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Federal budget a small step forward when big steps needed

Ottawa (07 April 2022) — Today’s federal budget was billed as making life more affordable, but what is proposed falls short of what Canadians need. There is new funding for a dental care program and funding to respond to the housing crisis as well as some cautious steps towards tax fairness. 

However, given how much is needed if we are to recover from the COVID-19 pandemic and respond to climate change, the budget fell short. Equally worrying is that, instead of strengthening public services, much of the money to address problems like the housing crisis and climate change is going towards more tax breaks and attracting private sector investment. This approach has failed to deliver for Canadians in the past and there is no reason to believe it will succeed now.

Health care a high-priority in words but not in deeds

Both the pandemic and the Liberal-NDP Confidence and Supply Agreement have placed a high priority on health care initiatives. Some of these are back ended in later years of the agreement, with dental care being the notable exception. The $5.3 billion over 5 years for dental care is a significant investment and in line with expectations. While it is important to invest in increasing access to dental care, this announcement does not expand our public health care system to include dental care. Instead, it acts as an insurance scheme which utilizes existing private dental care. The NDP, in the last election, promised dental care would be brought under the Canada Health Act and this does not achieve that goal.
Pharmacare is even more problematic, with the federal government only offering past promises with no new funding. These promises are focused on regulatory initiatives. The Liberals know that pharmacare will only be acceptable to the provinces if the federal government makes significant and permanent financial commitments. The blueprint for the implementation of national, universal, single-payer pharmacare was outlined by the National Advisory Panel on the Implementation of Pharmacare. The federal government needs to fund and implement this plan and the NDP needs to press them to ensure that investment is made and that a pharmacare bill promised in 2023 is substantial.
Finally, the government has confirmed promised funds of $4 billion under a ‘Helping Health Care Systems’ line in the budget. Some of this will be for long-term care (LTC) but beyond the 2021-2022 fiscal year, there is no new spending. There is a promise of a ‘Safe Long Term Act’ but this must include national standards that are strong, enforceable and ensure accountability. LTC, like dental care, should be brought under the Canada Health Act to ensure seniors across Canada are treated equitably and provided with the care they deserve. What's in the budget falls far short of that commitment.
Provincial governments will not be pleased, as they have not received a massive increase in health transfers. There are some funds under a ‘Safe Restart Agreement” designed to deal with the surgical backlogs. Overall, health care spending must be increased on an ongoing basis as the system needs investment and a commitment to deal with the staffing shortages. It is important that increased spending not go into general provincial revenue without any accountability. Health transfer increases must be spent on health care.  

Questions around support for climate action 

The budget includes more investment in climate action but it remains to be seen whether it will be enough to meet the scope of the crisis. The National  Union of Public and General Employees (NUPGE) called for investment in high-quality public services and a Just Transition, not corporate tax breaks or investment in new fossil fuel infrastructure. Also, the budget says nothing about supports for the workers or communities that will be affected by the energy transition.

Not clear if child care funds will go where they will do the most good

NUPGE has long been calling for a universal child care system. We welcomed last year’s budget announcement and the bilateral agreements that have since been reached, but have been clear that the details matter. For example, we believe that public funds must go towards the public and non-profit sectors, not enriching for-profit providers. In our pre-budget submission, NUPGE urged the federal government to allocate more funds to public and non-profit providers to ensure they have the capacity to expand the number of child care spaces. It appears that the budget includes additional funds for infrastructure, but it is not yet clear whether this will be designated for the public and non-profit sector.

More affordable housing needed

It is already clear that the housing plan in the federal budget won’t live up to the hype. What is needed is more affordable housing, particularly rental housing. And if that housing is going to stay affordable, it needs to be owned by public, cooperative or non-profit housing. The portion of new funding that is going to help build more affordable housing is inadequate. In addition, there was no recognition that, when money for affordable housing goes to for-profit developers, they will be jacking up the rents as soon as they can get away with it.

Similarly, restricting the ability of foreign buyers to purchase housing for investment purposes and a potentially modest tax on property flipping is only addressing part of the problem of rising housing costs. It is because investors are being allowed to use housing as a way to generate large profits that prices are going up — regardless of whether the money comes from inside or outside of Canada. A number of recent examples of people losing their homes because of housing being treated as an investment have involved Canadian investment firms

Conservative focus on austerity makes it easier for the Liberals to get away with half measures 

Ideally, the official Opposition would be calling the government out for inadequate or half measures. Unfortunately, even though the combination of austerity policies and tax cuts for the wealthy and large corporations has failed repeatedly in the past, the Conservatives are pushing this approach. This means that, instead of holding the government to account, Conservative criticisms of the federal budget are likely to make it easier for the Liberals to get away with half measures that don’t do enough to address the needs of Canadians.