FIRST READING: The Liberal fixation on addressing complex problems with $500 cheques

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TOP STORY

For the third time in 12 months, the Trudeau government will be taking a complex policy problem and attempting to address it with a one-time $500 cheque.

In the hours before the 2023 federal budget became public, sources in Ottawa leaked one of its signature policy planks: A “grocery rebate” targeted at 11 million Canadians on the lower end of the income spectrum.

Administered via the GST credit, it would be a one-time payout of between $200 and about $500 to buy food. If you’re a low-income senior, you get $234. If you’re a low-income couple with two children, you get the highest possible rebate of $467.

The rebate comes just three months after the launch of the Canadian Dental Benefit, a $650 payout for low-income Canadians to buy dental care. And one year after the debut of a Canadian Housing Benefit payout of $500 to help low-income Canadians pay their rent.

The dental benefit, introduced on Dec. 1, was a stop-gap fix after the Liberal government failed to deliver on a promise to provide universal dental care for low-income children under 12.

Dental coverage for children was to be the first plank of a universal dental care program that was fundamental to the NDP’s decision to prop up the government of Prime Minister Justin Trudeau into 2025.

But after the program’s debut appeared poised to blow past its Jan. 1 deadline, the Prime Minister’s Office instead rushed out an “interim” measure of tax-free benefits administered by the Canada Revenue Agency. Under the program, any family earning less than $90,000 and without access to a private dental care plan can apply for payouts of between $260 and $650 for any children under the age of 12.

Although the benefit is “is intended to help lower dental costs,” it’s just a cash payout and there is no mechanism to ensure it goes towards dental services.

And the Canadian Housing Benefit was slipped into last year’s federal budget as one of the signature tokens of the Liberals’ stated attempts to address housing affordability. Any household earning less than $35,000 per year could get a $500 payout if they could prove that they were experiencing “housing affordability challenges.”

“The top-up is part of the government’s plan to make housing more affordable for Canadians,” read official literature.

All three benefits require a rather elaborate application process. In the case of the Canadian Housing Benefit, applicants are required to establish a digital account via the Canada Revenue Agency. Then, they have to submit details of every home they occupied in 2022, proof of total rent paid and the name and contact information of their landlord.

And particularly in the case of the grocery rebate and the housing benefit, the payouts do relatively little to address the skyrocketing costs of food and shelter that have occurred under the purview of the current government.

According to the latest Food Price Report out of Dalhousie University, the average cost of groceries per Canadian household is set to be $1,065.60 higher as compared to 2022. As compared to 2021, food costs are $2,000 higher.

In certain centres, rents are rising even faster. While average rents rose 10.9 per cent across Canada in 2022, in cities like Toronto and Calgary rent prices rose by more than one fifth. In most Canadian cities, $500 now covers roughly one week of rent for a two-bedroom suite.

IN OTHER NEWS

Here’s the National Post’s breakdown of the key points in the 2023 budget. Or – if you like government buzzwords and surprisingly expensive stock photos – you can read the actual budget here. But here’s the leading takeaways we were able to glean in the two hours between the budget’s release and the First Reading deadline.

Although Finance Minister Chrystia Freeland has spent much of the last few months pledging her newfound fealty to fiscal prudence, that was all decidedly out the window in her latest budget. The current fiscal year is going to end with a $43 billion deficit – which is remarkable given all the extra revenue that Ottawa is raking in from oil and gas royalties these days. And the Liberals have completely abandoned the pretense that they’d have a balanced budget by 2027. Now, even the most far-reaching spending projections contain no plans whatsoever to eventually run a surplus.

In recent years climate change has decisively dropped away as a leading Canadian concern as it’s been overtaken by competitors such as cost of living and public safety. Nevertheless, this is a climate change budget, and includes several billion dollars in new tax incentives designed to subsidize Canadian utilities to find more sources of “non-emitting” electricity. While Canada has previously hung its carbon reduction hat on the idea of pricing carbon and letting the market figure things out, this budget offers any number of more interventionist green subsidies, such as $11.1 billion for clean technology manufacturing and $17.7 billion for hydrogen.

Getting the near-unconditional support of the NDP isn’t cheap, with the so-called New Canadian Dental Care Plan now expected to cost upwards of $20 billion over just the next five years. That’s nearly double what was originally forecast in last year’s budget.

The finance ministry knows that journalists are bad at math, so one trick in budgets is to throw in meaningless baubles that we end up writing about in lieu of soaring structural deficits or poorly costed spending programs. This year’s leading candidate is a vague pledge to “explore implementing a standard charging port in Canada.”

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