Council of Canadians disappointed by Budget 2017-18

Prime Minister Justin Trudeau and Finance Minister Bill Morneau

The Council of Canadians is disappointed by the Trudeau government's budget that was tabled earlier today.

Among a number of key priorities, we were looking for an immediate $1.2 billion investment in First Nations water and wastewater systems, the elimination of about $7.8 billion in federal subsidies to fossil fuel producers, a commitment to fund a minimum of 25 per cent of provincial health care costs, a commitment to a cost-saving universal pharmacare program, and a rejection of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) as a job-killer.

1- Water
Budget 2017 - "Over the last year, the Government has lifted 18 long-term drinking water advisories in First Nations communities, and is on track to eliminate all remaining advisories by March 2021."

Comment - The immediate $1.2 billion infusion for First Nations drinking water and wastewater systems noted in a 2011 federal government assessment of the spending needs to address this situation is not there. The March 2021 deadline is also slightly longer than the five-year pledge Trudeau made during the October 2015 election.

2- Fossil fuel subsidies
Budget 2017 - "Budget 2017 proposes to provide a one-time payment of $30 million to the Government of Alberta to support provincial actions that will stimulate economic activity and employment in Alberta’s resource sector. This specialized workforce is necessary to generate wealth for Albertan and Canadian citizens now and in the future."

Comment - The fossil fuel subsidies appear to remain in place despite a projected deficit of $28.5 billion in 2017-18, up from the $25.4 billion projected in the fall.

3- Health care
Budget 2017 - "In 2017-18, the Canada Health Transfer [will] grow in line with a three-year moving average of nominal gross domestic product growth, with funding guaranteed to increase by at least 3 per cent per year."

Comment - This is Harper's funding formula that could result in the loss of $43.5 billion in health care transfer payments over an eight year period.

4- Pharmacare
Budget 2017 - "Improving access to prescription medications, lowering drug prices and supporting appropriate prescribing through an investment of $140.3 million over five years, starting in 2017-18, with $18.2 million per year ongoing, for Health Canada, the Patented Medicine Prices Review Board and the Canadian Agency for Drugs and Technologies in Health."

Comment - Studies show that the patent provisions for pharmaceutical drugs in CETA could cost us between $850 million to $1.65 billion annually, while pharmacare would save about $14 billion a year.

5- CETA
Budget 2017 - "Canada and the EU will now complete their respective legislative and regulatory processes that will bring virtually all significant parts of the Agreement into force by the spring of 2017. This agreement sets the stage for an even stronger relationship with the EU, which will create greater opportunities for the middle class in Canada and in Europe by opening our respective markets."

Comment - The Tufts University CETA Without Blinders study shows that CETA signatory countries would lose 230,00 jobs, and that in Canada it would transfer 1.74 per cent of national income from labour to capital (meaning any economic gains will flow overwhelmingly to owners of capital rather than to workers) and that due to rising inequality and unemployment the average income in Canada is projected to fall by $2,650 by 2023.

In addition, an analyst from the Investment Industry Association of Canada says that the scant details about the proposed infrastructure bank suggest it could be "at least several years" before the bank will be able to attract private capital. That's good news given we see this as a privatization bank that will promote public-private partnerships.

And despite already having violated the United Nations Declaration on the Rights of Indigenous Peoples by approving pipelines that do not have the free, prior and informed consent of First Nations, the Liberals have budgeted $3.1 million over three years to establish a secretariat to support a ministerial working group to ensure Canada is meeting its UNDRIP obligations.

Overall, Toronto Star columnists are describing the budget as "a wordy rewrite of his previous one", walking "the line between prudence and dithering" and "not a useless document", while many analysts seem to regard it as a placeholder document that is modest by design given the likely implications of US President Donald Trump's planned corporate tax cuts (ie, corporate tax cuts here too).