Deficit, lack of funds for health concerning

Local Member of Parliament Alistair MacGregor had some praise for the budget, but expressed concern over high deficit spending

Alistair MacGregor

Alistair MacGregor

Federal Finance Minister Bill Morneau handed down his first budget Tuesday, with a deficit of $29.4 billion and an ambitious stimulus program including tax breaks for nine million taxpayers, a more generous, tax-free child benefit and big dollars for infrastructure and indigenous people.

Local Member of Parliament Alistair MacGregor, a member of the New Democratic Party, had some praise for the budget, but expressed concern over high deficit spending, mixed progress on seniors’ issues, lack of tax breaks for small businesses and no infrastructure funds for local railways and ferries.

“I think when you compare this budget to previous Conservative budgets there certainly are a number of groups who are happy to see an increase in funding. I know the veterans have expressed that and it’s great to see also for First Nations,” said MacGregor, who is also the NDP’s critic for seniors. “However, the comparison I make is if someone’s been wandering through the desert and you offer them a glass of water, they’re going to think it’s the most amazing thing in the world.”

The budget forecasts more than $100 billion in deficits for the next five years, contrary to Prime Minister Justin Trudeau’s election promise to balance the budget in four years.

Hailed by Morneau as a plan to “revitalize the Canadian economy,” the budget was called a “nightmare scenario” by Conservative leader Rona Ambrose and also drew some criticism from NDP leader Tom Mulcair.

MacGregor said Trudeau’s broken deficit promise concerns him.

“When the Liberals were campaigning they made quite a promise to stick with a deficit of $10 billion,” he said, adding that despite hopes of change under the Liberals, “we didn’t see anything for small businesses and we haven’t seen the closing of the stock option loopholes that very wealthy CEOs use.”

The budget allocates $120 billion to be spent on infrastructure in the next 10 years with a focus on water, transit, waste management and housing, but MacGregor said several local and regional services are not served by the increase.

“With Island Rail, there was no commitment in funding for infrastructure upgrades for railways. I think there was just some money for Via Rail to improve some of its service or to do a study,” MacGregor said. “For ferries, the only ferries mentioned in the budget were in Atlantic Canada. They’re receiving a further $51 million, but our ferries aren’t getting any money invested in them.”

At least one local piece of infrastructure may get a chance at some serious federal funding, however.

“For the Lake Cowichan weir, I have looked through the infrastructure and there is a fund of $518 million that’s specifically for projects that deal with climate change adaptation. Given that our low river levels are from climate change I think that’s something I might be looking more closely into,” MacGregor said.

Big ticket items in the budget include the reduction of middle class tax rates from 22 to 20.5 per cent for the $45,000 to $90,000 income bracket, with part of that tax cut cost offset by an increase in the tax rate for income over $200,000 from 29 to 33 per cent.

The budget also includes $8.4 billion for aboriginal communities.

Changes to improve employment insurance benefits for workers in regions hit by hard times are good, but MacGregor said concerns remain.

“There’s still no protection for the employment insurance fund. All the money that workers pay as premiums is still disappearing into the consolidated revenue fund,” MacGregor said, adding that previous Liberal governments have helped balanced their books before with money from EI premiums.

The seniors’ guaranteed-income supplement will increase by up to $947 annually, something which pleases MacGregor but leaves worries.

“I am very happy as the seniors’ critic to see that there has been an increase in the guaranteed income supplement,” he said. “However, it’s not going to be coming into effect until July of this year, so unfortunately seniors have had to wait a fair number of months, especially low-income ones, for this. Also it’s $947 annually for the most vulnerable, but unfortunately that $947 gets phased out when you reach an income level of just $8,400. It’s a very low threshold.”

MacGregor said there’s also been insufficient progress on health care issues.

“There’s a lot of talk about extending home care and doing a prescription drug plan, but there was no money budgeted for either of those items. So that for me was a big miss,” he said.

Overall, MacGregor said that while the budget does allocate some big funds to necessary areas, it is a fiscal red flag.

“I understand that in tough economic times, sometimes deficit spending is necessary, but Kevin Page, our former Parliamentary Budget Officer, noted that there’s no plan for over the next five years how we’re going to get out of deficit spending,” MacGregor said. “Sooner or later there’s going to have be a reckoning.”

With files from Tom Fletcher

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