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Quebec Budget 2024: A Reality Check?

The 2024-2025 budget reveals an $11 billion deficit attributed to sluggish economic activity and increased spending on public sector settlements. In response, the government is reaffirming its priorities
and devoting the bulk of its spending to health and education.

For the Coalition Avenir Québec, this budget marks a challenging moment. Opposition parties criticize past election-oriented budgets, tax cuts for individuals and one-off cheques sent to Quebecers to help them fight inflation. Despite this criticism, the government is sticking to its game plan, eschewing talk of austerity and committing to returning to balanced budgets in the future while enhancing public services.

To achieve its goals, the government plans to launch a “comprehensive review” of government and tax spending in the upcoming spring.

The 2024-2025 budget was an opportunity for Premier François Legault to reaffirm his priorities in a difficult context. The effectiveness of the announced measures and the hope of an economic upturn by the year’s end will determine whether public finances can find a more stable footing.

You can find our analysis of the budget below. For more analysis, or support engaging government on any of the budget announcements, contact your Navigator team or reach out at info@navltd.com.

Navigating Uncertainty: Alberta’s Precautionary Budget

Budget 2024: A Responsible Plan for a Growing Province

Albertans are likely to face headwinds this year as the broader economy is expected to slow slightly, experts predict another summer of worsening drought and wildfires, and debt servicing/debt refinancing costs increase significantly due to the current high interest rate environment. If Budget 2023 was a pre-election budget intended to keep Danielle Smith in the premier’s chair, Budget 2024 is a governing budget, leaning into themes of responsible spending and saving.

Budget 2024 prepares for these challenges while maintaining economic growth and labour attraction policies and safeguarding spending so Albertans continue to receive the high levels of service they are accustomed to.

Premier Smith’s vision for a reinvigorated Alberta Heritage Trust Fund remains a top priority for the year and likely for her mandate, having previewed the budget as Alberta’s last shot at getting off the resource revenue rollercoaster and saving for the future. The government is retaining more than $1 billion in investment earnings from the previous year and will deposit another $2 billion increasing the value of the fund to $25 billion.

This is a potentially fraught year to chart a new course and, to succeed, the Finance Minister and Premier will need to resist the temptations of stimulus spending and hold firm to the plan, more details of which are promised later in the year.

You can find our analysis of the budget below. For more analysis, or support engaging government on any of the budget announcements, contact your Navigator team or reach out at info@navltd.com.

We are looking for an Associate Consultant

Navigator, Canada’s leading high-stakes public strategy and communications firm, is growing, and we are looking for an Associate Consultant for our Edmonton office. With offices in Calgary, Edmonton, Vancouver, Toronto, Ottawa, and Montreal, we advise Canada’s largest companies on mandates ranging from government relations, crisis response and issue management, public persuasion and activation campaigns, and capital markets advisory services.

The successful candidate will contribute to interdisciplinary teams of public affairs professionals in providing wide-ranging strategy and communications advice to clients in the private, public and non-profit sectors. Advisory services include crisis communications planning and response, public affairs campaigns, reputation management and recovery, issues management and media relations, and government relations.

This role is hybrid with a mix of working in the office and from home.

All candidates must be willing to live and work in Edmonton, Alberta.

Responsibilities

  • Based on direction from colleagues, contribute to drafting Navigator client deliverables including, but not limited to: communications plans and associated communications products, advocacy plans, government relations support, research plans and proposals;
  • Support project teams through media and issues monitoring, briefing notes and other needs as required;
  • Deliver work on time even amidst competing and evolving priorities;
  • Exhibit a professional demeanour; and
  • Understand, embody and promote the firm’s culture and way of doing business.

Qualifications

  • University degree or comparable experience;
  • Familiarity with public affairs, government, media or adjacent fields;
  • Understanding of strategic communications and government relations;
  • Strong written and verbal communication, and presentation skills;
  • Effective time management skills and the ability to independently manage multiple projects simultaneously; and
  • Able to work well in a team environment.

Please send a cover letter and resume to Coralee Peters at cpeters@navltd.com and Zoe Keirstead at zkeirstead@navltd.com.

Sonya Savage appointed Expert Panelist at the CCPC and Senior Public Policy Advisor at Navigator

Calgary, AB, January 25, 2024 – Former Alberta Minister of Environment and Protected Areas and Minister of Energy Sonya Savage joins the Canadian Centre for the Purpose of the Corporation (CCPC) as an Expert Panelist and, as a Senior Advisor, will also provide public policy advice to Navigator and its clients.

“I’m thrilled to join the Canadian Centre for the Purpose of the Corporation’s expert panel. The CCPC’s mission to support organizations in achieving impactful ESG objectives resonates deeply with the values I’ve championed throughout my career, as a lawyer, an energy executive and as a cabinet minister. But more, I look forward to being able to immerse myself in the challenging public policy issues Navigator’s clients deal with.”

“More and more, organizations are seeking advice as they work to balance the demands of delivering on their purpose and ESG commitments in an increasingly challenging environment. Sonya couldn’t be joining us at a more opportune time.” remarked Graham Fox, Executive Chairman of the CCPC and Navigator’s Ottawa Managing Principal.

Added Jason Hatcher, Navigator’s Calgary Managing Principal “We are delighted that, in addition to having Sonya join the CCPC’s expert panel, we will be able to call on her genuinely unique experience to provide our clients with public policy advice.”

Sonya can be reached at sosavage@blg.com.

About Sonya Savage

Sonya Savage was first elected in 2019 and served as the Minister of Energy for Alberta, successfully leading the province through a global pandemic and overhauling energy policy to accelerate sustainable investment. In 2022, she was appointed to Minister of Environment and Protected Areas, overseeing the ESG Secretariat and developing the province’s net-zero climate strategy. Currently, Savage serves as Senior Counsel at BLG, leveraging her lengthy pipeline industry experience and political career to provide expert advice to clients on a range of issues. She also holds a Master of Laws in Environment and Energy with a published thesis on the evolving role of the National Energy Board. Learn more

About the Canadian Centre for the Purpose of the Corporation

The CCPC is an initiative of Navigator, Canada’s leading high-stakes strategic advisory and communications firm. The Centre releases regular analysis and guidance for business based around the expectations of Canadians. These insights inform the design of tailor-made strategic solutions for businesses and organizations to define, advance, and implement their purpose.

The Centre is led by Graham Fox alongside a panel of experts in policy, governance, business, law, communications, equity and diversity, sustainability and social responsibility. Learn more

Freeland signals an end to the big spend in FES

Today, Finance Minister Chrystia Freeland presented the Government of Canada’s 2023 Fall Economic Statement (FES) in the House of Commons. The update focused on mortgage affordability and increasing rental housing with $15.7B in new spending and projects a deficit of $40B in 2023-2024. The NDP committed to supporting the FES, ensuring confidence in the government and avoiding an election, at least for 2023.

You can read the full Fall Economic Statement here.

What it means

Minister Freeland faced a dual challenge drafting her Fall Economic Statement – trying to satisfy calls to spend more on housing and other priorities while heeding calls to avoid doing so much that she fuels inflation, increases the country’s debt-to-GDP ratio, and makes it harder for the Bank of Canada to lower interest rates.

It’s a delicate balance and explains why the department called this FES an update rather than a mini budget. Freeland’s focus is less on new programs than continuing previously announced measures, including the recent mandate to reduce costs.

The update confirms what most private sector forecasters have been saying. Economic growth will be less robust this fiscal year than previously thought. That means lower government revenues and less room to spend. Those hoping the federal government had a plan to return to balanced budgets will be disappointed. There’s no reading between the lines here. The bottom line is still written in red and will be for the foreseeable future.

What the statement emphasizes

The emphasis is on increasing the supply of housing, subsidies to support carbon capture and energy projects that won’t increase Canada’s carbon footprint, and initiatives to make life more affordable for Canadians struggling with the rising cost of living.
None of this made the Conservative Party happy. New Democrats took credit for the emphasis on affordability and signaled they will vote with the Liberals to approve it.

But the real test of whether the government struck the right balance will come when Freeland tables her next budget. This financial blueprint is as much about politics as fiscal policy, especially for a minority government that depends on the NDP to stay in power.

The big picture – new political direction on housing

Unsurprisingly, housing emerges as the winner in today’s FES, “bringing home” most of the pie and leaving a single slice behind for the remaining government priorities to share. The Liberals not only recognize the challenges Canadians face as the housing crisis deepens, but with an election creeping up and polls slipping down, the Liberals are going back to their original mantra of “real change” in designing their housing plan.

Bureaucrats take the keys

For the past few months, the Ministry of Infrastructure has been taking control over housing programs normally under the Canada Mortgage and Housing Corporation (CMHC) – an independent crown corporation with its own mortgage business line. A soft overhaul of federal housing policy has now officially taken a sharp turn, with the move to establish a new Department of Housing, Infrastructure and Communities.

Why it matters: For the first time in decades, a federal department will control housing policy. The government intends to draft the blueprints for funding priorities all the way to the next election. Expect more direction on projects, and more political influence to support Liberal MPs after years of frustrated expectations. The government’s message is clear – if the Liberals are to be blamed for housing failures, they’re going to play a bigger role solving the problem.

Big moves on rental

The Liberals are building on previous programs and lessons learned since forming government. The rental plan is focused on three initiatives – 1) create more purpose-built rentals by revamping and replenishing current loans programs with a substantial $15 billion boost (the largest expenditure of the day), 2) include new co-op rental housing under the GST exemption for rental construction, and 3) invest new and unused dollars meant for low-income renters to create even more affordable social/co-op housing opportunities instead.

Why it matters: With a new department focused on housing and infrastructure, new money on the line, and funds redirected from existing programs to boost the supply of affordable builds, the government is showing it’s serious about the purpose-built rental market. Most of today’s measures flow from the National Housing Accord, developed by industry partners, which helped lead to these groundbreaking results. The government has signaled that additional measures are to be announced in the weeks ahead.

Homeowners not left behind

The statement responds to criticism that the government lost sight of the challenges faced by homeowners with its focus on renters over the past few months. That’s why a significant number of measures announced today should provide Canadian homeowners with more options when renewing their mortgages. From longer amortization periods being permitted to fees and interest rates being waived for some of the relief measures, the new rules are intended to strike a balance. This includes the ability to make lump sum payments to reduce a mortgage before selling, or to refinance, if a homeowner finds themselves under water.

Why it matters: While the government is relaxing mortgage regulations by giving the banks room to help Canadians, the measures won’t automatically lower interest rates. That goal is spoken to most forcefully in today’s announcement by not giving in to the big spend.

The rest of the picture – affordability & clean growth

With little spending left after housing, the following are notable additions in the FES:

  • Increasing competition: Amendments to the Competition Act to crack down on anti-competitive behaviour, offer broader choices for consumers and stabilize prices.
  • Protecting consumers: Legislation to target “junk fees” Canadians pay in the form of unnecessary and hidden charges. The Financial Consumer Agency of Canada (FCAC) will be directed to work with banks to improve low- and no-cost accounts, such as increasing the number of debit transactions, online bill payments, and e-transfers with no extra fees. The agency will also work to expand the availability of low- and no cost accounts.
  • Grocery affordability: No new measures to control rising grocery prices but reiterates the commitment to address grocery affordability and highlights measures announced earlier this fall. It restates the government’s willingness to use tax measures to ensure retailers stabilize prices.
  • Enhancing health and dental care: Lifts GST/HST on counselling and psychotherapy services and teases the launch of the Canadian Dental Care Plan, expected to begin rolling out by the end of the year. Also includes a timetable for the bilateral health transfers announced in Budget 2023, giving provinces and territories until March 31, 2024, to sign agreements to access funding for 2023/2024.
  • Clean economy: Updated timelines to deliver all clean economy investment tax credits in 2024, including carbon capture, utilization and storage. A reminder on green initiatives already underway, such as battery manufacturing plans and the timeline for the roll-out of investment tax credits.

Opposition reaction

Conservative Party of Canada: “Trudeau spends. Canadians pay.”

  • Pierre Poilievre stuck to the script that has put him in front of the polls. He went after the new housing department as government building bureaucracy faster than new homes and argued that the government will be spending more on debt than healthcare.

New Democratic Party: “It does not meet the urgency of what Canadians are going through.”

  • Jagmeet Singh called this mini budget a ‘micro budget,’ took credit for the new investments in housing and steps taken to tackle the cost of groceries and yet promised to continue to support the government.

What’s next

To deliver on the commitments from the Fall Economic Statement, expect legislation to be tabled before the end of 2023, including part two of the Budget 2023 Implementation Act.

Your Navigator team will be monitoring the roll-out of today’s statement closely and is available to assist in advancing your priorities with the government.