Canada doesn’t have the same experience with minority governments as other countries do, particularly when there are formal agreements between parties, like we have now between the Liberals and the NDP. We have to go back a ways in our history for some context, but by far the most productive was the agreement between Lester Pearson’s Liberals and Tommy Douglas’ NDP in the 1960s.
Their five-year partnership introduced national medicare, the Canada Pension Plan, the Maple Leaf flag and one of the first social housing strategies.
What about the next four years in Canada, will they be equally productive?
Going into this budget, the starting point of national child care was heartening. It’s the biggest new national program in a generation. The agreement between the parties hints at big changes in health care, dental, long-term care and housing. Unfortunately, very little of those priorities actually made it into defined spending in this budget.
The biggest extension to health care by far in this budget was a national dental care program. This went from obscurity to policy in a matter of months due to its inclusion in the Liberal-NDP agreement. It was one of the most defined proposals in the agreement, with timelines and coverage goals. This likely made it the easiest to implement in the budget, although there are plenty of details to work out in the coming years.
But look to the other priorities and there is essentially nothing in new details or spending in this budget. Douglas’ initial plan was to include prescription drug coverage in the 1960s plan, but it wasn’t to be. Unfortunately, national pharmacare is nowhere to be found in this budget. Canada’s long-term care death rates from COVID-19 were the worst in the developed world. If there is any sector that needs serious re-evaluation after COVID-19, this is it. Despite planned spending in both party platforms to do exactly that and inclusion in the agreement, it isn’t even mentioned in this budget, much less properly funded.
On the broader point of better funding the provinces on health care generally, there are no plans for an expanded federal role, although there is a $2-billion one-time transfer to the provinces to help cover the cost of surgery backlogs, although the Liberal platform pegged this at $6 billion in the fall.
Thankfully, the budget looks for actual new sources of revenue to pay for some priorities: a one-time pandemic profit tax and an ongoing higher corporate tax on the financial industry. The one-time pandemic tax looks back to 2021 and applies an additional 15 per cent tax on pre-tax profits above $1 billion. But it only applies to the banks and to life insurance companies, not any big company making over a billion in 2021. The ongoing new corporate tax is similarly only on the banks and life insurance companies.
Turns out there are 51 Canadian public companies that made more than $1 billion in 2021. The banks and life insurance companies make up 10 of them, leaving 41 very profitable companies keeping their pandemic profits. Those other very profitable companies that won’t pay additional taxes made a combined $107 billion last year — all in the middle of the pandemic, according to my analysis.
Inflation has taken consumers for a ride in the past year and many of the sectors affecting sky-high inflation are made up of companies declaring billion-dollar profits, but not paying the excess pandemic tax. In fact, the industry with the most companies making over $1 billion in 2021 is actually oil and gas. There are 12 such companies, representing a quarter of all companies making that much. High gas prices are one of the primary drivers of inflation and this industry is making record profits as a result.
Food and drink companies, like grocery stores, make up six per cent of the companies with profits over $1 billion in 2021. High food prices are also a major driver of consumer inflation, but companies here are making big profits, without the need to pay any back in an excess pandemic profits tax.
While I’m hardly crying about the banks, which made a combined $57 billion in net income in 2021, they weren’t the only ones profiting from the pandemic to line their shareholders’ pockets. A wider net could clearly have been cast.
Dental care and child care are major new programs. Both are well on the way.
However, pharmacare, long-term care and health care generally have been left behind this year. They are in the agreement and may make a showing in future budgets, but this is not their hour.
There does seem to be a newfound interest in actually levying taxes versus cutting them on the corporate sector. It is very specific to the banks, though, and it could be much broader.
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