Budget 2023 gives boost to dental care, green economy while searching for savings

Deputy Prime Minister and Minister of Finance Chrystia Freeland delivers the federal budget in the House of Commons on Parliament Hill in Ottawa, Tuesday, March 28, 2023. THE CANADIAN PRESS/Sean Kilpatrick

By Mia Rabson in Ottawa

Finance Minister Chrystia Freeland’s 2023 federal budget promises “transformative investments” in Canada’s green economy as the country tries to maintain its place in the global clean tech revolution and realign its supply chains toward allies who won’t use energy as a political weapon.

“Together these two great shifts represent the most significant opportunity for Canadian workers in the lifetime of anyone here today,” Freeland said Tuesday in the House of Commons.

She is also using the budget to provide another top-up of the GST rebate, styled this time as a grocery rebate, to low-income Canadians who are feeling the pinch of inflation and keep making good on pledges in the confidence-and-supply agreement with the New Democrats.

There are also some measures reacting to political fires that have been burning around the Liberals in recent weeks and months, including some money to combat foreign interference, and to make airport security screening better.

In all the 2023-24 spending plan will cost $490.5 billion, including public debt charges, with $8.3 billion in new program spending. The projected deficit is $40.1 billion, which is greater than the $30.6 billion deficit for this coming fiscal year forecast in November’s fiscal update.

Over the next five years the government expects to spend $59.5 billion more than before. Nearly half of that will go to increase health transfers to the provinces and territories and further expand the national dental-care program the Liberals are creating as part of their deal with the NDP.

Dental care is expected to cost more than $13 billion over the next five years, about a $7-billion increase from what the government said it would cost when it was introduced in last year’s budget. It is now expected to cost $4.4 billion per year to keep it going beyond that.

Dental care was one of the NDP’s top demands from the Liberals when the opposition party entered into a confidence-and-supply agreement in March 2022 to back the minority government on key confidence votes, such as budgets, through to 2025.

“I’m really proud that we were able to force this government to expand dental care,” NDP Leader Jagmeet Singh said after the budget was tabled.

Singh said that while he is disappointed the budget lacks new measures to help make housing more affordable, his party will still vote for it. That will give the Liberals enough votes to pass the budget and continue governing.

The budget addresses a number of other NDP asks outlined in the deal, including anti-scab legislation and a new forum to better address the issue of missing and murdered Indigenous women and girls.

Conservative Leader Pierre Poilievre dismissed the budget as a high-spending plan that will drive up the deficit, make inflation worse, and subsidize major multinational companies. His party will not be voting for it, he said.

“Today’s budget by the costly coalition of the NDP and Liberals is a full-frontal attack on the paycheques of hard working Canadians,” he said.

More than one-third of new spending is wrapped up in Canada’s targeted response to keep pace with the United States Inflation Reduction Act, which last year promised to direct US$370 billion at clean technology and electric vehicles over a decade.

Over the next 12 years, Canada expects to spend more than $80 billion on investment tax credits to spur development of clean electricity, hydrogen, carbon capture and storage systems, critical minerals, and the electric-vehicle supply chain.

The budget warns of the ramifications of not investing in the low-carbon economy, with significant hits to the GDP and jobs in the next 30 years, even as it acknowledges the enormous amount of money it’s going to take.

“The scale of the required investment is massive,” the budget said.

Almost one-third of the investment tax credits will be for clean power, including finally aiming to connect Canada from coast to coast with power lines.

Hidden somewhere in the budget figures is the money Canada has promised that helped lure major auto companies to build battery plants in Ontario, including Volkswagen and Stellantis. The details of those are expected to be made public in the next few weeks.

All of the plans are looking to develop the new industries with supply chains connected to allies like the U.S. and Europe. Freeland said in her speech that this would help to end what Ursula Von Der Leyen, president of the European Commission has called Europe’s “dangerous dependencies” on authoritarian economies.

That includes Russia, which has used its oil and gas exports as a political lever in Europe, and China, which is dominating the electric vehicle and battery supply chain sectors.

Not quite one-tenth of the new spending is directed at making life a bit more affordable for some Canadians, including the second GST rebate top-to low-income Canadians up in a year, and increases to grants for post-secondary students.

While inflation is coming down, the budget predicts it will remain above the Bank of Canada’s two per cent target until at least the second quarter of 2024. Food prices are a key part of what is keeping it elevated.

“We all know that our most vulnerable friends and neighbours are still feeling the bite of higher prices,” Freeland said in her speech.

All the new spending, and a $17-billion increase in the cost of interest on government debt over five years, has eliminated Freeland’s hope for a balanced budget on the horizon.

In November, she forecast a $4.5 billion surplus by 2027-28. Tuesday’s budget says that year will now log a $14 billion deficit.

She is promising to find $15 billion in savings over five years by scaling back government travel, its use of outside consultants and asking most federal departments to cut their spending three per cent.

Freeland uses positive language to describe Canada’s current economic situation, but the budget makes clear the upheaval created by the pandemic means the country is still at risk of seeing its finances take a turn for the worse by the end of this year.

Mostafa Askari, the chief economist at the Institute of Fiscal Studies and Democracy at the University of Ottawa, said his first takeaway from the budget was simple.

“There is a lot of spending,” he said.

He is wary of the government being able to find $15 billion in savings, particularly given that the promises are vague, with no specific understanding of what money will not be spent.

“Every government, every budget has had some efficiency game,” said Askari. “It’s very unlikely they’re going to get these savings.”

Askari also said there are significant risks of a deeper economic downturn later this year than predicted in the budget, which could upend all of Freeland’s economic assumptions, lowering government revenues and making the deficit even bigger.

This report by The Canadian Press was first published March 28, 2023.

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The Plan: Lock You Down for 130 Days

Published on June 5, 2023

Todayville

From the Brownstone Institute

BY JAYANTA BHATTACHARYA

What if the coronavirus pandemic was not a once-in-a-century event but the beginning of a new era of regular deadly respiratory viral pandemics? The Biden administration is already planning for this future. Last year, it unveiled a national strategy to develop pharmaceutical firms’ capacity to create vaccines within 130 days of a pandemic emergency declaration.

The Biden plan enshrines former president Donald Trump‘s Operation Warp Speed as the model response for the next century of pandemics. Left unsaid is that, for the new pandemic plan to work as envisioned, it will require us to conduct dangerous gain-of-function research. It will also require cutting corners in the evaluation of the safety and efficacy of novel vaccines. And while the studies are underway, politicians will face tremendous pressure to impose draconian lockdowns to keep the population “safe.”

In the case of COVID-19 vaccines, it took about a year for governments to deploy the jab at scale after scientists sequenced the virus. Scientists identified a vaccine target—fragments of the spike protein that the virus uses to access cells—by early January 2020, even before the WHO declared a worldwide pandemic.

This rapid response was only possible because some scientists already knew much about the novel virus. Despite heavy regulations limiting the work, the US National Institutes of Health had funded collaborations between the EcoHealth Alliance and the Wuhan Institute of Virology. They collected bat viruses from the wild, enhanced their function to study their potential, and designed vaccines before the viruses infected humans.

While there is controversy over whether this gain-of-function work is responsible for the COVID pandemic, there is no question this research is potentially dangerous. Even cautious scientists sometimes accidentally leak hazardous, highly infectious viruses into the surrounding community. In December 2021, for instance, the virus that causes COVID-19 accidentally leaked out of a laboratory in Taiwan, where scientists were researching the virus.

A promising vaccine target would be needed immediately after a disease outbreak for the Biden pandemic plan to work. For that to be possible, there will need to be permanent support for research enhancing the capacity of viruses to infect and kill humans. The possibility of a deadly laboratory leak will hang over humanity into perpetuity.

Furthermore, before any mass vaccination campaign, pharmaceutical firms must test the vaccines for safety. High-quality randomized, controlled studies are needed to make sure the vaccine works.

In 1954, Jonas Salk’s group tested the vaccine in a million children before the polio mass vaccination campaign that effectively defanged the threat of polio to American children. Physicians need the results of these studies to provide accurate information to patients.

Operation Warp Speed cut red tape so that vaccine manufacturers could conduct these studies rapidly. The randomized trials cut some corners. For instance, the Pfizer and Moderna trials did not enroll enough people to determine whether the COVID vaccines reduce all-cause mortality.

Nor did they determine whether the vaccines stop disease transmission; a few months after the government deployed the vaccines, researchers found protection against infection was partial and short-lived. Each of these cut corners has since created policy controversies and uncertainty that better trials would have avoided. Because of the pressure to produce a vaccine within 130 days, President Biden’s pandemic plan will likely force randomized trials on future vaccines to cut the same corners.

This policy effectively guarantees that lockdowns will return to the US in the event of a new pandemic. Though the lockdowns did not work to protect populations from getting or spreading COVID—after 2.5 years, nearly everyone in the US has had COVID—public health bureaucracies like the CDC have not repudiated the strategy.

Imagine the early days of the next pandemic, with public health and the media fomenting fear of a new pathogen. The impetus to close schools, businesses, churches, beaches, and parks will be irresistible, though the pitch will be “130 days until the vax” rather than “two weeks to flatten the curve.”

When the vaccine finally arrives, the push to mass vaccinate for herd immunity will be enormous, even without evidence from the rushed trials that the vaccine provides long-lasting protection against disease transmission. This happened in 2021 with the COVID vaccine and would happen again amidst the pandemic panic. The government would push the vaccine even on populations at low risk from the novel pathogen. Mandates and discrimination against the unvaccinated would return, along with a fierce movement to resist them. The public’s remaining trust in public health would shatter.

Rather than pursue this foolish policy, the Biden administration should adopt the traditional strategy for managing new respiratory-virus pandemics. This strategy involves quickly identifying high-risk groups and adopting creative strategies to protect them while not throwing the rest of society into panic.

The development of vaccines and treatments should be encouraged, but without imposing an artificial timeline that guarantees corners will be cut in evaluation. And most of all, lockdowns—a disaster for children, the poor, and the working class—should be excised from the public health toolkit forever.

A version of this piece appeared in Newsweek

Jayanta Bhattacharya

Jay Bhattacharya is a physician, epidemiologist and health economist. He is Professor at Stanford Medical School, a Research Associate at the National Bureau of Economics Research, a Senior Fellow at the Stanford Institute for Economic Policy Research, a Faculty Member at the Stanford Freeman Spogli Institute, and a Fellow at the Academy of Science and Freedom. His research focuses on the economics of health care around the world with a particular emphasis on the health and well-being of vulnerable populations. Co-Author of the Great Barrington Declaration.