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2017 Budget: What's new?

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April 3, 2017

2017 Budget: What's new?

By Andrew Cardozo

From The Hill Times

There’s more to the stay-the-course budget than suggested
First published in the Hill Times
Monday, April 3, 2017
Depending which part of Finance Minister Bill Morneau’s budget you focus on, it was any of those things and more. The Hill Times photograph by Jake Wright
PUBLISHED : Monday, April 3, 2017 12:00 AM
OTTAWA—So what kind of budget was it? An innovation budget? A skills budget? A gender-aware budget? A social safety net budget? Or an environmental budget? Stay-the-course seemed to be the pundits’ consensus. I’m not so sure.
Depending which part of Finance Minister Bill Morneau’s budget you focus on, it was any of those things and more. At the same time, it was a cautious budget, whose broad strokes were set in the budget of 2016, with another shoe to drop perhaps in the upcoming fall economic statement which will deal with other more substantive issues, once the direction of the Trump administration becomes clear, assuming things will be that simple down south.
But Lorne Bozinoff of Forum Research says it was a very unpopular budget and he asked several questions about the details, albeit shallow questions. I find that hard to believe that this relatively safe budget, largely consistent with last year, was a major problem. Forum found that while the overall budget was unpopular, all its major component parts rated strongly. I think there is a larger issue or another one and one that the opposition parties have been hammering away at.
So to begin with, it was an innovation budget. It promises to spend $950-million over five years to support building innovation “superclusters” (largely re-directing existing funds with some new monies), and to help spur centres of innovation in a few parts of the country. One of the bravest parts of the budget was its naming of priority sectors—picking winners and losers. The six broad innovative sectors are: advanced manufacturing, agri-food, clean technology, digital industries, health/bio-sciences, and clean resources.
More was expected on the innovation front. This isn’t the whole of what the industry was hoping for, but it’s a clear marker.
For starters, the budget identifies the three main challenges for Canadian innovation: not enough investment in research and development (from government and the private sector), the lack of skilled workers needed today and tomorrow, and the need for better access to export markets. For too long the debate around innovation has been too vague and amorphous. Identifying three challenges and acting upon them is a key development.
Related to innovation are two new developments: a new organization to support skills development and measurement, presumably to get a better handle on what skills are needed in the economy and to guide students and educational institutions. What we need is better “labour market intelligence” that describes the current needs and workforce, forecasts future needs based on a range of economic and market trends and considers the demographics of who is in the workforce and then forecasts the needs for several years hence. This long-term approach is necessary because the education pipeline is a very slow one.
This initiative will include an investment of $225-million over four years, after the previous Conservative government had largely defunded the array of sector councils which performed just this task across all major sectors. A bit of back-to-the-future here, and wisely so.
Then there is what needs to be Canada’s third official language. Coding. This issue is exciting and timely. The feds will fund non-profit organizations in the field to the tune of $25-million a year for two years, to provide coding training for kids, in the kindergarten to Grade 12 school system. It’s a creative way to get around the fact that education is a provincial responsibility. It’s a bit of a risk to do this circuitous route, but hopefully the provinces will get into the act too, because coding needs to become mainstream in our education system. Too few young people today are getting training in this very basic skill which is needed tomorrow, if not today.
There will also be a push on STEM—education in science, technology, engineering, and math. Again, the feds using a bit of spending power, well about $2-million a year, to creatively meddle in the education system.
There is also support for the artificial intelligence industry, expanding high-speed internet in rural areas and developing a global skills strategy which includes faster entry for foreign high-skilled workers. This may become easier as international workers begin to look more favourably to Canada in light of the Trump immigration restrictions, or threatened restrictions.
Several of these measures make it a skills budget, even in jurisdictions where the federal government does not officially have responsibility. And when the feds promise dollars the provinces tend not to complain much although they would rather the money was given to them to spend.
This budget also begins a new aspect—providing a gender analysis of federal programs and policies, something that will happen every year. Many government policies do affect women and men differently and this approach is designed to highlight those areas and to eliminate disparities. These issues are as diverse as the Canada Child Benefit, science training for girls, and vocational training for women re-entering the workforce.
It’s a social safety net budget as the net is expanded between the Liberals’ two budgets. The 2016 budget introduced the Canada Child Benefit and this budget adds new money for early learning and child care ($7-billion) and brings the federal government firmly back into the housing field ($11.2-billion), an area they vacated back in 1988.
And it’s an environmental budget which saw the end to the urban transit tax credit, but did see $20-billion for public transit and $22-billion in green infrastructure spending.
Now a lot of these expenditures are spread over many years and, in some cases, almost a decade, which has drawn some skepticism. Demonstrating that they are keeping their promises will be a key to see some of the lofty goals being met.
A bit more than stay-the-course, I would suggest.
The Hill Times
Andrew Cardozo is president of the Pearson Centre for Progressive Policy and an adjunct professor at Carleton University.