Budget 2021 Overview

​This week the Liberal Government tabled its first budget in over two years.

In her budget speech, the Finance Minister stated that we must build:

“a more resilient Canada: better, more fair, more prosperous and more innovative.”

This raises the obvious question.

Who has been governing Canada for the past five years to have made Canada so un-resilient, so un-fair, so unprosperous and lacking in innovation?

This is generally the pattern of Liberal budgets and this one is no exception.

By the numbers this budget promises a massive level of spending, all told some $143 billion in new spending over the next six years.

Where is it all going? 

Despite promises not to use omnibus budgets, this Liberal budget comes in at over 700 pages, so it is only possible to highlight some of the proposed spending areas.

$30 billion has been earmarked for daycare and early learning over the next five years.

This will require partnerships with the provinces to fully implement.

Ultimately the goal is to provide $10 per day daycare.

$18 billion in promised spending over the next five years in an effort to close the gaps between Indigenous and non-Indigenous people.

$17 billion is promised to be spent in future years on the promotion of what the Liberals have termed the “green recovery effort".

There is also a $12 billion promise to extend COVID business aid programs as well as other income support measures.

Another announcement is $12 billion over five years to increase the OAS benefit that includes a one-time bonus payment of $500 expected at some point later this year.

I should also add this is not a tax and spend budget.

Many speculated this budget would include a “wealth tax” or other significant tax increases. 

From my read of this budget so far, while there have been some minor increases in places, there are no significant tax increases.

How does all this spending get paid for? 

While there is no actual debt reduction plan, the Liberals indicate that the levels of spending will decrease over time as many support programs will be wound down and that, combined with economic growth, will offset this spending.

What is ignored in this budget? 

Surprisingly there is no significant increase to Federal health transfers, when compared to what was requested by Provincial Premiers.

I say surprisingly as this is the most significant priority request from provincial governments with healthcare system under significant pressure right now.

For those hoping for a universal basic income or a national pharmacare program, these items are left out of the budget. 

Also given that this budget takes Canada to a debt to GDP ratio of roughly 50%, there is limited fiscal capacity to potentially add these programs.

My question this week:

Based on what you have read here, and likely heard reported elsewhere, what are your thoughts on this budget?

I can be reached at Dan.Albas@parl.gc.ca or call toll free 1-800-665-8711.