Finance Minister Bill Morneau unveiled the Liberal government’s first budget Tuesday afternoon, backing away from several campaign promises made by Prime Minister Justin Trudeau, and turning on the spending tap on middle class-focused projects, as well as new spending pledges for aboriginals, veterans and expansions to employment insurance.
The 2016-2017 budget projects a $29.4 billion deficit–three times the earlier promised $10 billion shortfall. While Trudeau had pledged a balanced budget by 2019-2020, the new projections include a deficit of $17.7 billion that year.
The budget, entitled “Growing the Middle Class,” puts $10 billion over the next two years for a new child benefit–replacing the child tax benefit and universal child care benefit, providing an average increase of $2,000 to low and middle income families.
In the maiden budget, other Harper era tax credits–notably income splitting for couples with children, the children’s fitness tax credit and the arts tax credit for kids.
The savings make way for new spending, however, such as $2.6 billion over five years for primary and secondary education on First Nations reserves, including language and cultural programs, and an additional $1 billion for education infrastructure.
Trudeau has often said that veterans were failed under the previous government, and offered $5.6 billion to veterans and their families in benefits, but delayed planned military spending on needed ships, planes and surface vehicles.
And a promised cut in the small business tax rate from 11 per cent to nine per cent has not fully materialized, falling only by half a percentage point, with the rest of the reduction deferred indefinitely.
The Liberals claim their budget will create 100,000 jobs and boost national economic growth, as measured by gross domestic product, by half a percentage point per year.