Budget 2023: A Meaningful Step Forward, But Is It Enough?

By Citizens for Public Justice

The 2023 Federal Budget was announced at a time when Canadian residents share deep concerns about affordability, access to health care, and the ever-accelerating climate crisis. The question that CPJ asks around every federal budget cycle remains the same: Does this budget prioritize systemic solutions that could eradicate poverty, uphold the rights and dignity of refugees and migrants, and address the climate crisis?

In this brief commentary, we analyze key features of the 2023 Federal Budget in relation to climate change, poverty eradication, and refugee and migrant rights, highlighting the interconnectedness of these problems and their solutions. In partnership with advocates across the country, we continue to urge the government to respond to the critical need for well-funded measures to address the structural barriers that divide our society and invest in policies that promote the rights and flourishing of all people and ecosystems in Canada.

Dental Care: the star of budget 2023

One of the main highlights of this budget is the investment in a new national dental program, a key condition of the Liberal-NDP Confidence and Supply Agreement. Money will begin to flow to Health Canada in 2023-2024, with a strong initial investment of $13 billion over five years, and $4.4 billion each year afterwards. Uninsured Canadians with annual family income below $90,000 will be provided with coverage by the end of 2023, with no co-pays for those with family incomes under $70,000. Similar to concerns elsewhere in our public health care systems, analysts at L’Institut de recherche et d’informations socioéconomiques (IRIS) note that to get the most bang for these bucks, measures will be needed to stem the financialization of dental care, such that public expenditures are not abused to increase profit margins of for-profit clinics.

Notably, the budget also recognizes that other barriers beyond cost may prevent people from accessing dental care, such as living in a remote community or the absence of required services to accommodate a disability. It proposes funding to begin in 2025-2026 for an Oral Health Access Fund, which will invest in targeted measures to address oral health gaps.

CPJ will be watching for more details on possible eligibility restrictions and what services will be covered for both the Canadian Dental Care Plan and the Oral Health Access Fund, but this is definitely a landmark program in expanding people’s access to needed health services.

Public Health Investments: critical conditions absent from funding agreements

Announced before the release of the budget, the federal government has agreed to provide an additional $195.8 billion over ten years in health transfers to provinces and territories. They have also committed to providing $2 billion over ten years (perhaps less impressive sounding at $200 million/year) for Indigenous health priorities, to be distributed through the Indigenous Health Equity Fund.

CPJ joins many other public health care advocates in critiquing a lack of accountability measures with these transfers. For much of the funds provided to provinces and territories, there are few strings attached to ensure the money is even spent on health care, let alone ensuring that our public health care dollars are not being swallowed up by for-profit care providers. Thankfully, the newly negotiated investments in a national childcare program have much more stringent conditions attached.

Income Supports & Housing: social determinants of health lack adequate support

While CPJ applauds these significant investments in health care and dental care, specifically, the budget is otherwise quite weak when it comes to the social determinants of health like poverty and housing.

Cash transfers targeted to low-income individuals and households have proven to be effective tools to address food insecurity and promote overall health. Unfortunately, the announced Grocery Rebate doesn’t live up to its full potential, offering a one-time increase to the GST credit rather than ongoing support. For those eligible, singles will receive up to $234, and a couple with two children will receive up to $467. In addition, Canadians for Tax Fairness notes that the grocery rebate and other tax measures in the budget fail to address the role of soaring corporate profits in increased food prices.

Notably, the Canada Disability Benefit is mentioned in the budget only in terms of funding to see the benefit developed, but not delivered.

Housing is another key social determinant of health lacking sufficient investment in this budget. Rather than injecting new dollars needed to increase the supply of non-profit affordable, accessible housing, this budget reallocates existing funding from the repairs stream to the construction stream in the National Housing Co-Investment Fund. The main housing investment included in this budget is $4 billion over seven years for the implementation of an Urban, Rural, and Northern (URN) Indigenous Housing Strategy (promised back in 2017 when the National Housing Strategy was launched). Unfortunately, the Canadian Housing and Renewal Association notes this comes nowhere near the $56 billion over ten years that the National Housing Council (appointed by the current government) estimates is needed to implement this strategy.

Meanwhile, the National Right to Housing Network reports, “the government’s measures to offer tax incentives to for-profit corporate developers and landlords, as well as prospective homebuyers, are contributing to systemic housing unaffordability issues. For example, tax incentives for first-time homebuyers to save and then spend even more on rising homeownership costs only contribute to inflation, thus driving up the cost of living even further.”

Taxes for Public Good: some progress, but much room for improvement

The re-commitment to increasing the number of people who file taxes is a positive step in this budget, including a pilot program for automatic tax filing. The budget notes that up to 12 per cent of Canadians currently do not file their tax return, including many low-income people who are “missing out on valuable benefits and support to which they are entitled, such as the Canada Child Benefit and the Guaranteed Income Supplement.” CPJ joins partners like Campaign 2000 and Canadians for Tax Fairness in pressing the government to also explore other programs to deliver cash benefits to marginalized individuals and households outside of banking and tax systems.

In addition to the missed opportunities for critical investments, this budget also could have been strengthened significantly on the revenue side of the equation. Canadians for Tax Fairness (C4TF) notes that “whereas the 2022 budget included a windfall profits tax on the financial sector, which reaped record profits during the pandemic, the government denied its own finance committee’s recommendations to expand it to other sectors seeing unprecedented gains, like grocery retail.” Budget 2023 does include plans to limit tax avoidance by the wealthiest Canadians by raising the Alternative Minimum Tax (AMT) Rate from 15% to 20.5% and raising the capital gains inclusion for the AMT from 80% to 100%. The expected revenue from these changes is $3.0 billion, compared to the $26 billion that C4TF estimates would be generated from a wealth tax. They note that the capital gains inclusion should apply to all capital gains taxation, and that the AMT should be raised for corporations as well as individuals (similar to what was introduced recently in the US).

Refugees and Migrants: key to the solutions, absent from many of the benefits

Immigrants to Canada provide immense economic and social contributions. The Canadian Government has frequently recognized their role in the pandemic recovery, and has tabled increased Immigration Level Plans to address labour shortages. However, a significant percentage of migrants in Canada are still largely excluded from the very programs and services they help fund. Until the Government prioritizes broad regularization programs, and the prompt processing of applications (in particular, those for permanent residency), we will continue to see significant gaps in how migrants are able to benefit from many investments outlined in the Federal Budget.

One area where this is evident is health care. As CPJ explained in the Work, Study, Pay Taxes, But Don’t Get Sick policy brief, there are myriad policy barriers that limit access to health care for several migrant and refugee populations. For instance, the new investments in dental care will most likely exclude those who lack provincial health coverage. Seasonal Agricultural Workers, Seafood Workers, those in-between immigration applications (e.g., international students transitioning to Post-Graduate Work Permits), and non-status individuals are among the migrant categories often excluded from provincial health coverage.

The $469 million allocated towards the Interim Federal Health Program (IFHP) for 2023/2024 is a positive development that will immediately address important gaps. The IFHP helps provide coverage to refugee claimants and resettled refugees who cannot access provincial coverage upon their arrival to Canada for a mandatory 3-month wait period. However, the IFHP does not provide the same level of coverage as the provincial programs do, and is often associated with disparate outcomes.

CPJ’s continues to call for full health coverage for migrants and refugees upon arrival to Canada, and for the entire duration of their stay. Though economic concerns should not supersede human rights obligations, the economic and social contributions of migrants and refugees to Canada (and the value of early health interventions) far outweigh the costs of extending this duly-deserved health coverage.

Climate Justice: Canada’s climate plan falls short on leadership, ambition, and equity

In terms of the amount of money allocated, investments to decarbonize Canada’s economy ranked second only to healthcare on the list of this year’s budgetary priorities. The budget boasts a record $60 billion in new climate-related spending, with $14 billion set to be invested in 2023-24. While this is welcome news, and a significant increase compared to previous years, the total figure remains far short of the 2% of GDP (equivalent to $50 billion per year) that experts agree is needed to effectively combat the climate crisis in Canada.

The budget includes several key initiatives to clean Canada’s electricity grid and promote low-carbon manufacturing and green technologies, with promises to invest $15 – $20 billion annually to achieve a net-zero electricity grid by 2035. Alarmingly, however, the government’s climate strategy relies heavily on the voluntary contributions of the private sector in order to reach net-zero by 2050.

While the private sector must play a crucial role in the transition to a green economy, the Government must also lead by enforcing minimum standards where the private sector tends to underperform, such as when mitigating the effects of environmental racism on Canada’s equity seeking groups, especially Indigenous Peoples and racialized, low-income Canadians. Instead, this budget distributed most new funding as tax credits to corporations rather than direct investments in proven emission-reducing projects such as public transit. The concerning absence of needed funding for transit services will lead Canada towards a Public Transit “death spiral” that will increase emissions, increase fare prices, and lead to more congested cities as more riders resort to using their personal vehicles.

Also notably absent was any reference to ending Canada’s existing subsidies for the fossil fuel industry or to phasing out fossil fuels. This highlights an unsettling trend of the Government’s hesitancy to address the root causes of the climate crisis by limiting the production, exporting, and consumption of fossil fuels in Canada. There is a legitimate concern that the $35 billion in support for hydrogen and carbon capture and storage technologies provided to corporations could inadvertently subsidise the continued production and consumption of fossil fuels.

While there were some other positive developments, such as the inclusion of labour conditions on eligibility requirements for the new tax credits, there are significant gaps in the government’s approach. For instance, the plan lacks coherent workforce development policies to attract more women, Indigenous workers, racialized workers, and immigrants to skilled trades and related professions in order to ensure that no one is left behind in this transition.

Other welcome announcements in the budget include $95 million to help plan climate resilience and nearly $800 million for freshwater protection. The budget also confirms $1.6 billion previously announced for the implementation of Canada’s National Adaptation Strategy. Additionally, the budget includes “contracts for difference,” a tool aimed at protecting the carbon pricing system by making it costly for future governments not to follow the scheduled carbon price increases.

As a major historical emitter and one of the world’s highest per capita polluters, Canada’s climate finance system ought to better support countries in the Global South who are disproportionately experiencing the consequences of climate change, while contributing little to the problem. Despite being a signatory to the OECD’s development assistance target of 0.7% of GDP, Canada currently only gives 0.35% of its GDP to foreign aid. It is not only a moral imperative to financially support developing countries reeling from the impacts of extreme weather events, it also promotes Canada’s role as a climate leader on the world stage.

The Path Forward

CPJ continues to call for federal policies and investments that reflect Canada’s human rights obligations and commitment to the Paris Agreement. We remain committed to working with government and civil society to see the implementation of evidence-based solutions to the intersecting crises facing us today, understanding that no one policy area, Minister, political party, or even level of government can do this alone.

While we celebrate some significant investments and commitments in this budget, our progress towards a more just and sustainable future will be self-limited by ignoring the interconnectedness of social determinants of health and well-being, human rights obligations, ecological well-being, and economic justice.

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