Federal budget makes a play for NDP voters but falls short on child care

Photo: CPAC

The 2018 federal budget has been out in public since Tuesday and the reviews, both positive and negative, are mostly sweet music to the ears of the Trudeau government.

This budget focuses on women, not just from an equity or a social justice point of view, but from an economic perspective.

Two of the budget's most prominent statistics are not part of the government's balance sheet, or its taxing or spending plans. They are figures provided by private sector analysts as to the economic value of enhancing women's equality and participation in the workforce.

First, federal finance minister Bill Morneau quotes his good friends at the global consulting firm McKinsey, who estimate that by taking steps to advance greater equality for women Canada could add $150 billion to its economy.

He then cites the Royal Bank of Canada's estimate that adding more women to the workforce could add as much as four per cent to Canada's gross domestic product (GDP).

The minister goes on to frankly describe the many and high barriers that "make it difficult for women to fully succeed in today's economy."

Canadian women are more likely to work part-time than men; they face a wage gap vis-à-vis men; and are underrepresented in positions of leadership.

As well, most businesses are owned by men, there are relatively few women in the crucial fields of science, technology and engineering, and the many hours women devote to unpaid work -- caring for children and the elderly, doing housework -- detract from their ability to pursue paid work.

The budget document also discusses the situation of women who are recent immigrants, LGBTQ women and single mothers, and the extent to which harassment and gender-based violence constitute real barriers to women's economic participation.

Overall, the finance minister provides an unflinching and thorough statement of the current role of women in Canada's notionally advanced, market-based economy.

However, the measures the budget announces to correct the imbalances and injustices seem modest by comparison.

Those measures include: equal pay for equal work in federally regulated industries such as banking and transport, enhanced parental leave for both parents not just mothers, and applying a gender-results framework to all of the government's economic policies.

The budget enunciates other important new measures that are not specifically targeted at women. For instance, the government will increase the Canada Workers Benefit, a supplement to low-income workers. Some women will gain by this measure, but so will many men.

Brave words, minimal outcomes

If one reads all of the budget's facts and figures carefully nowhere will one find the government claiming that its gender-focused measures will grow the GDP by four per cent or add $150 billion to the economy, the McKinsey and Royal Bank figures.

The budget's key technical section, which, without rhetoric, provides the economic and fiscal outlook for Canada, portrays an economy that has grown at the relatively fast clip of three per cent over the past two years, and is projected to continue to grow in coming years, but at a more modest rate.

The budget projects growth of between 2.2 and 1.6 per cent over the next five years. But it does not directly attribute any of that growth to its new gender-targeted measures.

Indeed, nowhere does the budget document show a path to the grand and ambitious economic outcomes that the Royal Bank and McKinsey tout. 

Further, the budget, as it must, also identifies risks to the admittedly modest growth projections.

There is, for instance, "uncertainty regarding the outcome of North American Free Trade Agreement negotiations as well as a notable shift towards more protectionism globally..."

On the monetary side, "financial conditions could tighten faster than anticipated" which "could create turbulence in world financial markets …This would affect Canadian businesses and households through a combination of higher interest rates, negative wealth effects and/or lower confidence."

And, perhaps most worrying of all, "high household debt remains a key domestic vulnerability for Canadian consumption and [home ownership]." The budget warns that, because of a high rate of indebtedness we would be in trouble "in the case of a large shock to income, house prices or interest rates."

On the crucial question of household debt, the budget offers virtually no solution and no response.

The economic soundness of this budget will depend on what actually happens in the future. If the downside risks do not materialize, the government will look pretty good. If there is some kind of global turbulence -- provoked, perhaps, by a spike in interest rates -- Canada's economy might look like a poorly balanced house of cards.

Getting the kind of reviews they need politically

For now, politically, the good news for the Liberal government is that the Conservatives and their ideological allies such as the Fraser and C.D. Howe Institutes and the Canadian Taxpayers' Federation loathe the budget.

The Right is particularly angry that rather than foreseeing an end to deficits, the finance minister only points to a declining debt-to-GDP ratio.

Meanwhile, there are plenty of folks on the other side, folks who choked when they tried to find something good to say about Stephen Harper's budgets, who are effusive in their praise of this one.

Among the cheerleaders are: the Canadian Association of University Teachers who are pleased with the major investment in basic scientific research; the Canadian Parks and Wilderness society who are over the moon about the $1.3 billion in the budget to protect Canada's land, oceans and wildlife; and the Assembly of First Nations which appreciates the increased, and "overdue," investments in First Nations child welfare and in infrastructure for Indigenous communities.

Trudeau and Morneau are, it seems, making the right friends and enemies with their 2018 budget.

As we approach the next election in 2019, the Liberals see much more upside potential on their left flank than on their right, and that's the obvious political play they're making with this budget.

In parts of the country, such as British Columbia, the Trudeau Liberals will face political pushback over their pipeline policy. This progressive-sounding budget may not be enough to counteract the anger at the Liberals for their decision on Kinder Morgan. 

Elsewhere, however, such as in Quebec, the 2018 budget just might do the trick. Liberals quite openly admit the possibility of their losing some western seats in the next election, but hope to compensate by picking up a number of the 38 Quebec seats they did not win in 2015. Sixteen of those are now in New Democratic hands.

Criticism from the Left, with some praise

And as for the New Democrats, when their leader Jagmeet Singh was asked about the budget he could not do much more than praise with faint damns.

The Liberals have poached the NDP's national pharmacare idea. New Democrats just unveiled their national pharmacare proposal at their recent policy convention. Singh had to recognize that the Liberals have borrowed a sound policy. His sole criticism consisted of pointing out that, for now, all the Liberals are doing is consulting. His party, the NDP leader says, would act immediately -- or as soon as it could get the provinces onside, which would happen after consulting them.

On pay equity, Singh had to give the Trudeau government full credit for adopting an NDP idea, as he did for the new parental leave measure and the increased investments in Indigenous services.

The NDP leader did rake the Liberals over the coals for their weak, newly announced efforts to catch tax cheats and recover the billions Canada loses as a result of tax evasion, in particular through foreign tax havens.

And, like the Broadbent Institute, the NDP would like to close costly tax loopholes, such as the stock options deduction.

The Broadbent Institute's Rick Smith and Andrew Jackson note that maintaining loopholes that benefit mostly male, affluent Canadians would not stand up to the government's new gender framework.

"Women tend to lose out in our tax system since they are greatly under-represented among top earners," Jackson says.

What about child care?

Oddly and incongruously, one policy area of crucial importance to women was almost entirely absent from the budget: child care.

Morna Ballantyne of Child Care Now, an advocacy organization, is not happy with that absence

"The 2017 federal budget gave $540 million for child care in 2018-2019, and that amount will rise to only $550 million by 2021-2022," Ballantyne says. "It is half what the previous Liberal government allocated more than 10 years ago and nowhere near close to enough to address the high cost of child care and the serious shortage of licensed spaces in the short, medium or long term." 

Ballantyne would like to see an "influx of federal funds" combined with a much stronger role for the federal government in child-care policy. Without much better access to affordable quality child care women's equality "will never become a reality," argues Ballantyne.

At one time, universal child care was a policy of both the Liberals and New Democrats -- for the New Democrats, as recently as the last election campaign.

Now that gender and the pursuit of equality for women are central political and policy preoccupations can we expect to hear more about child care again?

Photo: CPAC

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