Publications, opinions, and speeches


The 2017 Farewell Budget

Published on 26/03/2017

Every year after the release of a federal Budget, the Caledon Institute of Social Policy issues an analysis and response. We give every Budget reply a unique name, deriving from a key theme highlighted in the document. The title of our report this year is somewhat different. It signals that this is the last year in which Caledon will be issuing a Budget response.
Not surprisingly, we were pleased in 2016 to see that the federal Budget brought back social policy on the public radar screen after having been dormant for so many years. Budget 2017, by contrast, is not primarily about social policy but rather focuses predominantly on the economic side of Canada’s well-being equation.
Investment in both innovation and infrastructure are the twin pillars on which the 2017 Budget is built. While both streams are intended mainly to bolster economic growth, they are also highly relevant to social policy. On the whole, we believe that the Budget is moving Canada in the right direction. There are implementation lags and funding shortfalls in several areas to be sure. But the policy platforms and associated actions are fundamentally positive.
In terms of skills and training, most welcome is this Budget’s promise to begin unravelling the damage done by the unilateral introduction of the Canada Job Fund initiative by the previous Conservative government. Budget 2017 promised to return to cooperative federal-provincial/territorial development of skills and training programs while restoring greater flexibility.
Infrastructure investment comprises the second major component of the economic growth equation in Budget 2017. The investment of $11.2 billion over 11 years in a range of initiatives to build, renew and repair Canada’s stock of affordable housing is another welcome announcement. Decent affordable housing provides the foundation – literally – for the social well-being for all Canadians and especially for struggling low- and modest-households. We were pleased to see that Budget 2017 signals the reentry of the federal government, after years of absence, as a key player in the housing sector.
This year’s Budget also confirms the launch of the federal Early Learning and Childhood Development Framework, which seeks to tackle the serious lack of high-quality affordable child care in Canada. Starting in 2018-19, Ottawa will invest $7 billion over 10 years in high-quality, affordable child care spaces across the country. Improved affordability of child care enables parents to join the workforce or return to work. Support for quality services is also crucial for the healthy development of children.
All these announced innovation/skills and infrastructure measures are vital investments. While it can be argued that the funding is insufficient or the implementation is too slow, these proposed measures at least move in the right direction and are on the right track. The success of this package of initiatives is crucial, given the uncertainties and rapid changes that have ravaged the labour market in recent years. The rise in part-time, casual and contractual work is a major problem in this country. Precarious employment is a serious red flag for Canada.
Caledon has written for years about the need to improve working conditions for lower-income households to offset the growing market inequality rooted in poor and unstable wages. Equally important are the insecurity and uncertainties that precarious employment creates for Canadians as well as its serious impact upon health and well-being. Job instability and insecurity put increased pressure on Canada’s social safety net to perform effectively its dual functions: 1) to supplement low income, and 2) to replace lost or interrupted earnings.
Over the past 25 years, the Caledon Institute has put forward various policy options for making Canada’s income security system stronger and more robust than its current configuration. We have argued the need for a reformed architecture of income security in which constituent programs are strong in both absolute and relative (i.e., indexed to inflation) terms, portable across the country and respectful of human dignity.
We were surprised, if not dismayed, to see no reference whatsoever in Budget 2017 to the federal (already-announced) commitment to launch a National Poverty Reduction Strategy. Granted, there are a number of significant measures in the Budget that will be of assistance to lower-income households, including the investments in affordable housing and high-quality child care.
However, a poverty strategy is concerned explicitly with shoring up and improving all the core elements of Canada’s social safety net. In the notable absence of that agenda in the 2017 Budget, our response sets out the key areas that we believe need to be addressed in the coming years.

ISBN – 1-55382-683-3


Government spending and tax


Every year after the release of a federal Budget, the Caledon Institute of Social Policy issues an analysis and response.