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Presented by Innovative Medicines Canada: A daily look inside Canadian politics and power. | | | | |  | | By Zi-Ann Lum, Maura Forrest and Nick Taylor-Vaisey | Presented by Innovative Medicines Canada | Send tips | Subscribe here | Follow Politico Canada Thanks for reading Ottawa Playbook. I’m your host Zi-Ann Lum, with Nick Taylor-Vaisey and Maura Forrest. It’s Budget Day +1. Predictably, the NDP are pleased, while Conservatives are using the budget to add more paint to their portrait that Canadians are being squeezed. Plus, an election budget, this was not. And lobbyists score a partial win. |  | DRIVING THE DAY | |
SPIN CITY — What’s the point of a budget lock up if the biggest items are leaked in advance.
Finance Minister CHRYSTIA FREELAND kicks off her roadshow today at an Ottawa daycare, drawing the spotlight on the budget’s family-friendly cost-of-living measures. — What’s hot: The dental-care program and the extra C$7 billion it will cost to expand coverage to families who earn less than C$90,000 and individuals at C$70,000. Last year, finance forecast the program would cost C$6 billion over five years. That price tag has ballooned to C$13 billion. — What’s not: Ottawa’s fiscal anchor. Because it's 2023. — Inside the room: Reporters performed the ceremonial rite of handing over their phones, sealed in manila envelopes, in exchange for budget documents. But it was a sassy exchange inside the six-hour, WiFi-less media lock up Tuesday that captured the power dynamics between reporters and the third-term Liberal government they cover. The Logic’s MURAD HEMMADI stepped up to the microphone with a question for a SENIOR GOVERNMENT OFFICIAL, to ask how independent the C$15-billion Canada Growth Fund will really be from the government if its assets are managed by the Public Sector Pension Investment Board. Does Innovation, Science and Economic Development Canada set the investment criteria? “How independent are we talking about?” The SENIOR GOVERNMENT OFFICIAL not authorized to speak about their intel about a public document, didn’t like the question and didn’t hide his disdain. SENIOR GOVERNMENT OFFICIAL: “You’re looking for shadows that don’t exist to be blunt. I’m not surprised you’re looking for shadows that don’t exist.” HEMMADI: “Ouch.” SENIOR GOVERNMENT OFFICIAL: “No ouch. It’s what you get paid for.” Oh, how forthright government officials can be under a privileged protective cover. — Talk of the town: Confusion over the government’s marquee dental care plan. The National Post’s CATHERINE LÉVESQUE reported the budget stated “the plan would begin providing coverage by the end of 2023.” However, officials from the Prime Minister's office told reporters no, the original 2025 goal for full implementation remains unchanged — this year’s plan is to expand coverage to teenagers, seniors and Canadians living with a disability. It’s complicated, Freeland told reporters when asked about the confusion. “We are going to be rolling it out step by step by step … Delivering an entirely new aspect of the Canadian healthcare system is not a cakewalk.” | | | | A message from Innovative Medicines Canada: Canada’s vaccine strategy was one of the most effective in the world. Historic co-operation between pharmaceutical industry and government led to one of the fastest rollouts of vaccines, saving Canadians over $30 billion. This wasn’t an accident. With so much uncertainty looming over Canadians right now, knowing how to protect yourself from illness should never be a concern. Take a look at how we’re working with governments and stakeholders to protect Canadians. | | | | | HALLWAY CONVERSATION | |
‘NOT BAD, NOT GREAT’ — The upshot of being locked in a room for hours with no phones is that your circumstances are a natural conversation starter. We asked experts in our midst for their stock take on Freeland’s third budget. Does the 2023 budget offer the Liberals a reset?
Survey says: no. MOSTAFA ASKARI, chief economist at the Institute of Fiscal Studies and Democracy: — On dental: “My sense is that when they announced dental care in the fall economic statement, they had not done their homework on how much this would cost, because they had to move quickly to respond to their agreement with the NDP. And now they have done their homework and they have realized that it's going to cost a lot more.” — On projected savings and the deficit: “Those are dubious kinds of savings. It's very hard to get them. They may get some, but I don't think they're going to get C$20 billion in savings. So when I look at the numbers, my view is that the deficit numbers are going to be bigger than what they are showing.” ROBERT ASSELIN, senior vice president of policy at the Business Council of Canada: I see a lot of risk. One being a recession. Now they're talking about it, last fall they didn't. I just see overall, a more fragile fiscal framework to face future shocks, or unforeseen events, including a recession. That's the main worry coming out of this budget. There’s a bunch of things the government needed to do, including responding to the [Inflation Reduction Act]. But on the fiscal side, we don't have any fiscal anchor anymore. And I find that the government is much more vulnerable going forward. Politically, it's not like it's not a bad budget, but it's not a great budget, either. I would say this is a budget that will leave a lot of people indifferent, to be honest. Tax credits, for me, are not a vision for the economy. KEVIN PAGE, president and CEO of the Institute of Fiscal Studies and Democracy: In macroeconomics terms, I think it’s really important in this environment to have kind of a cautious approach, fiscally. A budget that doesn't have a lot of deficit finance measures is something we needed to see — a thinner budget. You don't want fiscal policy to be working in a way that's not cohere with monetary policy. This budget is responsible in that sense as well. It's small, it's modest in terms of the number of measures, little over $40 billion over six years — given the size of our spend, the size of our economy, that's a modest budget … I don't think this is a budget that people can really make the case that it’s going to be inflationary. I see this as kind of a prudent, credible budget for this particular period of time. It's not a budget that sets you up for an election. | | | | A message from Innovative Medicines Canada:   | | |
More on the 2023 budget:
→ TONDA MACCHARLES: “This budget overall — Freeland’s third — was equally about making political choices to retain New Democratic Party support for the minority Liberal government in the House of Commons, and meeting the political and economic challenge of the United States’ $370-billion dollar plan — Joe Biden’s Inflation Reduction Act.” The Toronto Star → BILL WATSON: “It was a Biden budget, from its blue-collar bluster, to its encomia to unions, its giant green subsidies, its Made-in-America — sorry, Made-in-Canada — packaging, its make-the-rich-pay-for-it-all rhetoric, and even its endorsement, explicitly, of Roe vs. Wade policies on abortion.” National Post → ALTHIA RAJ: “They have given up any pretext of talking about a return to balance. We’re not seeing that at all. This is a very big-spending budget.” CBC At Issue → PAUL WELLS: “This tax-credit stuff … shows Freeland and her boss, the prime minister, playing very much against type. They must know that these credits will be available to companies they don’t know, crown corporations run by governments they don’t like, and other strangers. It will be difficult to show up for ribbon-cutting ceremonies.” Substack
→ ANDREW COYNE: “If the government wanted to strangle economic growth, this is the budget it would produce.” The Globe
→ L. IAN MACDONALD: “Some commentators have already characterized this budget as one based on the hope that the many ‘events, dear boy’ external factors that impact Canada’s fiscal reality — illegal wars, global inflation, bank runs — will recede before a more election-adjacent Budget 2024. That may place a premium on optimism.” Policy Magazine → SUSAN DELACOURT: “‘Effective government’ is a whole chapter in the budget, which could well have been subtitled, ‘We’ll do better, really. This can be fixed.’” The Toronto Star | | For your radar | |
HONEY, I SHRUNK THE TAX — It's a nice-glass-of-wine day for any lobbyist who spotted a client's budget ask within its pages. Playbook noticed at least two.
A high-profile ad campaign featuring the iconic hosers Bob and Doug McKenzie — aka RICK MORANIS and DAVE THOMAS — urged the federal government to give the brewers of the nation a break. The federal excise tax on alcohol was scheduled to increase by 6.3 percent on April 1. The industry feared the hike would punish brewers already struggling with inflation and post-Covid recovery. So the leading lobby group, Beer Canada, hired Bob and Doug to take to the airwaves. Labatt tapped lobbyists at Enterprise Canada, Navigator and GT & Company to persuade policymakers. They urged the government to freeze excise duties for at least 2023 and 2024 — and keep them frozen until inflation returns to the central bank’s target range of 1–3 percent. — A partial win: Three days before the planned hike took effect, Freeland’s budget capped the excise duty increase at 2 percent. But only for a year. The partial win for the brewers comes at a cost — C$100 million in foregone revenue this year, and a total of C$550 million over five years. Half a billion dollars? That’d buy a few 2-4s, eh? — Clean gridbucks: Electricity Canada’s members may be chuffed as they peruse the budget. The lobby group for utilities, transmitters and distributors of electrical power had pushed the government to expand its planned clean tech investment tax credit to “ensure maximum support for non-emitting electricity.“ Electricity Canada wanted large-scale hydro and nuclear projects to be eligible, and also pushed the government to include tax-exempt entities — including Crown corporations and Indigenous organizations that form part of the electro-lobby’s membership. They also hoped for a 50 percent credit. What did they get for all those meetings? A new 15 percent refundable clean electricity investment tax credit all their own, budgeted to cost C$6.3 billion over four years starting in 2024 — and another C$19.4 billion from 2028–29 to 2034–35. Large-scale hydro and nuclear projects will be eligible. Win. So will tax-exempt entities. Win. Do you enjoy Ottawa Playbook? Maybe you know others who would like it, too. Point them to this link where they can sign up for free. ELEVEN THINGS YOU MAY HAVE MISSED — Most of the focus yesterday was on health care, affordability and the clean economy. But in the rush of headlines, here are 11 budget items that may have slipped beneath your radar. Convoy payback: The government has budgeted C$98 million to reimburse the RCMP and police forces in Windsor and Ottawa for the cost of security operations linked to last year’s “Freedom Convoy” protests. Political parties beware: A change is in store for the way federal political parties use personal data. Federal parties aren’t currently subject to privacy laws except in B.C., where the provincial privacy commissioner has found they must abide by provincial rules. Ottawa is now planning to establish a “uniform federal approach” to how federal parties can use personal info. Details TBD. Asylum seeker support: The budget includes C$530 million for temporary accommodations and C$469 million for temporary health coverage for asylum seekers, all to be provided this fiscal year. Roe v. Wade response: Health Canada’s sexual and reproductive health fund is set to see C$36 million to make abortions and other reproductive health services accessible. Tracking diversity: The government plans to require big banks and insurance companies to report on the number of women, Indigenous people, people with disabilities and members of visible minorities among board directors and senior management. Ottawa also wants to allow them to have virtual-only meetings, which is apparently something that requires a legislative change. A win for the rats: Canada is planning to ban cosmetic testing on animals, a move Health Canada confirmed earlier this year. On leave: The government plans to create a new paid leave for federal workers who experience the loss of a pregnancy. Dairy innovation: C$333 million (an increase from the C$300 million telegraphed last year) is going to Agriculture and Agri-Food Canada to research and develop novel uses for the country’s surplus of solids non-fat, a dairy processing by-product, typically used for animal feeds and improving the chew of ice cream. For the dogs: The government is promising C$30 million over the next five years to expand the bomb detection dog program at airports. Land ho! The ferry crossing between Caribou, N.S. and Wood Islands, P.E.I. is getting a second ferry boat. One port to rule them all: Ottawa wants to mandate a single standard charging port — maybe USB-C — to render the majority of your chargers and dongles obsolete. That is all. What did you see in the 2023 Budget? Tell us here. | | | | A message from Innovative Medicines Canada: COVID-19 forced Canadians to work in new ways. Whether it was ditching the office commute or adjusting to seeing colleagues through a screen instead of in person.
Government and the pharmaceutical industry also found new ways to work, this time at warp speed to deliver COVID-19 vaccines to Canadians in every corner of the country.
Because of this partnership, COVID-19 vaccines led to over $30 billion in savings to the Canadian economy.
Take a look at how we’re working with governments and stakeholders to protect Canadians. | | | | | TODAY'S HIGHLIGHTS | |
— It’s caucus day on the Hill.
— Prime Minister JUSTIN TRUDEAU is in Ottawa and has caucus at 10 a.m., and is slated to deliver remarks at the Summit for Democracy 2023 at 1 p.m. He has a 3 p.m. pop in at a local daycare with Deputy Prime Minister CHRYSTIA FREELAND to talk about the budget, just after naptime. 9:30 a.m. NDP Leader JAGMEET SINGH is throwing the doors open to media for a “keynote address” in the Valour Building before the party’s caucus meeting. 12:30 p.m. Conservative Leader PIERRE POILLIEVRE is taking media questions in West Block after caucus, alongside his Quebec lieutenant, PIERRE PAUL-HUS. 4 p.m. There’s an unveiling ceremony in the Senate for the chair of Sir ALEXANDRE LACOSTE, who was appointed Speaker in the red chamber in 1891. Former senator SERGE JOYAL donated Lacoste’s chair to the Senate’s Heritage Collection. 4:30 p.m. The House citizenship committee meets with Justice Minister DAVID LAMETTI to go over the government’s response to the final report of the special committee on Afghanistan. 4:30 p.m. The House operations committee will hear from ROBERT PALTER, a senior partner at McKinsey & Company. | | MEDIA ROOM | |
— From POLITICO’s STEVEN SHEPARD: The 2024 GOP field: How they win, how they lose.
— The Star’s JOANNA CHIU presents a guide to the scandal shaking Canadian politics. — MICHAEL IGNATIEFF is on the Everything Happens pod, talking with KATE BOWLER about tragedy and meaning. Read the transcript here. — From COLIN HORGAN on The Line: How the NHL can really signal it cares about gay rights. — Finally, LYNDSIE BOURGON was on The Big Story pod to talk about the Bay du Nord project, the most ambitious offshore mining project in Canadian history. | | PROZONE | |
Our latest policy newsletter for Pro s: Speed read the federal budget.
In other budget news for Pros:
— Freeland spins upsides of downside scenarios.
— Canada’s C$80B response to U.S. clean energy push.
— A Pro’s guide to budget fine print. Other headlines:
— How American energy helped Europe best Putin.
— World court set to be handed explosive climate change case.
— Russian body armor on the battlefield in Ukraine has links to China.
— California Democrats pass Newsom's proposal that could penalize oil company profits.
— U.S. wants allies to line up against China. Europe is starting to listen. | | PLAYBOOKERS | |
Birthdays: HBD to former Quebec premier PAULINE MAROIS.
Spotted: Inside iPolitics' budget party at the Met: MARCO MENDICINO, FRANÇOIS-PHILIPPE CHAMPAGNE, SEAN FRASER, KARINA GOULD, RACHEL BENDAYAN, JASON EASTON, GREG MACEACHERN, KATIE TELFORD, CAMERON AHMAD, ALTHIA RAJ, RACHEL AIELLO, MURAD HEMMADI, EMMA GODMERE, MIKE LECOUTEUR, CATHERINE LÉVESQUE, CHRIS NARDI, GLEN MCGREGOR, AARON WHERRY, ALICE HANSEN, SHANTI COSENTINO, BRIAN CLOW, ALANA KITELEY, BRIAN PLATT, TONY MAAS, NASSER HAIDAR, DAVID COCHRANE, MATTHEW HALL, BLAKE OLIVER and KEVIN DEAGLE. Media mentions: POLITICO was honored with the Toner Prize for Excellence in National Political Reporting by Syracuse University's Newhouse School Monday for its extensive reporting on the Supreme Court’s decision to overturn Roe v. Wade and the fallout that ensued. Send Playbookers tips to ottawaplaybook@politico.com.
| | On the Hill | |
— It’s caucus day on the Hill.
→ Find upcoming House committees here → Keep track of Senate committees here 4 p.m. The Senate social affairs committee meets to study Bill C-22. 4:15 p.m. The Senate legal and constitutional affairs committee meets to study Bill C-9. 4:30 p.m. The House committee on Indigenous and Northern Affairs continues its study of graduation rates and successful outcomes of Indigenous students. 6:45 p.m. The Senate national finance committee plays host to 11 department officials from Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada. — Behind closed doors: The House justice committee meets to discuss its report about Canada’s bail system; the Senate veteran affairs committee meets to discuss “future business”; the Senate ethics committee meets. | | TRIVIA | |
Tuesday’s answer: In 1867, Finance Minister JOHN ROSE read a modest speech to set out the government's first spending plan of C$5.3 million — according to this story by DEAN BEEBY, then of the CBC.
Props to STUART BENSON, ROBERT MCDOUGALL, and RYAN HAMILTON. Wednesday’s question: On this day in 1999 at Madison Square Garden, WAYNE GRETZKY knocked in a loose puck. What was significant about that goal? Think you have a harder trivia question? Send us your best. Want to grab the attention of movers and shakers on Parliament Hill? Want your brand in front of a key audience of Ottawa influencers? Playbook can help. Contact Jesse Shapiro to find out how: jshapiro@politico.com. Playbook wouldn’t happen: Without Luiza Ch. Savage and Sue Allan. | | | | Follow us on Twitter | | | | Subscribe to the POLITICO Playbook family Playbook | Playbook PM | California Playbook | Florida Playbook | Illinois Playbook | Massachusetts Playbook | New Jersey Playbook | New York Playbook | Ottawa Playbook | Brussels Playbook | London Playbook View all our political and policy newsletters | | Follow us | | | | |  |
