5 things to watch for as Liberals introduce their first federal budget
OTTAWA — Federal Finance Minister Bill Morneau will introduce the Liberal government’s first budget Tuesday in Ottawa. Here are five things to watch for:
1. The biggest single spending item on the Liberal docket is the new Canada child benefit, a promised $22-billion program that swallows four former benefits — including the universal child care benefit and income splitting — into a single new payment targeting middle and lower income Canadian families. The program won’t roll out until July 1, however, as the federal government continues to fine-tune details with provinces amid concerns over clawbacks. With a maximum $6,400 a year per child under five and $5,400 annually for kids six to 17, the working details of the new benefit will be critically important to Liberal messaging on income equality.
2. The Liberals have promised to borrow heavily to finance new infrastructure spending, but how fast the money will roll out and where initial spending will be focused remains a matter of conjecture. Prime Minister Justin Trudeau said last week the initial infrastructure funds will focus on “unsexy” projects such as deferred maintenance, recapitalization and restoring signals on subways. Budget watchers will be examining how the Liberals stickhandle the urban-rural infrastructure divide, the need for productivity enhancing investments and the government’s promise of “green” infrastructure spending.
3. Trudeau confirmed last week in New York that the eligibility age for old age security will be lowered back to 65 from 67, but there remains room for more re-engineering of retirement benefits. The fiscal challenge of an aging population, which the Conservatives attempted to address with the OAS move, remains for the new government — however, given immediate economic concerns, structural changes may be pushed off to the future.