The Liberals unveiled their 2018 budget this past Tuesday – we break down the positives, the negatives and what we are undecided about.
In case you haven’t heard, this was the ‘gender equality budget’, replacing the ‘middle class’ theme of the last two budgets. As such, you can expect to see high investment in supporting females in the workforce. The government argues that this will have a 33% positive impact on real GDP per capita, but it is also strategic for the Liberals who won big with female voters in the last election. And of course, it also reflects the feminist values of the Prime Minister and his team.
What else can you expect to see? A great deal of investment. The budget total is an $18.1 billion deficit in the 2018-2019 fiscal year, declining to $12.3 billion in 2022-2023 (CBC) – that’s right, no balanced budget in the next 4 years. Other big areas of spending include scientific research, a national pharmacare program, and federal infrastructure (Globe and Mail). Many of the investments are also seen as a strategic appeal to center-left and left-wing voters, who may be considering voting NDP in the next election.
Here’s a further breakdown of the highlights in budget 2018:
- Paternity/Maternity Leave – The budget introduces an additional 5 week take-it-or-leave-it paid leave for either parent, which increases the combined total amount of weeks parents can take to up to 40. (Budget 2018)
- Gender Equal Pay Legislation – The budget does not include a specific dollar amount but proposes pay equity legislation for the Federal government and Federal regulated sectors. (Globe and Mail)
- Scientific Research – Scientists are being allocated $3.8 million, about a 25% increase in funding, towards fundamental research and investment in physical facilities. We applaud this, especially in light of the cuts to scientific programs south of the border. (Globe and Mail)
- Indigenous Skills and Employment Training Program – The budget allocates $447 million over five years into a much-needed program to help Indigenous people gain training in higher quality and better paying jobs. (Globe and Mail)
- NAFTA and US Uncertainty – There is no mention of planned business tax cuts to mimic President Trump’s changes south of the border, and no allocated funds for a NAFTA contingency plan. (CBC)
- The Deficit – Though it is a negative, the government maintains that the federal debt-to-GDP ratio will continue to decrease. Moreover, strong economic growth has enabled the government to spend less money than planned in recent years. (Globe and Mail)
- The Phoenix Pay System – This is the failed payment system responsible for many public-sector employees still not receiving their owed pay. The budget allocates $16 million over two years for a new system, and $431.4 million over six years to address the issues of the current system. We certainly think this is a problem worth fixing, but we’re left undecided on whether it is better to scrap the system entirely or come up with a new one. (Globe and Mail)
- Pharmacare Plan – The government is studying whether a national pharmacare program would result in lower overall costs due to the government having greater negotiating power. We agree that the potential savings are worth looking at, but would like to see a stronger assessment of economic feasibility before investing billions of dollars. (Globe and Mail)
For more on the actual budget, see the official government page here.
What do you think of budget 2018? Do you have a different take on the positives and negatives of the budget? Let us know in the comments below!