Finance Minister Bill Morneau’s first federal budget focused on the new Liberal government’s promise to “restore hope for the middle class” and revitalize Canada’s economy. To do that, the government will be making targeted investments totalling $50.2 billion during the next six years, according to the budget documents.
In his budget speech delivered on Tuesday, Morneau said that what Canada’s middle class needs most is economic growth; to foster that growth, the government will be making new investments in infrastructure across Canada.
“To help families and communities struggling right now, the first phase of our infrastructure plan invests $11.9 billion over five years to modernize and rehabilitate public transit, water and wastewater systems, provide affordable housing, and to protect infrastructure systems from the effects of climate change,” he said.
“These investments will accelerate our transition to a low-carbon, clean growth economy, make traffic flow more smoothly, bring high-speed Internet to more rural communities, and deliver so many other benefits for Canadians,” Morneau added.
The clean economy was a major focus of Morneau’s speech. He noted that “the people, companies and countries who create the next economy will prosper. Canadians can be those people, create those companies and build that country.”
To do that, though, the government will have to invest in innovation, he said: “We will invest in new clean technology projects that address climate change, air quality, clean water and clean soil to support provincial and territorial actions that significantly reduce greenhouse gas emissions.”
Specifically, the federal government will invest $2 billion over the next three years on a new Post-Secondary Institutions Strategic Investment Fund to modernize on-campus research, commercialization and training facilities. It will also invest $800 million over the next four years to support innovation networks and clusters as well as create a $2 billion low-carbon economy fund.
Morneau pointed out in his speech that conditions are ideal for investing, as strong management of Canada’s finances dating back to the previous Liberal government of the 1990s “restored Canada’s fiscal health, giving us a debt to [gross domestic product (GDP)] level today that is by far the lowest of any G7 country.”
In addition, with interest rates at historical lows, he noted that the government can borrow on excellent terms — and that organizations such as the International Monetary Fund, the Organization for Economic Development and Organization and the G20 are urging governments to do just that.
“Our plan is reasonable and affordable,” he said. “By the end of our first mandate, Canada’s debt-to-GDP ratio will be lower than it is today.”