The New Federal Budget

The federal Liberal government of Canada has pledged billions of dollars for infrastructure in its new budget. According to The Globe and Mail, the pledge is “$125 billion over 10 years” (The Globe and Mail, 2016). That’s a lot of money. And It’s for national, provincial, and territorial infrastructure, with increased funding for research and innovation, among other areas. So it matters to colleges and universities, which means AU, too ? whether directly or indirectly. So what’s in the budget?

A number of reports note how the 2016 federal budget affects affordable housing, Canadian arts, citizens? eligibility for old age security, Canadian families, First Nations, the innovation sector, ocean and freshwater management, real estate, postsecondary students, and other areas.

Lots of things, in other words. Budget 2016 has a wide range of pledges, with changes to be implemented across the national socio-economic landscape. But this doesn’t come without costs. Because nothing is free, expenses and pledged investments lead to costs at the same time. Some things loom, even become worse, like the deficit.

The budget is expected to increase the deficit to $29.4 billion for 2016-17, which Prime Minister Justin Trudeau defends, naturally (Mintz, 2016; Nease, 2016; Grenier, 2016). Based on a survey, Canadians more or less accept the budget and deficit too (Grenier, 2016; Anderson & Coletto, 2016). So even though there’s an increase in the deficit through the dramatic suite of pledges amounting to $125 billion, Canadians are generally okay with it.

This is backed by a report in The Economist. The Economist indicated that the Canadian “economy” was “weakened by low commodity prices” but PM Trudeau’s government continued forward with the promises made during the campaign regardless (The Economist, 2016). Its continued that the Liberal government of Canada had reversed the fiscal policy of the ex-Conservative government of Canada.

It is important to note that the federal government will give tax cuts to the middle class and tax hikes for the higher-earners to attempt to balance them ibid.). The Economist article leaves on a vital note and query by stating, “?most economists support deficit spending at a time when borrowing rates are low and the economy is weak. The question is: will Mr Trudeau know when to stop?” (ibid.).

At the provincial level, we find similar reports from the Globe and Mail about the balance between deficit and spending being wise or foolish. “There are questions though as to how much more money provinces and municipalities can contribute to infrastructure, given that many cities and provinces are already managing high debt loads” The Globe and Mail said (The Globe and Mail, 2016).

So that means infrastructure spending is an issue, deficit spending is a good thing with a weak economy and low borrowing rates, but there are other, more general, considerations. Those like when deficit spending for investments in infrastructure is reasonable and when it is not. Some reports say it is a good time, and in the future it might not be. Or maybe it will, we don’t know with certainty. The future is murky.

The federal budget from the Liberal government has stated they have a major focus on strengthening the middle class. A Canadian middle class that many college and university graduates will be filling in the future, which is an acute concern for AU undergraduate and graduate students.

According to government sources, strengthening the middle class includes six main parts: a middle class tax cut, the Canada Child Benefit (CCB), helping young Canadians succeed, Employment Insurance (EI), skills training, and job creation, and middle class prosperity (The Government of Canada, 2016b). An important component is the pledged investment in the postsecondary sector too (Samson, 2016).

It talks about the rising costs of tuition for postsecondary education, the concomitant difficulties for young Canadians to attend postsecondary institutions as a result, and the necessity for the prosperity of the country for young Canadians to be able to become certified through postsecondary education (The Government of Canada, 2016c).

This is especially important at AU, where 31% of students have dependents, according to 2010/11 AU statistics (Athabasca University, 2016). One of the most relevant aspects, I think, of this new budget is the section, in Chapter I, to do with the success of young Canadians (The Government of Canada, 2016c). Or by implication, we the students. And the budget has a number of measures designed to help students who are having trouble affording post-secondary education (Gray, 2016).

So the new budget covers a broad range of areas of the socio-economic vista, increases the deficit, but it may be that the deficit spending is a net good for now. The PM and public (on net) approve of the budget and deficit, but there will need to be examination in the future about the extent of the federal government’s deficit spending. The infrastructure spending affects us at AU ? directly or indirectly, will affect us throughout 2016/17, and will need re-evaluation in the future in terms of its viability as time progresses. Echoing The Economist, are the pledges net good or net bad? My answer: now, they’re good; later, time will tell.

Anderson, B. & Coletto, D. (2016, March 24). Most feel Budget 2016 is a change from the past, appropriate to circumstances, and sets good priorities.
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Athabasca University. (2016, February 3). Facts and Statistics.
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Gray, J. (2016, March 25). What students should know about the federal budget.
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Grenier, E. (2016, March 25). Canadians support budget, accept deficit, poll suggests.
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Mintz, J.M. (2016, March 22). Jack Mintz: Liberals? budget hikes pressure on Canada’s dangerous debt bomb. Retrieved from, K. (2016, March 23). Federal budget 2016: Justin Trudeau defends bigger deficit, First Nations funding. Retrieved from, N. (2016, March 23). University Sector responds favourably to federal budget.
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The Economist. (2016, March 26). Globalization with a human face.
Retrieved from The Globe and Mail. (2016, March 21). The $125-Billion Question.
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The Government of Canada. (2016c, March 22). Chapter 1 ? Help for the Middle Class.
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A native British Columbian, Scott Douglas Jacobsen is an AU undergrad and AUSU Councillor-elect. He researches in the Learning Analytics Research Group, Lifespan Cognition Psychology Lab, and IMAGe Psychology Lab, and with the UCI Ethics Center, and runs In-Sight: Independent Interview-Based Journal, and In-Sight Publishing.