Unbalanced budget: Does it show 'prudence' or a 'nightmare scenario?'

The Liberals' first federal budget may be a $30-billion bet that big spending will lead to big growth, but Finance Minister BillMorneaufeels confident thattaking therisk will stimulate the economy and pay off in the longterm.

"When you think of it as spending, I'm really not on the same page. I think of it as an investment in the future,"Morneautold host Chris Hall in an interview on CBC Radio'sThe House.

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"Yes, we're making investments that are going to make a difference, and yes, some of them are going to be continuing, but it's going to get us to a higher growth rate."

Morneau'sbudget predicts deficitsover the next five years and beyond to finance a new tax-free monthly child benefit, more money for First Nations, infrastructure spending and extended employment insurance benefits to hard-hit regions.

But he maintains that spending for stimulus can be done in a fiscally prudent way, and that balancing the books remains the ultimateobjective.

"Balancing the budget matters because over the long term, we need to live within our means.With the growth that we're anticipating, in about five years we should be able to get back into balanced budgets," he said.

But there's a caveat,Morneauadded.

"That's not a precise estimate, because we are aiming to increase growth in order to get there. We believe it's the right thing to do."

Procurement topromote innovation

One of the ways the government will try to stimulate growth will be to focus on innovation. Part of the Liberals' strategy to strengthen the innovation sectorwill be for Ottawa to deal more with Canadian entrepreneurs, according Navdeep Bains,the minister of innovation, science and economic development.

"How do we use government procurement?" BainstoldThe Housein aseparateinterview.

The House10:35Interview - Navdeep Bains

Innovation, Science and Economic Development Minister Navdeep Bains discusses Budget 2016.

"If there's a good idea, if there's a small company in Canada, if there's an entrepreneur that has an idea, I think the government should do business with that person. Because when that person goes abroad, wants to go global or deal with other businesses, they always ask the question: Are you doing business with the government?"

Bains also said that the Liberals listened to entrepreneurs when they chose to disregard an election promiseto increase taxation of stock options.

"We're not proceeding with the changes to stock options," he said.

"It's something that we realized from our conversations, in terms of growing the economy, it is a legitimate vehicle and means to be able to help companies start up and grow."

Tories call budget a 'nightmare scenario'

Interim Conservative Leader Rona Ambrose says she doesn't buy that explanation, nor is she happy with the choice to keep the small business tax rate at 10.5 per cent,calling the 2016 budget a "nightmare scenario" for Canadian taxpayers and small business owners.

"[The Liberals] broke that promise to small businesses. Now if you couple that with the EI increases and CPP payroll increases, this is a hit to small businesses," Ambrose said onThe House.

She pointedto the loss of tax credits like the child fitness tax credit as well as the rolling back of the Conservatives' increase fortax free savings account limitsas additional tax hikesfor Canadians.

The House10:58Interview - Rona Ambrose

The interim leader of the Conservative Party, Rona Ambrose, outlines her issues with the latest federal budget.

Morneaudefended his decision to back away from the campaign promise to lower the small business tax rate to nine per cent.

"What we believe is the thing that a small business needs most is a strong and growing economy," he said.

"I'm someone who has spent a career in business, and when a businessperson wakes up in the morning, they're worried about a growing economy so they can have the opportunity for their business."

Morneaualso refused to speculate on whether his government would potentially cut the tax rate at some point over the rest of the mandate.

"We are going to each year put forth a budget that reflects our view of where the economy is at that particular time," he said.

"We are proud of what we did this year, and that's where we're at."

Road map to getting back to balance?

Ambrose said the 2016 budget doesn't have a clear road map showing how the government will get back to balance.

"[Morneau] says five years, but there isn't actually a plan showing, OK, this is where we're going to save, this is how we're going to do it, this is the plan to get back to a balanced budget, and that's important because what it signals to everyone is that taxes won't go up any further."

Ambrose added she's concerned about other "big ticket items" the Liberals promised but that didn't show up in the budget.

"If those promises like a health-care accord aren't in there, how much more will taxes have to go up to make sure [the Liberals] can actually implement those promises? A balanced budget just seems like a fantasy right now."

NDP question prudence of budget

NDP Leader Tom Mulcairshocked Canadians during the election campaignwhen hepromised four straight years of balanced budgetsif elected.

The House8:44Interview - Tom Mulcair

NDP leader Tom Mulcair talks about the latest federal budget and his party's upcoming convention.

He told Hall the NDP would have sought to balance the budget by looking to increase revenue with corporate tax hikes, while still being able to offer universal pharmacare and child care.

"I think the smart way to ensure the long-term stability of your social programsis to make sure everyone pays their fair share of taxes, including corporations," Mulcair said.

"You don't hesitate to go into debt if the situation requires, but as a general rule, the best way to ensure those programs are there long term is to be a good prudent public administrator."

It's the question of prudence thatMorneauhimself keeps coming back to, saying the Liberal fiscal brand previously defined by former prime minister Paul Martin's balanced budgets as finance minister in the 1990s remains the same.

"We are going to maintain a level of prudence, and that is something I will be watching for during my time in this role, but we're recognizing that right now, Canadians asked us to invest in the economy. That's what we're going to do."