Federal budget projects $18.1 billion deficit for 2018-19

By Canadian Press
February 27, 2018 - 1:15pm

OTTAWA —The Trudeau government has tabled a budget that will use billions of dollars worth of fresh fiscal runway for new investments — but it leaves Ottawa with no timetable for balanced books anywhere on its horizon.

Finance Minister Bill Morneau's budget will channel the extra dollars into new spending that he's banking on to lift Canada's long-term growth.

Morneau says the new spending will be carried out in a responsible way and argues his earlier investments have already produced encouraging economic results.

Compared to the fall, the government has $19.8 billion in additional cash to play with over the next six years — an average of $3.3 billion per year in extra fiscal elbow room.

The extra money comes from a number of sources, including the stronger economy, revenues from tax changes for private corporations, lower-than-expected departmental spending and re-profiled infrastructure commitments.

The government is projecting deficits roughly in line with its October projections. The new outlook now shows a $18.1-billion shortfall for 2018-19 that's expected to gradually shrink to $12.3 billion in 2022-23, including annual $3-billion cushions to offset risks.

Here are the budget highlights in more detail:

  •     ``Proactive'' pay equity legislation, as well as $3 million over five years for a ``pay transparency'' measure, to close the wage gap among federal workers and in federally regulated sectors, impacting some 1.2 million people.
  •      The ``Advisory Council on the Implementation of National Pharmacare,'' to be headed by former Ontario health minister Eric Hoskins, which will explore ways to establish a national drug program.
  •       $3.2 billion over five years for Canadian science and research, including money for granting councils and Canada Research Chairs, upgrading outdated laboratory facilities and harnessing the power of ``Big Data.''
  •       $2.6 billion over five years for a wide array of measures to encourage and foster scientific innovation and gender equality in the field, including encouraging female entrepreneurs and business leaders, revamping procurement and expanding access to broadband internet.
  •      A federal deficit of $18.1 billion, including a $3-billion ``risk adjustment,'' down from $19.3 billion last year, that's projected to decline slowly over the next several years, reaching $12.3 billion ($9.3 billion without the $3-billion cushion) by 2022-23.
  •       About $1.4 billion over six years to support Indigenous children in foster care and promote family reunification, plus $400 million over 10 years to upgrade and expand Inuit housing and $500 million for Metis housing.
  •       Higher excise taxes on tobacco products, including a $1 increase on a carton of 200 cigarettes and an adjustment that would see taxes increase with inflation every year, rather than every five years.
  •       $1.2 billion over five years and $344.7 million a year afterward for a new employment insurance parental sharing benefit that would provide additional ``use-it-or-lose-it'' benefits for non-birthing parents to encourage women to re-enter the workforce.
  •      $2 billion over five years for international aid through a new International Assistance Innovation program, designed to come up with flexible new financing arrangements, and the Sovereign Loans program.
  •       $155.2 million over five years for a new Canadian Centre for Cyber Security and $116 million over five years for the RCMP to create a National Cybercrime Co-ordination Unit.
  •       $448.5 million over five years to double the number of plac ments under the Canada Summer Jobs program by 2019-20.
  •       $172 million over five years and $42.5 million a year afterward for the Canada Media Fund to foster the growth of Canadian-produced content.
  •       $50 million over five years to support ``local journalism in underserved communities,'' and plans to explore new models that would allow private and philanthropic support for ``non-profit'' journalism, including allowing Canadian newspapers to receive charitable status.
  •       $75 million over five years, with $11.8 million a year afterward, to bolster Canada's trade ties with China and Asia.
  •       $191 million over five years to support jobs in the softwood lumber industry, including litigation under the World Trade Organization and NAFTA's dispute resolution mechanism.
  •       $90.6 million over five years to track down tax evaders and avoiders, plus $41.9 million over five years and $9.3 million a year thereafter to help Canada's courts deal with the additional caseload.
  •       Changes to income sprinkling, passive investment income and the small business tax rate that are expected to save the government $925 million a year by 2022-23.
  •       $173.2 million in 2018-19 to support claim processing and to improve border security to better manage the increased number of people seeking asylum in Canada.

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