Liberals set to unveil federal budget that promises billions in new spending

The federal Liberals are set to unveil their latest spending plan Thursday that aims to balance promises made to voters in last year’s election campaign, in the pact with the NDP, and recently to Canada’s global defence allies.

Finance Minister Chrystia Freeland is scheduled to table the budget in the House of Commons this afternoon.

The economy has fared better than anticipated over the past few months, which along with higher prices for oil is expected to pad the government’s bottom line and help offset any new spending to be announced.

Outstanding promises from the Liberals’ campaign platform amount to about $48.5 billion in net new spending, once taking into account new revenues from things like an expected tax on excess bank profits.

Among the promises are measures aimed at addressing housing affordability concerns that have been rising alongside prices and rent since the September vote.

But billions more could be heaped onto federal books to pay for pharmacare and dental care as part of a deal to have New Democrats prop up the minority government, and more for the military as part of an agreement with NATO allies to more quickly ratchet up defence spending.

Speaking Wednesday, Prime Minister Justin Trudeau said the budget would show the country’s debt remains affordable, with debt declining over the coming years as a percentage of the national economy.

First federal budget since Liberals-NDP deal

The budget is the first one since the Liberals and the NDP reached a confidence deal back in March, which should ensure the fiscal plan passes and the minority government doesn’t fall.

The agreement, which will see the NDP prop up the minority government on confidence votes for the next three years, has been being billed as a “confidence and supply agreement,” not a formal coalition, since no NDP MPs will sit in cabinet. It will effectively keep Canadians away from the polls until 2025 and see the NDP back the Liberals on the next four federal budgets.

The deal takes some of the drama out of a minority budget since it pretty much eliminates any questions about whether the government will survive.

“This is where the rubber meets the road … this could fall apart at any time,” said Keith Brownsey, a political scientist at Mount Royal University.

Brownsey said the budget is a first test to this deal, which will see the government survive if they deliver on NDP priorities like pharma care, dental care and housing — all of which are expected to be addressed in the budget.

However, he wonders how long this will last, noting Liberals’ approval of energy projects and big increases in military spending are bound to cause friction with the NDP.

While the two parties have framed the confidence deal as a cooperation on important issues for Canadians, Conservatives have accused them of massive spending and higher taxes.

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With files from Micheal Ranger of CityNews