Federal finance minister Bill Morneau’s 2016 federal budget forecasts big deficits over the next five years or more to pay for the Liberals’ election promises, but with a lack of timelines, the benefits of the spending may not come soon enough, according to the Powell River Chamber of Commerce.
The federal Liberal government passed its first budget on Tuesday, March 22, projecting a $29.4-billion deficit and promising billions in new spending to help kickstart Canada’s economy.
Chamber of commerce vice-president Cory Carr, who also works as an investment advisor, said he is concerned Morneau did not provide a timeline on when the deficit would be paid down and the timeframe involved with the funds.
“They’re doing the right thing in investing the dollars in the economy,” said Carr, “but it’s going to take some time for the benefit to trickle through.”
Carr added that it looks like the majority of infrastructure funds will not be spent for another two to five years.
“It’s great that that’s on the books, but if you look at when we need the influx of jobs and projects, it’s between now and two years,” he said.
Despite concerns around timelines and short-term results, Carr said he likes the fact that the government has put money into infrastructure.
“It’s one of the best places to spend our money,” said Carr. “If we’re going to go into deficit, it’s one of the best tools to stimulate the economy.”
The Liberals have pledged to spend $120 billion over the next decade on infrastructure projects, focusing first on transit, water, waste management and housing.
Carr added he was pleased to see the government was looking for solutions to the record unemployment happening as the Alberta oil industry tanks.
One of the key projects Carr said he is hoping the federal government will chip in on is connecting Powell River to the rest of the mainland with a road.
While the plan to put people to work on infrastructure projects may take some time, the Liberals provided some short-term increased benefits for families, those on employment insurance (EI), students, seniors and first nations, among others.
The Liberals’ Canada Child Benefit will provide monthly tax-free payments starting July 1 and replaces the Conservatives’ universal child-care benefit. It will provide up to $6,400 a year per child under six and $5,400 for those between six and 18 years old for those households with income under $30,000. The benefit amounts per child will be reduced progressively for those households with incomes over that threshold up to $190,000.
Also, EI changes will mean it is easier to qualify for benefits. Students will see their federal grants increased by 50 per cent to $3,000 for low-income students and $1,200 for middle income.
North Island-Powell River MP Rachel Blaney shares Carr’s concerns with the potential for smaller rural centres being passed over.
“In this changing economy, there is a need for real action and smaller centres across Canada deserve more help,” stated Blaney in a media release on March 23.
Blaney stated that the budget has some hits, but also includes some significant misses for Canadians who may not be considered middle class.
Blaney is welcoming the government’s plan to add almost $950 for seniors’ guaranteed income supplement (GIS).
“The concern is this amount is for seniors making $4,600 or less, with the GIS decreasing for those who make more and no increase at all for incomes about $8,400,” she stated. “This just does not provide the level of support required.”
