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HomePoliticsJustin Trudeau and Chrystia Freeland defend ‘fiscally responsible’ budget despite deficits and...

Justin Trudeau and Chrystia Freeland defend ‘fiscally responsible’ budget despite deficits and recession risk


OTTAWA —A federal budget that lays out $43 billion in planned new spending is “fiscally responsible” despite deficits, a growing public debt and the risk of a mild recession because it pegs big ambition on clean technology investments which will expand Canada’s economy, Finance Minister Chrystia Freeland says.

Freeland and Prime Minister Justin Trudeau went to an Ottawa-area daycare Wednesday, pitched the benefits of the budget and pushed back against some economists who criticized the new spending when there is so much economic uncertainty in the air.

Freeland, who is also the deputy prime minister, likened her plans to provide $80 billion over the next decade in tax credits and incentives to lure more “green” investment to the economic boost Canada is already getting from the Liberals’ $30-billion early learning and child care program.

Freeland’s budget said although $10-a-day daycare isn’t supposed to be fully implemented until 2026, six provinces have already met that target, and it’s already boosting the economy, she said.

The labour force participation rate for women aged 25 to 54 years has grown as a result, and reached a “record high of nearly 86 per cent, compared to just 77 per cent in the U.S.” Freeland’s budget said.

Trudeau echoed Freeland and boasted that, “Much of what the United States is right now doing on the Inflation Reduction Act (a $369-billion plan to boost the American clean energy transition) is trying to catch up to the work that Canada has been doing steadily over the past four years when the U.S. took a turn away from dealing with environmental responsibility.”

The day after the budget was tabled, Trudeau’s political critics honed in on what they saw as gaps.

The only new housing measure is $1.9 billion to increase Indigenous housing options in urban, rural and northern areas, with the government pointing to money in previous budgets that is only now rolling out, such as a first time home buyers tax-free savings account, and the $4 billion housing accelerator to help municipalities speed up zoning permits and other approvals.

NDP leader Jagmeet Singh took credit for the investment in Indigenous housing and the extended GST credit worth $2.5 billion, but he told his caucus and reporters, “We’re not satisfied.”

In the Commons later, Singh challenged Trudeau to do more on housing: “Will the government take the housing crisis seriously and finally build more homes people can afford faster?”

The high price of owning or renting is a key plank in Conservative leader Pierre Poilievre’s attacks on the Liberals. On Wednesday he slammed the budget, saying Canadians “who do the work deserve a country that works for them, not an out-of-control tax squanderer NDP budget like we have before us today.”

The budget projects a $40.1 billion deficit for the coming fiscal year, and says it will cost Ottawa $43.9 billion in charges to service the overall public debt, pegged at $1.2 trillion.

Singh, the NDP leader, said his MPs will vote for the budget because it finally allocates $13 billion for a national dental care plan that Health Minister Jean-Yves Duclos said will eventually cover some 9 million Canadians who earn less than $90,000 and have no workplace dental benefits.

By the end of this year, the nascent dental care plan that already covers children under 12 will be extended to those under 18, elderly and disabled individuals who fall into that under-$90,000 income category, he said.

Tuesday’s budget also built on old promises to tackle racism and hate, noting that misinformation and disinformation — the only reference to either issue in the entire document — is “increasingly” harming Canadians.

That includes pledging just under $50 million over five years to expand a federal program that helps offset the cost of security enhancements for places of worship, some schools and community centres. Ottawa will also launch its long-touted national action plan on combatting hate later this year, which the Liberals said during the last election would be in place by 2022.

There’s also an additional $25.4 million set aside over five years for Canada’s anti-racism strategy, and a $25-million top-up for the Supporting Black Canadian Communities Initiative, which supports Black-led and Black-serving organizations.

And the budget promises new rules to force banks and financial to disclose the diversity — or lack of — on their board of directors and senior management.

The budget books money to fight foreign interference, although it does not include a specific amount for the review work now underway by former Governor General David Johnston or for any possible inquiry he may recommend into Chinese election interference in Canada.

It does, however, allocate $49 million for the RCMP to track and combat foreign interference, and $13.5 million to set up an office on foreign interference within Public Safety, and promises new financial oversight tools to address foreign interference, although no specifics were given.

“We’re going to continue to make sure that our security services, that our police, that our investigative agencies have the resources necessary to respond to the very real and ongoing threats of foreign interference, whether it be in our businesses, in our politics, in our academic institutions,” Trudeau told reporters Wednesday.

“This is something we’ve always taken seriously. We’ve put forward significant structures and — and ways of dealing with it, and we’re going to continue to work with experts like David Johnston to make sure that we’re doing everything” possible, he said.

The budget froze the alcohol excise tax, which is indexed to inflation and would have risen by 6.3 per cent, after a fierce lobbying campaign in Ottawa. The tax will be frozen at 2 per cent for a year.

The Freeland budget also levies a new airline security fee onto the cost of airline tickets even though the government promises to go after “junk fees” like excess baggage fees or roaming charges.

It promised a smorgasbord of other measures to be brought forward in legislation.

Those include a ban on cosmetics tested on animals or on advertising animal-tested cosmetics; an extension of up to five weeks for seasonal EI claimants in 13 regions; a new Crown corporation to increase research and development in Canada; swifter processing of privately sponsored refugees; the power for Immigration, Refugees and Citizenship Canada to “require electronic submission of asylum claims”; more powers for the Canada Post to open parcels; and new rules in the Canada Elections Act for federal political parties’ collection, use and disclosure of personal information

The budget also promises new anti-scab legislation for federally regulated sectors. Labour Minister Seamus O’Regan told reporters that he hopes to introduce a bill by the end of the year, saying “in a G7 country, we have an economy to run and you want to make sure supply chains aren’t interrupted.”

He admitted that how to minimize work stoppages is a hot topic of concern for Canada’s trading partners in the U.S.

“One thing I learned very early on, you know, you’re handling a CP Rail strike and suddenly you’re getting calls from the White House and texts from the U.S. Ambassador in the middle of the night and Marty Walsh, the Secretary of Labour, is calling you, it occurs to you, yeah, we are intimately, intricately linked. And so yeah, you want to get it right, that’s for sure.”

With files from Raisa Patel

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