Edelman 2018 Federal Budget Update

Edelman Ottawa | 155 Queen St. Suite 1302 | Ottawa, ON K1P 6L1 | 1.613.569.9000
Finance Minister Bill Morneau’s third
Budget, Equality + Growth, continued
the Liberals’ goals of advancing social
inclusion and supporting the innovation
economy. However, announcements are
modest, with most investments directed at
the public sector.
Uncertainty from stalled NAFTA
negotiations and the impacts of U.S. tax
cuts seem to be driving the cautious
approach. Politically, the Liberals may
also want to hold any bold program
announcements for 2019 where they could
support their re-election efforts.
2018 FEDERAL BUDGET UPDATE
OUR PERSPECTIVE – EQUALITY + GROWTH
Darcy Walsh
Senior Vice President & General Manager
613.569.9000 | darcy.walsh@edelman.com
Christopher Vivone
Senior Vice President & Deputy General Manager
613.569.9000 | chris.vivone@edelman.com
BY THE NUMBERS
0
5
10
15
20
DeficitBillions
2020/212019/202018/192017/18
$19.4
billion
$18.1
billion
$17.5
billion
$16.9
billion
$13.8
billion
$12.3
billion
2021/22 2022/23
0
10
40
15
20
25
30
35
DebttoGDPPercentage
30.4% 30.1% 29.8% 29.4% 28.9% 28.4%
Unemployment Rate
(projected 2018)
6%
Nominal GDP Growth
5.2% 2017
4.0% 2018 (average
private sector forecast)
Despite a 2015 campaign promise to
balance the books by 2019, the Budget
projects a deficit of $18.1 billion for
2018-19, down slightly from $19.4 billion
in 2017-18. In the face of the projected
deficit, the Budget stresses Canada’s strong
economic fundamentals and declining debt
to GDP percentage.

Edelman Ottawa | 155 Queen St. Suite 1302 | Ottawa, ON K1P 6L1 | 1.613.569.9000
2018 FEDERAL BUDGET UPDATE
Increasing Economic Opportunities for Women
› The Budget launches a $105 million Women Entrepreneurship Strategy
which will invest in women-led businesses and initiatives to support female
entrepreneurship.
› The Federal Government also aims to triple the percentage of female-owned
small and medium-sized businesses participating in federal procurements to 15%.
› New Parental Leave rules that increase EI support by 5 weeks if both partners
take at least 5 weeks of leave (to a maximum 40 weeks combined – up from 35).
Small Business Tax Changes – Passive Investments
› Building on changes debated last summer, Budget 2018 introduces a requirement
that small businesses can claim a maximum of $50,000 in passive investment
income annually, beyond which the company will lose eligibility for the small
business tax rate.
Support for Science and Research
› $4 billion in new funding to support Canadian scientists and researchers.
› This includes boosts in funding for Canada’s research funding agencies (NSERC,
CIHR, SSHRC) and academic research chairs.
› Investments in national laboratories, equipment and infrastructure, including
new facility building.
› $572 million (over 5 years) to implement a Digital Research Infrastructure
strategy.
› A reimagining of the National Research Council, with $540 million in new
funding, to reinforce research strengths and increase collaboration with industry.
STAKEHOLDER REACTIONS
“Sad reality after 3 years of Justin Trudeau. Never has a politician boasted so loudly and spent so much
to achieve so little. Justin Trudeau promised that he would borrow $10 billion a year – this year’s deficit is
$18 billion. Justin Trudeau is failing to balance the budget by 2019 as he promised, ensuring that the future
generations of Canadians will have more and more debt to pay back”
- Andrew Scheer, MP, Leader of the Conservative Party of Canada
“For all their talk on helping the middle class, this is a very timid budget that will actually increase the gap
between the super-wealthy and the rest of us. Canadians are rightfully asking, ‘if the economy is doing so
well, why am I not feeling those benefits?.”
- Jagmeet Singh, Leader of the New Democratic Party of Canada
“Although the budget sets out many positive measures, including support for women
entrepreneurs, a clearer path to Indigenous self-determination and improved skills development, it
doesn’t address the most basic issues facing our economy.”
- Perrin Beatty, President & CEO, Canadian Chamber of Commerce
Expert Panel to Study the Viability of a National Pharmacare
Program
› Former Ontario Minister of Health, Eric Hoskins, will lead a national study on the
viability of a national pharmacare program. The committee will report back in
2019 – making it highly likely that pharmacare will be a central plank in the Liberal
re-election platform.
IT Modernization and Cyber Security
› $507.7 million to fund a National Cyber Security Strategy including: $155.2
million for Communications Security Establishment to create a new Canadian
Centre for Cyber Security that will integrate expertise from across government,
and $116 million for RCMP to create a National Cybercrime Coordination Unit
› $2.2 billion over six years to improve Government of Canada IT services,
including cyber security.
› $110 million (over 6 years) for Shared Services Canada to support agencies
migrate to modern data centres and the cloud.
› $431.4 million (over 6 years) to continue making progress on pay issues related
to Phoenix, plus $16 million to work with experts, public sector unions and
technology partners on a new way forward for the federal pay system.
Innovation Program Rationalization
› The Budget builds on moves from 2017 to consolidate innovation funding
program, consolidating 92 innovation programs across government into 35,
that will be primarily delivered by four flagship innovation platforms: IRAP,
Strategic Innovation Fund, Canadian Trade Commissioner Service,and Regional
Development Agencies.
KEY HIGHLIGHTS

Edelman 2018 Federal Budget Update

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Edelman 2018 Federal Budget Update