On Tuesday March 22nd the new Federal Liberal government tabled their first budget. Based on recent announcements, it was expected that the government would run a larger deficit than the $10 billion for each of the first three years that was promised during the election campaign. The actual numbers – $29.4 billion deficit in year 1, $29 billion deficit in year 2, and an acknowledgement that the government would not forecast a return to surplus before the end of their mandate. Maybe most surprising is the open-ended nature of the budget for years 3 and 4, with no clear plan from the Liberals on what deficits in those years will look like.
So what is all this money being spent on and how will it affect you? Two items in particular stand out for Canadian millennials:
- Targeting the Middle Class through the Canada Child Benefit: This will replace the Universal Childcare Benefit introduced by the Harper Conservatives, and will put more money in the pockets of low and middle-income families, while eliminating any benefit for household incomes over $190,000. For young millennials starting families, this could mean up to $6400 per child under the age of 6, and $5400 per child under the age of 18.
- Promoting education through improvement to student grants: A total of $1.53 billion will be provided to increase tuition support for low and middle income students.
Both of these items reflect the Liberal initiative to target the middle class, and in doing so will affect the majority of millennials. There are however many other big initiatives in the budget, most of which will not make a direct impact on millennial lives:
- Supporting First Nations communities: Over the next 5 years the government allocates $4.22 billion to improve facilities, infrastructure and education for First Nations reserves, in addition to other investments in indigenous communities. This is a large sum of money and shows the Liberals dedication on this issue.
- Allocating funds to much-needed infrastructure projects in Canada’s big cities: $120 billion will be spent on improving transit systems, water and social infrastructure over the next 10 years. Related to this, the government has set aside additional funding for green infrastructure and clean technology projects, beginning in 2017-2018.
- Increasing accessibility to Employment Insurance: In addition to increasing ease of access, this change will directly benefit Canadians in regions like Alberta that have been most hard-hit by recent economic downturns.
- Veteran disability payment increases
For more information, check out our sources:
- Budget Text and Finance Minister Bill Morneau’s Introduction Speech, National Post
- Federal Budget 2016 Highlights, CBC
- Winners and Losers of the 2016 Federal Budget, Toronto Star