Following the unveiling of the Federal Government’s 2019 Budget, MLI Munk Senior Fellow Sean Speer provided extensive commentary on BNN Bloomberg.
This budget effectively answered two main questions: to what extent was resolving the deficit a priority for the government, and what Canadians can expect in the lead up to the 2019 election.
According to Speer, a principle takeaway from this budget is that the Trudeau government’s deficit is structural in nature.
“…Mr. Morneau, in the days ahead as he tries to sell his budget, both to Main Street and to Bay Street, is going to have to explain why the deficit is moving up instead of down.”
Speer also argues that the 2019 budget is a “signal to the business community” and those interested in economic growth that they must do a better job when it comes to communicating the importance of fostering a dynamic and growing economy.
The budget is also intended to be a pivot away from the SNC-Lavalin case, although Speer does express some doubt as to whether this budget will be successful through that political lens.
Speaking of politics, Speer argues that much of the government’s decision-making on this budget reflects that they have an eye towards the upcoming election.
“The fact is, faced with windfall revenue, the government has fallen back into deficit.” Speer pins this deficit on two motivations: one is a genuine interest in the priorities espoused by the government, and the other is to create a political wedge between the Liberal Party’s deficit-financed spending, and what the Liberals intend to argue would be the Conservative Party’s “austerity.”
Among other interesting elements of the budget, Minister Morneau’s budget also makes good on a 2015 Liberal Party promise to tighten rules regarding stock options. The question is whether the government will be successful in improving the progressivity of the tax system without unintended consequences when it comes to attracting and retaining entrepreneurs.
Speer’s participation on BNN Bloomberg’s panels may be viewed here: