March 24, 2017
Canadian Club of Toronto/ Empire Club of Canada
Budget 2017: Working for the Middle Class
Remarks by the Honourable Bill Morneau, P.C., M.P.
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Hello, and thank you for joining me here today.
It's been an incredible few days for me—an incredible year and a half, actually—and I'm very grateful to end my week here in my hometown, with you.
As you might have heard, on Wednesday I tabled our government's second budget, called Building a Strong Middle Class.
It's a continuation of the plan that brought us into office, and it builds on the progress we've made since our first budget almost exactly one year ago.
It's about creating good middle class jobs today, while preparing Canadians for the jobs of tomorrow.
It's a plan that brings hope and optimism back to the middle class, by investing in our people, our communities and in our economy.
And it is not lost on me that, for many in this room, our plan has asked more from you.
Last year, we asked some of you to pay more in tax, so that we could cut taxes for the middle class—for nearly 9 million Canadians.
We decided that the Canada Child Benefit would be income-tested, meaning many of you no longer receive a monthly cheque from the federal government.
We asked more from you, so that 9 out of 10 Canadian families can receive an average increase of nearly $2,300 in child benefits this year, tax-free.
We asked more from you so that we could do more for the middle class and those working hard to join it.
And it is a plan that is even more important now than it was 18 months ago.
When I attended my first G20 in November of 2015, in Antalya, Turkey, people looked at our plan to invest in the middle class with interest, and with a bit of curiosity.
Not everyone saw what our Prime Minister saw, or perhaps didn't consider it as seriously—which was that the middle class was feeling anxious about their future, and the future of their kids and grandkids.
A lot has changed in the world since then.
It's become more and more obvious that middle class anxiety is not only real, it's become a powerful force.
I just got back from my latest G20 in Baden-Baden, Germany, where sharing the benefits of growth, globalization and trade was on everyone's mind—but just as important this time around was working to ensure the benefits of openness and trade were reaching everyone.
When I met the US Secretary of the Treasury, Steven Mnuchin, in Washington, and again in Germany last week, we talked about our shared focus on helping middle class families get ahead.
So people are coming around to seeing in a serious way what the middle class has known for some time: while advances in technology have pushed our economies ahead, more of the middle class was falling behind.
We can debate statistics and Gini coefficients—but the evidence out there is clear.
We reached out to a million Canadians in our pre-budget consultations, I've knocked on tens of thousands of doors in this city…and there are movements around the world that are undeniably fuelled by a deep sense of uncertainty about the future.
We cannot ignore middle class anxiety.
It's real, and the long-term success of our country, our great country, requires all hands on deck.
To address middle class anxiety, our government chose to act.
And more and more, the world is looking to Canada as a model of how to respond to this concern in a positive, refreshing and generous way.
And that's because our plan is working.
There is a growing sense of optimism among Canada's middle class.
Over the past seven months, the economy has created a quarter of a million new jobs—the highest growth rate of any seven-month period in a decade.
And since 2015, our unemployment rate has dropped from 7.1% to 6.6%.
We also know that consumer spending has increased since we put more money in people's pockets with the Canada Child Benefit.
The pace of economic expansion is forecast to pick up in 2017.
But we know there's more to do.
With Budget 2017, we are taking the next step.
We're building on our past investments to make our communities better places to live, with historic investments in infrastructure: more than $180 billion over the next decade.
In 10 years our economy won't just be more dynamic, but public transit will get us all home faster at the end of the day. That means more time with our kids; it also means higher productivity and more globally competitive cities—cities like Toronto.
As a trading nation, being competitive on a global scale requires world-class infrastructure.
That's why Budget 2017 also includes a new National Trade Corridors Fund, which will target congestion along the busiest rail and highway corridors around the Greater Toronto Area—more money directed to one of our biggest challenges.
And we'll use our new Canada Infrastructure Bank —leveraging the expertise and capital of the private sector—to help cities, towns and communities get big, transformative projects off the ground.
With the Canada Infrastructure Bank we will get institutional and pension fund money from around the world invested in big, transformative infrastructure projects like transit or electricity grids.
We will build more, and make your and your children's lives better by combining government and private capital to improve our communities.
Projects that otherwise wouldn't get built, like electricity grids or more transit connections.
And I want to pause on that for a minute.
Our government is working with the private sector to get things done for Canadians.
We know government can't do it all. We need your help.
And I'm not afraid to ask.
Take the launch of the new Canadian Business Growth Fund earlier this month.
Here's a great example of what happens when we work together.
With the help of my Advisory Council on Economic Growth, we identified a gap with small and medium-sized enterprises that wanted to grow, but couldn't access the necessary funding without sacrificing controlling ownership.
We then convened our financial institutions, who saw an opportunity to help and an opportunity for their business, and we found a solution.
At lightning speed by most standards.
Definitely by government standards.
It's a good reminder that solutions don't necessarily have to come with a cost to taxpayers.
And as a government, we will continue to look for solutions, inside and outside government, to push Canada and its economy forward.
Along with our continued investments in infrastructure, our government is working to best position Canada for the innovation economy.
Our plan strives for nothing less than making Canada a world-leading centre for innovation, in part by making big bets on specific sectors—especially digital, clean tech and agri-food.
From urban centres to rural farms, from researchers looking to secure new patents to entrepreneurs working to bring their products to market, innovation is what allows Canadians to adapt to change and prepare for the future.
As complex as the technology we rely on gets, we can never forget who's behind that innovation: people.
Skilled, talented and creative people.
We want every Canadian to see the opportunity in the new innovative economy.
Which is why we are not just creating the jobs of today, we're getting people ready for the jobs of tomorrow.
Because the next job should be a better job.
We call it our Innovation and Skills Plan.
With it, we will support a culture of lifelong learning to help workers and their families adapt to the changing demands of our time.
We will help students get the work experience they need to kick-start their careers.
We will make it more affordable to pursue higher education, and expand access to training to help Canadians learn new skills.
And we will help people who've lost their job to pursue training or go back to school.
Since we started, our plan put people first—and that has been good for business.
In the last seven months, as I said, we have seen the highest job growth in over a decade.
Where others would have put on the brakes, we did what confident and ambitious countries do—we invested in ourselves.
And we did it while always keeping an eye on our fiscal situation and capacity.
Investing with purpose is not something I take lightly.
And while others around the world are choosing to close themselves off, Canada is betting its future on openness and investment.
We are quite fortunate in Canada to have exactly the right ingredients to do just that.
Canada has the best fiscal position among G7 countries, and our diverse, well-educated, innovative and driven population gives us good potential for continued growth.
Our financial system is among the world's soundest, and we are host to global-scale pension funds.
Canada has the lowest total business tax costs and the lowest overall business costs in the G7.
We are one of only 10 countries with triple-A ratings from the three major ratings agencies.
So we will build on that.
Not just building up our industries, but our communities as well.
It's what's helped us strengthen our relationships with our top five trading partners—the United States, Mexico, China, Japan and the European Union.
And I know it's what helped us make inroads all over Asia.
In fact, it gives me great pleasure today to announce, officially, that as of Thursday, Canada has become the first North American country to be accepted into the Asian Infrastructure Investment Bank—helping boost global economic growth through high-quality infrastructure projects that will result in benefits for people in the region and Canadians.
Our membership means that we will be able to help fund high-quality infrastructure in Asia that contributes to global economic growth.
Trade, openness, investment and giving all Canadians a real and fair chance at success are what our plan is all about.
As you've seen, it's working.
As we remain focused on growth, it won't just be for growth's sake.
We will make sure it helps all Canadians, not just the wealthy few.
We will help families feel better about the future of their kids and grandkids—and make sure that the next generation gets what our generation and generations before it have always had in Canada: optimism fuelled by opportunity.
Thank you. I am happy to take a few questions.