Morneau Delivers Federal Budget
CBJ — Federal Finance Minister Bill Morneau tabled the government’s pre-election budget on Tuesday and it was largely underwhelming according to the opposition Conservatives and NDP.
The government focused on making targeted spending commitments aimed towards millennials, workers, and seniors in their budget, and are continuing to spend while posting deficits, with still virtually no path to balance the books.
Back in 2015 Prime Minister Justin Trudeau said his government would run modest deficits for several years of no more than $10 billion before balancing the budget by 2019. We’re now in 2019 and the Trudeau government is nowhere close to running a balanced budget. In fact, the deficit for this last fiscal year will likely come in with a final tally of more than $17 billion.
For the coming year 2019-20 the projected deficit will be $19.8 billion. That figure includes the $3 billion contingency fund for 2019-20, otherwise considered an adjustment for risk, or rainy-day fund.
With tax revenues increasing, instead of chipping away at the ballooning deficit, the government has announced $4 billion in new spending in 2019-20, with total new spending over the next six years amounting to $22.8 billion.
There was definitely no blockbuster home run in this budget, but rather little bits and pieces across a wide spectrum according to financial analysts.
The highlights included changes aimed at improving the economic security of low-income seniors, and lowering the interest on Canada Student Loans and Canada Apprentice Loans.
The government also wants to make it easier for young people to buy their first home. How they will aim to do this is through a targeted new support for first-time home buyers.
This First-Time Home Buyer Incentive will allow buyers — who have the minimum down payment for a mortgage — to finance 10% on a new home or 5% on an existing home through a shared equity mortgage with the Canadian Mortgage and Housing Corporation. It could lower buyers’ monthly mortgage payments by about $225 per month and applies to households with combined incomes lower than $120,000 a year.
The opposition refused to listen to Morneau’s address, and instead banged on their hands on their tables and shouted “let her speak” in reference to a decision not to allow former Attorney General and Justice Minister Jody Wilson-Raybould to appear for followup questioning before a Commons Committee regarding the SNC-Lavalin scandal. The Conservatives then walked out of the chambers in disgust.
“Today’s budget is part of the continuing coverup,” said Conservative leader Andrew Scheer. “This budget is not a serious fiscal plan for the country. This budget has no legitimacy and we could not legitimize it by remaining in the chamber.”
Other notable spending allocations include:
– A one-time infrastructure fund of $2.2 billion to municipalities through the Gas Tax Fund.
– $1.2 billion over three years for Indigenous child welfare services.
– $1.2 billion over five years for border security and to assist in processing asylum claims.
– $739 million over five years to keep up the promise of eliminating all drinking water advisories in First Nation communities.
– $550-million over the next five years towards fixing the Phoenix pay system including $21.7 million to be spent in the current fiscal years on “urgent” pay pressures.
– $508.6 million over five years for RCMP policing operations.