Le ministre des Finances, Bill Morneau a déposé son troisième budget à la Chambre des communes hier. Ayant dépassé la mi-mandat et les priorités telles les infrastructures ayant déjà été adressées, le gouvernement libéral a profité de ce budget pour laisser sa marque sur les politiques sociales du pays.
Ce budget vise avant tout à mettre de l’avant les objectifs stratégiques du premier ministre Trudeau de remettre de l’argent à la classe moyenne et de créer une société plus égalitaire. Parmi les mesures pour la classe moyenne, on lance des travaux pour développer un programme national d’assurance-médicaments, à laquelle s’ajoutent de multiples initiatives pour tendre vers l’équité salariale et pour pallier aux lacunes historiques dans les services offerts aux autochtones.
Pour plus de détails et pour connaître les impacts sectoriels des mesures annoncées, lire l’analyse complète de notre équipe d’Ottawa (en anglais).
Late this afternoon, the Minister of Finance, Hon. Bill Morneau, delivered his third budget in the House of Commons. With their electoral mandate past its halfway mark, and major priorities like infrastructure behind them, the Liberal government used this budget to make its mark on Canada’s social policy.
This budget is all about Prime Minister Trudeau’s key goals of boosting the middle class and creating a more equal society. The middle class agenda is advanced with work to develop a National Pharmacare program, while multiple initiatives aim to close the gender gap and address longstanding failure to provide similar services to Indigenous Canadians.
Budget 2018 launches an effort – led by former Ontario Health Minister Dr. Eric Hoskins – to develop a national program to pay for prescription medications. The rising cost of medicines, particularly cutting-edge treatments for life-threatening diseases, is seen as putting increasing strain on the day-to-day lives of middle class families. The government hopes to launch its Pharmacare program as a key part of next year’s budget, months before the kick-off the of the next federal election campaign.
Mr. Trudeau has made the pursuit of gender equality a signature initiative from the day his government was sworn into office with an equal number of men and women forming the cabinet. Today’s budget continues down this path with measures to equalize pay in the public sector, federally-regulated employers and federal contractors. The budget also introduces dedicated paternity leave. The intended purpose is to encourage more fathers to take time off work when their children are born, helping to address the fact that women’s careers are far more likely than men’s to suffer with the birth of their children.
Indigenous reconciliation is another pillar of the Prime Minister’s equality efforts, and Budget 2018 includes several initiatives in this area. The budget delivers funding for clean drinking water and improved housing on reserves, and to improve the quality of healthcare, skills training, and child welfare for Indigenous Canadians.
Science is another important area for the Liberals. The 2018 budget includes several science-related measures, including boosts to university research and money to develop and implement science-based environmental regulations.
With these announcements, we can begin to see the narrative that Mr. Trudeau and his government want to take into the 2019 federal election.
Mr. Morneau also used today’s budget to try to end a controversy that has dogged him and the government through much of 2017 with the unveiling of the final details of the small business tax changes, related to the taxation of passive investments held in a corporation. The tax changes have been simplified and made more targeted in an attempt to head off criticism that they were penalizing middle class small business owners.
While these measures cover a wide range of areas, Budget 2018 only contains a relatively small amount of new spending. The government’s books have also benefited from higher than expected tax revenue due to the strong performance of the Canadian economy over the last year. As a result, this year’s deficit is now forecast to be $18.1 billion, falling to $12.3 billion by 2023/2024. The government is yet to announce a plan to balance the budget.
Key highlights of Budget 2018 include:
The Government of Canada under Prime Minister Trudeau has placed extra effort on reducing gender inequality, in part as a measure to increase economic productivity. To that end, the government has introduced the following measures in Budget 2018:
- Budget 2018 commits $1.2 billion over five years and $344.7 million annually thereafter for the implementation of a ‘take it or leave it’ parental leave system, whereby parents can share parental leave beginning in June 2019;
- The government will introduce ‘equal pay for equal work’ legislation as part of the Budget Implementation Act that will apply to federal employers and federal contractors with contracts equal to or greater than $1 million;
- Budget 2018 commits $3 million over five years to implement a pay transparency program that will cover all federally regulated employers
The Government of Canada’s relationship with its First Nations feature prominently in Budget 2018 as part of its larger reconciliation agenda.
- Budget 2018 proposes $1.4 billion over six years for First Nations Child and Family Services;
- The Government of Canada is reiterating its efforts to end drinking water advisories on First Nations reserves and has committed $172.6 million over three years to improve access to clean drinking water;
- Budget 2018 proposes to invest $2 billion over five years and $408.2 million per year ongoing towards the new Indigenous Skills and Employment program, replacing the older Aboriginal Skills and Employment Program
The environment and energy did not feature heavily in Budget 2018. However, there are some key measures that stakeholders should be aware of, particularly relating to the proposed national price on carbon and the Pan-Canadian Framework on Clean Growth and Climate Change.
- The Government of Canada proposes to allocate $109 million over five years for the implementation of a national carbon pricing plan to be overseen by Environment and Climate Change Canada alongside the Canada Revenue Agency;
- Budget 2018 allocates $20 million over five years towards the Pan-Canadian Framework on Clean Growth and Climate Change to facilitate conversations between the government and experts to identify metrics and best practices;
- $123 million over five years in tax support for business that adopt energy efficient processes, energy efficient equipment, and investment in clean energy.
Corporate and Small Business
The Government of Canada has made a priority out of revisiting Canada’s tax system as part of its ‘fairness’ agenda aimed at the middle class. To that end, Budget 2018 includes measures that follow up on significant changes to the tax system relating to small businesses, trusts, and similar financial instruments.
- The government will review and introduce measures to address reporting requirements for trusts;
- Budget 2018 revisits the government’s strategy to target the hiding of passive income in a corporation for the purpose of tax evasion by reducing the access of corporations to a small business tax rate if they hold significant passive income sources;
- Budget 2018 proposes that CCPC’s will no longer be able to obtain refunds of taxes paid on investment income while distributing dividends from income taxed at the general corporate rate.
Middle Class Taxes and Pension Protection
In keeping with this government’s focus on the middle class and those working to join in, Budget 2018 introduces various measures aimed at helping the average working Canadian.
- The Government of Canada plans to strengthen the Working Income Tax Benefit (WITB) and rename it to the Canada Worker’s Benefit (CWB), increasing the maximum benefits by $170 in 2019;
- Budget 2018 allocates funds to the Canada Child Benefit (CCB) to keep up with the cost of indexing the program to inflation by providing an additional $5.6 billion in support;
- The Government of Canada committed to reviewing how best to protect Canadians’ pensions in light of the recent Sears Canada incident.
Social Infrastructure and Programs
Budget 2018 provides some updates on the federal government’s approach to the future of skills training and jobs. This budget also follows up on several measures introduced last year, either to reintroduce or upgrade funding, or to make some programs permanent.
- The Government of Canada proposes to provide an additional $448.5 million over five years for the Canada Summer Jobs program to support the doubling of job placements;
- Budget 2018 makes permanent the Working While on Claim employment insurance program;
- The budget also provides $46 million over five years and $10 million annually thereafter for a Pre-Apprenticeship Program targeted at encouraging Canadians to take up skilled trade.
The Government of Canada announced a series of taxation measures for cannabis and cannabis-related products as part of Budget 2018. Highlights of the tax measures are as follows:
- Low-THC containing Cannabidiol products will generally not be subject to the planned excise tax on cannabis and cannabis products;
- Medical marijuana products that have a Drug Identification Number (DIN) and are medically prescribed are exempt from the excise tax;
- The Government of Canada will evaluate options for a rebate program to retroactively reimburse Canadians for products that will be given a DIN.
The Government of Canada continues to run larger-than-promised deficits with the following projections:
- $19.4 billion for 2017-2018;
- $18.1 billion for 2018-2019;
- $17.5 billion for 2019-2020;
- $16.9 billion for 2020-2021;
- $13.8 billion for 2021-2022;
- $12.3 billion by 2022-2023.