April 8, 2022

The federal budget was tabled yesterday by Deputy Prime Minister and Minister of Finance Chrystia Freeland.

One of my clients, Sussex Strategy Group, has kindly agreed to let me provide you with their analysis of the budget.

Sussex is an experienced and highly respected government relations firm that offers strategic and consulting services. I find their reports and analyses informative and insightful, and I hope you will also.

As always, please contact me with any employment questions you may have or for assistance working through your staffing matters.

Federal Budget 2022: A Plan For
Economic Growth and Affordability

Deputy Prime Minister and Minister of Finance Chrystia Freeland released Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable. The plan aims to advance some of the election commitments made by the Liberals, while at the same time, support Canada’s COVID recovery and address some of the challenges that have emerged over the course of the pandemic. The document focuses on a few key commitments; making life more affordable, investing in economic development, and investing in the clean economy. This budget also takes modest steps to address its shortfall in NATO defence spending and lays out further details on improving the healthcare system.

Back in January 2022, the government stated this would be a back-to-basics budget with less spending However, with the recent agreement with the NDP and the war in Ukraine, much has changed, and new programs and funding were required to satisfy newly important stakeholders. Relative to pre-pandemic budgets, there is quite a bit of new spending in Budget 2022. However, even with the new spending, the deficit is lower than expected and the government believes that Canada will also see the second fastest recovery in the G7 by the end of this year. What back-to-basics seem to mean is a focus on the issues traditionally most important to individuals; ensuring Canadians have a roof over their head through affordable housing commitments, access to healthcare though investments to address surgical backlogs and implement dental care, and jobs to support their families through investments to help people transition back to work and settle immigrants.

While the extra COVID spending could have meant disaster for federal budgets into the future, this budget signals much more fiscal optimism. With rising natural resources prices, the government has been given the room to add expenditures while also lowering debt-to-GDP, its fiscal anchor. However, the Conservatives will point out that good times do not last forever and that more should be done to position Canada for tougher roads ahead in the context of rising interest rates and inflationary pressures. Though these may be valid criticisms, the investments in defence, healthcare, and affordable housing are all timely and seem to have the support of most of the electorate.

For their part, the opposition leaders – Candice Bergen, Yves-François Blanchet, and Jagmeet Singh– will need to carefully calibrate their responses to the Budget over the coming days and weeks. While there is no risk of an election at this point with the recent Liberal-NDP supply agreement, how the parties respond to this budget will have a lasting impact on voters’ perceptions of the parties likely through the next election.

Click here »» to view or download the full Sussex Strategy Group analysis.