Front Burner - $10-a-day child care and a big-ticket budget

Episode Date: April 20, 2021

After two long years, the Liberals have finally delivered a federal budget and boy is it a big one. Today we dissect the biggest ticket items, from a national childcare plan to a bucket full of green future promises with help from CBC’s Vassy Kapelos.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. All of this costs a lot of money. So it's entirely appropriate to ask, can we afford it? We can.

And here's why. Okay, so after two years, finally, we have a budget. The Liberals have presented their plan to get the country out of COVID and beyond. Really, it's part budget, and it is very much part election platform, because we all know that one of those is coming. There's a lot going on in the 739 pages, including big, big news around childcare, new environmental targets, and a $15 minimum wage. And of course, with all of this, a hefty price tag. More than $100 billion in spending

over the next three years and deep deficits for years to come. Today, CBC's host of Power and Politics, Vashie Capellos, is with me to take you through everything that you need to know. I'm Jamie Poisson, and let's get to it. Hi, Vashi. Hi, Jamie. Thank you so much for making the time. You have been going since, I think think like 8 o'clock this morning. So thank you.

You and I are talking Monday night. It's all right. It's budget day. It's very exciting. Okay. Well, really exciting stuff here. Vyashi, I know that this is tough to ask because I mentioned that this budget is 739 pages. But how would you describe it big picture if you only had like a

few sentences. That's a good question. It's actually a hard one to answer because it is so voluminous and kind of all over the place to a certain degree. And by that, I mean, I guess the first sentence I would use in this is there appears to be something in it for everyone. And by that, I mean Canadians as well as political parties. The second thing I would use to describe it is it's a balancing act between introducing things or extending things that address the reality of the pandemic, which is maybe not what we anticipated it would be at this time. It really sucks and it's really hard in a lot of provinces. Kind of stacked up against what the country and the country's economy might look like emerging out of the pandemic and how a recovery from the government's perspective might take place.

We promised last year to spend up to $100 billion over three years to get Canada back to work and to ensure the lives and prospects of Canadians are not permanently stunted by this pandemic recession. This budget keeps that promise. Okay, so then let's go through it with that in mind. And I guess let's start with the pandemic because for so many people, this is an ongoing, urgent economic and health issue. It's probably all that they can really think about today. And so I'm sure if you're a business owner, or just a person struggling right now, what you care about right now is just getting through the next little while. And so what does this budget have in it to sustain Canadians through the remainder of the

pandemic? So what it has primarily is a focus on extending some of the supports the federal government has already put in place through to the fall, which gives you an indication of, for example, when the government thinks a post-pandemic recovery might be more on the horizon. And by those supports, I mean, for example, the wage subsidy. I mean, a lot of the caregiver benefits and the sickness benefits, as well as the emergency rent subsidy. All of that basically takes us through the summer into the fall. So if you are a business owner, for example, shut down and in no way have any idea when you might be able to open up, you know that some of

those supports, which are not, I should say, perfect, which have certainly had their share of criticisms levied against them, but they will be in place. And so you can plan for that until the fall. There's also the introduction of a new benefit aimed like a hiring recovery benefit aimed at moving people off of the wage subsidy onto that. And we'll provide $595 million to make it easier for businesses to hire back laid off workers or to bring on new ones. And it has a focus more in incentivizing employers to make additional hires and then as well add additional hours. And that's something that starts in the summer too. So we get a bit of an indication of how the government thinks this might work. There'll be kind of a tapering off of some of the benefits through the summer,

but an acknowledgement that probably they will still be needed until the fall. Right, right. And you mentioned criticisms of some of these wage subsidies. I did find it interesting in the budget that the SEWS, the emergency wage subsidy, you know, as you mentioned, is going to be tapered off over the summer. So companies will get less and less money. But also publicly listed corporations would be required to repay wage subsidies received this summer if their executive compensation in 2021 is higher than 2019. So that actually does address some of the criticisms here that, you know, people were getting big bonuses, companies were paying out dividends, but it certainly addresses, I guess, the bonus question.

Just sticking with COVID, the budget also talked about vaccines, right? We know now how much they spent on vaccines, which is interesting. It's a number we hadn't heard before today, I don't think. It's $10 billion. Is that right? Yeah. It's $10 billion. Yeah, we didn't know that. And there's been some interesting disclosure over the past few days through committee documents tabled in committee around price per dose and that kind of thing. It is interesting to find out. It's also in the hours before it, they were really stressing and even premiers, I should say as well. They were really stressing the need for more vaccines and for vaccine procurement to speed up all that kind of thing.

Familiar refrains, but in the context of the budget, they were really making the argument that before we can even think about an economic recovery, for example, like the population needs to get vaccinated. And there are, as you are well aware, multiple struggles on multiple fronts when it comes to that. Yes, absolutely. And also worth noting here that there's some stuff in the budget about ramping up domestic vaccine capacity, like to make vaccines in the future. Canada has brilliant scientists and entrepreneurs. We'll support them with an investment of $2.2 billion in biomanufacturing and life sciences. Since we're kind of talking about health, I think it's also probably worth noting here that not in the budget was more money for health care transfers, right?

Something that Bloc Quebecois leader Yves-François Blochet was not pleased about. He was not. The government will have a deficit which will go up to $150 billion without answering positively about the transfers for health care. And I cannot so far explain myself why he could get to that conclusion. In fact, it was one of two big things that he had signaled he wanted to see in the budget in order to support it. The first being more money for seniors and the second being health care transfers with no strings attached. And so that has left a lot of premiers not happy. They wanted to see a huge boost, like, you know, nearly $30

billion boost in funding for health care transfers. And their argument is that the federal government's portion of spending has decreased over the years, while the needs of health care, as laid bare by the pandemic, have only increased. So that will be an interesting conversation to follow. I would just note that the federal government had signaled very clearly in the past few months that it would not be in this budget. All right, so now we're moving sort of out of the pandemic, hopefully.

And we've got to talk about the big, big headline from this budget, and that is child care. So Finance Minister Christopher Freeland is hanging a lot of credibility on this, it seems to me. Our government is totally committed to it, and we are putting a lot of money on the table. But the even more important reason is, I think Canadians have decided we together want to make this happen. $30 billion. They're committing over five years and $8.3 billion annually thereafter. They're aiming to cut daycare fees in half within a year. The goal is to create $10 a day child care in the next five years. And so talk to me about what you're hearing. What's

the reaction to this? Well, this is definitely, I think you're framing it in the right way. Like if people are going to talk about one thing in this budget, this is what the federal government wants them to be talking about. And that's for a number of reasons. First of all, the Liberals themselves, along with many nonpartisan commissions and reports, have called for a boost to affordable, high-quality child care for decades. Like the Liberals themselves since the early 1990s. And no government has been able to actually make that materialize. So this is definitely from every expert I've spoken to who reacted following the budget, you know, more even than they anticipated. I think Armin Jelinizian said, bam, when I asked her if this is if this is what she wanted to see. I saw that. I saw that. Yes. We got everything that we thought was necessary to be able to stabilize the most vital part of the social infrastructure that supports households, making sure all hands

are on deck. So I think certainly this is the biggest commitment any government has made to the idea of child care. That doesn't mean that there aren't a huge amount of questions around how it gets implemented, how the negotiations with provinces go, who it affects, like which Canadians actually will end up benefiting most from it. But those questions, of course, will ensue. However, this kind of fiscal or financial commitment has never been made before. And so now there's at least, you know, a document I can hold up two years from now and say, have you spent this much money? And have you allocated it? Or five years from now and say, hey, is child care really $10 a day? And that is something that is really

unprecedented. Putting a political lens on it, you know, people are struggling, they're stuck at home with their kids. Like, I would imagine the promise of $10 a day daycare is really going to seem very good to a lot of people right now, especially women, obviously, who have left the workforce in droves because of the pandemic. And it's worth noting, like even beyond politics, we've basically reversed all the progress women had made entering the workforce back to, I've heard a couple economists say, like levels of the 1980s. So it is a huge, huge impact that has been had on women in this country that are still struggling and will be for months and for years to reenter the workforce. So I think you're right. Like this does definitely address a very widespread issue that I think a lot of Canadians care about right now. I was a good professional and now I feel that I am stuck. For former journalist Amanda Aron-Shamanovich, $10 a day care can't come fast enough.

It would be really good if I can, I don't know, take some courses and move on with my life. And, you know, I should say, as you mentioned, the liberals and other political parties have been talking about this since the mid 90s. We've got a whole episode on this issue coming tomorrow. So I hope people will tune in. Another key element of the budget were a lot of items devoted to developing the green economy. So this included new targets to exceed Canada's current climate change targets a little bit, which is now 36% below 2005 levels of greenhouse gas emissions by 2030. We are at a pivotal moment in the green transformation. We can lead or we can be left behind. Our government knows that the only choice for Canada is to be in the vanguard.

And so talk to me a little bit more about what else was promised on the green economy front and the reaction to that. I think it's between $17 and $18 billion devoted to quote unquote green growth. Lots of talk about home retrofitting, for example, and tax benefits for Canadians on that. Some talk about development for electric vehicles and batteries, manufacturers, like incentives basically for businesses to go green. I find this stuff kind of difficult to parse out because it's so big and it's so much. And I don't really know what a lot of it looks like in tangible terms. And I feel like that's why maybe it will kind of get a little bit less scrutiny from Canadians and some of the other more tangible stuff that was proposed. But I think the greater context that you mentioned is important.

And that is it's tied to more aggressive targets for 2030. And I say it's kind of significant in a political way because they've said that the floor is 36 percent below 2005 levels. So it might be upwards of 40. We're going to find out any day this week when the climate summit happens with the Americans. But we were just talking about Erin O'Toole's climate plan and various other parties' climate plans and what targets they'll offer. I mean, this sort of sets a new conversation around all of that and a whole other line of accountability for the stuff that the government is introducing? Like, will it actually get us to those targets?

And I think it's fair to ask of the government, like, are those targets aggressive enough? Because lots of people contend they aren't. Right. You know, what the liberals are proposing right now is certainly a plan, but a Green New Deal, it is not, right? Like, so there are a lot of people who want way more aggressive targets here. Vashi, any other big things that stood out to you here? Like, what are we missing?

I think a couple of things just based on conversations that we've had and issues that we know are front of mind for many Canadians. About $18 billion to, quote unquote, build safer, healthier, rather indigenous communities. Also money in the budget to be directed towards the Department of National Defense for the work that we think, I guess, they intend to do when it comes to rectifying issues around sexual misconduct and the culture that exists there. I should point out we don't know what those measures are or what form they'll take, but it's in there. I think also worth pointing out that there was nothing in the budget that I saw about like an independent body to investigate sexual misconduct claims, which is something that a lot of people are calling for. It will be interesting to see what exactly, though the money is set aside, like what exactly it gets used for and if it's in fact enough to adequately address the problem, which we now know is pretty deeply seated. adequately address the problem, which we now know is pretty deeply seated. And then we talked about health care transfers and how much money is not there for the provinces. There's a bit of it,

though, $3 billion, I think, for long-term care. And I'm very interested to see how that materializes as well, because it's tied to the introduction of national standards, something that in theory sounds like a no-brainer, in practice is not so simple. And specifically, again, I'd invoke the Bloc leader who was not happy with the idea, and Quebec's premier as well, who is not exactly like welcoming with open arms the possibility of money with strings attached when it comes to health care. Okay. Also maybe worth noting here, there was money designed to encourage businesses to hire historically marginalized workers, big cash injections into innovation funds for business, a $15 minimum wage. What do you think about that?

Yes, that was an interesting one too. The thing I would highlight, and we should give a nod in this case to the NDP, it's very interesting how the pandemic and kind of voting patterns over the last six years have changed some of the government's posture on this. And I say that when you bring up minimum wage because I have this memory from the 2015 campaign of both universal child care

and a federal minimum wage being proposed by the federal NDP and the Liberals decrying both and pointing out ad nauseum how much both didn't make sense. I put that to Minister Freeland at one point following the budget and and she said she sort of said you know well things have and I'm paraphrasing but this pandemic has truly opened everyone's eyes and there's more of a general acceptance that those that those issues need to be rectified. On early learning and child care in particular,

I think that we are at a new and special and important moment as a country. Right. I believe she said something like she doesn't like to look back. You know, Vashi, as a person, I don't spend a lot of time looking back. I really look forward. Yeah, that was probably... A lot of politicians say that to me. But I do. I think it's fair to point out that it yes, that these problems have been laid bare by the pandemic. But issues with not earning enough on minimum wage or women not being able to fully participate in the workforce are not brand new. connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National

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To listen to this podcast, just search for Money for Cups. All right, here's what we got to talk about now, how much all of this is going to cost. So it's a very hefty price tag. I think you mentioned earlier, you know, $100 billion over the next three years. So we're looking at a huge deficit this year, $354 billion. We're looking at a huge deficit this year, $354 billion. And then next year, a projected $154.7 billion that, you know, according to this budget, would gradually reduce to $31 billion by 2025. You remember when everyone was losing their minds over a $20 billion deficit a couple of years ago?

Hashtag memories. What's been the reaction to this? Well, there's a mixed reaction. And I think for a couple of good reasons. I think there are a lot of things that the Liberals plan to address with this spending that many Canadians and many economists feel need to be rectified. And we've gone over many of them. But it is a huge price tag. And in the lead up to the budget, there was a lot of really interesting analysis around whether this particular level of spending on quote unquote stimulus was actually necessary. And that's because, though it sounds weird to say it right now, because, you know, we're in the middle of this awful crisis in so many of our most populated provinces and businesses are closed and Canadians are still unemployed.

Canadians are still unemployed. Overall, when you look at kind of the big picture indicators, and I'm talking specifically about the amount of money Canadians are saving versus what they have saved in the past, or even overall GDP growth. So the size of the economy and how fast it's growing. It is actually and has, until probably the next couple of months of data come out, outpaced and outdone expectations. And so lots of economists were saying, you know, take a step back. The economy might rebound a lot more quickly than you anticipate, and you might not need to spend as much money. The Liberals dismissed that argument. They talked about the hundreds of thousands of Canadians who were employed prior to the pandemic who are still unemployed. Some will say our sense of urgency is misplaced. Some will say that we're spending too much. To them, I ask this. Did you lose your job during a COVID lockdown? Were you reluctantly let go

by your small business employers who were like a family to you, but simply could not afford your salary any longer? And I think that argument certainly has a lot of salience with many Canadians right now. But I do think as the situation improves, like fingers crossed, I hope we're in a position where that's a conversation one day. As the situation does improve and those big indicators get even stronger, are they going to be able to make the same argument against the backdrop of increased debt service payments, right? If you're spending $40 billion on servicing the debt instead of putting that money to programs, like there is a genuine debate and conversation to be had about

that if there's some sort of emerging consensus that it might not be necessary. I don't think we're at that point right now because so many Canadians are suffering. I think a lot of what's being put out there in this makes sense to a number of them. But that doesn't mean the economic situation won't or can't change. And the conversation would as well. And this does tap into one of the criticisms that Aaron O'Toole was talking about.

The criticism that he feels like this budget and the Liberals weren't letting the private sector lead the recovery, that they weren't doing enough to just support small businesses to get back on their feet and then to just let them take the recovery over. Internships for young people is not a plan for an economic recovery. We need a serious plan. That's what I recommended to Mr. Trudeau.

And the debt levels they're putting in here are astronomical and are going to actually squeeze out programs in the future, particularly if we see inflation and interest rates change. So it missed the mark entirely for a budget that should be about securing our economy. Yeah, and I think that points to whether or not the economic situation will be a different one, let's say six months or a year from now. Like, there certainly doesn't seem to be a massive appetite for get the government out of our lives at this point. There may be a point in which the argument Erin O'Toole is making really resonates. I'm just not sure it's this point in time. And I do want to talk about one more criticism coming from Jagmeet Singh, leader of the NDP. Obviously, the budget did put forward some measures to help pay for all of this,

including a tax on large digital companies, 3% on revenue starting in 2022 on big companies, a luxury cars and personal aircraft tax, a tax on non-residents that own Canadian properties. But, you know, hearing from Singh today, he certainly said that he doesn't think that this goes far enough. Canadians are looking in this budget

for an answer to the question, who's going to pay for the recovery? Who's going to pay for the cost of this pandemic? And the Liberals have answered very clearly that it will not be the ultra-rich. They have not put in any significant measures to address the fact that the ultra rich in Canada have seen not just profits, not just getting by, but record profits in this pandemic. Yeah. So he's proposed a wealth tax targeting people who have or families who have a wealth of 20 million dollars. And then it's also kind of targeting companies which have profited quite a bit during the pandemic.

It still wouldn't make much of a dent. That said, the point he's making around the revenue side of the equation is I think one to watch. Only in so far as Kevin Page, a former parliamentary budget officer says in his assessment, there's about $10 billion of extra revenue raised over a number of years

through the measures that you just went through. Well, that's $10 billion. We know the spending is $101 billion. Yeah, checks calculator. Yeah, checks calculator. I'm not great at math, hence I'm a journalist, but still, I can even tell that that isn't a great balance sheet. And obviously, economic growth will continue to fuel the growth in revenue. But it does, I think, raise a good question going forward around how the government is going to pay for a lot of this stuff. And if, you know, interest rates will be as low as they say they will continue to be, or will there be, should we be expecting in future years revenue generators, a.k.a. new taxes or increases to current taxes in order to pay for a lot of the spending?

Page says, Mr. Page says that right now it looks like they can cover what they've laid out. But let's say they add the health care transfers. Let's say they add another big ticket item in the next election or in the years that follow. Well, then the revenue side of the equation becomes a big problem. All right. Vashi, thank you so much on this very momentous budget 2021 day. It's great to be with you as always. Thanks, Jamie. All right, that is all for today.

I'm Jamie Poisson. Thanks so much for listening to FrontBurner. We'll talk to you tomorrow. For more CBC Podcasts, go to cbc.ca slash podcasts.