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Bill Morneau’s shift from long-term strategy to immediate benefits

Comparing the finance minister’s fall economic statement last year to today’s edition shows a dramatic change in emphasis
Bill Morneau
Finance Minister Bill Morneau makes an announcement on housing in Toronto Monday, October 3, 2016. The federal government has announced measures intended to stabilize the real estate sector amid concerns that pockets of risk have emerged in some housing markets, particularly those in Toronto and Vancouver. (Nathan Denette/CP)

Re-reading Finance Minister Bill Morneau’s economic statement from last fall and then listening to the one he delivered in the House this afternoon, the shift in emphasis is almost jarring. Last fall’s version of the annual update was all about long-term plans for ensuring Canada’s prosperity decades from now in a fiercely competitive world; this year’s is all about converting today’s unexpectedly strong growth into quick dividends for Canadian families.

Here’s how the two economic statements compare:

Setting out his theme

Morneau 2016: Global challenges. “Many of the most dynamic economies are now in Asia and developing regions. The Internet is transforming how we communicate, live and work. Economies are facing the challenge of becoming cleaner and more sustainable. So a year ago, Canadians asked for our help. They wanted a government that would work with them to secure a brighter future for their kids and grandkids.”

Morneau 2017: Domestic successes. “We came to office knowing that growing the middle class is how we grow the economy. Today…we’re doubling down on that strategy because it’s working. In just two years, over 450,000 jobs have been created, and youth unemployment is the lowest on record. Economic growth has spiked from just 0.9 per cent to the highest we’ve seen in over a decade.

READ: Bill Morneau, Canada’s very expensive finance minister

Sketching his policy response

Morneau 2016: Playing the long game. “In recognition of the long-term nature of our challenges and opportunities, I am announcing measures that invest more dollars, over a longer period of time, so that we can create good jobs now, and set our workers, business and communities up for success in the future. Over the next 11 years, the government of Canada will invest an additional $81 billion in public transit, green infrastructure, social infrastructure, in transportation that supports trade, and in smart cities.

Morneau 2017: Promising benefits now. “As the economy grows we need to make sure the benefits are shared with the middle class, and those working hard to join it. And as we invest directly in Canadians and their families, we have an immediate impact on the economy…. Starting next July—two years ahead of schedule—tax-free CCB amounts for families with two children will go up by approximately $200. The year after that, families can count on $500 more. And for those working hard to join the middle class—many of whom are living alone—we will offer even more help, with an increase to the Working Income Tax Benefit.”

Talking about where Canadians stand

Morneau 2016. Compared to international competition. “Canadians are highly educated and skilled. We have what it takes to succeed. That’s the story potential investors don’t hear often enough. I am announcing today the creation of a new institution—the Invest in Canada Hub—whose job it will be to go out and sell Canada to the world… Our Global Skills Strategy will further support Canadian companies by making sure they can attract top talent and can have timely access to the specific skills and international expertise that will allow them to scale up, create good Canadian jobs and thrive right here at home.”

Morneau 2017: Compared to other Canadians. “As the Prime Minister said last week, ‘Canada is a country where we celebrate our collective contributions rather than protect the interests of a privileged few.’ It’s in that spirit that we are moving forward to fix a system that currently allows someone making hundreds of thousands of dollars a year to pay a lower tax rate than someone making far less, just because they are incorporated and have children over 18. For incorporated professionals and business owners, we will preserve the flexibility to save up for a rainy day, for parental leave, or for retirement, while not allowing individuals to have unlimited tax-advantaged savings accounts over and above what is available to everyone else.”