Budget 2017: No Balance In Sight
This week the major talk in Ottawa revolves around the Liberal Government announcing the 2017 Budget document. This is typically the time where Government promotes what it believes are the benefits of said budget and opposition generally looks to point out those items they view as missing or otherwise lacking. For this week’s report I will pass on some of my own observations and thoughts from my perspective of the official opposition deputy finance critic.
My first observation was how inaccurate many of the advance rumours on this budget turned out to be. As an example while many expected the Liberals to honour a promise to phase out taxation benefits with stock options and capital gains none were targeted in this budget. Likewise another rumour that many airports located on federally owned lands would be sold is also off the table, at least for the moment.
The most frequently asked question on budget day is typically what taxes are being increased or decreased. In this case the changes in this budget are mostly tax increases in specific areas.
Some of those areas include a tax increase on alcohol and tobacco products, ride sharing services such as Uber are now taxable, and curiously the elimination of the transit tax credit for those who frequently use public transportation. Income taxes remain unchanged after being altered in the 2016 budget.
Although the Liberals promised to balance the budget in 2019 the fiscal update contained in Budget 2017 reveals that in reality the Liberals plan to run a deficit over $23 billion in 2019 with no plan to return to a balanced budget in the foreseeable future.
By the numbers Budget 2017 proposes a total budget deficit of $28.5 billion with a $ 3 billion risk buffer. If the risk buffer is removed the actual deficit would be around $25 billion. For added context the 2016 budget deficit is estimated at $23 billion so in that respect spending has increased by roughly $2 Billion.
Where is the increased spending going? The Liberals are using a different strategy in Budget 2017. Rather than spend relatively large amounts of funds in specific areas, such as infrastructure as an example, the Liberals are giving relatively small amounts of funding spread out over a much wider range of areas, far too many to include in this report. Some critics have already suggested this will result in these funds having little impact being spread too thin. From my standpoint while it would be easy to suggest this budget is trying to do too many things I believe taking a wait and see approach is prudent.
Overall my largest concern with this budget is the failure to indicate when the Liberals will return to a balanced budget. By the time the next election occurs the Liberals will have added over $100 Billion in new debt with literally no end in sight. While the Liberals argue this is investing in the middle class in my view it is mortgaging the middle class as future generations of Canadians will be left paying for what is basically a structural deficit.
As always I welcome your questions and comments on Budget 2017 and any matter before the House of Commons. I can be reached at Dan.Albas@parl.gc.ca or toll free at 1-800-665-8711.
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Dan Albas is the Member of Parliament for the riding of Central Okanagan-Similkameen-Nicola.
Central Okanagan – Similkameen – Nicola