Canadians' Reaction to the Federal Budget

Canadians give the new federal budget "two thumbs up", believing it will benefit the country's economy overall. And when given a choice as to what the federal government should do with any "extra money" in light of being ahead of its original deficit reduction targets -- put it towards health care/education, job creation, the deficit, or a tax cut -- only one in ten Canadians opt for tax relief. These results emerged from a post-budget National Angus Reid/Southam News Poll conducted among a representative cross-section of 1,500 Canadians between February 19th and 24th, 1997.

The Liberals' recent budget receives an overall endorsement from a solid majority of Canadians. The public tends to be satisfied with the overall spending increases included in the budget, including the new child tax benefit for poor and lower income people. Canadians expect the budget to have a positive impact on the international investment community's confidence in the Canadian economy and on the national economy overall -- indeed, in the wake of the Liberals' new budget, Canadians' outlook for the economy continues its gradual improvement. Significantly, however, the public expects this budget will have virtually no impact on the unemployment situation or on their personal financial well-being, and many believe it will have an adverse effect on the quality of social programs and on the prospects for those in tough financial circumstances.

On the political front, this post-budget survey finds the Liberals holding on to their wide lead in popular support. Underlining the Liberals' continuing goodwill among voters, fully one-half of Canadians report heightened confidence in the federal government's ability to manage the economy as a result of the new budget, and almost one-half pick the Liberals as the party which they believe would do the best job of managing the economy.

The highlights of the poll results are as follows:

Overall Assessment

Nearly six in ten (58%) Canadians surveyed in this post-budget sounding said they believe the federal government is "on the right track" with the overall approach they have taken with this budget, compared to one in four (25%) who felt they are "on the wrong track". (Eighteen percent of survey respondents were unable to offer an overall assessment of the new budget.) (Table 1) This positive appraisal is similar to Canadians' overall reaction to last year's budget, but is somewhat less favourable than the public's assessment of the 1995-96 budget. (Table 6)

Regionally, the federal budget received a broad endorsement from a majority of respondents from all major regions of the country -- especially Atlantic Canada (66% right track) -- with the exception of Alberta (45%, though still a large plurality).

Across other population groupings, a majority of survey respondents from all major socio-demographic segments of the population gave a "thumbs up" to the overall direction of this budget. Regarding political orientation, a majority endorsement was provided by supporters of all major federal parties except Reform (39% right track, 40% wrong track) and the New Democrats (45% versus 38% respectively).

The Budget's Spending Increases

With respect to the overall spending increases included in this budget, close to one-half (46%) of surveyed Canadians said they are at "about the right level", while equal numbers felt the spending increases are "too much" (15%) or "not enough" (16%). (One in five -- 22% -- were unsure.) Those most likely to say the budget did not increase spending enough were respondents from the smaller provinces -- Atlantic Canada (32%) and Manitoba/Saskatchewan (28%). Meanwhile, those most inclined to feel the budget's spending increases are excessive were Quebecers (23%, with this figure driven largely by current BQ supporters). (Table 2)

In terms of the federal budget's new $600 million child tax benefit for poor and lower income Canadians, one-half (49%) of those polled viewed this measure as "about the right amount" of effort on this front. Most of the remainder, however, were more inclined to say this represents "too little" (31%) rather than "too much" (11%) effort in this area. That the budget's child tax benefit represents inadequate federal government attention to this issue was a view most likely to be held by respondents from the Atlantic region (a plurality of 43% opted for "too little") and Quebec (37% -- again, BQ supporters fuel this figure). (Table 2)

Canadians' Preferred Option in Light of Being Ahead of Deficit Reduction Targets

Surveyed Canadians were asked which of four broad options they would prefer the federal government to take in light of the government being ahead of its original targets for reducing the deficit. One in three (34%) chose "meet the original deficit target and put any extra money towards health care and education", and a similar number opted for "meet the original deficit target and put any extra money towards job creation" (34%). About one in five (21%) felt the federal government should "stay ahead of the original deficit target and put any extra money towards further reducing the deficit". The least popular option was to "meet the original deficit target and put any extra money towards a tax cut for all Canadians" (9%). Similar preferences emerged from an October 1996 sounding. (Table 3)

The public's preferences vary significantly across regional lines. Applying any 'extra money' towards health care and education was the most favoured approach among a plurality of those surveyed in Manitoba/Saskatchewan (42%), Alberta (38%) and Ontario (38%). On the other hand, putting any extra money towards job creation was the preferred option among a majority (54%) of Quebecers as well as a plurality (40%) of Atlantic Canadians. Meanwhile, surveyed residents of British Columbia were divided between allocating the extra money to health care/education or to the deficit. The proportion choosing the tax-cut option ranged from 7 percent in Manitoba/Saskatchewan to 12 percent in B.C. and Alberta.

Expected Impact on International Confidence and the Canadian Economy

Fully one-half (51%) of surveyed Canadians said they expect this budget will have positive results in terms of international investors' confidence in the Canadian economy, the most favourable anticipated impact of seven areas examined in this poll. (Table 4)

Regarding the budget's effect on the Canadian economy as a whole, 41 percent of respondents expected this budget will improve the national economy rather than hurt it (12%). This 29-point spread is more favourable than was recorded in 1995 (a gap of 25 points) and especially in the wake of Paul Martin's first budget in 1994 (34% expected the budget to improve the economy versus 22% who expected it to make the economy worse, for only a 12-point spread). (Table 6)

Relatedly, this post-budget sounding finds that Canadians' outlook for the national economy continues its very gradual improvement. Four in ten (41%) respondents said they expect the Canadian economy to improve during the coming year -- up marginally (2 points) from January -- versus 16 percent who envisioned a downturn. Another four in ten (42%) predicted the status quo will prevail on the national economic front. (Table 5)

Surveyed Canadians were divided as to what impact the budget will have on the economy in their own region (21% felt their region's economy would benefit, 19% expected adverse effects), with one-half (52%) predicting no impact. (Table 4) Still, these expectations are more positive compared to two years ago when Canadians felt the 1995-96 budget would hurt their regional economy by almost a two-to-one margin. (Table 6) Atlantic Canadians are the most likely to believe that their region's economy will be negatively affected by this recent budget (33%).

The public is also split as to whether this budget will make the unemployment situation better or worse (21% and 23% respectively); one-half (48%) expect no impact either way. Nevertheless, this represents a marked improvement compared to two years ago when a clear majority (57%) expected the 1995-96 budget to have a negative effect on the unemployment situation. Again, those most likely to feel this budget will worsen the unemployment situation are residents of Atlantic Canada (33%).

Expected Impact on Personal Financial Situation

In terms of this budget's expected impact on their own personal financial situation, most surveyed Canadians -- 61 percent -- felt they will not be affected either way. By almost a two-to-one margin, those predicting they will be worse off due to this budget outnumbered those who expected they will be better off (22% versus 12%) -- this margin was wider still among Atlantic Canadians (32% worse, 13% better). (Table 4) However, expectations on this front were more negative for the Liberal government's earlier budgets. (Table 6)

Expected Impact on Social Programs and the Poor

Canadians' expectations of this budget's impact over the coming year are least favourable on the social front. One in three (32%) of those surveyed said they expect the quality of our social programs to be hurt by this budget, nearly twice as many as felt this area will benefit (18%); a plurality of 40 percent anticipated no impact. (Table 4) However, these expectations represent a considerable improvement compared to two years ago when a majority (57%) of polled Canadians expected social programs to suffer as a result of the 1995-96 budget. (Table 6)

By a two-to-one margin, survey respondents believed that the prospects for the poor, the elderly and those in financial trouble will be worse (37%) rather than better (19%) as a result of this budget; roughly one in three (36%) expected no impact either way. Again, this represents a less critical assessment than that received by the 1995-96 budget (52% expected that earlier budget to hurt these groups in Canadian society).

Politics and the Budget

The federal Liberals emerge from this post-budget sounding with 46 percent of the decided popular vote, up a single point since January. The Charest Conservatives remain in second place with 17 percent of the decided vote, down 2 points from their post-election high of 19 percent last month, but still ahead of their 16 percent level of support in the 1993 federal election. Reform is up 1 point to 12 percent; the Bloc Quebecois also gains a point to reach 12 percent nationally (46% in Quebec); the NDP is also up a single point to 11 percent; and all other parties combined garner 2 percent of the decided vote. (This poll finds a total of 13% of voters currently undecided/refused or not sure they would vote in a federal election -- a figure which was 18% before a follow-up "leaners" question.) (Table 7A & Table 7B)

The Chretien Liberals have gained at least some ground in all regions except Alberta, where a 9-point drop puts them in a tie with Reform (30% and 31% respectively). In Quebec, the Liberal gain of 3 points (to 40%) is outshone by a 5-point rise in the Bloc Quebecois' support to 46 percent, the BQ's best showing since last October. The Charest Conservatives, who had risen to a post-election high of 19 percent of the decided vote in January, have since seen their numbers dip in all regions except Alberta (up 10 points to 27%) -- they are back to single digits in British Columbia and Quebec. The Reform party, while dipping slightly in Alberta, has either held steady or gained strength in every other region -- particularly in Manitoba/Saskatchewan, where its numbers have doubled since January to 21 percent in this late-February sounding. Results for the New Democrats are mixed, with slight gains in Alberta and Ontario, but down in Manitoba/Saskatchewan.

Canadians also report they are now more confident in the federal government's ability to manage the economy. Better than one-half (52%) of those surveyed said their confidence has improved (8% a lot, 44% a little) -- ranging from 42 percent in Alberta to 59 percent in Atlantic Canada -- which is double the number who indicated their confidence has worsened (27%). (Table 8) The proportion of Canadians reporting heightened confidence in the federal government's ability to manage the economy is higher than the 44 percent recorded last year, is comparable to the 56 percent measured in 1995, and is much higher than the figures recorded in the mid to late 1980s for the Mulroney Conservative government. (Table 6)

Asked which of the major federal parties would do the best job of managing the economy, almost one-half (46%) of surveyed Canadians picked the Liberals: the Liberals were the top choice in all major regions of the country, ranging from 37 percent in Alberta to 50 percent in Ontario. The other major parties were less popular choices: Progressive Conservatives (11%); Reform (10%); New Democrats (6%); and the Bloc Quebecois (5%). In a mid-September 1993 survey, just before the last federal election, the Liberals trailed the Conservatives on this question (24% and 33% respectively). (Table 9)

---

This National Angus Reid/Southam News Poll was conducted by telephone between February 19th and 24th, 1997 among a representative cross-section of 1,500 Canadian adults.

The actual number of completed interviews in each region was as follows: B.C. - 200; Alberta - 135; Manitoba/Saskatchewan - 120; Ontario - 525; Quebec - 400; Atlantic - 120. These data were statistically weighted to ensure the sample's regional and age/sex composition reflects that of the actual Canadian population according to the 1991 Census data.

With a national sample of 1,500, one can say with 95 percent certainty that the results are within ±2.5 percentage points of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population.

---

For more information on this news releases, please contact:

John Wright
Senior Vice President
Angus Reid Group
(416) 324-2900

Darrell Bricker
Senior Vice President
Angus Reid Group
(613) 241-5802