The Liberal government is planning to announce billions in deep cuts to the federal budget this fall, according to multiple news reports. This announcement comes just before the announcement of Canada’s own federal deficit, which is expected to be over $92 billion for this fiscal year. The analysts have been warning that the cuts might reach 24 percent of operational expenditures. These cuts will hit staff the hardest and go further than the cuts during the last Stephen Harper government.
We’re still waiting for that fiscal update, originally due in spring, now delayed to fall. This decision is in keeping with a pattern the Liberal government has developed to avoid releasing the clear yearly budget. As David MacDonald, an economist with the Canadian Centre for Policy Alternatives, noted, the cuts are massive in scope.
“You’d be getting to cuts in the neighbourhood of 24 percent of operational expenditures. Most of that would be on personnel,” – David MacDonald
Historical Context of Budget Cuts
Historically, previous administrations have proposed cuts, large or small. For the early 2010s, the Harper cuts were between five and ten percent. The fiscal cuts under Paul Martin during his time were an extreme 18.9 percent. The new measures will go further than those earlier cuts. This foreshadows a much more painful, perhaps even draconian, change in federal spending priorities by the government.
The ramifications of these cuts can’t be overstated, especially for departments other than defense. As long as Canada remains committed to meeting NATO spending targets, these ordinary development budgets will be left unscathed while defense budgets are expanded. It’s the other sectors that will hold the short end of the fiscal cuts. This is a real concern with the quality of service delivery and the broader impacts on public welfare.
Impact on Social Programs
Researchers and advocates have raised alarm about the drastic consequences of these budget reductions on social support infrastructure. Ian Lee, a professor at Carleton University, would like to see the entire social assistance structure in Canada upended. His passion lies in ensuring that rich people can’t access services any better than poor people.
“We have a reverse Robin Hood social structure in Canada,” – Ian Lee
Lee doesn’t just think budgetary constraints will have a real negative effect on citizens. This will be most keenly felt when it comes to tax revenues and Old Age Security payments. He argues that the government has been living the illusion that it could bring unlimited resources to bear on every program.
“We have been living in a fool’s paradise where we thought we could subsidize just about everything and everybody,” – Ian Lee
What Lies Ahead
That’s a key question as the Liberal government prepares to reveal its fiscal intentions this autumn. Canadians are closely watching to see how these plans—the cuts beyond the cuts—will re-design federal spending and delivery of services. The broader implications of these cuts will undoubtedly play a role in shaping public opinion and political dynamics in the months ahead.
