Reaction to yesterday's budget has been predictable. On the Right, Andrew Coyne writes that the budget is "one for the 1970's to address problems from the 1980's." On the Left, Andrew Jackson -- of the Broadbent Institute -- writes, "The Budget reinvests significantly and appropriately in many important programs broadly in line with the promises made in the Liberal platform." And former parliamentary budget officer Kevin Page writes that the budget announces "big policy initiatives," but is "short on fiscal prudence."
Page admits that some of the big promises have been kept. But he worries about the future:
Put in perspective, the increase in federal direct program spending is large (representing one per cent of GDP). This budget is not like previous Conservative budgets. Budget “winners” include First Nations and veterans. While the Conservatives’ stimulus budget in 2009/10 was based largely on temporary measures, the Liberals’ newly announced measures represent ongoing spending. Like recent Conservative budgets, however, there was precious little to address military procurement issues. This can was kicked down the road again.
The government has put forth some big policy initiatives but they are failing short on fiscal prudence. There are a number of red flags that merit closer attention and analysis. The budget and its presentation is premised on growing the middle class. However, there is no diagnostic or definition of the middle class in the budget.
Perhaps that's because everyone likes to think of him or herself as middle class. And, while it is true that there appear to be very few defined constraints, the government has based its revenue predictions on $25 oil. I suspect that revenues will exceed projections considerably. And, like Paul Martin, Justin Trudeau will claim that his government has exceeded expectations.
The big questions remains: Will the budget really stimulate the economy?