On Monday, April 19, when Canada’s first woman minister of finance Chrystia Freeland gave her first budget speech she made a point of mentioning her feminist mother.
The finance minister’s mother, Halyna Chomiak Freeland, died at the age of 60, more than 13 years ago. In their obituary, Halyna Freeland’s family describes her as, among other things: a lawyer, an activist, a teacher, a community organizer, a cooperative housing pioneer, an international legal reformer — and a single mother.
Chrystia Freeland told Parliament her mom was also an NDP candidate.
The elder Freeland ran in 1988, in the Edmonton Strathcona riding. The family says she made history by “involving the largest number of volunteers ever in a federal election campaign.” Halyna Freeland won the most votes to that point for a CCF or NDP candidate in Edmonton Strathcona, finishing a close second.
On Monday, addressing a question from NDP finance critic Peter Julian, Chrystia Freeland pointed out that Edmonton Strathcona is now an NDP seat. Through the Speaker, the finance minister told the veteran NDP MP “we have more in common than he might think.”
Justin Trudeau’s finance minister has a point. Reading parts of the Liberals’ 2021 budget you could think you were reading the NDP’s 2015 campaign platform.
Universal $10-per-day child care
In the run-up to the 2015 election, then NDP leader Tom Mulcair made affordable, universal child care a centrepiece of New Democratic policy. When he unveiled the plan in 2014, at an Ottawa daycare centre, Mulcair made a point of saying child care was not just a needed social program, it made good economic sense. And he brought along Quebec economist Pierre Fortin to help make that point.
Fortin explained that the Quebec child-care program had allowed many more women to join the workforce, which, in turn, generated economic activity, yielding more taxes for governments. The federal government, Fortin said, benefited from the Quebec child-care program to the tune of $900 million per year, the result of increased tax revenues.
Flash forward to the 2021 federal budget and we find the Liberal finance minister making the same point.
“There is agreement across the political spectrum that early learning and child care is the national economic policy we need now,” Freeland told Canadians. “This is social infrastructure that will drive jobs and growth.”
But Freeland relies less on the cold and calculating logic of standard economics and more on an argument based on equity. In her budget speech, she placed great emphasis on the gender injustice laid bare by the COVID-19 pandemic.
“COVID has brutally exposed something women have long known,” Freeland said. “Without child care, parents, usually mothers, cannot work. The closing of our schools and daycares drove women’s participation in the labour force down to its lowest level in more than two decades.”
The finance minister added that a national child-care program is “feminist economic policy” — which might be the first time any finance minister has described any new measure in that way.
The Liberals are putting real money into their child-care commitment: up to $30 billion over five years, designed to reach about $9 billion annually. That would be the ongoing federal contribution to provincially run child-care programs. For Quebec, which has had its own program for more than two decades, the federal government promises an “asymmetric” financial arrangement.
The ultimate goal is $10-per-day child care for all Canadian families, in mostly regulated, non-profit daycare centres. Groups that support child care as sound social and economic policy, from the Canadian Childcare Federation to the Canadian Centre for Policy Alternatives (CCPA), were quick to commend Freeland and the Liberal government.
The Freeland plan is, in fact, more ambitious than the one Tom Mulcair’s NDP proposed seven years ago. In 2014, the NDP pledged about $2 billion of federal money annually, and aimed for a system that would cost parents $15 per day.
Huge contrast with Martin budget of 1995
How times have changed.
The Trudeau government’s 2021 budget is a watershed document. It signals a major shift toward more, and ongoing, government spending, and increased federal regulation of the economy.
On the spending side, there are huge financial commitments, spread over the next decade, on: infrastructure; job creation; health and long-term care; boosts for innovation in life sciences, information technology and other areas of the economy; and increases to old-age security — to name just a small number.
There are also major short-term pandemic-related spending initiatives, such as an extension of the emergency wage subsidy, with new rules to prevent companies from raising the remuneration of executives while receiving the benefit.
The government will extend the period during which Canadians can receive the Canada Recovery Benefit (successor to the Canada Emergency Response Benefit, the CERB) by 12 weeks, up to 50 weeks. That benefit will start at $500 per week, but decline, after five weeks, to $300.
This measure, as well as the similar Canada Recovery Caregiving Benefit and enhancements to employment insurance, will remain in place until the end of November of this year, if needed. The budget estimates their total cost will be $2.5 billion.
When it talks about debt and deficit, the Freeland budget focuses not on absolute numbers, but on the debt-to-GDP ratio. According to the budget, that crucial number will not grow beyond 50 per cent, well below the debt-to-GDP ratios of most similar countries.
The budget forecasts economic growth will increase at a greater rate than government spending. And so, over time, the federal budget will, in a way, balance itself. Canada should achieve fiscal equilibrium as a matter of course, without the need for any austerity measures.
On regulation, there are numerous climate-change-related measures. Plus, the government promises new rules to assure diversity in the federally regulated financial sector, and greater legal protections for gig workers.
The last similar watershed moment for Liberals came in February of 1995. That’s when then finance minister Paul Martin tabled his oft-cited (and almost universally praised) second budget. The contrast between the two — between 1995 and 2021 — could not be starker.
In 1995, we had a government elected during a recession — on the promise of policies designed to stimulate employment and growth — which instituted some of the most severe austerity measures in modern Canadian history.
Paul Martin promised to achieve a zero deficit, without a penny in tax increases, “come hell or high water,” and he was true to his word. He slashed spending on everything from the CBC, to international development assistance, to unemployment insurance (re-named employment insurance), to housing, to, most importantly, federal transfers to the provinces for health, higher education, and social services.
The latter cuts were worth multiple billions of dollars each year, for many years.
Major spending on housing, innovation, environment
The Justin Trudeau Liberals have pursued an entirely different course from their predecessors more than a quarter of a century ago.
They got the federal government back into the housing business in 2017, and budget 2021 doubles down on that commitment.
The budget declares that the government “is currently on track to deliver over $70 billion by 2027-28 to help more Canadians find a place to call home.”
There are major funding programs for community and social housing (jointly with the provinces and territories), to support households in need through the Canada Housing Benefit, for a homelessness strategy, and a first-time home buyer initiative.
The budget also commits to over $15 billion in joint funding with provinces and territories directed towards community housing, households in need through the Canada Housing Benefit, and support for provincial and territorial housing priorities related to repair, construction, and affordability.
The biggest ongoing federal housing item is “over $40 billion to support new construction and repair of affordable housing.”
Other spending items include:
- a one-time top-up of $4 billion to the more than $43 billion the federal government transfers to the provinces for health care;
- $3 billion over five years for long-term-care-enforcing standards;
- a one-time payment of $500 to pensioners 75 and older who receive the Old Age Security (OAS) pension and a 10 per cent increase in regular OAS payments for those same pensioners;
- extending the employment insurance sickness benefit from 15 to 26 weeks;
- and $7.2 billion over seven years for the federal government’s Strategic Innovation Fund.
The fund supports almost the entire range of industries in Canada, from automotive and aerospace to agriculture.
One billion dollars of this fund, together with $1.2 billion of other federal money, will go to the life sciences and bio-manufacturing sector. This will be “an important component of Canada’s plan to build domestic resilience and improve long-term pandemic preparedness.”
The fund also has a big climate-change component. It devotes $8 billion over seven years to “projects that will help reduce Canada’s greenhouse gas emissions by expediting decarbonization projects, scaling-up clean technology, and accelerating Canada’s industrial transformation.”
The government has adopted the NDP’s longstanding proposal for a $15-per-hour federal minimum wage. That is not a spending item per se, but will increase the federal government’s own costs. Over the years the federal Liberals have scoffed at New Democrats for pushing this measure, pointing out that most workers in Canada are provincially regulated.
The NDP has argued the federal government could lead by example. With Chrystia Freeland at the helm of finance, the Liberals have belatedly agreed.
The environment gets its own chapter in budget 2021. There are many items, some small and targeted, some major and systemic. They range from funding for forestry and the bio-economy, to carbon capture and storage for big industrial polluters (in the form of direct spending and tax incentives), to a $1.5-billion clean fuels fund and several hundred million for agricultural clean technology.
As well there is $2.3 billion over five years to “protect Canada’s natural legacy.”
Much of that money will go toward achieving Canada’s stated target of protecting 25 per cent of its territory by 2025. The budget says the government will do this through “national wildlife areas, and Indigenous Protected and Conserved Areas.”
The Canadian Parks and Wilderness Society (CPAWS) salutes this chapter of the budget, which it calls “the largest Canadian investment ever in nature.”
As CPAWS executive director Sandra Schwartz puts it:
“This budget demonstrates the federal government’s commitment to responding to the biodiversity crisis that threatens our planet, and its commitment to action to protect our land, freshwater and ocean as a critical component of the pandemic recovery.”
At the same time CPAWS points out that the promised investment only, in effect, guarantees protection for 10 per cent of Canada’s land and water.
“Greater investment will likely be needed to get to 25 per cent protection by 2025,” Schwartz says.
Liberals will not ask billionaires to pay their fair share
Others, including the CCPA, have expressed disappointment with the lack of any plan for a universal basic income and with the failure to reform the tax system to make it fairer and more equitable. As well, many items in the budget, such as the paragraphs on pharmacare and temporary foreign workers, only make vague promises to do something in the future.
The NDP has focused on the tax issue as a big failure for the government. Where is the wealth tax? New Democrats ask.
Reading the budget, this writer noted mention of billionaires paying their fair share. Most of them have profited handsomely during the pandemic. It turns out, the government is only going to add some additional taxes to the purchase of über-luxury cars, private aircraft, and yachts. That measure will bring in limited revenue, and leaves untouched huge reservoirs of wealth and capital that are sitting idle.
Still, despite the criticisms from the left, this budget tells a completely different story from that of the Liberal Party a generation ago. At that time, debt and deficit, and cutting back on the public sector, dominated political and economic talk in the West. The influence of Britain’s Margaret Thatcher and the U.S.’s Ronald Reagan still loomed large, although both had left the political stage.
In Canada, the New Democrats had been reduced to a rump in the 1993 election, while the new free-market fundamentalist Reform Party wielded outsized influence.
Mainstream media fawned over the tough-and-stern fiscal medicine Reformers proposed, and Wall Street did its bit. The New York-based Moody’s agency got the attention of key decision-makers, and the Canadian media, when it downgraded Canada’s credit rating.
Now, in 2021, New Democrats are well-ensconced in Parliament.
The NDP is down considerably from its high-water mark of 2011, when it won over 100 seats. But with 24 seats it effectively holds the balance of power in the current Parliament, and has used its leverage with strategic effect over the past 16 months or so.
We will never know what kind of budget we would have had this past Monday had the current Parliament looked more like that of 1993.
When they get their chance — which should not be until much later this year, at the earliest — progressive voters will have a hard decision to make. They will have to ask themselves: do they trust the Liberals to actually carry out the ambitious plans outlined in this budget?
Karl Nerenberg has been a journalist and filmmaker for more than 25 years. He is rabble’s politics reporter.
Image credit: Chrystia Freeland/Facebook
Editor’s note, April 21, 2021: A previous version of this article stated that Quebec has had its own child-care program for more than a decade. It is in fact more than two decades. The article has been corrected.
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