Liberals' Maiden 'Sunny Ways' Budget Showers Spending, Deficits to Spur Growth

By Cheadle, Bruce | The Canadian Press, March 22, 2016 | Go to article overview

Liberals' Maiden 'Sunny Ways' Budget Showers Spending, Deficits to Spur Growth


Cheadle, Bruce, The Canadian Press


Sunny ways budget showers spending, deficits

--

OTTAWA - The new Liberal government delivered a sunny ways budget Tuesday brimming with optimism and billion-dollar spending increases spread across a wide spectrum of society.

But the bold effort to spur economic growth after almost a decade of fiscal restraint will add more than $100 billion to the federal debt over the next five years as Finance Minister Bill Morneau plunges Ottawa back into the red.

And like March sunshine in the frozen national capital, there's concern that Prime Minister Justin Trudeau's bright budget may not heat up the economy quite as much as the Liberals promised it would.

"We act for the years and decades to come," Morneau said in his maiden budget speech in the House of Commons.

"We act for our children and our children's children."

There's billions in new spending on infrastructure, Aboriginal Peoples, and transfers to middle and lower income Canadians in a budget blueprint framed by Morneau in terms of Canada's great post-war expansion of the last century.

"Confidence inspired investment," Morneau said of those high-growth, post-war decades. "Investment inspired confidence."

The Liberals claim their budget will create 100,000 jobs and boost national economic growth, as measured by gross domestic product, by half a percentage point per year -- a huge increase on a $2 trillion economy.

The promised sunny future comes with an immediate fiscal chill.

The Liberals are projecting a $29.4-billion deficit in 2016-17, followed by a $29-billion shortfall the following year and almost $23 billion in 2018-19. Over the next five years, Tuesday's budget shows $113.2 billion in red ink, including a $14.3 billion shortfall for 2020-21 -- after the next scheduled federal election.

During last year's campaign, the Liberals promised "modest deficits" of no more than $10 billion over the course of their mandate and to balance the books by 2019-20.

Times, it seems, have changed: The word "deficit" appeared nowhere in Morneau's budget speech, nor did "spending." "Investment," on the other hand, registered 22 times.

"Canadians gave them an inch and they're taking miles," Conservative interim leader Rona Ambrose said in a release, while calling the Liberal budget a "nightmare scenario for taxpayers."

The relatively slim, 269-page budget is packed with spending promises for all and sundry on every page. The final Conservative budget of April 2015, by contrast, weighed in at 518 pages while ratcheting down spending in a government-wide effort to show an election-year surplus.

On Parliament Hill, the post-budget stakeholder reaction bullpen -- typically a cauldron of grievances -- was largely singing the Liberal gospel.

But economist Craig Alexander of the C.D. Howe Institute sounded a note of caution.

"I think budget 2016 runs the risk of over-reaching," said Alexander. "The reality is the amount of money they have to make an impact is relatively limited. …

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