Prime Minister Justin Trudeau (left) walks with Minister of Finance Bill Morneau as he arrives to table the budget on Parliament Hill, Tuesday, March 22, 2016 in Ottawa. The Trudeau government will table the second budget of its mandate Wednesday. THE CANADIAN PRESS/Justin Tang

Budget 2017: big on ideas, small on spending

Federal budget out Wednesday

OTTAWA — The federal government’s second budget Wednesday is expected to emphasize skills and job training, but will also illustrate lessons learned as Justin Trudeau’s Liberals move away from the sunny ways of 2015 and towards the hard truths of the next campaign.

The last time Finance Minister Bill Morneau went through this exercise, the Liberals were still all aglow from their election win; the ensuing budget read like a longer — and more expensive — version of their campaign platform.

Now, after a bruising year in government and a U.S. election that challenged assumptions around the world about how politics is supposed to work, the 2017 budget is expected to take a more cautious, steady-as-she-goes approach.

With lacklustre growth sill plaguing the Canadian economy and the tab for last year’s billions and billions of dollars worth of commitments looming large, the government has precious little room to introduce new spending.

That doesn’t seem to have prevented anyone from asking: MPs heard from 293 witnesses and received 444 written submissions during pre-budget consultations. Nearly 600 organizations, businesses, universities and other groups are registered to lobby finance officials on the budget.

And that doesn’t even include the 28 people in cabinet, not counting Morneau or Trudeau, who prepared funding requests — budget “asks,” in political parlance — to help them tick off the boxes on their ambitious mandate letters.

A lot are likely to be disappointed: big commitments in areas like defence and international aid are expected to be put off until later in the four-year electoral calendar.

Perhaps because spending expectations have been pushed so low, the Liberals hinted Tuesday at bolder steps in social policy, in particular helping those who fear being left behind by the government’s big plans for economic innovation.

“Not everything is spending; not everything is money,” said one Finance Department source, speaking on condition of anonymity in order to discuss details in advance of the budget’s release.

The budget will still be “transformative” and “bold” in terms of what it will do for Canada’s policy direction, particularly in areas like skills, training and innovation, insisted the source.

“The budget’s a public policy document and I think the story will be much more into where the country needs to go as opposed to dollar amounts,” the source said.

“If you’re just looking at tables, that’s not where this story is going to be.”

So where is it?

Morneau dropped some major hints in a speech last week in Germany, where he argued that “anti-globalization, protectionism and even anti-immigration sentiments” are stoked when people feel nervous about their future.

“They look at the pace of technological change, and the seemingly never-ending need for new skills, and are understandably stressed about the future. It’s hard to feel confident, and to face every day with optimism, when you can’t see what’s around the corner.”

One way to respond to that challenge, Morneau said, would be “a culture of lifelong learning, helping people develop the skills they need at every stage of their life to succeed in the new economy,” which he said he would be taking steps to create.

And while the annual tradition of the finance minister buying a new pair of shoes often brings clues about the budget narrative, the symbolism this year seemed heavier than most.

The dress shoes, black with laces, were designed by the two Canadian sisters behind Poppy Barley, an Edmonton company that says its shoes are hand-crafted by fairly paid artisans in Mexico. Morneau donned the shoes in a Toronto classroom, surrounded by children of diverse backgrounds, including girls wearing the Muslim hijab.

The Opposition, meanwhile, wants to see more than just bold ideas.

“Justin Trudeau has racked up the credit card and now he needs money to pay the bill,” said interim Conservative leader Rona Ambrose, who said she expects to see tax increases in Wednesday’s document.

New Democrat MP Alexandre Boulerice said the time has come for the government to close tax loopholes that benefit the rich, and use the proceeds to help more people.

“We can bring back billions of dollars for our social programs and public services,” Boulerice said.

— Follow @smithjoanna and @AndyBlatchford on Twitter

Joanna Smith and Andy Blatchford, The Canadian Press


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