OTTAWA | Penniless and in anticipation of a recession, the Trudeau administration is betting what little is left in the coffers on the green transition in a minimalist budget that offers few new measures.
• Also read: Here are 7 actions announced in Freeland’s 2023 budget
“It’s relatively limited in terms of priorities. We focused on the green economy, that’s the big piece,” summarizes Jimmy Jean, chief economist at Desjardins, peeling the 288 pages of the 2023 federal budget presented yesterday.
This plan provides more than $18 billion for the green transition. Most of the money will go to tax credits, specifically to encourage investment in clean power.
“The backbone of the plan is clean power, which is a major industrial advantage that we have and that we need to stimulate,” said a senior Finance Canada official, noting that investment in the sector needs to be doubled.
This is Canada’s response to the massive nearly $400 billion green investment that the United States government has unleashed in recent months with its Inflation Reduction Act.
social programs
So it’s a lot less than what our neighbors to the south expect, but the government should set aside some money for other things. He decided to allocate $13 billion to the Canadian Dental Care Plan that was promised to the New Democratic Party (NDP).
The other significant spending goes to First Nations and Inuit: US$4 billion, mainly to implement an Aboriginal housing strategy in urban, rural and northern areas.
Nothing, however, for the other Canadians who are struggling to find housing while “there is an emergency in this sector”, worries Mr Jean and regrets that this issue has clearly been “sacrificed” from the 2023 budget.
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The box is empty
But Treasury Secretary Chrystia Freeland “went to the limit of what she could afford,” said Robert Asselin, vice president for public policy at the Business Council of Canada.
After years of waste, the government has “no longer any room for maneuver” and has used up the surpluses that it needs today in a significantly gloomier global economic context, emphasizes the economist and former advisor to the Trudeau team.
After insisting the shadows were only temporary, Ottawa has taken off its rose-colored glasses and now admits even a “mild” recession is on the horizon, a senior Finance Canada official has said. It puts a strain on economic growth, i.e. the money that the state receives and can spend little on.
“The anticipation of the recession is very clear in their plan,” stresses Mr. Jean.
Into the red
That doesn’t stop Chrystia Freeland from continuing to spend more than the state coffers bring, bringing its estimated debt to B$1221 this year and then B$1256 next year.
So while the autumn economic statement forecast a surplus five years from now, it has completely evaporated, stresses Mr Jean.
“They tried to limit the damage by announcing a strategic spending review” aimed at saving money in the state apparatus, says Desjardins’ chief economist.
But “it’s shoveling forward,” he complains.
What they said in response to the budget
“The total cost of all new spending announced in this budget equates to $4,300 per family in Canada. That’s almost enough to put the Prime Minister in a hotel room for a night!” – Pierre Poilievre
“I’m very proud that we were able to force this government to expand the dentist plan. […] This is the largest healthcare expansion in a generation.” – Jagmeet Singh
“This is a budget that is failing people and the planet. It’s very focused on things that aren’t going to have an impact.” – Elizabeth May
“[C’est] a copy-and-paste of last fall’s economic report. […] It’s a short-sighted budget that doesn’t require a lot of planning time, it’s so narrow.” – Yves-François Blanchet
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