What really matters in 2023’s federal budget?

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Jordan Heath-Rawlings Every single time the federal government drops a budget, a few things happen. In the immediate aftermath, the big ticket items are analyzed. And of course, whatever gets the most money, makes the most headlines. Tuesday’s budget was no exception. We will ensure that every single Canadian can rely on a world class, publicly funded universal healthcare system, one that is deserving of its place at the very. Of what it means to be Canadian. Next, there’s the question of if the government has done enough to head off the chief criticisms its opponents have been making of it. In this case, that would be the real concerns Canadians have about inflation and the rising cost of living, which the conservatives have been hammering them on and. Check that item off too. Food prices, for example, are still too high. That’s why, uh, we’re bringing in significant supports, uh, for Canadians on buying groceries. But the 11 million Canadians who need it the most, these are the kinds of things we move forward to help with affordability. Naturally. After that, the opposition comes out and says, naturally. They haven’t done enough, and off we go, but there is always more in the budget that gets ignored. Tuesday’s budget was unveiled in a 270 page document with 432 billion in spending. So yes, the devil or the angel is in the details. So what should be your top line takeaways from the budget, but also what’s in this document that hasn’t gotten enough attention? But will matter to your bank account or your future. What’s not in here it should be, or at least that people expected would be. And how much of what is in here will actually, you know, arrive in the form that it’s promised. I’m Jordan Heath-Rawlings. This is the big story. Cormack McSweeney is the Parliament Hill reporter for City News. He’s not actually on Parliament Hill today because like so many of us, he’s home with a sick child. Hi Cormack. I hope they’re feeling okay.

Cormack McSweeney It’s, it’s all good. You just might hear some kids’ cartoons in the background every now and then.

Jordan Heath-Rawlings That’s the soundtrack of my life anyway. Is there anything in the budget for kids at home sick?

Cormack McSweeney I didn’t see anything. Um, it’s not like the last one where you could get that work from home benefit almost. But, uh, it’s, uh, I wish there was maybe a Paw Patrol benefit.

Jordan Heath-Rawlings There you go. First I’ll just ask, uh, cuz everybody asks this. What was the big theme of this budget, if you had to pick one?

Cormack McSweeney Well, I, I’m literally holding the budget in one of my hands right now, and it’s called a Made in Canada plan. That’s the title for the budget. A lot of budgets come with titles and they basically told us in lockup, uh, government officials that there were three themes to this budget, and the government had already signaled this anyway, affordability, healthcare, and the shift towards a clean economy. If I had to choose one winner ahead of those three themes in the budget, I’d probably say the shift towards a clean economy. And that’s because it was already signaled that we were getting affordability measures and healthcare spending ahead of the budget. Uh, but the big question mark was what would they do about a clean economy? And there’s a big portion of the large new spending that we’re seeing out of this budget. There’s something like 80, more than 80 billion worth of measures involved in this. You’re seeing tax credits like a 15% refundable tax credit for non emitting electricity generation systems like, you know, wind and solar and hydro and stuff like that.

Jordan Heath-Rawlings Hmm.

Cormack McSweeney Uh, and then a tax credit. 30%, uh, for the cost of investments in clean technology as well. So that shift towards a clean economy is probably the big winner out of all of this. And I will note that those tax credits come with a big, sort of asterisks on them. That the companies that get it have to prove that they are treating their workers well, that they’re paying living wages and, and they’re offering, uh, you know, proper, uh, employment to those workers. So, um, there is a big condition attached to some of these measures, but it’s, it’s all a part of the shift that we’re seeing globally. And, uh, the government kind of had to act because of the, the big investments we’re seeing south of the border didn’t want to get left behind. Uh, but that was probably the big winner out of this budget. You mentioned workers, and this is the second question that we often ask after a budget.

Jordan Heath-Rawlings Where are those workers and all Canadians most likely to feel the impact of this budget, whether that’s for better or for worse? Where will you notice this the most?

Cormack McSweeney Well, you know, I guess the most immediate thing that people might notice is this grocery rebate. Of course, we’re living through an inflation crisis right now, and that’s the big affordability aspect. Budget and as a part of the measures to try and deal with that, you know, they’re talking about, um, addressing supply chain issues to try and address, address those inflationary pressures. Uh, but along with that came this grocery rebate. It’s a one-time rebate in which. People, eligible families will receive up to $467. Uh, single people know kids could get up to $234 in a single payment. Hmm. The funny thing about that though is they call it a grocery rebate, but there’s nothing to directly tie it to groceries. It’s just a payment that’s come to eligible people. You don’t have to spend it on groceries. It’s not like a, a food stamp or something like that. It’s just an inflation check.

Jordan Heath-Rawlings Yeah.

Cormack McSweeney It’s just you know, going into your account to try and help with the rising cost of everything. Uh, but you know, the political spin on a lot of measures, they’re calling it a grocery, uh, rebate. So that’s, that’s one element that I think a lot of people will see soon, uh, pop up in their bank accounts if they are eligible. I think there’s 11 million different households in Canada that will see this, uh, come through in this g s. Rebate, they’re gonna use the G S T rebate to pump this out to people. People might also see some issues, uh, with this, uh, in terms of, you know, more longer term things such as the state of our economy. I mean, there are a lot of economists who are actually a little bit disappointed with this budget. Uh, they’re looking at the projections and they’re noticing that if the economy starts to slow, we could potentially be in more, uh, Problems as a result of the increased spending that we’re seeing. So that’s, that’s a warning that we’re getting from some economists who are not happy after hearing the finance minister say that she was gonna be fiscally restrained in this budget, that they’re still seeing a lot of new spending, which has them a bit worried. But there, you know, there are arguments to the other side of that as well, uh, where they say that they understand that we’re spending. This money now because the eco economic outlook isn’t as bright as it otherwise would’ve been. There’s also, of course, for people who work in the public service, which is mainly, uh, a lot of people in Ottawa, uh, but there’s gonna be big spending reductions, and the fear is that that could lead to a cutting of the workforce. The federal government says they’re not looking at cutting public servants, but. Public sector unions are deeply concerned that the amount of money, uh, in terms of government operations that they’re looking to cut, which billions and billions of dollars, that that won’t just be through, you know, a reduction in travel and a reduction in the amount of money they spend on consultants. Um, so that could impact a certain segment of, of. Canadians. But then there’s also an issue for wealthier Canadians. The government has promised to put in a hike to the alternative minimum tax, and that essentially makes, uh, the wealthier pay a little bit more in their taxes and and to tax dividends that are received by financial institutions. And there’s also a tax on stock buybacks. So some of the wealthier corporations are going to, uh, be hit with an extra tax, uh, on stock buybacks that are worth over a million dollars. Uh, all of this is. Bring in about 11 billion over the next five years and extra revenue for the government, but it’s gonna be some wealthier people who are hit as well. As a result of that, as I shed a single tier. This is the top line item. And by top line item, I just mean, uh, the item that is the biggest amount of dollars and therefore got the biggest amount of headlines. There’s a ton, and this budget for healthcare.

Jordan Heath-Rawlings My question for you is how much do we know about what that will be spent on? How much control does the government have, frankly, over how it’s spent?

Cormack McSweeney So the healthcare thing, I know it’s a big element to the budget, but it was already well known leading up to this, for most of the spending on healthcare, that we were gonna see this, right? Because the Prime Minister and the premiers were in this epic public battle over health transfers. After, you know, the lockdowns in the pandemic were over and we were seeing serious strains on our healthcare system, they landed this $200 billion. 10 year deal with the provinces. 200 billion sounds like a lot, but it’s only about 46 billion in new cash that wasn’t already expected to go to the provinces anyway. Nonetheless, it’s more money for the provinces. A lot of that is just gonna be a general increase to the transfers. Uh, but there are some conditions to some of the cash that’s been allocated. They want to make sure. Better healthcare tracking, uh, of data. Uh, they want to make sure that there’s more transparency on how the money is being spent, but then there’s also these side deals that they’re reaching with the provinces, which will be more tailored to the provincial needs. But there are other areas in which we can’t sort of force. The provinces, the federal government can’t really force the provinces to spend on certain things. So, you know, there are questions about whether the provinces will really follow through with improving staffing levels, et cetera. But that’s gonna be worked out more on the provincial stages because of the way our, our federal system works.

Jordan Heath-Rawlings Uh, but the big thing on healthcare, the big thing that was in this budget is around dental care. Right?

Cormack McSweeney The government has announced that it is expand. Dental care and it is going to be putting in place a new dental care program by the end of this year to have it up and running. Um, they had sort of a benefit system to sort of kick things off and appease the n D p as a part of their supply and confidence deal.Now we’ve got some of the harder details formalizing this dental care program, and it is going to be eligible for families that have a, an annual income of less. $90,000 a year who are uninsured. And I want to just make this clear. This is for uninsured people. It’s aimed at filling in the gap. So if you work a job, you already have dental insurance. This is not for you. It, it’s trying to make sure that, uh, as you know, the NDP has pushed for a long time that dental care is healthcare and the price tag for this program is 13 billion over five years. And then ongoing funding after that to maintain the program. You know, it’s a little bit more of an expansion than I think even the NDP was looking for in this budget, because they said they just wanted to see it expanded to people with disabilities, all kids under 18.

Jordan Heath-Rawlings Mm-hmm.

Cormack McSweeney Uh, but it, it goes beyond that really. Solidifying this, which is a big thing politically, uh, given the supply and confidence deal that the Liberals and N D P have, right?

Jordan Heath-Rawlings I mean, that was gonna be my next question. Does this mean that, uh, jug, meh Singh and the N D P are happy with this budget and continue to support, uh, that agreement?

Cormack McSweeney Yes. Uh, to, to put it plainly, uh, I asked Jug Mead sing that, uh, right after the budget was introduced. I said, the big question, Mr. Singh, are you going to support this budget? And he said, yes, they will. Um, they’re, they’re doing victory laps over this today because, uh, they say it, it is because of the NDP, uh, that we actually are. Seeing these big measures be put through. Right. The NDP was calling for A G S T rebate increase. We get the grocery rebate. They’ve been calling for dental care for some time. It was a part of that deal that they struck with the liberals to keep the Trudeau government in power through this minority government. It’s there in the budget and so, you know, their pitch to Canadians right now is the NDP is the party that’s fighting for people. The liberals, of course, are, are saying, you know, we are, I’m implementing this. It’s because of us and, and our willingness to work together with other parties that you are seeing this action that’s gonna benefit Canadians right now. And, and then, you know, the conservatives are not as happy, uh, about this budget as the NDP is, even though the NDP still has some criticisms of this budget is not going far enough on the environmental standards, the environmental issues as they were hoping for. And uh, I think most opposition parties are scratching their heads asking, where’s the housing initiative? We’re, we’re facing a housing crisis right now and there’s really nothing big or new on housing and, and trying to get houses built. You know, there were previous promises, uh, but they’re saying they wanted to see more action there.

Jordan Heath-Rawlings What would you say is in here that maybe didn’t get the coverage in the headlines yesterday, but as you’ve kind of gone back and forth, or as you’ve talked to economists or people in the know, you know, they’ve pointed out like, yeah, this is a little thing, but could be a big deal. Couple of things here.

Cormack McSweeney One thing I didn’t mention yet in this, and I did get some play when the budget was released, is the alcohol tax, the beer tax. Uh, you know, I’m sure everyone’s seen the ads on tv or heard Bob and Doug Mackenzie, uh, saying acts the, uh, beer tax hike, right? And so what came in this budget was a cap on that tax. And, and the tax when it was introduced was on tobacco and alcohol. It was an excise tax and it was a percentage that was tied to inflation. So it would go up or down with inflation and it would go into general coffers. And the, the aim the government said was to, you know, spend on healthcare and other issues.

Jordan Heath-Rawlings Right.

Cormack McSweeney And 6.3% was what this excise tax was set to go up April 1st, Saturday, the government decided to cap that in the end at 2%. So, and that’s only a temporary cap. It’s just happening for this year, but they’re gonna prevent a 6.3% increase on your alcohol, wine, and beer. Tobacco did not get the same cut that they did not get the same treatment. uh, tobacco products are still going up 6.3%. Another issue, uh, for people paying mortgages, uh, there’s a pitch for a new mortgage code of conduct that’s gonna help people with variable mortgages. Probably the best. It’s sort of meant to ensure that federally regulated financial institutions. A fair and sort of equitable access to mortgage relief measures. And that’s for people who are struggling, you know, to stay in their homes, especially due to high interest. Um, you know, if you’ve ever traveled recently, you know, there are a lot of problems with our airports. There’s. 1.8 billion over five years that’s supposed to go to the Canadian Air Transport Security Authority. That’s aimed at trying to improve passenger screening and sort of strengthen security measures at the airports. And that’s hopefully will sort of cut delays and, and have better coordination at airports and between airlines and the authorities that run the airports. So that’s another thing that could be big that’s in this budget. Maybe got overshadowed by some of the larger promises. Uh, there’s also something to help veterans in here as well. They made a commitment to set aside 156 million over five years to try and address some issues, uh, around longstanding delays and backlogs for ill and injured veterans. However, they’re still waiting on the details. Another interesting thing is foreign interference. You know, we’ve been talking so much about Chinese government. Interference in our elections, right? And it’s become a big problem. And there are two measures in this budget to try and address that. Uh, nearly 50 million, five zero million. That’s going to the RCMP. That’s meant to help them sort of make sure interference doesn’t happen, investigate it when it does happen, but also to sort of take a proactive stance on this by staying in constant contact. With, uh, diaspora communities that are more likely to be targeted. So they would essentially be maybe possibly hiring new officers or, or, you know, shifting around officers who would be acting as sort of liaison slash investigative officers. They’re also creating a new office. I believe it’s called National Counter Inter-Foreign Interference Office. Um, the details around that are kind of vague at this point. I asked a government official, what does that mean exactly? And they said, you’re gonna have to wait for public safety to make that announcement. Another government official did tell me a little bit more saying they’d be looking to sort of coordinate efforts between all these different departments and agencies. Cause kind of right now a lot of agencies and departments can work in their own sort of silos. And this office would be meant to. Bring that all together. It’s just another measure that the government’s been announcing while dealing with this big controversy. And it comes, you know, not long before the Prime Minister’s own chief of staff, uh, Katie Telford is set to testify at a committee beginning as early as next week. Uh, we still don’t have a date and time on that yet, but the range in which she could be called to testify begins next week.So an interesting, uh, promise there that maybe didn’t get as much coverage, uh, out of the budget as some would’ve.

Jordan Heath-Rawlings I wanna ask what might be kind of a basic question, but maybe I still don’t have this nailed down. You know, when this big document comes out and all these spending commitments, are there measures, and if so, what’s there to make sure that the government actually acts on everything that’s in here. Or is this more like, you know, a campaign book that lays out what they plan to do, but doesn’t bind them to anything. When we talk about, you know, this money’s going here and this money’s going there, is it gone now that they’ve said that? Or what?

Cormack McSweeney This is the government saying where they’re aiming to spend that money. I mean, it could be shifted over time throughout the year until the next budget. Of course, you know, they’re bound completely by what’s in the budget. There are things that pop up. You gotta spend money sometimes, and your budget projections could be completely thrown off by, let’s say, a pandemic. Uh, things you just cannot predict. So they’re not technically bound by this. They are the government. They could make changes as they see fit throughout the year until the next budget. But it’s important to make sure we have accounting for how they plan to spend the money, how they did spend the money last year, and to make sure that they have accurate forecasts for the next few years. I mean, like one interesting thing that came out of this is the deficit back in the fall, during the fall economic update, the government had predicted a surplus by 2027, 2028 fiscal year. That was very interesting. It was the first time in the Trudeau government’s time and power that we saw the liberals forecasting a potential budgetary surplus. And then months later when the budget, it’s gone, right? It’s, it’s, it’s completely gone. The 2027, 2028 forecast is now for a 14 billion deficit. The government says it, it justifies that by saying, look, we had to spend, this inflation crisis is a problem. It’s, it’s creating a lot of problems for Canadians. There’s a potential recession on the horizon, and we needed to make investments right now to make sure Canadians are supported. That’s their argument behind this. The conservatives, on the other hand, argue against that saying, look, this more and more spending this sort of spending is only gonna add to the inflationary pressures, and it’s not good at this time. They think it’s not doing enough. There’s a lot of spending without the outcomes that the conservatives were hoping for. And so they’re critical of all of this.

Cormack McSweeney But you know what? To come back to the more basic question that you’re asking. The real accountability comes at the ballot box, right? Whether it’s a majority or minority government, however long they serve, whether it’s, you know, one, four, uh, years, five years even. Because technically you can go up to five years before calling an election. The voter, if they see complete fiscal mismanagement, the voters will let that government have it at the, at, at the ballot box whenever the next election is held. I think one big question out of this going into this budget was whether there’d be enough to keep that supply and confidence deal in place with the NDP. And that’s the other sort of check and balance on this government is that they have two separate deals. They got this budget deal that they’re pitching to Canadians, that they’re hoping to pass through Parliament, which the NDP has said it will support, so it will pass through parliament. The other deal that they have right now ahead of them is this N D P Supply and confidence deal, and as much as almost everything that was a part of that deal has already been addressed. There’s one big question mark. Still PharmaCare, that’s one big item that wasn’t. In the budget, and it’s something that the NDP has been pushing for. They really want to see action on PharmaCare. They’ve given a deadline of the end of this year to see legislation passed on PharmaCare, and I think when it comes to the checks and balances on this government, that’s gonna be a big one because it might determine whether their deal continues and whether we could see a potential election next year, which is essentially what the deadline, uh is for the N D P.

Jordan Heath-Rawlings We just did an episode on Tuesday about Canadians were promised Universal PharmaCare, where is it? At the end of the episode? I said, well, you never know. We could see it in the budget, but, uh, no dice.

Cormack McSweeney No dice. And, uh, we asked, sing about that, and he said, you know, I told them they have until the end of the year and we’re gonna stand by that deadline, okay? And, and we’ll just have to wait and see, because if they don’t follow through on that deadline of passing legislation on PharmaCare, you know, the clock is ticking here to get it in for the spring. It’s gonna be tough to try and put it through the proper checks and balances, uh, of parliament. And, and get it passed in the fall sitting alone. It’s not impossible. It can happen. It definitely could, but, uh, it’s, it’s gonna be interesting to see with the clock ticking down towards New Year, whether we could be talking about, uh, an election in 2024. Canadians are getting either free drugs or an election. It seems like a good deal.

Jordan Heath-Rawlings Cormack, thank you so much for this. As always, I appreciate you taking the time. I hope your child feels better, and, uh, we’ll talk to you soon.

Cormack McSweeney Anytime.

Jordan Heath-Rawlings Cormack McSweeney because we don’t support a particular party. He is our favorite person on Parliament Hill. That was the big story. For more, you can head to the big story podcast.ca. You can talk to us absolutely anytime on Twitter. Even if you do pay the $8 for a blue check, you can find us. At the Big Story fpn. You can also email us. That’s always free. Hello at the Big story podcast.ca. Or call us on a telephone and leave a voicemail depending on your plan. That may not be free. 4 1 6 9 3 5 5 9 3 5. The big story is available wherever you get your podcasts. Always for free. You want them without ads, in which case you can subscribe to the Big Story. Plus on Apple Podcasts, it’s just five bucks a month. You don’t have to hear any commercials. Thanks for listening. I’m Jordan Heath-Rawlings. We’ll talk tomorrow.