Timing Is Everything: The ‘All in This Together’ Budget

John Delacourt

April 19, 2021

It is a quiz question for Zoom dinner parties only in Ottawa: what vote brought down the last Liberal minority government in 2005? Those with long memories or quick, furtive Googling skills on their iPhones off-screen will quickly shout “health care!” As if it were inevitable that the fault lines within parliament must open up and widen, time and again, on some fundamental question of how large a role the federal government will play on big ticket items governments will contend with for years to come.

If you’re the Opposition, Budget 2021 just provided you with another centrepiece, big ticket policy item: the $30 billion commitment, over five years, for a national program to ensure child care is accessible and affordable for every family. Finance and Minister-of-Everything Minister Chrystia Freeland even signaled this was coming at the Liberals’ recent convention so the Opposition could sharpen their attacks. She chose, above all other policy fronts to focus on, to convene a dialogue with the last Liberal who tried to launch a national childcare plan, Ken Dryden. Here was a platform plank for building back better that the Conservatives could force this government to walk.

And two years ago, this might have been just one of the many reasons for a confidence vote for the Conservatives. We have a $400 billion deficit projected in this budget, which could be considered the “avalanche of spending” that shadow Finance Minister Ed Fast distinctly counseled against in his letter to the deputy prime minister last week. The commitments for health care, pharmacare and clean technology transition could only further coarsen relations with the provinces, seven premiers of which are either conservative or conservative-leaning now — a notable change in dynamics from when Trudeau won his only majority government in 2015. We should all be talking about how this government has sealed its fate with the Opposition, given how generous these commitments are.

And yet we are not — and we will not, any time soon. Because what this government has known for months now is that even conservative-leaning voters do not want to talk about belt-tightening right now. The economy may be doing better than expected, with growth surging to nearly 10 per cent in the fourth quarter of last year, unemployment down to 7.5 per cent, consumer confidence at a three-year high, but ask a working mother who, after months of balancing looking after her kids and work priorities in the same space, if she feels that what the Liberals have sketched out today on child care is a deal-breaker for her, or if she wants less government in her life to battle the she-cession. Or ask those in the baby boomer demographic if there’s just too much of a focus on long-term care, or too much of a handout for small businesses. You know, those same businesses that aren’t boarded up on Main Street. The numbers for recovery may be promising, and Parliamentary Budget Officer Yves Giroux could be proven right that a stimulus package this large is “miscalibrated”. But try campaigning on miscalibration this summer. Put it in big bold letters on the side of your bus, if indeed you can actually travel anywhere beyond the virtual hustings.

Timing in politics, as it turns out, might really be everything. The Liberals, early in the drafting of this document, thematically divided its commitments into three “buckets:” finishing the fight against COVID, focusing on jobs and growth through social infrastructure, and building a better fairer country by looking at long-term strategies to address the systemic inequities the pandemic exposed. As third-wave infection rates have taken off with the spread of new variants and provinces have scrambled to implement – or re-implement – measures to contain the virus, the economic horizon remains overcast at best for many. And building back better does not have quite the hopeful ring to it when, despite the rollout of vaccines, Canadians have an overwhelming sense of reversion to the pandemic’s starkest limitations on interactions — and economic transactions.

The government has stated that if they could reduce the budget to one line (out of a whopping 724 pages), it would be “we are all in this together.” They have focused on early learning, support for low-wage workers, racialized Canadians and young people, micro-targeting investments to ensure that the economic recovery is truly equitable. It’s an effort to ensure that what we’re seeing in growth numbers actually begins to be felt by those whose greatest concern is that they will be left behind in a rapidly evolving economy.

Such measures may prove to be ultimately effective, but it is also the macroeconomic considerations for investment and growth that are of note. The promise of a return to a still-notional fiscal anchor was fulfilled. This budget commits to a debt-to-GDP ratio that will be below 50 percent by 2026, which fares well in comparison to other OECD countries. A more salient comparison might be to the debt-to-GDP ratios recorded in the high 60s back in the early nineties here in Canada — or the 100 percent recorded in 1945-46.  The closer you look and the more you compare with other crises and other countries right now, you realize this budget, as eye-watering as a $400 billion dollar deficit might be, actually aims down the centre right now, where Canadian voters still tend to gather — five metres apart, of course.

So, given the force of the third wave and the lack of any clear “poison pills” in this hefty tome, we are likely in this together at least until the fall, when, vaccinated and headed for some measure of economic recovery, Canadians might be more amenable to an election.

Contributing Writer John Delacourt, Vice President and Group Leader of Hill & Knowlton public affairs in Ottawa, is a former director of research for the Liberal research bureau. He is also the author of three novels.