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.
1:59 Budget 2024: Here’s what Canadians want from the federal government
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.
1:51 CEOs urge CPP investment in Canadian companies in open letter to Chrystia Freeland
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.”
NEW YORK (AP) — Teen smoking hit an all-time low in the U.S. this year, part of a big drop in the youth use of tobacco overall, the government reported Thursday.
There was a 20% drop in the estimated number of middle and high school students who recently used at least one tobacco product, including cigarettes, electronic cigarettes, nicotine pouches and hookahs. The number went from 2.8 million last year to 2.25 million this year — the lowest since the Centers for Disease Control and Prevention’s key survey began in 1999.
“Reaching a 25-year low for youth tobacco product use is an extraordinary milestone for public health,” said Deirdre Lawrence Kittner, director of CDC’s Office on Smoking and Health, in a statement. However, “our mission is far from complete.”
A previously reported drop in vaping largely explains the overall decline in tobacco use from 10% to about 8% of students, health officials said.
The youth e-cigarette rate fell to under 6% this year, down from 7.7% last year — the lowest at any point in the last decade. E-cigarettes are the most commonly used tobacco products among teens, followed by nicotine pouches.
Use of other products has been dropping, too.
Twenty-five years ago, nearly 30% of high school students smoked. This year, it was just 1.7%, down from the 1.9%. That one-year decline is so small it is not considered statistically significant, but marks the lowest since the survey began 25 years ago. The middle school rate also is at its lowest mark.
Recent use of hookahs also dropped, from 1.1% to 0.7%.
The results come from an annual CDC survey, which included nearly 30,000 middle and high school students at 283 schools. The response rate this year was about 33%.
Officials attribute the declines to a number of measures, ranging from price increases and public health education campaigns to age restrictions and more aggressive enforcement against retailers and manufacturers selling products to kids.
Among high school students, use of any tobacco product dropped to 10%, from nearly 13% and e-cigarette use dipped under 8%, from 10%. But there was no change reported for middle school students, who less commonly vape or smoke or use other products,
Current use of tobacco fell among girls and Hispanic students, but rose among American Indian or Alaska Native students. And current use of nicotine pouches increased among white kids.
___
The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.
WASHINGTON (AP) — An Alabama man was arrested Thursday for his alleged role in the January hack of a U.S. Securities and Exchange Commission social media account that led the price of bitcoin to spike, the Justice Department said.
Eric Council Jr., 25, of Athens, is accused of helping to break into the SEC’s account on X, formerly known as Twitter, allowing the hackers to prematurely announce the approval of long-awaited bitcoin exchange-traded funds.
The price of bitcoin briefly spiked more than $1,000 after the post claimed “The SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.”
But soon after the initial post appeared, SEC Chairman Gary Gensler said on his personal account that the SEC’s account was compromised. “The SEC has not approved the listing and trading of spot bitcoin exchange-traded products,” Gensler wrote, calling the post unauthorized without providing further explanation.
Authorities say Council carried out what’s known as a “SIM swap,” using a fake ID to impersonate someone with access to the SEC’s X account and convince a cellphone store to give him a SIM card linked to the person’s phone. Council was able to take over the person’s cellphone number and get access codes to the SEC’s X account, which he shared with others who broke into the account and sent the post, the Justice Department says.
Prosecutors say after Council returned the iPhone he used for the SIM swap, his online searches included: “What are the signs that you are under investigation by law enforcement or the FBI even if you have not been contacted by them.”
An email seeking comment was sent Thursday to an attorney for Council, who is charged in Washington’s federal court with conspiracy to commit aggravated identity theft and access device fraud.
The price of bitcoin swung from about $46,730 to just below $48,000 after the unauthorized post hit on Jan. 9 and then dropped to around $45,200 after the SEC’s denial. The SEC officially approved the first exchange-traded funds that hold bitcoin the following day.
Google, Meta and TikTok have removed social media accounts belonging to an industrial plant in Russia’s Tatarstan region aimed at recruiting young foreign women to make drones for Moscow’s war in Ukraine.
Posts on YouTube, Facebook, Instagram and TikTok were taken down following an investigation by The Associated Press published Oct. 10 that detailed working conditions in the drone factory in the Alabuga Special Economic Zone, which is under U.S. and British sanctions.
Videos and other posts on the social media platforms promised the young women, who are largely from Africa, a free plane ticket to Russia and a salary of more than $500 a month following their recruitment via the program called “Alabuga Start.”
But instead of a work-study program in areas like hospitality and catering, some of them said they learned only arriving in the Tatarstan region that they would be toiling in a factory to make weapons of war, assembling thousands of Iranian-designed attack drones to be launched into Ukraine.
In interviews with AP, some of the women who worked in the complex complained of long hours under constant surveillance, of broken promises about wages and areas of study, and of working with caustic chemicals that left their skin pockmarked and itching. AP did not identify them by name or nationality out of concern for their safety.
The tech companies also removed accounts for Alabuga Polytechnic, a vocational boarding school for Russians aged 16-18 and Central Asians aged 18-22 that bills its graduates as experts in drone production.
The accounts collectively had at least 158,344 followers while one page on TikTok had more than a million likes.
In a statement, YouTube said its parent company Google is committed to sanctions and trade compliance and “after review and consistent with our policies, we terminated channels associated with Alabuga Special Economic Zone.”
Meta said it removed accounts on Facebook and Instagram that “violate our policies.” The company said it was committed to complying with sanctions laws and said it recognized that human exploitation is a serious problem which required a multifaceted approach, including at Meta.
It said it had teams dedicated to anti-trafficking efforts and aimed to remove those seeking to abuse its platforms.
TikTok said it removed videos and accounts which violated its community guidelines, which state it does not allow content that is used for the recruitment of victims, coordination of their transport, and their exploitation using force, fraud, coercion, or deception.
The women aged 18-22 were recruited to fill an urgent labor shortage in wartime Russia. They are from places like Uganda, Rwanda, Kenya, South Sudan, Sierra Leone and Nigeria, as well as the South Asian country of Sri Lanka. The drive also is expanding to elsewhere in Asia as well as Latin America.
Accounts affiliated to Alabuga with tens of thousands of followers are still accessible on Telegram, which did not reply to a request for comment. The plant’s management also did not respond to AP.
The Alabuga Start recruiting drive used a robust social media campaign of slickly edited videos with upbeat music that show African women smiling while cleaning floors, wearing hard hats while directing cranes, and donning protective equipment to apply paint or chemicals.
Videos also showed them enjoying Tatarstan’s cultural sites or playing sports. None of the videos made it clear the women would be working in a drone manufacturing complex.
Online, Alabuga promoted visits to the industrial area by foreign dignitaries, including some from Brazil, Sri Lanka and Burkina Faso.
In a since-deleted Instagram post, a Turkish diplomat who visited the plant had compared Alabuga Polytechnic to colleges in Turkey and pronounced it “much more developed and high-tech.”
According to Russian investigative outlets Protokol and Razvorot, some pupils at Alabuga Polytechnic are as young as 15 and have complained of poor working conditions.
Videos previously on the platforms showed the vocational school students in team-building exercises such as “military-patriotic” paintball matches and recreating historic Soviet battles while wearing camouflage.
Last month, Alabuga Start said on Telegram its “audience has grown significantly!”
That could be due to its hiring of influencers, who promoted the site on TikTok and Instagram as an easy way for young women to make money after leaving school.
TikTok removed two videos promoting Alabuga after publication of the AP investigation.
Experts told AP that about 90% of the women recruited via the Alabuga Start program work in drone manufacturing.
