Chrystia Freeland tabled her third budget as Canada’s finance minister on Tuesday in Ottawa. Despite its progressive veneer, Justin Trudeau’s government is adopting a counter-productive approach to ecological transition in addition to delaying the implementation of the ambitious social policies that got him elected eight years ago.
Minister Freeland heard the concerns of large Canadian companies who, seeing the United States release hundreds of billions of dollars under the Inflation Reduction Act, feared for their “competitiveness”. Accordingly, Budget 2023-2024 announces generous subsidies in the form of refundable tax credits for the so-called clean technology industry.
Far from responding to the scale of the environmental task, the government, by naively betting on the technological miracles that the fossil industry has been dangling for several decades, is instead leading Canada in the wrong direction.
Clearly, the Trudeau government isn’t afraid of paradoxes: one-third of its $80 billion transition plan will go to renewable electricity infrastructure projects (which may include natural gas and nuclear), while that a quarter of this sum will be allocated to companies in the fossil industry for carbon capture and sequestration projects.
Note that the Régie de l’énergie forecasts a 20% increase in natural gas production and 20% increase in oil production by 2040.
Subsidies to the mining industry intended for critical minerals (lithium, cobalt, copper, graphite, nickel and the elements composing the rare earths) are also provided for in this budget. However, this mineral rush is likely to lead to a multiplication of conflicts surrounding the use of the territory, which contrasts with the measures of reconciliation towards the indigenous peoples, whose budget intends to “advance self-determination”.
In 2016, during the first budget of the Liberal era, IRIS noted that, despite its bombast, the Trudeau government struggled to translate its ideas into action and often contented itself with launching consultations. Seven years later, it is striking how little progress has been made.
For example, the 2023 budget does not say a word about the drug insurance program promised by the government, which is still pending. In terms of employment insurance, we are also waiting for the reform that should make it possible to set up, in the words of the Prime Minister, a system “worthy of the 21st century”.
In terms of housing, no new measures are planned to counter the crisis that is raging in many Canadian municipalities, apart from the deployment of an Aboriginal housing strategy in urban, rural and northern areas. This inaction is worrying as the lack of affordable housing is set to worsen in the coming years, according to several analysts.
The one exception is Canada’s new dental plan, which was announced last year and will take off this year. This program, which is expected to cost $5 billion per year starting in fiscal year 2027-2028, will be for uninsured Canadians with annual household incomes of less than $90,000. Note, however, that the measure could prove to be very profitable for private dental practices, a sector that has been the subject of a major wave of financial investment in Canada for several years.
Finally, it should be noted that the government has planned measures to protect the purchasing power of households in the face of inflation. These include a GST credit enhancement that bills itself as a “grocery rebate,” a positive move considering it targets the right people and is easy to administer. However, it is to be hoped that these sums will not simply further increase the profit margins of food stores, which have grown significantly during the pandemic.
In short, this seventh budget of the Trudeau era is disappointing when compared to the political project that the Liberal troops put forward in 2015 and which allowed them to come to power with broad support from the population. If Justin Trudeau never went through with his ambitious proposals, it is obviously because they would have required regulating the markets and reducing the sphere of influence of the private sector on the economy. In other words, the Liberal government remains a…liberal government.