Desires and Expectations for the Federal Budget

By André Marchildon

By André Marchildon

The federal budget is to be tabled next week on March 19th. The budget is always a great opportunity for governments to change the narrative and to focus on their priorities. The Liberal government is in particular need of this after a full month of unflattering stories related to their handling of the SNC-Lavalin issue. Most governments in an election year make lavish promises to the electorate with new programs, additional funding for existing programs and/or tax cuts, all in the hope of being re-elected. What makes this budget somewhat unique is that the Liberal government has been essentially presenting election year budgets every single year since they were elected. Since the Liberals have come to power the deficit has been nearly $20 billion, much higher than the maximum $10 billion a year and a return to balance budget by 2019 that the Liberals promised during the last federal election.

Everyone is looking for something different in the budget. Young families might be looking for more generous tax rebates, seniors often look for more health care funding and small businesses reliably make the case for a reduction in the small business tax. As a graduate student with a small income, in good health who doesn’t yet have a family, you might wonder what I am looking for in this budget. After all, I don’t pay any taxes and I hardly utilize any federal government services. What I am looking for in this budget is not what will necessarily benefit me in the short term, but rather what I think will improve my lifestyle and Canada as a whole in the long term. There are three items I am looking for in this budget: a path towards a national pharmacare system, a detailed ambitious transit plan and a path towards a balanced budget.

As Canadians, when we get asked what we are most proud of, a common response is our universal health care system. Yet, our health care system only covers the prescription needs of Canadians when they are admitted in a health institution such as a hospital. How exactly can this be described as universal health care? While most Canadians get a large portion of their prescriptions covered by private insurance, not all Canadians are so lucky. This would increase expenditures for the federal and provincial governments, but these expenses are currently being incurred by individuals and businesses alike. In fact, it has been reported that a federal pharmacare system could reduce the cost of providing prescriptions to Canadians since the federal government would have a greater purchasing power than the provinces, territories and private insurers have on their own. A national pharmacare system will not happen overnight but this federal budget should set the groundwork to make it a reality.

Transit is an integral part of any large city and is especially crucial for individuals with lower income that cannot afford the cost of purchasing and maintaining a vehicle. Any Torontonian such as myself that utilizes Toronto’s transit system will indicate it is very good, IF you live near one of the subway lines. Unfortunately, Toronto’s subway system has been neglected and underdeveloped for decades. The cost of improving a transit system can be immense and regrettably, cities have limited means to raise revenue to pay for these much needed improvements. This is why it is crucial for the federal government to play a larger role in improving transit in cities all across Canada. Even if this year’s federal budget promises additional funding for transit, by the time the plans are made and the subway line are operating, there is a good chance I will no longer live in Toronto. Nonetheless, I believe the development of transit systems is one of the most important investments Canada can make in its cities.

It is easy for governments in election years to use the public purse to bankroll their lavish promises. However, instead of using this budget to buy votes in the coming election the federal government should put forward a fiscally responsible budget that prioritizes the strategic long term benefits of the country. Running government deficits is not inherently bad, in fact it can serve an important purpose in stimulating the economy during a recession. The problem arises when governments abuse the use of deficits to increase expenditures without making difficult decisions such as increasing taxes or finding efficiencies (also known as making cuts somewhere else in the budget). Canada currently has a low debt to GDP ratio when compared to other G7 and G20 nations. To ensure that this remains the case it is important that Canada remains fiscally responsible and that begins with balancing the budget.

From the previous budgets and announcements of this federal government it appears likely that there will be a continued focus in investing in Canada’s infrastructure and this includes transit systems. The Liberals have also hinted at their interest in a federal pharmacare system, this might even be one of their key promises in the upcoming election. These promises, as well as many other ambitious ones, are likely to be made next week by Bill Morneau, Canada’s Minister of Finance. The question really is whether the government will use this budget to prioritize certain projects that will have lasting beneficial impacts or whether they will have a laundry list of promises to please all voters and neglect the deficit in the process. Based on the Liberal’s previous budgets, the latter looks nearly certain.

David Birnbaum