Trudeau to Unveil New Budget on March 19 Ahead of Fall Election

(Bloomberg) -- Finance Minister Bill Morneau’s pre-election budget will be unveiled on March 19, as the Canadian government looks to dangle new program spending ahead of a vote this year.

Morneau announced the budget date in parliament Wednesday. He has signaled it will include new prescription drug coverage and measures aimed at younger homebuyers.

He and Prime Minister Justin Trudeau don’t have much leeway to roll out new spending without ballooning the deficit, since slower-than-expected growth has eaten up any wiggle room, National Bank of Canada said in a report last month. A slump in Canadian crude oil prices late last year will take a bite out of revenue.

“It’s really important for us to continue to be fiscally responsible,” Morneau told reporters in Ottawa, adding that priorities will include skills training and making millennials “see some optimism” in the housing market. He said it’s important to address the costs of some “very expensive” pharmaceuticals and a system that doesn’t offer all Canadians drug coverage.

A fiscal update last fall already announced C$14 billion ($10.6 billion) in corporate tax breaks over six years, at a time when government revenues were rising. The budget will be the most detailed picture of federal finances since that update, which projected an C$18.1 billion deficit for the current fiscal year, and a cumulative deficit of C$76.8 billion, including an annual risk adjustment, over the following five years.

Trudeau campaigned in the 2015 election on balancing the budget by now. The government has since said its fiscal focus is lowering the ratio of debt to the economy, rather than balancing the budget.

Morneau last year launched a review of drug coverage with the aim of creating a pharmacare strategy to cover what he called “gaps” in the current system, which relies on coverage from governments, private insurers and patients paying out-of-pocket. The latter group accounts for about C$3.6 billion in annual spending, the country’s budget watchdog has said.

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