PARKIN: Timid Liberal budget fails Canadians who need bold policy steps
The Liberals’ budget successfully exposed the policy incoherence of Andrew Scheer’s Conservative Party. But their timid policy approach — and that’s being kind — has created a big opening for Jagmeet Singh to drive the big and bold policy agenda he outlined to his party convention just 10 days ago.
The Conservatives’ incoherence is on basic stuff — fiscal and tax policy. One group of conservatives want to follow Trump into more tax cuts for corporations and the wealthy and bigger budget deficits. Another faction wants small budget deficits. Maybe someday Conservatives will figure out that they can’t suck and blow at the same time — but not today.
And anyway, the Conservative concern about government budget deficits misses the mark. Public debt is shrinking in relation to the size of our economy. The real risk is Canadians’ personal debt, which ballooned during a generation of ultra-low interest rates. Today, Canadians’ personal debt — mortgages, cars, student loans, credit cards — is more than 100% of our annual GDP, among the highest in the world.
And now, as interest rates increase, higher borrowing costs are about to erode Canadians’ paycheques, pinch consumer spending and lower economic growth.
Conservative austerity would simply make things worse — hurting growth when the task is to keep it going. And it’s on this key point that Trudeau’s timid approach fails while Singh’s bolder offer should score some points.
To offset the economic impact of higher interest rates, Canadians need strategies that boost incomes and make everyday life more affordable. And that’s where the Liberals’ timid approach came up short.
A small increase in the Working Income Tax Benefit was welcome. WITB is a good program that pays a small benefit to working poor Canadians. Trudeau also increased the number of weeks available for parental leave — a fine idea, but it does nothing to boost economic participation or growth.
But there was no increase to the federal minimum wage. No childcare plan to help parents stay in the paid economy, creating wealth and paying their taxes. No action to undo the speculative pressures driving up house prices and rents. Little action on tax loopholes or tax haven laws.
Over $7 billion in infrastructure investment, the cornerstone of the Liberals 2015 election appeal, was cut and pushed past the next election — despite the sorry state of our social housing, transit, roads and schools.
And just two days after the Liberals implied they would support a national pharmacare plan, Finance Minister Bill Morneau ruled it out, saying the Liberals would only create a piecemeal drug scheme. The U-turn probably pleased Big Pharma. After all, pharmacare lowers drug prices by using its universal, single-buyer model to squeeze better prices from drug companies.
Across all fronts, the Liberals took timid steps, failing to use their power to help Canadians stretch their paycheques right when interest rates are about to take a bigger bite from the economy. And that timid approach makes it harder to keep growth going.
For NDP Leader Jagmeet Singh it’s a big opportunity. Singh’s NDP has consistently advocated childcare, pharmacare and public infrastructure — and the NDP governments in BC and Alberta are now getting the job done. That bolder approach will now contrast sharply with that of the Liberals — who continue to serve-up a watery gruel to voters who thought they’d ordered a hearty stew.
Tom Parkin is a former NDP staffer and social democrat media commentator.