Morning Update: Federal budget earmarks $56-billion in new spending, higher taxes as critics fear it will push inflation higher

Good morning,

The federal government’s 2022 budget plan outlines more than $56-billion in new spending over six years as part of a package Finance Minister Chrystia Freeland says will boost innovation and green technology, but some economists say falls short of a long-term growth agenda.

Framed by the government as a strategy to grow the economy and make life more affordable, the budget includes $5.3-billion to run a national dental care program for low-income people, the creation of two agencies focused on attracting private investment in Canada and billions for housing and defence, report The Globe’s Bill Curry and Robert Fife.

The minority Liberal government is facing increased criticism from Bay Street, with some bank CEOs expressing concern over Ottawa’s approach to economic and fiscal matters. At the same time, the Liberals have agreed to implement several NDP priorities – such as dental care – as part of a parliamentary co-operation agreement reached last month.

In his analysis, The Globe’s Patrick Brethour reports that the Liberals correctly diagnose the economic woes that Canada faces: intensifying global competition for capital and a persistent lack of private-sector investment. The government even gives a nod to a recent report from the Organization for Economic Co-operation and Development that places Canada dead last in potential economic growth through to 2060. But the government, he writes, is not proposing any policy shakeup that would alter the projection of Canada’s last-place standing in that critical economic race.

More coverage:

• The highlights: What you need to know about the 2022 budget; how it affects home buyers and consumers
• Housing: Budget targets foreign buyers, promises to double the pace of home building
• Climate: Liberals banking on energy transition as key driver of economic growth
• Health: Federal budget includes $5.3-billion for dental coverage plan, but few details on pharmacare
• Indigenous housing: Liberals earmark $4-billion to improve housing in Indigenous communities
• Defence: ‘Very modest’ spending boost for defence in budget 2022
• Ukraine: Ottawa to offer Ukraine $1-billion loan to assist war-torn economy
• Financial institutions: Ottawa’s tax on banks and life insurers to deliver $6.1-billion over five years, 40 per cent less than Liberal campaign pledge
• Innovation: Ottawa unveils $3-billion in new spending on innovation to address Canada’s chronic weaknesses in productivity, R&D and investment
• Small businesses: Minor tax break for small businesses, but no action on credit-card fees
• Listen to The Decibel: Behind the scenes of the federal budget lockup

Opinion:

• John Ibbitson: Federal budget hits mark with enough funding to meet record-setting immigration levels
• Kelly Cryderman: Liberal 2022 budget has a before-the-war feel as Ottawa abandons oil-industry lifelines
• Robyn Urback: Chrystia Freeland’s 2022 federal budget is a political instrument as much as an economic ledger
• Konrad Yakabuski: Chrystia Freeland’s federal budget is a missed opportunity
• Rob Carrick: Liberals stake their reputation as inflation-fighters on help for home buyers

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Inside prosecutors’ efforts to gather evidence of war crimes in Bucha

Shortly before noon on Thursday, Ruslan Kravchenko strode down a gravel alley lined with dozens of spent 100-millimetre shells. Ahead, a body lay face down. A mine disposal team attached a long strap, slowly dragging the corpse roughly three metres, an exercise to ensure it had not been rigged with explosives.

Then Kravchenko approached. A former military prosecutor, he now leads the prosecutor’s office in Bucha, the town on the outskirts of Kyiv that has become synonymous with the brutality of the Russian invasion. The work of his office will prove critical to Ukraine’s bid to prove that Russia has committed war crimes here., reports The Globe’s Nathan VanderKlippe. Moscow has denied any wrongdoing.

Prosecutors have already assembled 84 pages of names of Russian soldiers who they say were in the area. Now, they are working to connect those names to pictures and then to match them with evidence from witness accounts, CCTV footage, satellite imagery and intercepted phone calls – all in hopes of turning civilian deaths into cases strong enough to prosecute in court.

More coverage:

• Russian rocket strike on east Ukrainian rail station kills scores of evacuees. Follow our live updates
• Higher food prices from Ukraine war will push up to 47 million people into acute hunger, UN says
• How the U.S. plans to starve Russia’s ‘war machine’
• Kyiv mayor pleads for more defensive aid in address to Toronto City Council
• UN refugee chief warns Ukrainians may need permanent resettlement if Russia’s war drags on

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ALSO ON OUR RADAR

U.S. Senate confirms first Black female Supreme Court justice: Ketanji Brown Jackson, a 51-year-old appeals court judge was confirmed 53-47, mostly along party lines but with three Republican votes. Her confirmation as the first Black female justice shatters a historic barrier and gives President Joe Biden a bipartisan endorsement for his effort to diversify the court.

Canadian set to make history in commercial flight to space station: Montreal businessman and philanthropist Mark Pathy is set to lift off in a Space X capsule that will take him, along with three crew mates, to the International Space Station on Friday morning at 11:17 ET. The trip will be the first fully commercial mission to the station.

Wearing masks could help Ontario ease ‘tidal wave’ of COVID-19 cases, adviser says: If Ontarians resumed wearing masks indoors for a few weeks, a “tidal wave” of COVID-19 cases could quickly recede, says Dr. Peter Juni, who leads the province’s scientific advisory table.

MORNING MARKETS

European shares rebounded on Friday but world stocks were still on track for their first weekly loss in four weeks as the prospect of aggressive global rate hikes and geopolitical risks rattled investors. Global risk appetite declined during the week as minutes from the Federal Reserve and European Central Bank showed policymakers are set to ramp up efforts to rein in inflation. The MSCI world equity index, which tracks shares in 50 countries, was up 0.2 per cent but for the week was down 1.3 per cent. The Canadian dollar was trading at 79.40 US cents.

WHAT EVERYONE’S TALKING ABOUT

How many more people will become the ‘Ghosts of Afghanistan’?

“... There are different rules for journalists, women’s rights leaders and other activists who have no ties to Canada. (Though in fact their ties run deep, fighting for rights in a country devastated by a war in which Canada and other Western nations played a huge role.) They are supposed to somehow make their way out of Afghanistan and get sponsored by what Ottawa calls “referral partners,” international NGOs that are already overwhelmed.” Julian Sher

The owners of luxury superyachts can sail, but they can’t hide

“It’s not just the Russians who are weathering a storm: Wealthy yacht owners have found that even the vast stretches of the ocean don’t isolate them from public rage.” - Elizabeth Renzetti

TODAY’S EDITORIAL CARTOON

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LIVING BETTER

Consider new ideas coming from greater RRSP savings

Contributions to RRSPs increased 13.1 per cent in 2020 over the prior year, according to Statistics Canada, and the number of contributors increased 4.9 per cent. What should Canadians do next, now that they’ve given their RRSPs a shot in the arm? Tim Cestnick offers some ideas for consideration.

MOMENT IN TIME: April 8, 1820

Venus de Milo statue discovered

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One of art history’s most significant sculptures, the Venus de Milo, was found by a farmer digging for marble building blocks on Milos, an Aegean island between mainland Greece and Crete. The peasant had been removing stones around an ancient wall when he happened upon the top half of a statue of a woman, missing her arms. By chance, an ensign in the French navy, Olivier Voutier, saw the farmer struggling with the massive piece of stone and went to help. The two men continued to dig, eventually finding the lower half of the torso a short distance away. Voutier, who had an interest in antiquities and recognized its potential worth, convinced his superiors to purchase the statue (for a modest sum). In 1821, it arrived in France and was deemed a masterpiece from the Greek Classical era. Scholars now believe, however, that Venus de Milo hails from the Hellenistic age, and was carved by artist Alexandros of Antioch, about whom little is known. Venus de Milo was presented to Louis XVIII, who then donated it to the Louvre Museum, where the Greek beauty continues to enthrall audiences today. Gayle MacDonald

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