/Schmale critical of ‘monstrous’ 2021 budget

Schmale critical of ‘monstrous’ 2021 budget

By Mike Baker

Haliburton-Kawartha Lakes-Brock MP Jamie Schmale is concerned by the figures included in the 2021 federal budget, which he has labelled a “super spreader of spending.”

Tabled by Canada’s finance minister Chrystia Freeland last Monday [April 19], the budget, which is the Liberal government’s first in two years, includes an unprecedented $101.4 billion in new spending over the next three years. That money, Freeland said, will help to support the country through this third wave of COVID-19 and stimulate the economic recovery post-pandemic.

The crown jewel of the mammoth 700-page document is $30 billion in spending over the next five years, and $8.3 billion per year after that, to establish and sustain a new national child care program. A further $17.6 billion has been set aside for “green recovery,” money that will help to conserve 25 per cent of Canada’s lands and oceans by 2025.

Keeping up with the green theme, $4.4 billion was set aside to help homeowners complete green retrofits on their homes through interest-free loans of up to $40,000; $3 billion will be invested over five years to help provinces and territories improve long-term care; $2.5 billion to build and repair 35,000 housing units for vulnerable Canadians; $1 billion for the tourism sector to support festivals and cultural events; and $300 million to support Black and other underrepresented entrepreneurs.

There was just one figure, however, that Schmale wanted to focus on – that being the federal deficit, which is slated at $354.2 billion in 2020/21. In total, the federal debt is now in excess of $1 trillion.
“The unfortunate thing about all of this new spending is that the federal government is effectively putting it on the credit card,” Schmale said. “… By 2026, under the government’s current plan, we’re going to be spending $39 billion per year on interest payments on our debt. There’s absolutely no planning here – the Liberals are just increasing their spending on the backs of future generations.”

While there has been widespread support, particularly from the public, for the proposed national child care program, Schmale believes the Liberals are creating a substantial problem for future governments, and taxpayers, down the road.
It should be pointed out too that the initiative, as proposed, would require buy-in from all Canadian provinces and territories, with the feds suggesting a 50/50 cost sharing model.

“This national child care program is something that the provinces weren’t asking for. It’s going to require a substantial buy-in, and I’m not sure there is any province in this confederation that is so flush with cash right now that they’d be willing to take on another structural program that will require funding way into the future,” Schmale said. “This program will not accomplish what the government hopes it will, and that’s the unfortunate part.”

Schmale said the federal initiative is being modelled after Quebec’s provincial daycare program, which has a massive waiting list. Only “traditional” daycare facilities will qualify for funding too, Schmale says, with individuals who have started a home-based daycare set to miss out on any subsidy or support.
The result of this, he believes, is that child care services will become more unaffordable for the average Canadian in the future.
“What will happen, because of government insertion into the marketplace, it will eviscerate competition. And when you start to get rid of competition… your price goes up and your quality goes down,” Schmale said.

Given the sheer amount of spending outlined throughout the document, Schmale was surprised there wasn’t more money included to support the individual provincial health services, which are struggling mightily right now through the third wave of the COVID-19 pandemic.
“That was the one thing the provinces and territories were crying out for most, was help with health care transfers. They didn’t want some of the other things that have been included,” Schmale noted.

He believes the federal government’s number one priority moving forward should be trying to secure as many doses of COVID-19 vaccine as is possible, and that any excess funds – such as the $100 million outlined for pandemic relief, which Schmale believes will essentially serve as a government slush fund to do with as they please – should be used solely for vaccine relief.

It isn’t all negative though, Schmale says. He likes that the federal government is extending some of its wage subsidy programs and introducing new hiring credits, while he commended the fact that money has, once again, been set aside to bolster internet and broadband connectivity in rural communities.
That’s particularly important for communities like Haliburton County, Schmale says, particularly right now when more people than ever before are working from home.

Another area of concern, and something that will impact Canadians of all ages, was the government’s inability to address the red-hot housing market. According to the Canadian Real Estate Association [CREA], from February 2020 to February 2021, the national housing market saw a price increase of 25 per cent, with the average cost of a home rising from approximately $542,000 to $678,000.

“There’s nothing in the budget, whether it be funding or any kind of plan, to address the housing prices, or try to cool the market,” Schmale said, adding that a bloated housing market makes things more expensive for everyone, with rental rates going up, and cost for goods and services also going up to offset the extra costs associated with home ownership.