Finance Minister Chrystia Freeland tabled every second federal budget Thursday promising a return to “fiscal responsibility” after years of big COVID-related spending.
It’s a noticeably thinner budget that left some of the Liberal Party’s major 2021 election promises on the cutting room floor. A number of those commitments – most notably more money for health care, mental health and long-term care, and more support for seniors – were slated to roll out starting in this fiscal year.
Freeland said the pandemic blew big holes in the federal budget and it’s now her job to “review and reduce” spending and revert to Canada’s “proud tradition” of spending within set limits now that the worst of COVID-19 is behind us. The budget is projecting $ 31 billion in net new spending over the next five years, a fraction of what the government has allocated in past budgets.
“Our pandemic deficits are and must continue to be reduced. The extraordinary debts we incurred to keep Canadians safe and solvent must be paid down,” Freeland said.
Freeland’s stated commitment to fiscal prudence caught some observers by surprise, considering the party election platform – released just eight months ago – made no mention of belt-tightening. In fact, the fiscal and costing plan from the election platform called for much more spending in some priority areas.
“We’ve got an issue here and it’s not about money. It’s about politics,” Armine Yalnizyan, one of the country’s leading progressive economists and an Atkinson Fellow on the Future of Workers, told CBC News.
“It’s incomprehensible because we have no affordability problem. We’ve had no trouble selling our bonds. In fact, our bond sales are oversubscribed. It isn’t that we couldn’t borrow more or raise taxes.
“They are appealing to ‘blue Liberals’ and Bay Street to de-fang some of their opposition from the right. It’s a political ploy to buy peace with the corporate chattering class.”
Yalnizyan said the government’s decision to slash a promised tax hike on Canada’s largest banks and life insurance companies was an unnecessary sop to corporate Canada.
In the election, the Liberals promised a 3 per cent “surtax” on those large financial institutions. Instead, the budget offers a 1.5 per cent increase to the tax rate paid by these companies on taxable income.
Yalnizyan, a strong advocate for the national child care plan the government eventually implemented, said she was most troubled by a gaping hole in the government plan for the “care economy” – a sector she said is in “chaos” after a debilitating pandemic left the country grappling with massive labor shortages in health care, child care and long-term care.
“People are leaving the sector in droves, the conditions are appalling and there wasn’t a word about that in this budget,” she said.
No new money for long-term care
While the budget allocates billions in new spending to rein in a hot housing market and help with the transition to a cleaner economy, it was all but silent on a major election promise: billions of dollars to support the country’s long-term care system, which has been particularly challenged by COVID-19.
Research suggests Canada’s LTC facilities have recorded some of the worst COVID-19 fatality rates in the world.
To address this, the Liberal platform promised $ 6.7 billion over the next four years for that file – a cash injection to “improve the quality and availability of long-term care homes and beds.”
In August 2021, Prime Minister Justin Trudeau also promised to spend $ 1.8 billion over four years to raise the salaries of personal support workers (PSWs) to at least $ 25 an hour and train 50,000 more of them to prop up a faltering system.
Freeland’s budget projects just $ 1 million in new spending on long-term care beyond the 2021-2022 fiscal year. In the 280-page document, there’s only one brief mention of LTCs.
CanAge, a national seniors’ advocacy organization, called the budget’s “oversight … a cause for concern.”
“A new budget is a golden opportunity for the federal government to show that it’s committed to helping older Canadians,” Laura Tamblyn Watts, CEO of CanAge, said in a media statement.
“Without the same attention paid to properly funding seniors’ care and implementing critical national initiatives like long-term care standards and the dementia strategy, it simply doesn’t go far enough.”
Freeland’s budget also doesn’t include another promised policy for seniors – a $ 500 increase to the Guaranteed Income Supplement (GIS) for low-income seniors and $ 750 for couples. That nearly $ 4.2 billion commitment was supposed to take effect this fiscal year; it’s not accounted for in the budget.
Liberals promised billions to hire more doctors
During the election, the party promised $ 3.2 billion for the provinces and territories to hire 7,500 new family doctors, nurses and nurse practitioners starting in this fiscal year.
It was money earmarked to expand access to primary care in a country where, according to StatsCan data, 14.5 per cent of the population – about 4.6 million people – say they do not have a regular health care provider.
As Health Minister Jean-Yves Duclos announced last month, the Canada Health Transfer – the money Ottawa sends to the provinces each year to cover some of the cost of running the health care system – will get a one-time cash infusion of $ 2 billion to help clear surgical backlogs.
Beyond the pre-planned yearly increase to the transfer – and a plan to implement some sort of dental program – the government has not allocated any additional funds this fiscal year to the health care system.
The dental care program – which will cost about $ 5.3 billion over five years and some $ 1.7 billion for every year after that – is a budget line-item but there is a plan yet to implement it. Officials told reporters in a budget briefing Thursday that the work will get underway sometime this year.
HealthCareCAN, an industry group representing health care organizations and hospitals, said it was pleased to see Freeland propose some tweaks to the temporary foreign worker program to help with health care staffing.
But the group said more is needed “urgently” to “shore up our overwhelmed health care system.”
“This budget does not effectively address what our health care system has undergone for the last two years. Canadians can no longer wait for the political leadership to build a modern health care system that provides timely access to high-quality care, regardless of where you are. are in the country. They want and deserve action now, “said Paul-Émile Cloutier, the group’s president and CEO.
Asked about the absence of new health spending, Freeland said no budget can be expected to do everything at once. She also said more funding could come after negotiations with the premiers – almost all of whom have said this is a top priority.
“We need to work with the provinces and territories to get this right. It’s a complicated challenge,” Freeland said. “It’s something that takes a lot of time.”
Many of the premiers have said repeatedly that new money for the existing health care system should be Ottawa’s focus – not an expansion through new programs like dental care and pharmacare.
Mental health care transfer missing from the budget
Canada is in the throes of a mental health crisis.
The pandemic-driven lockdowns, restrictions, limits on social gatherings and forced social distancing have been disastrous for this country’s collective mental health – prompting unprecedented levels of loneliness, depression, anxiety, stress and unease among some people.
According to figures supplied by the Canadian Mental Health Association (CMHA), a stunning 40 per cent of all Canadians have reported a deterioration in mental health during the pandemic – with people with pre-existing health conditions (61 per cent), the unemployed ( 61 per cent), people between the ages of 18-24 (60 per cent) and lesbian, gay, bisexual and transgender (LGBT) people (54 per cent) reporting numbers much higher than the national average.
COVID-19-related restrictions have exacerbated mental health concerns and addiction issues across Canada but the problem is particularly acute in the country’s rural and remote areas because access to services is so poor in so many communities, says a report recently released by the Mental Health Commission of Canada.
The Liberal Party identified this as an issue in the last election. Speaking at a campaign stop in August, Trudeau said “the past 18 months have been really tough” and Canadians “deserve the right support and that includes on mental health.”
Trudeau promised to create a new Canada Mental Health Transfer, with an initial investment of $ 4.5 billion over five years.
That money isn’t in this budget. Instead, the document said the government “intends to engage with the provinces and territories” before possibly allocating funds to such a program.
Michel Rodrigue, the president and CEO of the Mental Health Commission of Canada, told CBC News he was pleased to see the government commit some new funds to the problem.
While there’s no funding for a mental health transfer, the budget does include $ 140 million over two years to keep the “Wellness Together Canada” online portal functional. There’s also another $ 100 million over three years for Health Canada’s substance use and addictions program.
“The transfer is still very much in the works and that’s a positive thing,” Rodrigue said.
“But, of course, there could always be more. We are facing a parallel pandemic of mental health and substance use issues combined with an opioid crisis. There’s a lot of work ahead to really respond to the needs out there.”
Asked if more federal money should have been earmarked now, given that deteriorating mental health is such a pressing problem, Rodrigue said, “That’s a very astute analysis.”