Now that we all have had a good laugh over the prime minister’s excellent adventure in India, maybe we can get back to something once considered very important to this country: the federal budget.
Not long ago, journalists and commentators would give the budget document an initial read, then report and comment on the highlights. Subsequently, they would parse and analyze the document over the week after Budget Day, looking for nuances and subtle changes to government policy. Some years, the budget would be in the news for more than a week.
This is why Parliament is always off in the week following Budget Day – so that the finance minister and the prime minister can hit the road and sell or defend it.
In recent years, the budget has been in the news for shorter and shorter periods. But this year, the budget barely lasted one news cycle before Canadians got back to laughing at the prime minister and his Mr. Dressup schtick.
Too bad, because there were some important developments in this year’s budget that should be noticed. Some examples:
– Intellectual property (ip). Most countries’ copyright laws were written long before artificial intelligence (AI) was even a buzz phrase. But Canada’s digital IP rights are behind those of almost all other countries – so much so that AI creators in this country have no copyright protection. If this won’t discourage investment in the AI sector, nothing will.
Help is on the way, according to the budget. There will be a new IP strategy that will protect digital IP ownership while providing great access to IP for small and medium-sized businesses. This will lead eventually to democratizing AI in the Canadian economy.
The professional classes are just waking up to the fact that AI could affect their livelihoods rather than just jobs in manufacturing or fast food. So, the government is coy about saying very much on that topic. But this IP protection is an important signal just the same.
Of course, reports from all over the country noted that the budget also earmarked more than $5 billion for research over five years. Big numbers like that are easy to report.
– Deficit, shmeficit. The Liberals took flak again this year for not including a timetable for eliminating the deficit. But given that the world is on the verge of a massive trade war with the U.S. and all the uncertainty with our noisy neighbours downstairs, would austerity have been the responsible thing to implement?
That’s the position of Scott Clark, former deputy finance minister, and Peter DeVries, the former head of fiscal policy at the Department of Finance Canada, in a joint blog post that analyzes the budget in detail. These two men probably have forgotten more about the budget-making process than the rest of us will ever know.
“Fiscal policy must be realistic. By that we mean fiscal policy should be based on sound analysis and a careful and balanced view of economic and fiscal prospects, challenges and risks,” the blog post states, adding that the deficit could easily have been reduced by $3.5 billion had the feds used more buoyant assumptions.
For anyone interested in going beyond template analysis of the budget, Clark and DeVries recommend reading the annex sections at the back of the document. Here you will find a warning that an increase in interest rates of just 100 basis points will mean a major economic shock.
Fiscal nerds should check out the post at 3dpolicy.ca.
– Pharmacare. True, the Liberals did promise pharmacare for all Canadians in the 1997 election, and we all know how that worked out.
But this time, they mean it.
Otherwise, the government would not have gone through the trouble of announcing in the budget a special advisory committee on pharmacare’s implementation headed by Eric Hoskins, who traded his old job as Ontario’s health minister for this one. Hoskins will report in time for the 2019 election.
– Social engineering. This budget is not the first government document to pay homage to gender balance in the workplace, but it’s the first one to lay out a doctrine that paying women the same as men will grow the economy. Establishing political doctrine is the first step toward laying down permanent policy. Once established, no future government will be able to reverse it.
We may remember 2018 as the year of a stealth budget that brought about great change.