Budget 2024: Liberals Attempt to Reframe Narrative, Win Back Millennial and Gen Z Voters
Fairness For Every Generation is what federal Finance Minister Chrystia Freeland is calling Budget 2024. As the government’s pre-announcements signaled, the plan is centred on attempting to win back Millennial and Gen Z voters with a focus on housing and affordability.
In 2015, the Liberals were elected based on three main voter pools: long-time Liberal voters, one million swing Liberal-NDP ‘anti-Conservative’ voters, and a massive pool of first time or occasional voters who were swayed by Trudeau’s “sunny” call for change.
From a high point of three million votes in 2015, this ‘occasional voter’ pool declined to two million in 2019 and then 1.5 million in 2021. Since last year, many of the remaining female occasional voters defected to the NDP and the male occasional voters to the Conservatives.
To mitigate this decline, Liberal strategy is now three-fold:
- Present a tangible retail policy aimed at pocketbook issues of concern to voters under 40. These include housing availability, affordability, and childcare costs.
- Election-style touring to maximize attention to each policy. Past budgets saved most policy announcements for budget day, with only a handful of leaks to single media outlets. The approach to Budget 2024 was a marked change.
- Picking fights with the provinces, financial institutions, corporations, and others to extend media coverage of policy announcements and contrast Liberal actions with barriers put up by other institutional players.
Key Components
Budget 2024 forecasts a deficit of $39.8 billion for the 2024-2025 fiscal year. With total expenses increasing more than revenues, deficits for the coming years will be higher than previously projected in the 2023 Fall Economic Statement.
The budget does not include a path to balance in the next five years.
The Liberals made housing a pillar of Budget 2024. Following the release of the government’s Housing Plan last week, the budget includes several measures as the Liberals attempt to address the housing crisis including:
- Additional funding for the Apartment Construction Loan Program and the Housing Accelerator Fund.
- A new Canada Housing Infrastructure Fund.
- Funding to procure and prepare public lands for sustainable and mixed-market housing.
The Liberals focused other budget commitments on families, as many Millennials who voted for Trudeau in 2015 are now parents. Budget 2024 announced more funding for childcare and training early childhood educators, the establishment of a national school food program, and the creation of a youth mental health fund.
The budget also committed over $2 billion to grow Canada’s artificial intelligence ecosystem. Most of the funding will go towards increasing computing capabilities and technological infrastructure. The Liberals are framing this announcement as an effort to increase productivity as concerns grow around Canada’s productivity decline.
There are also $73 billion in proposed spending commitments projected out over the next twenty years to support the Canadian Armed Forces. Though $8.1 billion commited over the next five years means that by 2029-30 Canada’s defence spending will be 1.76 per cent of GDP. This still falls short of the 2 per cent of GDP NATO Target, for which Canada has already received international criticism. It remains to be seen if domestic criticism in certain circumstances will be placated, as well as against foreign criticism from NATO and G7 allies, the Biden Administration, as well as a potential Trump 2.0 Presidency this fall.
Budget 2024 also provides legislative and funding guidance on what comes next in the development of open banking in Canada – an issue that has frustrated business and legislators for years. The budget sets out funding for the Department of Finance and the Financial Consumer Agency of Canada to prepare the necessary awareness, policy, oversight, and security framework for the implementation of consumer-driven banking.
As part of the “improving tax fairness” angle, the budget commits to raising the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and trusts. Budget 2024 also confirms that the government will move ahead with the OECD/G20 Pillars One and Two and implement a Digital Services Tax and a “global minimum tax” regime in Canada.
Opposition Reaction
Poilievre’s Fiery Response
In some ways, today’s budget can be viewed as a wholescale response to the Conservative Party of Canada (CPC) and its leader Pierre Poilievre. Poilievre has been consistently focused on affordability and cost-of-living issues since he launched his leadership campaign in the spring of 2022. Since July of last year, the Conservative polling lead over the Liberals has consistently remained in the range of 10-20%.
It is not surprising that Poilievre and the Conservatives are opposing the budget. In the leadup to today, Poilievre focused on “the working-class people that Justin Trudeau is ripping off with his high inflationary taxes and spending, and everything else he does will be political theatre designed to distract from that.”
In the House of Commons post-budget, Poilievre suggested the Liberal plan is “a wasteful inflationary budget.” Expect Poilievre and the Conservatives to stick to four-pillar main messages of “Axe the Tax, Build the Homes, Fix the Budget, and Stop the Crime,” while using their messaging on today’s budget as their proof point that Trudeau and the Liberals are on the wrong path.
How Did the NDP Do?
The NDP and its leader Jagmeet Singh would not immediately commit to supporting the budget, citing concerns with the levels of funding committed to the Canada Disability Benefit and to Indigenous infrastructure and housing, the loss of 5,000 public sector workers, as well as what they perceive as a government failure to include any significant measures to tackle corporate greed.
The NDP were quick to take credit for key items including housing, the National Food School Program, renter rights, the Youth Mental Health Fund, and pharmacare and dental care. While the party tries to maintain a level of mystery while holding the ability to trigger an election at any time, in the context of NDP polling numbers there is little doubt they will support the government on this budget.
The Bloc Calls the Budget an Attack on Quebec’s Jurisdiction
The leader of the Bloc Quebecois Yves-François Blanchet stated his opposition to the budget. He stated that several budget measures fall within Quebec’s provincial jurisdiction, such as the Clean Electricity Investment Tax Credit conditions for Crown Corporations which he argued interfere with Hydro-Québec’s ability to set prices. In a pointed comment, Blanchet called the budget an attempt from the Liberals to address their “electoral distress.”