The Trudeau government tabled a no-surprise budget on Tuesday, March 27.
Much of what is in finance minister Chrystia Freeland’s document had been previously announced – the increase in health transfers to the provinces, for instance.
Where there are new initiatives, the government had strategically leaked many in advance.
That was the case with the one big new transfer to individuals and families, what the Liberals have chosen to call a “Grocery Rebate.” New Democrats point out this is a rebranded version of a persistent NDP demand: doubling of the GST rebate for modest income Canadians.
The budget announced that 11 million Canadian households will qualify for one-time payments up to $467 for a family with two children and $234 for single Canadians without children.
The government will deliver this money through the existing GST rebate program, even though there is no goods and services tax on most food we buy in grocery stores.
The budget’s “Grocery Rebate” label is all marketing.
But those who pushed for this measure, notably NDPers, are happy it is happening, no matter what they call it.
Dental care for adults as well as children
The other big social spending item – also high on the NDP’s list of priorities – is on dental care.
READ MORE: Ten NDP priorities in 2023
In 2022 the government launched a dental benefit for children under 12. The 2023 budget announces an expansion of that benefit to adults.
By the end of this year, the Canada Dental Care Plan will provide oral health coverage for all uninsured Canadians with annual family incomes under $90,000 per year.
There are, as yet, few details, but it appears eligible Canadians will have to pay out of pocket and then make claims, as with many private insurance plans.
It is far cry from universal, comprehensive dental coverage, on the model of Canada’s health care public insurance system.
Still, this new dental plan should encourage millions of Canadians who consider visits to the dentist to be too expensive to take better care of their teeth and gums. Not doing so can be extremely detrimental to one’s general health.
In fact, the budget recognizes that ability to pay is not the only barrier to dental care many Canadians face.
In addition to the Dental Care Plan there will also be an Oral Health Access Fund to “address oral health gaps among vulnerable populations and reduce barriers to accessing care, including in rural and remote communities”.
If you have dental coverage, but there is no dental service available anywhere near where you live, that coverage is close to useless.
Canada’s answer to Biden’s subsidies for green industry
The flashiest new spending item in Budget 2023 comes in the form of $80 billion, spread over more than a decade, to encourage businesses to make greenhouse-gas-reducing investments.
Canada, here, has adopted some of U.S. president Joe Biden’s climate change strategy, contained in his landmark Inflation Reduction Act. But our government has crafted a distinctly Canadian version.
While the U.S. will rely on massive subsidies to industry to spur clean energy innovation, Canada’s approach will focus more on investment tax credits. Corporations will have to show results to get access to public money.
The measures announced on Tuesday include:
A 30 per cent tax credit – which started on budget day – on the capital cost of corporate investments in wind, solar and energy-storage technologies.
Another 30 per cent tax credit for investment in machinery and equipment used to manufacture clean technology and extract “relevant critical minerals”.
There was much chatter about these rare, critical minerals during the U.S. president’s recent visit to Canada. They are necessary for the production of what, in the industry, they call “energy-storage equipment”. Some of us call such equipment batteries.
As well, there is a 40 per cent investment tax credit for so-called green hydrogen projects, although critics are not sure exactly how green hydrogen is. Some hydrogen projects could require using power generated by oil and gas.
The budget recruits the Canadian Infrastructure Bank, an entity the Trudeau government created during its first mandate, to the climate cause. It assigns $20 billion to the Bank for direct clean energy and green infrastructure investments. This will be actual public spending, in partnership with private business, not spending in the form of tax incentives.
And, finally, the budget even sees a green role for non-private-sector, corporate entities such as Indigenous communities, Crown corporations, and publicly-owned utilities, in the form of a 15 per cent tax credit on the capital costs of investments in renewable energy, energy storage and other non-carbon-emission-producing electric infrastructure.
Market-oriented commentators appreciate the government’s incentives as opposed to the U.S.’s direct-subsidies approach. They give the government credit for committing public funds to industry in a way that will not produce photo-ops of MPs handing out big cheques.
In one way, however, this new Canadian effort does mirror what the U.S. is doing.
As does Biden’s Inflation Reduction Act, the initiatives announced in the 2023 Liberal budget include incentives to hire union labour, and where there are no unions, to match union wage rates and benefits such as pensions.
The NDP’s Jagmeet Singh had particular praise for that aspect of the Trudeau government green energy plan. Singh said this was unprecedented. No previous government had ever tied unionization and workers’ remuneration to federal incentives to private industry.
The progressive think tank, the Canadian Centre for Policy Alternatives (CCPA), took a more skeptical view of the budget’s green plan.
In the CCPA’s view the budget gives too much control to giant private sector corporations.
“When it comes to climate action, this budget comes up with the money, but it hands the wheel over to corporate Canada to drive the transition,” the CCPA’s Senior Researcher Hadrian Mertins-Kirkwood said. “The climate crisis demands urgent and bold public leadership, but today’s budget instead defers to the private sector to solve the problem.”
The same researcher pointed out that the budget “does little to address Canada’s biggest source of greenhouse gas emissions: the fossil fuel industry. Without a plan to wind down oil and gas extraction, Canadian climate action continues to fall short.”
On that latter point, NDP leader Singh at least partially agreed – although his party will nonetheless vote in favour of this budget, as is, when the time comes.
Singh told more than one interviewer, post-budget, that the Liberals have missed a big opportunity to find more revenues by ending fossil fuel subsidies.
The oil and gas sector is currently earning whopping record-setting profits – far bigger than grocery retail, for instance – yet still benefits from subsidies, such as tax breaks for investments in exploration. As well, public funds are helping these massively profitable corporations clean up the polluting infrastructure – which includes decommissioned wells – they created.
Not surprisingly, this budget is getting a fair bit of love from spokespeople for corporate Canada.
The Business Council of Canada was quick out the gate on budget day. Its 170 members represent Canada’s major economic sectors, including banking, finance and insurance, oil and gas, food processing, manufacturing, high-tech, real estate, engineering, transport, and communications.
The Business Council’s president Goldie Hyder was unreservedly positive about the newly announced green incentives to industry:
“The targeted investment tax credits reflect a recognition of the need to improve Canada’s competitiveness in the low-carbon economy and respond to global pressures, notably the Biden Administration’s Inflation Reduction Act.”
At the same time, Hyder and the Council worry about federal deficits projected far into the future. While the budget shows the federal deficit trending downward over time, it includes no plan for achieving a budgetary balance in the foreseeable future.
“This budget increases the national debt burden at a time of higher interest rates,” Hyder pointed out. “More of every taxpayer dollar will now have to go towards servicing the debt.”
In addition, the big business folks are only modestly optimistic the Trudeau government will live up to the budget’s plan to “improve the efficiency of the impact assessment and permitting processes for major projects.”
Big business seems to buy Conservative leader Pierre Poilievre’s argument that “gatekeepers” impede economic growth. The Trudeau team worries the Conservative leader’s rhetoric is having an impact on public opinion. And so, the 2023 budget underscores what the government is doing to “streamline” project approvals.
Streamlining measures include $1.3 billion over six years to the three main regulating agencies – the Impact Assessment Agency of Canada, the Canada Energy Regulator, and the Canadian nuclear Safety Commission – and to ten other federal departments to “improve the efficiency of assessments for major projects”.
It seems those regulatory initiatives might not be enough for big business. They will certainly not satisfy Mr. Poilievre.
Limits on credit card fees, no action on EI, not much on housing
The people who speak for small business, the Canadian Federation for Independent Business (CFIB), were almost over the moon with one highlight of the budget, an agreement with the two largest credit card companies, Visa and Mastercard, to lower fees to small businesses.
Those credit card fees will come down by as much as 27 per cent, the budget says, but it provides few details.
The CFIB is applauding, while holding its breath and hoping for the best.
The small business group also made a point of praising what the government is not doing about Employment Insurance (EI). The government has no plans to expand that inadequate program to properly cover the millions of workers who are left out of it.
Small business is happy it will have no further obligations to its workers, while progressive commentators and the NDP are disappointed, but not surprised, at the inaction on EI reform.
On housing, especially rental housing, the budget offers some brave words, but little that is new and tangible.
Last year the government did bring in some big housing measures, such as a two-year ban on foreign investment in Canadian housing, a tax on under-used foreign-owned homes, and measures to make sure property flippers pay their fair share.
This year there is mostly rhetoric.
“Homes should be for Canadians to live in—not a financial asset class,” the budget says. “While large corporate investors own a significant share of Canada’s rental units and will play an important role in building new homes, the government recognizes that too many Canadians have experienced excessive renovictions, above-guideline rent increases, and other actions that have made rent more expensive.”
The budget then admits “more needs to be done”, but only promises that “policy changes” for major corporate landlords “could be considered to ensure best outcomes on affordability and fair treatment of tenants.”
There is no indication the government has anything resembling a plan to deal with the corporate landlord conundrum, and, more specifically, such troubling phenomena as the proliferation of real estate investment trusts (REITs).
For renters, the government is only “committed to ensuring that investor activity, especially among those who own a significant number of investment properties, is helping, not hurting, housing affordability …”
For prospective homeowners, the budget reiterates a previous pledge to come up with a Home Buyers’ Bill of Rights, which would “make the process of buying a home more open, transparent, and fair.”
Such a Bill of Rights “could include ensuring the legal right to a home inspection, requiring that real estate agents disclose whether they are representing both sides of a potential sale, and ensuring transparency on the history of sale prices.”
There is no timeline for the Bill of Rights project. All the budget says is that the government is working with the provinces and territories on it.
There is more in the budget – such as an intriguing plan to implement an obligatory, common charger for all phones, laptops and other devices. The government is consulting internationally on that idea.
Equally intriguing is the item in the budget about a new “right to repair”.
“When it comes to broken appliances or devices, high repair fees and a lack of access to specific parts often mean Canadians are pushed to buy new products rather than repairing the ones they have,” the budget states. “Devices and appliances should be easy to repair, spare parts should be readily accessible, and companies should not be able to prevent repairs with complex programming or hard-to-obtain bespoke parts.”
Here the budget is quite concrete. The government has pledged to “implement a right to repair, with the aim of introducing a targeted framework for home appliances and electronics in 2024.”We at rabble.ca will have more on this and many other vital budget-related matters in the days to come.
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Nick Seebruch, editor
