Prime Minister Justin Trudeau (left) walks with Minister of Finance Bill Morneau as he arrives to table the budget on Parliament Hill, Tuesday, March 22, 2016 in Ottawa.

Prime Minister Justin Trudeau (left) walks with Minister of Finance Bill Morneau as he arrives to table the budget on Parliament Hill, Tuesday, March 22, 2016 in Ottawa.
Photo Credit: PC / Justin Tang

Budget 2016: Ottawa forecasts $29.4B deficit

The Liberal government unveiled its first federal budget on Tuesday, outlining the new government’s plans to spend billions on infrastructure projects and tax benefits for the middle class amid a sea of red ink for the next four years.

Finance Minister Bill Morneau plans to spend $29.4 billion more than the government takes in taxes in the 2016-17 fiscal year.

Morneau projects more red ink in coming years: $29 billion the following year, then $22.8 billion and $17.7 billion in 2019-2020, promising his first budget will generate 100,000 jobs and stimulate economic growth.

“Today we begin a long-term plan that will use smart investments in an unwavering belief that progress is possible to insure that Canada’s best days lie ahead,” Morneau told the House of Commons as he presented the budget. “It is an essential step in a sustained and strategic effort to restore prosperity and optimism.”

The 2016 budget highlights include:
  • $11.9 billion over five years to modernize and upgrade Canada’s ageing infrastructure systems, including transit and water
  • $23 billion in 2016-17 to administer the new Canada Child Benefit
  • $8.4 billion over 5 years for Canada’s indigenous communities, including $2 billion on water and wastewater systems in First Nations and $2.6 billion over five years for primary and secondary education on reserves
  • $3.4 billion over five years to increase the guaranteed income supplement top-up benefit for single seniors, and restore the old age security eligibility age to 65 from 67
  • $2 billion over three years for a new post-secondary strategic investment fund
  • Extension of employment insurance benefits in hard-hit areas in Canada’s oil-producing provinces
  • More than $1 billion over four years for clean technology investments

Canada’s opposition parties were quick to pounce on the Liberals.

“This is not a good day for the taxpayer, what we’re seeing now is reckless spending without a job creation plan and no actual plan in the budget to return to a balance,” said Interim Conservative Leader Rona Ambrose.

“Given the size of what they are spending, frankly it’s surprising that there that many promises,” said Tom Mulcair, leader of the New Democratic Party.

During last year’s campaign, the Liberals promised “modest deficits” of no more than $10 billion over the course of their mandate and to balance the books by 2019-20.

The Liberals did not follow through on campaign promise to re-establish lifetime pensions as an option for injured veterans.

And the Canadian military will have to delay its ­­$3.7-billion in planned procurement spending to beyond 2020.

With files from The Canadian Press and CBC News

Categories: Economy, Politics
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