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Budget 2021 prioritizes ‘care economy’

New federal budget takes into account lessons from COVID.

Part COVID response and part post-COVID recovery, the federal Canadian Budget 2021 resembles a long, expensive shopping list more than either a clear future vision or a blueprint out of a COVID-recession. 

The budget is organized under three themes: 1) Finishing the job against COVID-19; 2) Creating Jobs and Growth; and 3) A Resilient and Inclusive Canada. Readers might be surprised to find sections on early childhood and aging in the second section, next to support for businesses, climate policy and strengthening cities. This budget reflects what COVID has taught us: health and economics are intertwined. There is no economy without the care economy. 

Care economy

Early Childhood Learning and Care, the centerpiece of Budget 2021, is not a new or a quick fix. In order to “get it done this time,” as Finance Minister Chrystia Freeland says, the table is set with $30 billion over five years and $8.5 billion annually after that. The required agreements with every province, territory and Indigenous government will be a significant challenge. Plans to put the principles into legislation this fall could ensure that the program is child-centered and high quality, as well as affordable and accessible. It also means more rounds of debate about how best to support our youngest citizens and future workers. 

At the other end of life, additional funds for long-term care are linked to work with provinces on national standards of care. This responds to the public outrage over the past year about poor-quality care, and concern than tax dollars subsidize profits instead of quality care. 

In budget-related discussion, Freeland stated her own belief that non-profit delivery of care is preferable for vulnerable persons at both ends of life. Renewal of recognition and support for the role of the charitable sector fits with a revival of focus on the care economy and warrants more attention. So does explicit attention to equity and support for Black, Asian and other minority groups. This is a structural shift as well as a shift in funding, one of interest to Christian Courier readers. 

The budget also includes a new initiative to Age Well at Home and enhancements of Old Age Assistance for persons over 75 through a one-time $500 addition for COVID-related costs and a 10 percent increase in monthly payments. These measures may allow more elderly to age-in-place, which shows better outcomes. 

Funds to expand palliative care respond to calls by many faith-based organizations to invest more in palliative care, particularly during the debate on assistance in dying. Mental health, named as a priority by opposition parties, will see funding for innovative services for high-need, challenging groups, such as youth and Indigenous communities, and work toward standards of care for mental health services.   

For housing, new funds will speed up affordable housing and shelters for the homeless; the budget also includes a pilot program to address veteran homelessness

While the criticism of a spending spree is warranted, these examples illustrate that investments in the care economy address important gaps that citizen groups have flagged for years. Pharmacare, however, is still missing from the care economy agenda; it’s another long-standing gap. While provinces are sharply critical that there is no increase in broad health care transfers, the federal government earlier transferred funds for COVID-related health costs. There are important questions about how it is being spent. Some say we need to wait and consider what the health-care system will need, post-COVID. COVID has alerted citizens to the weaknesses of transfers without accountability in Canada, even while most people continue to support our federal system of government. 

Job Creation and Income Support

The extension of pandemic wage and rental support programs is likely welcome news for individuals, charities and churches who are using these programs to survive COVID-times. 

Budget 2021 adds more patches to the patchwork of job creation and income support programs. These range from incentives to hire young people, who have the highest rate of unemployment, to the extension of sick benefits under Employment Insurance. Growing public calls for a broad-based basic income program were rejected or postponed. Some of the patches could become part of future policies more attuned to the emerging shape of the future economy.

Green Growth

Investments in greening the economy range from loans for home retrofits to support for high-tech solutions, such as carbon capture. Many of these investments will be in Alberta and Saskatchewan, hard hit by the shift from fossil fuels. More details and more debate about the merits of various options will emerge after the U.S.-led global Climate Change summit, held in the same week as the budget. The greening of U.S. policies turns a trade disadvantage into a possible advantage for “clean” businesses. Since all political parties in Canada now accept the reality of climate change, and the courts have confirmed it is a national issue, future debates can focus on which measures will be more effective and more just.  


More funding for Indigenous Services holds potential for closing some of the big gaps that discriminate against our Indigenous neighbors, such as clean water and housing. Dollars alone fall short of reconciliation. Achingly slow response to the Truth and Reconciliation Calls to Action and the failure to table a National Action Plan to address Murdered and Missing Indigeneous Women mean that reconciliation is unfinished business. Funding for co-development of a plan to implement the United Nations Declaration on the Rights of Indigenous People could either make progress or further delay what most Canadians now understand as necessary for the future.

Fiscal Responsibility

Budget 2021 raises new/old concerns about annual deficits, long-term debt, sustainability, and passing costs on to the next generation. While two-thirds of the spending is short-term COVID-response, the huge deficit was reduced by more revenue than expected in 2020; this gives  some weight to future projections of return to more balanced budgets. Longer-term commitments raise concerns about too much or too little stimulus spending and the threat of returning to the debt-focused 1990s. The terms of the debate are shifting under Budget 2021 in important ways for Christians.

Cagle Cartoons.

This budget ends decades of belief in a neo-liberal approach to national economics. It ends the assumption that states should be hand-maidens of market-driven economic growth to create revenue and treat all other aspects of public life as secondary or unaffordable luxuries. It begins a more integrated approach to understanding what makes a successful economy. That includes sustainability and fiscal responsibility, but not on the old terms, because it recognizes that caring for others and the environment are economic goods as well as social goods. 

New Zealand is ahead of Canada with two years of using a Well-being based budget. It is not surprising that Canada’s first attempt is a mish-mash of both approaches, given how change happens in Canada. While many complain about the long 739 pages, the last chapter is the most interesting because it shows a different way of thinking about what actually creates good jobs and contributes to long-term economic and social well-being. Citizens who draw on Biblical teachings may find the new debate closer to their values, with more space to bring their priorities to the public table for discussion. 

Kathy Vandergrift, a public policy analyst, has analyzed every federal budget in the last decade from the perspective of impact for children, as part of advocacy for the rights of children.


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