What should Morneau's budget do? We asked the experts — and the critics

Only a handful of people in the Ottawa bubble know for certain what's in the budget document Finance Minister Bill Morneau is releasing next week. But as always, there's no shortage of theories — and everyone has a wish list.

Calls for funding to target everything from the deficit, to boil water advisories and affordable housing

Minister of Finance Bill Morneau may know for certain what is in Tuesdays' federal budget, but that is not stopping politicians and policy experts from speculating. (Justin Tang/Canadian Press)

Only a handful of people in the Ottawa bubble know for certain what's in the budget document Finance Minister Bill Morneau is releasing next week. But as always, there's no shortage of theories — and everyone has a wish list.

There have been hints — reports that the budget was passed through a gender-based analysis to test its impact on gender parity, for example. There have been strong and sustained calls for more funding for Indigenous children, rumours of a new parental leave plan and reports of a big-money plan to boost cybersecurity.

But all else is speculation — which is why CBC's The House asked politicians and policy experts to tell us what they're hoping to see in the Trudeau government's fiscal plan for the coming year.

Aaron Wudrick's priority is no surprise: the federal director of the Canadian Taxpayers Federation wants Morneau to roll out a plan to eliminate the federal deficit in the near term.

"What we would like to see is, first of all, a plan to get back to balance," he told The House. Such a plan should go hand-in-glove with efforts to reform the tax system, he said.

The Department of Finance estimated Canada won't be able to run a balanced budget until 2050, with the deficit peaking at $38.8 billion in the 2035-36 fiscal year.

Aaron Wudrick the federal director of the Canadian Taxpayers Federation wants to see a return to balanced budgets. (CBC)

Wudrick admitted finding a faster path to balance would be a daunting task, but said the government should begin with tax policy, especially the carbon tax, which — along with other current tax policies — hurts Canada's ability to compete with the United States.

"If we do everything we're supposed and other countries don't, it's not going to stop climate change," he said.

"If you were an investor with a choice between putting money here or south of the border, the big tax rate advantage that Canada used to enjoy is gone. So the government at the very least needs to start thinking about other ways to increase their advantages."

Cutting taxes

Conservative finance critic Pierre Poilievre agrees, arguing Morneau should use this budget to stabilize Canada's tax policy with an eye to maintaining Canada's ability to compete in the global economy.

The mounting federal deficit and uncertainty caused by high household debt levels will worry investors, he told The House.

Household debt levels in Canada are higher than those in any country included in a new OECD report — something that Stephen Poloz, the governor of the Bank of Canada, admits keeps him up at night.

"Today's deficits are tomorrow's taxes," Poilievre said.

Conservative finance critic Pierre Poilievre wants to see tax cuts in the budget. (Adrian Wyld/Canadian Press)

When asked where the government could cut back taxes, Poilievre offered a sweeping answer: "Almost everywhere."

Canada's tax policy gives a "major advantage" to Canada's southern neighbour, he said. To keep Canadian firms from suffering in competition with American rivals, he added, the government should put its focus firmly on reducing the federal debt and keeping taxes low.

"[High taxes] make it harder for our businesses to create jobs and compete on a world stage," he said.

Parental leave

This budget could give Canadians their first glimpse of a new federal parental leave policy.

Prime Minister Justin Trudeau has been toying with the idea of creating use-it-or-lose-it funded leave for new dads or second parents, but few details have surfaced.

Even with the limited information being made public, the Liberals appear to be in a position to finally put a plan in place, said Kate Bezanson, a social policy expert at Brock University.

All indicators suggest a comprehensive strategy on parental leave is coming, she told The House.

"I expect that this budget will probably emulate the Quebec model," Bezanson said, adding that the five weeks of leave at 70 per cent income offered by Quebec — the only province with dedicated leave for a second parent — has turned out to be effective.

Gender parity

The idea of running the budget through a gender-parity review is particularly intriguing, said Bezanson.

The budget, she said, likely will begin to challenge some "longstanding issues," such as the problem of how to boost the number of women in the labour market and address the gender wage gap.

Attaching other social policies to the parental leave plan, as was done in Quebec, could make it more effective, she added.

"I'm remaining hopeful that childcare will still be significantly on the agenda," Bezanson said. "We know that parental leave and childcare go hand in hand in terms of women's economic equality."

NDP finance critic Peter Julian is hoping for money for affordable housing in Tuesday's budget. (Justin Tang/Canadian Press)

Budget 2018 is likely to include policies to tackle inequality in various forms — but the problem of economic inequality still worries Peter Julian, the NDP's finance critic.

One of the most significant factors contributing to that inequality is the existence of loopholes that allow for offshore tax havens, he told The House.

Affordable housing

Canadians have billions of dollars tucked away in accounts overseas, according to news reports based on leaked confidential investment documents such as the Panama Papers and the Paradise Papers — but the government so far hasn't been able to reclaim a penny of taxes owed.

Julian said the NDP thinks taxing those billions would provide enough funds to begin to tackle inequality issues such as housing and pharmacare.

It's not a perfect plan, he said — but it's a place for the government to start.

"We expect that they will do a reality check and actually respond to Canadians' needs," he said.

And what is Julian himself hoping to see in the budget?

"What I would hope to see, what is absolutely necessary, is a significant investment in affordable housing."

Ending boil water advisories

The fight to further close the funding gap between Indigenous and non-Indigenous communities in Canada could finally show results in the 2018 budget, after years of consultations and meetings between the government and Indigenous officials.

That gives Perry Bellegarde, national chief for the Assembly of First Nations (AFN), cause for hope.

Good progress has been made, especially in the past few months, he told The House — but there's still a need to push the government and "hold their feet to the fire."

Assembly of First Nations (AFN) National Chief Perry Bellegarde is looking for money that will ensure Indigenous children receive the same level of services as non Indigenous children do. (Mark Taylor/Canadian Press)

He said he's expecting a proper investment to end discrimination against Indigenous children, as well as money to end more boil-water advisories and build more housing.

In its pre-budget submission to Finance Canada, the AFN made a plea for funding for things like education, housing and infrastructure.

While almost $12 billion has been promised for Indigenous services in the last two federal budgets, how the money gets treated as it trickles down the bureaucracy will be the real test, said Bellegarde. 

"Are the departments looking at more effective and efficient ways to make sure that these precious resources are having an impact on the ground where it really matters?"


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