Canada’s budget: The message, the meat & the meaning

Monday was Budget Day in Canada. It came as pollsters found Canadians in an angry and pessimistic mood, with declining confidence in governments and rising skepticism of leaders’ motives.

Modern budgets are exercises in communication as much as policy or finance. In communications terms, the government — personified by federal finance minister Chrystia Freeland — had to get three things right: understanding the audience, aligning the government’s vision with their needs, and earning their confidence. Here’s a first look at how they did on the first two — and at their prospects for the third.

The message: Does Ottawa understand Canadians’ anxieties?

Most budget decisions must be made well in advance, a distinct challenge during a fast-moving pandemic. This created a communications dilemma: how does one communicate a long-term vision for a post-crisis recovery when the audience is still in the thick of the crisis?

Fortunately for the government, budget communications can be refined closer to the finish line. In defining the core purpose of the budget, the minister was able to connect the priorities of the present with the imperatives for the future:

“This budget is about finishing the fight against COVID-19. It’s about healing the wounds left by the COVID-19 recession. And it’s about creating more jobs and prosperity for Canadians in the days—and decades—to come.”

In both its policy and communications choices, the budget shows the government is well aware of Canadians’ anxieties. Citizens are anxious about everything the pandemic has shaken: their jobs and workplaces; their kids’ education and mental health; seniors’ quality of life; and, for many, their sense of safety and belonging in their communities.

The budget touched all of these anxieties, and more, in both its prose about those who have been hurt most by the pandemic, and in its policy prescriptions in virtually every area of government activity. Some of these commitments, such as those on elder care, were more about principle than clear policy.

Like all important budgets, this one also had a signature initiative: a national early learning and childcare program projected to cost $8.3-billion annually when fully implemented. While such a program had been promised by the governing party for almost thirty years, it was a logical choice in 2021: it enjoyed the support of business leaders such as the CEO of Scotiabank; it could be framed as an policy to boost Canada’s economic output; and it could also be cast as a socially equitable initiative by promoting the participation of women in the work force, as they have borne a disproportionate burden during the pandemic.

The meat: Does the government share Canadians’ policy priorities?

As budget day dawned, Canadians were worried about the sustainability of their systems and readiness for future crises, from pandemics to climate-related disasters to unsustainable public debt.

In pre-budget polling, more than two-thirds of Canadians agreed the budget should lay out a plan to shift from fossil fuels to sustainable practices, renewables and alternative energy. In this area, the government was building on one of its acknowledged strengths: its plan to take the country to ‘net zero’ emissions by 2050. Budget measures included a loan program to help homeowners retrofit their homes, a net-zero accelerator fund to decarbonize large emitters, a 50 percent tax cut for manufacturers of net-zero technologies, and the first-federal ‘green bond’ to subsidize future initiatives.

If climate action was a clear-cut choice, however, other government spending was less so. In pre-budget polling, Canadians were divided: many favoured tax cuts over spending. 35 percent backed low- and middle-income tax relief and 12 percent small business tax relief, while only 25 percent supported increased program spending to help Canadians during the pandemic. 17 percent actually favoured spending reductions to cut the nation’s alarming deficit. 71 percent told pollsters they were worried about the deficit — including a majority of every party’s supporters.

The other challenge is the growing view among economists, including Canada’s Parliamentary Budget Officer, that robust economic growth projections — fuelled in part by pent-up demand and record savings by Canadians — mean aggressive stimulus is not required.

With an election likely this year, the government would not be deterred from its previously telegraphed stimulus plans. The minister made her case deftly with three core arguments.

First, she acknowledged that the economy was “roaring back” — but that its benefits were not equitably shared. “Some will say our sense of urgency is misplaced,” she said in an opening statement in the budget. “To them, I ask this: ‘Did you lose your job during a COVID lockdown?’ This argument extended beyond individuals to hard-hit sectors such as air travel, tourism, art and culture.

Second, she argued that “in today’s low-interest-rate environment, not only can we afford these investments in Canada’s future, it would be short-sighted of us not to make them.”

Third, she was aided by the obvious reality that the pandemic persists, as do many of its impacts, and by the need to extend government supports for those who need them.

In this context, the pitch will be persuasive to many today. However, as interest rates rise, so will concerns about the dangers of unsustainable debt. Can Canadians’ anxiety about the fiscal situation be assuaged? They may be encouraged to see a ‘fiscal anchor’ tied to reducing debt as a share of the economy but concerned about the absence of any specific target for eliminating the largest deficit in history.

The meaning: Can we regain confidence in government?

Freeland, the country’s first female finance minister, was an important messenger for a country experiencing the crisis in uneven, inequitable ways. While political speeches — including this one — are not known for humility, she struck the right tone at some moments, speaking directly to seniors, and to families who had lost elderly relatives: “I am so sorry. We owe you so much better than this.”

Tone matters. Research tells us that at times of crisis, tone is often more influential on anxious audiences than content or visuals. What tone do leaders need to use now? Success means being humble, sober, realistic, action-oriented and collaborative – not preachy, partisan, cloying or self-congratulatory.

As a whole, both the budget and the government can be seen as action-oriented and collaborative, if not humble and sober, and striking a reasonable balance between realism and idealism.

The budget is an unrepentant endorsement of activist government. A generation ago, amidst an earlier debt crisis, a previous Liberal finance minister, Paul Martin, made the case for a more focused federal government that would “do what only government can do best, and leave the rest for those who can do better.”

As the pandemic rages on, this budget comes at a time of great stress and great need. But amidst rising anger about the glacial pace of vaccinations and the inconsistent approach to public health restrictions, the budget also comes at a time of rising skepticism about government as a source of competent protection and sound guidance.

Reversing this trend will require a consistently more subdued tone, an acknowledgement of hard lessons learned, less conflict and more collaboration between governments, and a coherent strategy not just for outbound communication, but for genuine engagement between citizens and governments.

Do leaders understand the need to rebuild public trust, confidence, satisfaction and the sense that citizens are being heard — the elements of our very relationships with those who govern us?

Beyond the budget, the answers to these questions may be the most urgent, long-term communication challenge of all.

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