Liberals' second budget gets failing grade

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The 2017 federal budget tabled Wednesday proved a disappointment for those seeking meaningful investments in childcare, affordable housing and reconciliation with Indigenous peoples.

Much of the budget simply provided more detail on the specifics of the spending in Budget 2016 and an economic update. David Macdonald of the Canadian Centre for Policy Alternatives says the federal government "took the 2016 budget out and put a new cover on it... They’ve gift wrapped last year’s budget."

Finance Minister Bill Morneau's second federal budget did provide details behind the government's infrastructure spending and plans for innovation, but made no mention of any major tax changes.

By failing to address major tax loopholes that enable the wealthiest to evade paying taxes, Macdonald says the budget failed to address major issues Canadians are facing. examined some of the major areas of concern for Canadians in this year’s budget.

Childcare and Parental Leave

The government put aside $7 billion over 10 years for early learning and childcare programs, which added to the $500 million over one year promised in the 2016 budget. This is designed to increase affordable childcare for low-income families.

While childcare funding will be around $550 million a year for the next five years and then jump to approximately $800 million annually between 2022 and 2028, Macdonald notes promised funding only equals about a third of what Paul Martin’s Liberal government spent.

It’s a positive step, Macdonald argues, but adds the additional investment is not enough to produce any real changes on the ground.

“What it effectively will mean is that the major variables around childcare won’t change dramatically," he explains. "Waitlists are long and... fees are too high, so it's very unlikely there will much of an impact."

The Liberal budget did stick to its campaign promise to extend parental leave to 18 months from the current 12. However, parents who choose to stay home longer will be entitled to a lower Employment Insurance (EI) benefit rate of 33 per cent of their average weekly earning compared to the current rate of 55 per cent.

Affordable housing and homelessness

The federal government also promised to invest $11.2 billion over 11 years in affordable housing. Critics say that’s not nearly enough to ensure people have adequate access.

“If you want to make a big dent there, you can’t be spending in the $200-300-million range," says Macdonald. “You have to spend in the billion-dollar range, and we are definitely not there. The impact will definitely not be a huge revolution for affordable housing.”

A new National Housing Fund will address critical housing issues and better support vulnerable citizens, the budget claimed. The government will invest $5 billion over 11 years in the fund. In 2018-19, the investment will be at $141 million, and slowly ramp up to $707 million by 2024-25.

Macdonald believes it needs to happen quicker because there is already a backlog in accessing affordable housing.

Macdonald says he was positively surprised, however, at the $2.1 billion targeted at reducing homelessness. “In the homeless file, there is quite a big expenditure, but in regards to the affordable housing, it’s much smaller in terms of what’s needed.”

Reconciliation with Indigenous peoples

The 2017 budget aims to increase funding for First Nations, Inuit and Metis peoples and communities in the areas of post-secondary education, community infrastructure and health.

The budget adds an additional $3.4 billion over five years for areas of “critical need.” The new spending adds to the $8.4 billion promised in 2016.

Ninety million dollars will go to the Post-Secondary Student Support Program over the next two years, which the government believes will support the needs of more than 4,600 First Nations and Inuit students.

Although this will not clear the backlog of thousands of students waiting for support, Macdonald acknowledges there was an initial fear the government might provide no funding for the program at all.  

“I mean it’s vaguely positive that it's continuing to be addressed.”

Macdonald was also surprised there was no new funding for First Nations child welfare in the budget.  

The government, however, has promised to create an “Indigenous Framework on Early Learning and Child Care.” A spokesperson told APTN the government is prepared to invest additional dollars into First Nation child welfare and is planning to develop the framework with input from stakeholders before committing to the new funding.

In January 2016, a Canadian Human Rights Tribunal ruling found Ottawa has consistently failed to provide adequate services to First Nations children and that the resulting funding gap is state-sanctioned racial discrimination. It ordered the federal government to immediately overhaul the system and increase funding.

The Liberal government backed an NDP motion in October last year, calling for an emergency investment of $155 million into First Nations child welfare to comply with the ruling.


Image: PMO/Adam Scotti

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