Thursday March 23, 2017

'It's very much about laying out a long-term vision': Finance Minister Bill Morneau addresses budget concerns

Bill Morneau delivers budget speech 27:41

Listen 22:05

Read story transcript

On March 22, Finance Minister Bill Morneau tabled the Liberal government's second budget in the House of Commons.

He talked about hope and optimism that had helped build Canada in previous generations. But what was front and centre in this budget was the focus on the middle class who have been left behind. 

And while helping today's middle class regain hope may have been front and centre in this budget, for some political and financial watchers, the numbers don't add up. 

The Liberals committed to $5.7 billion in new spending over the next six years — not necessarily a large number for a government that talks a lot about "real change" in Canada. 

And on the fiscal side, multi-billion dollar deficits are now projected for at least five years, with no clear path back into the black.  

Finance Minister Bill Morneau joined The Current's Anna Maria Tremonti from Ottawa to explain what's behind this budget and respond to the criticism.

[This transcript has been edited for clarity and length]

Anna Maria Tremonti: Has Donald Trump got you afraid to move forward on your own agenda?

Bill Morneau: No, not at all. I mean as you can imagine, we are engaged with the new U.S. administration because that's what we need to do to protect Canadians' interests.  

FedBudget 20170322

Finance Minister Bill Morneau and Prime Minister Justin Trudeau hold copies of the 2017 federal budget. The budget revises the deficit for the year just ended, rising slightly to $23 billion. (Adrian Wyld/Canadian Press)

So our plan really which we started from day one was thinking about how we could deal with middle-class anxiety, the things we can do here in our country and clearly we've taken measures that are making a difference. So reducing taxes on middle-class Canadians — that's a Canadian effort that we started off with changing the Canada child benefits so that families who need it can get more money to raise their children — a Canadian measure that restores confidence helps people to see more opportunities in this budget.  

It's very much about laying out a long-term vision. It's saying that this is a next step and in identifying where can Canada be a world leader, what sectors are we already great at and how do we continue to invest.
 

Childcare: $7 billion over 10 years

BM: This budget had a real focus on how we could empower women. We know that early learning and child care is a critical way to make a difference there. So starting today, we'll be working with the provinces to make sure that we actually generate the 40,000 spaces that we estimate we can find in early learning and child-care spaces. That will take a little bit of time but we're getting on it right now.
 

Housing: $11.2 billion over 11 years

BM: Affordable housing. It's the biggest single item in our budget. Yes, we're doing it over a period of years because that's the prudent way to do it. We need to make sure that we're working together with our partners and provinces and municipalities. We want to be responsible along the way. We can't put money out and not have the way to appropriately use it because that could be wasteful. So what we'll do is we will get to agreements on how we're going to do it. We'll be renovating spaces that exist, we'll be creating new spaces and that will be a measured approach to making a real difference on affordable housing.

AMT: How many jurisdictions do you have to work with on affordable housing?

BM: We'll be working with all 10 provinces and three territories.


Military defence: $8.4 billion in capital spending for equipment postponed until 2035

BM: We've gone through a very significant review of our defence policy since we've been in office. That defence policy review is coming out in the next couple of months that will inform our agenda going forward. When you look at where we think the spending will happen, the reality in defence is you want to make sure that the defence area has the opportunity to make the investments at the time that makes sense. So you put in place long-term plans around ships, long-term plans around the kinds of equipment we need, and all you're seeing in our timeline is when we think those investments will be made.

AMT: Fair enough but arguably the control in 2035 will be someone else's. So would you not plan and start spending now and then plan it out to 2035?

BM: Well, remember that we are continuing to have a strong military on a year-by-year basis so that planning is in fact going on right now. The consideration for what you're actually going to invest in takes time. You want to do that wisely. That effort continues.
 

Listen to the full conversation at the top of this web post.

This segment was produced by The Current's John Chipman.