The Liberal government faces a slowing economy and an uphill battle in the polls as it prepares to table its 2024 federal budget on Tuesday.
Global News spoke to Canada’s former parliamentary budget officer ahead of April 16, who said he’s expecting a tight spending plan with little room for surprises or hotly demanded relief on cost-of-living issues for Canadians.
Heading into the third budget under the government’s current mandate, Justin Trudeau’s Liberals have been on a cross-country tour plugging a series of measures that will be included in the coming year’s spending plans.
Since late March, the Liberals have announced just over $37 billion in new spending and loans planned for the federal budget, according to a Global News analysis. Some of the Liberal announcements have spending spread out over multiple years, while other items come with little to no price tag attached.
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All the while, Finance Minister Chrystia Freeland has pledged that the Liberals will not increase the federal deficit past its current $40.1-billion levels.
Liberals have little fiscal room to ‘manoeuvre’: former PBO
Kevin Page, Canada’s first PBO and the president of the Institute of Fiscal Studies and Democracy at the University of Ottawa, tells Global News the Liberals are facing significant headwinds in trying to keep the deficit stable while also meeting the needs of Canadians.
“Their challenge is, they just don’t have a lot of fiscal room to manoeuvre,” Page explains.
An RBC economics report released last week also warns of consequences for Canadians if governments are tempted to stray from their fiscal anchors, whether that be maintaining the overall size of the deficit or keeping a steady debt-to-GDP ratio.
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Governments, federal or provincial, keeping to their fiscal anchors instils “confidence in voters and financial markets,” author Rachel Battaglia, an economist with RBC, wrote.
Canada’s sovereign triple-A credit rating heading into the 2024 federal budget is “strong,” Battaglia said, but the country risks a downgrade if Ottawa were to stray from its fiscal anchors.
A hit to this key credit rating would trickle down to large banks, and by extension, the rates paid by their customers on products like mortgages, according to Battaglia.
“Even though deeper deficits and higher associated sovereign borrowing costs may feel like a distant problem for many Canadians, the impact has the potential to trickle down to most households and businesses,” Battaglia wrote.
“Therefore, all Canadians have a stake in seeing the federal government meet its fiscal targets.”
Another tactic to increase revenues when economic growth is stalling is by hiking or introducing new taxes. While Freeland has pledged that no new taxes will be levied against the middle class in the 2024 budget, she has been mum on whether taxes on wealthier individuals or corporations could be in the cards.
That’s giving the Liberals a bit more spending room than they would’ve otherwise had amid pressures to maintain the deficit, Page says. But he expects this bandwidth will have been mostly eaten up with the already announced measures, and he does not expect any new big-ticket items will be unveiled on April 16.
Some 44 per cent of those surveyed in March said they wanted help with rising daily expenses, followed by 38 per cent who prioritized health-care investments and 33 per cent asking for a reduction in personal taxes.
“Pocketbook issues dominate the list of the things that Canadians want to see addressed in the budget,” Sean Simpson, senior vice-president at Ipsos Global Affairs, told Global News earlier this month.
But Page sees little room for those kinds of relief efforts in the 2024 budget if the Liberals want to maintain the deficit.
The best the Liberals can do is make it look to Canadians like they’re “trying their best” when it comes to acting in a fiscally responsible way while providing support to the most vulnerable, he says.
“I don’t think we’re going to see much new that can make a big difference for families in 2024 with respect to affordability,” Page says.
“It’s possible we see some small measures, but they will be small and targeted.”
The already announced efforts to get more homes built are “incremental steps” to solving the housing crisis, but Page says the country is “millions of units short” of what’s needed to restore affordability. Even efforts to put more housing supply in the pipeline will take years before homes are move-in ready, he says.
“It’s not something that we’re going to solve in the 2024 budget,” Page adds.
Liberals could have better prospects in 2025
Ipsos’s latest political polling from March 28has the Conservatives up 18 points over the incumbent Liberals, who are themselves only three points ahead of the NDP. Simpson said the Liberals will need to “stop the bleeding” to avoid falling into third place behind the NDP.
A federal election is currently slated for no later than October 2025, but could be called earlier if the Liberals fail a confidence vote or bring down the government themselves.
Page expects a “pretty thin budget” this year, with some major items reserved for a hopeful pre-election budget next year.
But if the Liberals do get to put up another budget before the next federal election is called, Page thinks the incumbent party might find better fortunes in 2025.
By that point, many economists, as well as the Bank of Canada, forecast that the economy will be starting to recover amid anticipated cuts to the central bank’s benchmark interest rate.
1:32 Bank of Canada holds key interest rate at 5%
This time next year, the Liberals might find rising revenues will boost their electoral prospects and give them more ammunition to deliver a 2025 budget that would have a better chance at restoring voter confidence in the government, Page says.
“The government knows it’s going to be a hard year economically for Canadians and probably a hard year politically,” he says. “But I think they’re hoping that this will rebalance when we get to 2025.”
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
