private corporations, because the wealthiest Canadians should not be able to use private corporations to pay less tax than the middle class," Morneau said.
Bruce Ball, vice-president of tax for CPA Canada, said he was happy that the passive income change was a simpler solution compared with other options.
"At the same time though we still believe that they should look at taxation of passive income along with a number of other changes as part of a more general tax review," he said.
To help crack down on tax cheats, the government will spend $90.6 million over five years to address additional cases that have been identified both domestically and internationally.
Ottawa is also moving to improve the tax rules to prevent what it said was typically Canadian banks and other financial institutions from gaining a tax advantage by creating artificial losses through sophisticated financial instruments. The move is expected to generate roughly $2.5 billion for the government over five years.
"Children care about the future because they understand that the decisions we make today will transform the world that they will grow up in. And they are looking us to make good decisions - smart decisions."
— Bill Morneau (@Bill_Morneau) February 27, 2018
It said it would also clarify the application of certain rules for limited partnerships to prevent unintended tax advantages.
While the minister left the corporate tax rate unchanged, the government spending plan did include cash on several fronts to help Canadian businesses and further its key priorities including supporting women in the workforce.
The government said it will make $1.4 billion available over three years in new financing for women entrepreneurs through the Business Development Bank as well as $250 million over three years through Export Development Canada for financing and insurance for women-owned and women-led businesses.
The budget also included $105 million over five years to regional development agencies to support investment in businesses led by women and $10 million over five years to connect women with expanded export services.
To help Global Affairs Canada boost diplomatic and trade support in Asia, the budget includes up to $75 million over five years starting in 2018-19 with $11.8 million per year. The money will include boosting the number of diplomats and trade commissioners in China as well as moves to promote trade with China and other Asian markets.
The government will also provide $191 million over five years to Global Affairs Canada and Natural Resources Canada to support softwood lumber jobs through litigation under the World Trade Organization and the NAFTA dispute settlement mechanisms.
BUDGET LAYS FOUNDATION FOR PHARMACARE IN 2019, EASES TAXES ON POT-BASED DRUGS
OTTAWA — The federal Liberals will appoint a group of advisers, led by Ontario's former health minister, to explore options for a national program to cover the cost of prescription drugs — and are already making it easier to cover the cost of cannabis-based pharmaceuticals.
The two measures, while unrelated, form part of a trinity of major drug initiatives in Tuesday's federal budget, the third being a $231-million package of steps that aims to confront Canada's escalating opioid crisis, including $150 million in emergency funding.
The next year will see former Ontario health minister Eric Hoskins head up an advisory council to come up with options on how to create a national pharmacare program — a program that the parliamentary budget watchdog has warned could cost $19 billion a year.
An estimated 10 per cent of Canadians can't afford their prescription drugs each year, the Liberals say.
Equality and economic growth go hand-in-hand. Together, they will ensure that Canada has a strong middle class, and a bright future. Here's a sneak peak at our title for #YourBudget2018: pic.twitter.com/Uh47EzWocb
— Bill Morneau (@Bill_Morneau) February 27, 2018
"We're trying to get at this issue. It's a really important issue," Finance Minister Bill Morneau told a news conference Tuesday before the budget was tabled.
"It's, in our estimation, just not acceptable that a significant subset of the population doesn't have access to pharmaceutical products."
Morneau didn't give a timeline on when the council will have to report its findings — fuelling speculation that the Liberals plan to make pharmacare a centrepiece of its 2019 election campaign and take away a key talking point for NDP Leader Jagmeet Singh.
In the meantime, the Liberals say they won't apply new sales taxes to cannabis-based pharmaceutical products that can be obtained with a prescription.
Nor will taxes be applied to oils that contain low amounts of THC, the primary psychoactive element in marijuana, that are used by children with certain medical conditions.
As well, the government says it plans to look at creating a rebate program to retroactively reimburse patients an unspecified amount for taxes already paid on cannabis-based pharmaceuticals.
Taxes on marijuana will amount to $1 per gram, or 10 per cent of product price, when a legalized cannabis regime comes into effect by this fall. The federal government will keep up to $100 million on the new taxes as part of a cost sharing split that will see three-quarters of cannabis tax revenue flow to provinces and territories.
The Opposition Conservatives have chided the government for moving too fast on legal pot, suggesting there are outstanding public safety issues that need to be addressed.
The budget outlines $62.5 million over five years beginning this year for public education programs around cannabis use, and a further $20 million over five years for research by the Mental Health Commission of Canada and the Canadian Centre on Substance Use and Addiction.
The Liberals are also spending $80.5 million over five years starting this year to reduce tobacco use, particularly in Indigenous communities, and raising taxes on cigarettes by $1 per carton.
On opioids, provinces and territories will receive $150 million in emergency funding this year to deal with a crisis that is projected to claim more than 4,000 lives this year.
The balance of the $231.4 million will go towards public education campaigns, better access to public health data and new equipment and tools to allow border agents to better detect dangerous opioids like fentanyl before they enter the country.
Highlights from the federal Liberal budget tabled Tuesday by Finance Minister Bill Morneau:
— "Proactive" pay equity legislation, as well as $3 million over five years for a "pay transparency" measure, to close the wage gap among federal workers and in federally regulated sectors, impacting some 1.2 million people.
— The "Advisory Council on the Implementation of National Pharmacare," to be headed by former Ontario health minister Eric Hoskins, which will explore ways to establish a national drug program.
— $3.2 billion over five years for Canadian science and research, including money for granting councils and Canada Research Chairs, upgrading outdated laboratory facilities and harnessing the power of "Big Data."
— $2.6 billion over five years for a wide array of measures to encourage and foster scientific innovation and gender equality in the field, including encouraging female entrepreneurs and business leaders, revamping procurement and expanding access to broadband internet.
— A federal deficit of $18.1 billion, including a $3-billion "risk adjustment," down from $19.3 billion last year, that's projected to decline slowly over the next several years, reaching $12.3 billion ($9.3 billion without the $3-billion cushion) by 2022-23.
— About $1.4 billion over six years to support Indigenous children in foster care and promote family reunification, plus $400 million over 10 years to upgrade and expand Inuit housing and $500 million for Metis housing.
— Higher excise taxes on tobacco products, including a $1 increase on a carton of 200 cigarettes and an adjustment that would see taxes increase with inflation every year, rather than every five years.
— $1.2 billion over five years and $344.7 million a year afterward for a new employment insurance parental sharing benefit that would provide additional "use-it-or-lose-it" benefits for non-birthing parents to encourage women to re-enter the workforce.
— $2 billion over five years for international aid through a new International Assistance Innovation program, designed to come up with flexible new financing arrangements, and the Sovereign Loans program.
— $155.2 million over five years for a new Canadian Centre for Cyber Security and $116 million over five years for the RCMP to create a National Cybercrime Co-ordination Unit.
— $448.5 million over five years to double the number of placements under the Canada Summer Jobs program by 2019-20.
— $172 million over five years and $42.5 million a year afterward for the Canada Media Fund to foster the growth of Canadian-produced content.
— $50 million over five years to support "local journalism in underserved communities," and plans to explore new models that would allow private and philanthropic support for "non-profit" journalism, including allowing Canadian newspapers to receive charitable status.
— $75 million over five years, with $11.8 million a year afterward, to bolster Canada's trade ties with China and Asia.
— $191 million over five years to support jobs in the softwood lumber industry, including litigation under the World Trade Organization and NAFTA's dispute resolution mechanism.
— $90.6 million over five years to track down tax evaders and avoiders, plus $41.9 million over five years and $9.3 million a year thereafter to help Canada's courts deal with the additional caseload.
— Changes to income sprinkling, passive investment income and the small business tax rate that are expected to save the government $925 million a year by 2022-23.
— $173.2 million in 2018-19 to support claim processing and to improve border security to better manage the increased number of people seeking asylum in Canada.
FIVE THINGS AIMED AT INCREASING GENDER EQUALITY IN THE 2018 BUDGET
Finance Minister Bill Morneau said gender equality would be an overarching theme of the 2018 federal budget, particularly when it comes to boosting the participation of women in the workplace.
That includes changes for paternity leave and plans for closing the gender wage gap in federally regulated workplaces, but here are some other measures aimed at advancing equality:
STATUS OF WOMEN CANADA
The Liberal government has been giving Status of Women Canada more and more things to do since coming to power with the promise to implement a feminist agenda, but the agency remained relatively strapped for cash. The budget, which makes it a full department, is changing that. The funding boost includes another $100 million over five years to expand a grants program for projects aimed at advancing gender equality and $1.8 million over two years to develop a strategy to engage men and boys with the issue.
TRACKING PROGRESS THROUGH BETTER DATA
The budget went through a full gender-based analysis, which involves thinking about how every tax or spending measure would impact men and women in different ways, while also taking things like age, income, ethnicity and other intersecting factors into account. The Liberals also included a "gender results framework," which is meant to help them assess the impact this and future budgets will have on the greater goal of improving equality. To bolster these efforts going forward, the Liberals are also committing millions of dollars to improving the collection of data needed to do this. That includes $6.7 million over five years and $600,000 a year thereafter, for Statistics Canada to set up a new Centre for Gender, Diversity and Inclusion Statistics.
SEXUAL ASSAULTS ON CAMPUS
The Liberal government is committing $5.5 million over five years to develop a national framework aimed at addressing gender-based violence at universities and colleges. They are also backing up the initiative with a threat: if a post-secondary institution is not serious enough about dealing with on-campus sexual assault in 2019, the government will consider withdrawing funding. The federal gender-based violence strategy is also getting an additional $86 million over five years to focus on things like preventing dating violence among teenagers and giving more support to sexual assault centres located near Canadian Forces bases.
WOMEN IN NON-TRADITIONAL WORK
The Liberal government wants to increase the participation of women in the workforce — and that includes jobs that have traditionally dominated by men. The federal government will allocate $19.9 million over five years, for a pilot apprenticeship incentive grant to provide women with up to $6,000 while training in male-dominated skilled trades, such as welding or pipe-fitting. Other measures include $1.4 billion over three years from the Business Development Bank in new financing for female entrepreneurs and $105 million over five years to help the regional development agencies support women-led businesses.
WOMEN AND GIRLS AROUND THE WORLD
The Liberal government is also committing to increasing its overseas humanitarian aid budget by $2 billion over five years, which the budget says will be focused on supporting women and girls through its feminist international development policy. The budget also includes $20.3 million over five years to settle 1,000 more refugee women and girls from conflict zones around the globe.
