Budget 2016: A Growing Concern

With all the salacious news stories covering the United States’ elections, it is easy to forget that the Minister of Finance, Bill Morneau, has presented his first federal budget – the first of the new Liberal mandate. A federal budget is a complicated piece of governmental policy, but is an effective way for governing parties to translate their ideology into public policy. Each budget is hundreds of pages long, and covers numerous issues. I will glance over the most prominent points of this budget for students, but more important than those individual pieces is the politics behind it all.

In their press release, The Canadian Alliance of Student Associations (CASA) highlighted the positives and negatives of the Liberal budget as it pertains to student issues. On the positive side, the Liberals have increased the maximum Canada Student Grant amount for low and middle-income families by 50%, increased the Repayment Assistance Plan income threshold to $25,000, and increased work integrating learning opportunities for greater employment outcomes. However, according to CASA, the budget fails to address the increasing financial need of graduate students, and while it does invest $8.4 billion for Indigenous peoples, the budget does not explicitly remove the 2% cap on annual increases to the Post-Secondary Student Support Program for First Nations students.

What is really troublesome with the Federal Budget is the deficit that the Liberals are projecting. As everyone knows, the Liberals broke the mould during the federal elections, when they promised a $10 billion deficit for the next three years instead of pledging to balance the budget as every other political party had pledged to do. The deficit was pitched as a means of stimulating the economy with targeted spending on things like green and social infrastructure, and the Liberals added an additional promise of returning to balanced budgets by the end of their mandate. Voters overwhelmingly accepted their pitch, as a Liberal majority government was projected after all of Atlantic Canada went red. The Liberal’s infrastructure spending came through, however the promise for a modest deficit did not.

Instead of a $10 billion deficit, the Liberals are projecting a $29.4 billion deficit for 2016-17. Additionally, while the Liberals had promised to return to a balanced budget by the end of their mandate, they are now projecting a $14.3 billion deficit for 2020-21, with no stated plan to return to a balanced budget. The budget has been praised by some for being the most progressive federal budget ever seen, and many have recognized that the projected deficit of $29.4 billion is a consequence of the Liberals efforts to keep their many progressive campaign promises, after they were given the lack-lustre books by the outgoing Conservatives.

However, during the campaign, then-Prime Minister Stephen Harper openly mocked Trudeau’s promise to run three modest deficits, and former Conservative Finance Minister, Joe Oliver, recently said the most difficult yet important skill in drafting a budget is the ability to set priorities. The Liberal deficit could be seen as an inability to set clear priorities and be fiscally responsible. Whether a $29.4 billion deficit is still a modest, or even a necessary one, the inability to set more clear priorities and stick to the promised $10 billion deficit allows the Tories to paint the Liberals as reckless and irresponsible spenders. With their overwhelming majority in Parliament, the budget will pass without issue. The only actual opposition will be rhetoric, since neither the NDP nor the Conservatives have the numbers to vote it down. What the budget needs, though, is follow-through. If the deficits are manageable, and help grow the economy, the Liberals win. However, if the deficits continue to grow and add to the national debt throughout the Liberal mandate, then a reactionary wave of new conservatism may rise as a result.

I would like to reject the notion that the only political decisions that affect students are PSE related. The economy affects us all, and students are not immune to its ups and downs. Before we are students, we are Canadians, and we should care about the political decisions that are being made, not just decisions about education. Student issues are important, but students should be politically literate on all issues so we may have a more responsive political system. I would argue that it is beholden of us all to have some sort of opinion on the Liberal deficit – positive or negative – because federal spending affects everyone in one way or another.