Municipal officials say the federal budget released on March 21 contains positive measures, but some federal politicians are less enthused.
Wellington-Halton Hills MP Michael Chong said the Liberal’s second budget effort is disappointing.
“You could have forgiven the government for not coming forward with a comprehensive plan in its first budget of a year ago …” said the Conservative MP.
“Now that they’re almost halfway through their mandate, I would have expected that this budget would have contained a comprehensive plan to deal with our stubbornly high unemployment and to deal with our sluggish economic growth.”
However, Liberal MP Lloyd Longfield of Guelph praised the 2017 federal budget.
“I was really excited to see some of the work we’ve been doing on committees come forward into the budget and there’s a lot for the Guelph-Wellington area around agriculture, innovation, affordable housing,” he said.
“The things we’ve been working on locally it was great to see them reflected in the budget. I’m pretty excited.”
Housing
Longfield explained the federal government is creating a national housing strategy with Statistics Canada to best indicate where to invest $11.2 billion over 11 years and $5 billion in maintenance for housing programs.
“We’re stepping in to try to help with the creation of affordable housing spaces,” he said. “So, using Stats Canada rather than doing it politically, we’re saying it doesn’t matter where the riding is in Canada, where are the greatest needs?”
Wellington County Warden Dennis Lever said there is “good News” for Wellington County in the budget’s commitment of about a billion dollars a year for social housing, an area where the county has spent considerable funds in recent years.
While it remains to be seen how much of the funding Wellington County will receive, Lever said, “it’s definitely a good thing.”
Chong was more reserved.
“I think that is there is a gap in data collection on our housing market so I welcome them making the move to collect more data … but ultimately they need to take action to put housing on a more affordable track for families,” he said.
“It’s clear that skyrocketing housing prices are putting housing out of reach for many middle class families and the government tinkering around the edges to try to address this problem isn’t working.”
Chong said he thinks the government needs a “big change,” and that starts with the privatization of Canada Mortgage and Housing Corporation (CMHC).
“We need to privatize CMHC’s mortgage insurance and securitization business which is the single biggest factor driving these housing prices,” Chong said.
He added that while he welcomes the Liberals’ commitment to collect more data, “I think they’re missing the bigger picture of what needs to be done to get housing on a more affordable track.”
Infrastructure
The federal budget also includes a $2-billion investment plan dedicated to “the unique priorities of rural, northern and remote communities,” including better transportation links and more reliable broadband internet access.
Lever said he can’t comment on the local impact of that funding until more details are available, noting such announcements often target more remote areas.
“Sometimes we’re included with the rural, sometimes not so much,” said Lever.
Longfield said that while the government has invested specifically in transit, funding for roads, bridges and tracks are under general infrastructure.
“So if we look at Wellington County and all the bridges we have in Wellington County it doesn’t directly affect Guelph … these aren’t national projects but there could be some partnerships with the federal government and the municipality and transportation,” he said.
Longfield also indicated he would have liked to have seen funding specifically for regional transit.
“Getting buses between [Guelph] and the rest of the county and Waterloo county,” he said. “We are investing in transit, but it’s more urban transit than regional transit.”
Chong said infrastructure funding isn’t flowing to area municipalities fast enough.
“They’ve reaffirmed the previous government’s commitment to infrastructure spending on part of the federal government and they’ve added more promise money to that infrastructure spending so that’s a welcome benefit for the people of Wellington County,” he said.
“The government needs to get the money out the door more quickly in order to not only help rebuild infrastructure here in Wellington County, but also help get our economy moving.”
Clark Somerville, president of the Federation of Canadian Municipalities, was more effusive in his praise.
“This budget is a game-changer because of the tools it gives municipalities to drive growth and a higher quality of life for Canadians,” said Somerville in a press release.
“This budget’s allocation-based transit plan puts cities in the driver’s seat like never before, it creates a real opportunity to address the housing crisis, and its rural growth plan recognizes that Canada’s future depends on communities of all sizes.”
While much of Somerville’s optimism focused on the transit plan, which will primarily impact major cities, he also cited the funding for rural transportation links and more broadband as positive developments.
Somerville also pointed out the budget prioritizes climate change, stating, “municipalities will be looking to ensure that investment will be directed toward local projects – to reduce climate-changing emissions, to adapt communities to new weather extremes, and to support other environmental priorities.”
Disappointment
Chong said he was “unimpressed” by the budget.
“It has no new ideas on how to get our economy moving and how to create jobs,” he said. “I would like to have seen an economic plan to reduce taxes and to create more economic growth.”
Perth-Wellington MP John Nater stated in a press release he is “disappointed” with the budget, at least in part because of its lack of attention to rural areas.
Nater stated he saw “little in tangible support for rural and small-town Canada.” He pointed out no changes were announced to business risk management programs for farmers, and said support for rural infrastructure is lacking.
“In fact, $860 million of funding under the Clean Water and Wastewater Fund has not been allocated. This is a disappointment to communities across Perth-Wellington, which could benefit from much-needed water and wastewater infrastructure,” said Nater.
“A commitment of $2 billion in funding for rural and northern infrastructure is welcome, however when distributed across 10 provinces, three territories, and over 11 years, the significance of the fund is greatly diminished,” he added.
“Once again, we see a government giving Canadians empty rhetoric rather than real action” said Nater.
“The deficit is already out of control and getting worse. The Liberal government promised a modest deficit of $10 billion. Today’s budget promised $142.8 billion in new debt over the next six fiscal years. This new debt is simply a tax on our children and their children.”
The budget projects a deficit of $23 billion, down from $25.1 billion in the last fiscal update.
The deficit is projected to reach $28.5 billion for 2017-18, including a $3 billion contingency fund, before declining to $18.8 billion in 2021-22.
Chong was also unimpressed with the deficit and the government “irresponsibly borrowing tens of billions of dollars.”
“The other criticism I have with the budget is that they’ve not only broken their election promise of limiting borrowing to $25 billion by committing to borrowing hundreds of billions of dollars, they are setting us on a track of decades of deficits,” he said.
“In fact the budget doesn’t plan to balance the budget and eliminate the deficit until the year 2055.
“That’s not a plan, that’s a recipe of burdening younger generations with debt and deficits for decades to come.”
However, Longfield said the government is more concerned about the debt to gross domestic product (GDP) ratio.
“We’re looking at investing in the economy, we’re looking at trying to support middle class; that comes at a cost,” he said.
“We’re not taking on more debt than the economy growth and the economy can handle, but right now we have the lowest debt-to-GDP in the G7 so there is room to invest in the economy.”
He added that about $250,000 new jobs were created in Canada over the last six months.
Other notable elements of the budget include:
– elimination of Canada Savings Bond program, first established in 1946 and phased out as being no longer cost effective;
– higher taxes on alcohol and tobacco with the excise duty rate on cigarettes raised to $21.56 per carton of cigarettes from $21.03 and the rates on alcohol are going up two per cent. Both will be adjusted every April 1 starting next year, based on the consumer price index;
– an “innovation and skills plan” to foster high-tech growth in areas such as advanced manufacturing, agri-food, clean technology, digital industries, health/bio-sciences and clean resources;
– $523.9 million over five years to prevent tax evasion and improve tax compliance;
– $7 billion over 10 years for family-focused initiatives, including 40,000 new subsidized day care spaces across Canada by 2019, extended parental leave and allowing expectant mothers to claim maternity benefits 12 weeks prior to their due date;
– $2.7 billion over six years for labour market transfer agreements with the provinces and territories to modernize training and job support programs;
– $400 million over three years through the Business Development Bank of Canada to make more venture capital available;
– over $300 million in funding over three to four years for a variety of programs aimed at making student loans more accessible to part-time students and adult learners; and
– $395.5 million over three years for youth employment strategies.
