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Canada’s first Trump-era budget tackles what he won’t

Canada’s first Trump-era budget tries to hit all the notes that Trump isn’t

The Trudeau government’s second budget hits all the Liberal Party’s campaign notes, but it is a much more tame than last year’s ambitious spending plan.

In the run up to the release of the Liberals’ plan, government staffers spun the document as focused on innovation, adding that it would be the first Canadian budget with a specific gender lens built in. Although long priorities for the Liberals, the 2017 document has the Donald Trump effect written all over it. 

In his speech unveiling the budget, Finance Minister Bill Morneau harkened to “everyday folks” who are “worried that rapid technological change, the seemingly never-ending need for new skills, and growing demands on our time will mean that their kids won’t have the same opportunities that they had.”

The second budget disperses nearly $30 billion in new funding over the next four years, without doing much to raise taxes or close loopholes.

“And who can blame them?” Morneau added.

The second budget disperses nearly $30 billion in new funding over the next four years, without doing much to raise taxes or close loopholes.

Spending on so-called innovation — which includes an attempt to link Canada to advancing economies in Asia and Europe, attract high-skill workers from abroad, and boost research and development in green technology — comes as President Trump’s brand of hard nationalism spooks big technology players worldwide.

Attracting high-skill workers, and recognizing foreign credentials, has long been a preoccupation for Ottawa, but that priority, too, has taken on a new prominence thanks to Trump, who has already blunted the flow of foreign students into the United States and prompted fears of brain drain.

Budget 2017 is proposing some $1.4 billion over five years to immigration programs to bring foreign workers of various skill levels into Canada. That includes nearly $8 million in funding, over two years, for the “global talent stream,” which aims at creating an expanded visa and work permit programs to allow for more high-skill talent in Canada.

It throws another $1 billion over five years into supporting ‘superclusters’ — cities or regions with a high number of technology companies and start-ups.

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In a clear tip-of-the-hat to the uncertainty enrapturing the world, the budget contains an entire a section tackling the “Canada-United States relationship.”

The 2017 budget is the first federal budget to come with a gender-based analysis, which analyzes how each commitment could impact women and men separately.

“The Government of Canada has also reorganized some internal operations and deployed new resources to cross-border files,” the budget reads. “Our whole-of-government approach is founded on a commitment to free, fair trade, protecting Canadians’ economic interests and upholding Canadian values. “

The concern with advancing women in the domestic and global economy has, meanwhile, given Trump and Trudeau a joint project, which even earned the Canadian prime minister a shout-out in Trump’s state of the union address.

The 2017 budget is the first federal budget to come with a gender-based analysis, which analyzes how each commitment could impact women and men separately. Something, as Morneau put it, “should have been done long ago.”

The budget has already received some skepticism from all sides.

James Moore, former Industry Minister under the previous Conservative government and currently a senior advisor at the Denton’s law firm, says that, two years on, Trudeau doesn’t have much to show for some quickly-stacking budgets. He adds that, for all of the spending laid out in 2016, much of it hasn’t actually been spent — such as the funding for superclusters, which was announced last year but only launched with Wednesday’s budget.

The real question is what to do with the blue and white-collar workers that might not have the skills to enter into the high-skill sectors.

“Get on with it,” Moore told VICE News.

Angela MacEwen, senior economist at the Canadian Labour Congress, praised the effort to boost various skills development programs funded under the budget, but says the government has still fundamentally failed to look into exactly what ‘skills gap’ exists in Canada. And while the budget’s focus has been on high-skill, high-tech jobs, the real question is what to do with the blue and white-collar workers that might not have the skills to enter into the high-skill sectors.

“It’s not about teaching kids to code, it’s about teaching them how to use fractions,” MacEwen says.

She adds: “They haven’t fully identified the real problem.”

A number of policies in the budget took specific aim at tackling issues women in Canada face — from tinkering with the Labour Code to allow for more flexible work arrangements or telecommuniting, initiatives, which are aimed at helping with women children stay in the workforce or return faster after their pregnancy.  The budget also carries more than $20 million a year to establish a national strategy to address gender-based violence, which would include LGBTQ2 minorities.

The budget posts the same large deficits Trudeau acknowledged he’d rack up before taking office, but trims the projected overall addition to Canada’s national debt by just shy of $2 billion. The deficit hawks, including Conservative Party frontrunner Kevin O’Leary, will likely be obsessed with the new spending, honing in on a variety of assumptions rife in the budget that may yet balloon — or shrink — the actual deficit.

“It’s not about teaching kids to code, it’s about teaching them how to use fractions.”

The government is counting on the Canadian economy to grow slightly less than they anticipated this time last year — staying at or below two percent GDP growth from now until 2020. They expect interest rates will be kept internationally low, too, meaning their debt charges will be less than anticipated.

One priority that Trudeau has advanced since hitting the campaign trail in 2015 is boosting infrastructure spending as a way to kick-start an economy still hobbled by the 2008 financial crisis.

In the 2017 budget, the government of Canada is funding a previously-announced Canada Infrastructure Bank, which is designed to provide cities a cheap way to borrow money to underwrite large-scale projects, including public transit.

Cover: Ralph Damman/Vice Illustration

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