After Bill Morneau's budget, Liberals should move on pharmacare
For his fourth budget as Justin Trudeau’s finance minister, Bill Morneau has produced a document that manages to be both forward-looking and retro at the same time.
Forward-looking, because even in the face of a slowing economy and an uncertain international environment, he is not retreating from the robust spending that has been this government’s hallmark for the past three and a half years.
Morneau’s budget promises $22.8 billion in additional spending over the next six years. And, as expected, he offers no date certain for balancing the federal books. He projects deficits, albeit smaller ones, as far as the eye can see.
Expect Conservatives to howl that the Liberals have broken their promise back in 2015 to eliminate the deficit by, yes, 2019. And expect the public not to care a whole lot, because Morneau is right that the government’s financial situation is quite manageable. Compared to other comparable major countries, in fact, it’s comfortable.
At the same time, Morneau’s fourth budget has a decidedly retro feel about it. While the minister titled it “Investing in the Middle Class,” a familiar Liberal theme, it feels more like an old-fashioned attempt to woo an array of groups whose support the government believes it will need if it is to be re-elected in October.
So rather than one over-arching theme, there are half a dozen.
There’s modest help for “first-time home buyers,” a.k.a. millennials who are having trouble affording houses in expensive cities like Toronto, and will form the biggest voting bloc this year, eclipsing their boomer parents.
There’s aid and comfort for seniors, including stronger guarantees that they won’t see their pensions slashed if their company goes bankrupt (as notoriously happened to former employees of Sears).
There’s a suite of training programs designed to make it easier for workers to keep up their skills as the needs of the economy change. There’s a promise of high-speed internet for everyone, major new money for Indigenous communities, subsidies for electric vehicles and clean energy, new ferries in the Atlantic region, a bridge across the Ottawa River…. and on and on and on.
What there isn’t is a big new initiative along the lines of what must still stand as the Trudeau government’s single most important social measure, the Canada Child Benefit that it introduced back in 2016.
That was a game-changer for many families and made a substantial contribution to cutting the number of children living in poverty. Statistics Canada reported in February that this one program was key to lifting some 280,000 children out of poverty in just two years – news that barely made a dent in the public consciousness amid the sound and fury of the SNC-Lavalin affair.
The Trudeau government has every right to be proud of that achievement, but at this point it is proposing nothing even remotely as ambitious.
It could have been national pharmacare, which would be a similarly transformative move. The absence of comprehensive prescription drug coverage is the most glaring hole in our much-vaunted medicare system, and the Liberals could have made it the central theme of this pre-election budget.
But, disappointingly, they have chosen a much more modest approach, promising only to “start us down that road” by setting up a national drug agency and putting in place a plan to deal with the ruinous cost of drugs for rare diseases.
It’s understandable why the government is taking that cautious, step-by-step approach. Setting up a true national pharmacare program will be expensive and difficult, involving major push-back from the insurance industry and complex negotiations with the provinces.
But the Liberals should not shy away from the challenge. As Morneau insisted on Tuesday, they came into office promising to make real changes in the lives of ordinary people and they can rightly claim to have made important progress on that front.
Tackling the job of bringing down drug prices and making sure everyone can afford them would be another big and long-overdue step in that direction.
The government set up an advisory panel last year to help it map out the road toward a Canada-wide program bringing prescription drug coverage into medicare. That group is due to issue its final report soon, and once that advice is in the Liberals should put national pharmacare front and centre in their program for this fall’s election campaign.
It’s that important, and it’s high time for the government to lead from the front on this issue.
Much of Morneau’s budget was foreshadowed by selective leaks, but he did include one important measure that came as a surprise – perhaps because it will make some important people unhappy.
The government will put strict limits on the use of stock options to reward employees, typically senior executives, which allows them to pay just half the tax they would pay if they received a regular salary. It will restrict use of stock options at what it calls “long-established, mature firms,” while allowing them to continue where they can have a real economic purpose – at start-ups that need to attract talent but can’t afford to pay big salaries.
This is an important step toward tax fairness, one the Trudeau government should have taken years ago. Rather than sneak it in at the back of his budget, Morneau should have crowed about it. It may upset some people, but many more will cheer – especially those middle-class families the Liberals prize so highly.