Justin Trudeau’s 2018 Federal Budget Was Aggressively OK

Can’t believe we’re here folks: the third Bill Morneau budget. Our governments grow up so fast. One minute they’re all young and fresh-faced and promising that they’ll have the budget balanced again by 2019, and then the next they’re a grizzled husk looking to kick that debt can down the road past the next election. Time flies when you’re having fun.

The big theme of the budget this year is “equality,” which should surprise no one. This budget is the first to emerge out of the “gender-based analysis” the Liberals brought in with their budget last year. Accordingly, one of its major highlights is a commitment to closing the wage gap between men and women in the public service and federally-regulated private sector. The plan is to bring in pay equity legislation modelled after what has been done in Ontario and Quebec, although the cost of this plan and the details about how it would work still remain a mystery.

Similarly, the Liberals also plan to spend $1.2 billion over the next five years to establish a paternity leave program. Those “second parents” who take at least five weeks off to care for their children during the 12 month parental leave period will be compensated at 55 percent of their income. For those who take the 18 month leave, that compensation becomes 33 percent and runs for up to eight weeks. These new parental leave benefits will also be available to same-sex couples beginning in 2019.

Indigenous child and family services will also get $1.4 billion over the next six years, in the hopes that it will strengthen service provision enough to enable more Indigenous children to remain home with their families and communities. Although Indigenous children only make up about 8 percent of all children in Canada, they account for more than half of all children in foster care. This is part of the overall $4.1 billion pledged for Indigenous water, housing, and childcare in the 2018 budget, and the total $16.5 billion, spread out over seven years, that the Liberals have earmarked for Indigenous issues since their first budget.

There is also about $3.8 billion allotted in the budget for scientific funding. The lion’s share of which will go to fundamental research projects happening at Canadian universities, but at least $600 million will go towards upgrading federal government laboratories and coordinating scientific activity across government. A few hundred million more dollars are earmarked for “innovation,” including the Industrial Research Assistance Program, female entrepreneurs, and a new intellectual property regime.

Other things also appear in the budget: $500 million for cybersecurity; $50 million for community journalism (and maybe newspapers will become non-profits); $62 million for a public education campaign about the dangers of drug use in the wake of legal weed; $231 million to tackle the opioid crisis. They established an advisory council on bringing in a national pharmacare program, so look forward to that ahead of the next election. They’re also going to cancel the Phoenix pay system that has aggrieved millions of federal employees since its introduction. But in the meantime, they’re pumping in another $430 million dollars over the next six years to sort out all its currently-existing problems.

Anyways, that’s the sizzle reel of the 2018 federal budget. There is something in here for almost everyone. Even the deficit hawks! Team Trudeau campaigned in 2015 on running a small deficit to jump-start the country’s infrastructure before returning to a balanced budget by 2019, but this is not going to happen. Budget 2018 projects a deficit of $18.1 billion for the 2018-19 fiscal years, before eventually easing off to $12.3 billion by 2022-23. Understandably, this has given conservatives across the country a minor conniption.

Before anyone freaks out about Canada’s impending federal debt apocalypse: the sky is not falling. Even with the string of post-Trudeau deficits, the country’s overall debt-to-GDP ratio is still set to decrease. UBC economist Kevin Milligan has a good thread unpacking what this means on Twitter, but the tl;dr version is that fears about the nominal federal deficit are greatly exaggerated. In the grand financial scheme of things, these deficits are minor compared to what is produced annually by the Canadian economy, and the feds have pretty good long-term fiscal prospects.

(The provinces, on the other hand, are a very different story. But let’s not worry about that right now!)

So chalk this whole deficit thing up to another broken promise from the prime minister. (He is very bad for that.) But that too is part and parcel of a budget that is, by and large, more smoke than fire. It contains no groundbreaking measures nor expansive visions—beyond prepping some version of a pharmacare policy to likely anchor their 2019 election campaign. The budget’s ideological commitment to liberal feminism is admirable, but even most of those measures are comparatively light.

Don’t get me wrong. Subsidies for female entrepreneurs/athletes and a month or two of paternity leave are more than welcome. But if the goal is to supercharge the economy by filling the workforce with women freshly emancipated from the drudgery of domestic labour —and we’re copying Quebec anyway—why not just bring in a childcare program? As former Saskatchewan finance minister Janice MacKinnon told CBC, it really does appear like the Liberals opted for a symbolic flash-in-the-pan approach to gender equity rather than taking it soberly or seriously.

To a lesser degree, you could argue the Liberals are doing the same thing with the deficits. Given that they are comparatively small—and that the debt-to-GDP ratio is still projected to decrease—it is likely that the government’s emphasis on providing infrastructure spending (although there was little to none in this budget) or social programs with a deficit is another symbolic gesture. It signals their progressive credentials to a Canadian electorate long-conditioned to believe that the primary ideological cleavage in political life is that the Left spends money and the Right does not, which is very important in a party system with two leftish parties against a single conservative opponent. This was part of the Liberal resurgence against the NDP in the 2015 election and it’s clear that they’re sticking with it. When Mulcair promised to balance budgets, Trudeau promised to run a deficit. (For the record, Harper’s last “balanced budget” was as much political posturing as this one; the Conservatives sold off the government’s stake in the auto sector to fudge the numbers on their books. Substantive federal budgets have already joined the Sears Catalogue and Rupert’s Land as another unhappy ghost of long-gone Canadiana.)

It makes more sense, then, to see this all as a pre-pre-election budget aimed at undercutting an electoral threat from the NDP. If you’ve got a Liberal government ready to give you pharmacare and a winking “money is no object” patronage to the equity-seeking groups it targets at election time—and they’re an incumbent “progressive” government trying to hold down the fort from the scary Conservatives—why do you need a Liberal-lite NDP? But that’s a question for Jagmeet Singh to answer at some point in the next 18 months.

Follow Drew Brown on Twitter.