Thursday, March 23, 2017

The Pollcast: The politics of the budget


In the budget presented by Finance Minister Bill Morneau on Wednesday, the Liberal government laid out its plans for the future of Canada's economy, with a focus on skills training and innovation.

But some of those plans extend to well after the 2019 federal election. The calculations the Liberals have baked into the budget could be at the whim of what happens in the interim, including changes in the world economy and the unpredictability of Donald Trump's presidency.

You can listen to the podcast heresubscribe to future episodes here, and listen to past episodes here.

So how does the budget position the Liberals politically? Does it give them something to sell to voters between now and 2019? Will the government's plan to stay in deficit well into the next decade hamstring the Liberals and give the opposition parties a vulnerability to exploit?

To break down the politics of Budget 2017, I'm joined by the CBC's David Cochrane, Catherine Cullen and Susan Lunn.

You can listen to the podcast heresubscribe to future episodes here, and listen to past episodes here.

9 comments:

  1. Did you see the latest BC Poll

    http://www.mainstreetresearch.ca/greens-gain-party-leaders-favourability-virtually-unchanged/

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  2. I think this whole budget really reflects how little we know what Trump/Ryan will do !!

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    1. That and the Liberals have spent the money already- we have deficits planned until the children and maybe the grandchildren are in university. The 2050's!

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    2. While making deficits ad vitam aeternam, the current deficit is not changing relatively speaking to the GDP, still around 30-something percent. So the deficit is raising as fast (or slowly...) as the GDP. We don't have to go all crazy on it, our position is quite enviable in the G20.

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    3. I think this budget proves that the Liberals are out of touch, but all governments have sold out Canadians and believe in debt-based economics because they all want people to take out more debt to finance things, and if you look at the personal debt of Canadians it is 4 trillion and that extends back to the financial crisis under Harper, so both Liberals and Conservatives are guilty of this.

      As for debts and deficits, all the parties have ran deficits and massive debts over time, and no party has really paid off Canada's debt even though if they were they would have had enough time to do so.

      So, this game of saying Conservatives would actually pay off Canada's collective 1.2 trillion dollar debt is laughable, when both Liberals and Conservatives and the NDP are debt-based parties.

      The minor parties would propose using the Bank of Canada for finance, except the Libertarian party of Canada.

      Canadians should realize this, and even the point of saying 2050's is more talking points and should not be taken seriously, as the Conservatives had 8 straight deficits and the Liberals have a history of cuts, but like I said before all three big parties are debt-based parties!

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    4. Thierry,

      You forget the ratio only remain at a static level so long as the economy grows and interest rates remain relatively low.

      New Zealand did not go bankrupt because their debt to GDP ratio was overly high. The economy fell into a bad recession and shrank by 4% at the same time interest rates globally were rising. New Zealand had to begin to borrow to pay their interest payments, as Canada did some years later during Mulroney's second term. This is where Trudeau debt leaves us; eventually interest rates rise and deficits continue for the sole purpose of paying the accumulated interest on the debt. Such a course is usually sustainable until the inevitable economic shock occurs. It is kind of like paying the mortgage on a house while forgetting to put away money for a new roof. Eventually, it starts to down pour and one needs a new roof.

      It took the better part of a decade of hard work and cuts to balance the budget after Pierre Trudeau. The fact Justin so cavalierly destroyed the hard work of Paul Martin, Jean Chretien, Michael Wilson and Brian Mulroney should be troubling to all Canadians who sacrificed during the 1990's and early 2000's to restore Canada economic stability.

      The long-term growth trend for Canada's economic growth is declining-we are still growing albeit at a slower rate than the 20th century. This in itself is not alarming but, it is a reminder that we can not grow ourselves out of debt.

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    5. Yeah, I first wrote that continuing deficits wasn't a great idea, but somehow, that got lost at some point. I especially don't understand how the federal government can run a deficit with in its constitutional fields. The big spending is at the provincial level: education and healthcare, most notably. I think one of the big problems is the imbalance in tax perception, which should be a whole lot more skewed towards the provinces and far less to the federal, eliminating incursions in fields they shouldn't be in (such as the most recent health transfers and the research chairs).

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    6. Hi Thierry,

      Tax room (tax perception)is skewed in favour of Canada; with the ability to levy direct and indirect taxation, even though as you note the social responsibilities of Government are given mainly to the Provinces; who only have the ability to raise money through direct taxation.

      Where Trudeau is incurring big deficits is through entitlement programs primarily; the Canada Child Benefit. He said the rich would not receive it but, a family of four making just under $200,000 still receives a payment of roughly $100 a month!

      We're going into debt so the well-off can be slightly better off! Liberals only help their rich friends. The Liberal Party is little more than a corrupt clique. It's disgusting! When Indigenous children are suffering through inadequate federal spending - to go into debt-to give $1200 a year to a family making over $150,000 (before taxes) simply can not be justified.

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    7. The direct/indirect tax distinction is pretty meaningless now. Courts have allowed the provinces to impose sales tax (the textbook definition of an indirect tax) through the fiction of deputizing all providers of goods or services as provincial tax collectors. So basically, except for import duties, provinces can impose any kind of tax they want.

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