A ‘steady’ budget

By Admin Wednesday February 12 2014 in Editorial
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The Harper Conservatives’ 10th budget was so unspectacular in its aspirations that it is possible many missed it, giving attention instead to Canada’s strong showing in the medal count at the winter Olympics taking place in Sochi, Russia.

 

This “steady as she goes” budget, which from appearances could be Finance Minister Jim Flaherty’s last, was not a grand plan, but Flaherty made clear the numbers point to the deficit as all but gone.

 

By the time the federal budget was fully released earlier this week Flaherty had already been making the rounds to let the public know what was to come. Thus the early complaints from this province’s Liberal government that transfer payments to Ontario would be down by $641-million, both sides as usual playing politics with the figures. Flaherty’s explanation is that Ontario’s economy has improved, automatically lowering its transfer payment requirements.

 

For her part, Premier Kathleen Wynne complained that the federal Conservatives were being unfair to this Liberal government. Still, one item that did receive approval from Wynne is the $500-million earmarked for innovation in the automotive industry, a key sector in this province.

 

Flaherty has made no secret of an expected $6.4-billion surplus by 2015-16. Any discussion on what to do with that surplus, however, will wait until next year when federal elections are due, which the Conservatives will use in their attempt to continue to hold onto power.

 

It is a cynical move, but not one that should surprise anyone who recognizes the way political strategizing routinely trumps the common good.

 

Flaherty repeated old promises as if they are new, including the centerpiece Jobs Grant Program that the Conservatives have been touting for some time, now set to begin on April 1. This program has met with resistance from a number of provincial governments because of fears it would result in funding cuts to provincially run jobs programs, but the feds are now set to go forward regardless.

 

Additionally, with a nod to the 16 per cent unemployment rate among young people, $40-million will go toward 3000 full-time internship jobs for post-secondary graduates over three years. That number, however, would be an answer to less than one per cent of young people needing a job. There would be another $25.2-million over the next two years for interest-free loans through a proposed Canada Apprenticeship Loan program to support training.

 

At the same time, the small business sector, the real lifeblood of our economy, sees no extension of the $1000 Employment Insurance hiring credit in this budget as well as no tax cuts and no tax relief for now.

 

One tax increase however is an old-fashioned sin tax. It’s hard to believe the Conservative would be relying so much on smokers to be the answer to that anticipated surplus but the $4 increase on a carton of cigarettes – as well as increases on other tobacco products – is expected to bring in more than $3-billion over four years. Even tobacco products bought at duty-free shops will be taxed.

 

Other goodies include a cap on domestic wireless roaming charges and legislation to end the price gap between goods sold in the United States and Canada.

 

While Flaherty played up this budget as one that works to retire any remaining deficit, what he did not say as clearly is that the Canadian economy is not currently as strong as we would all like it to be. No mention was made for instance of the plans to cut thousands of jobs from Canada Post, or of the thousands of jobs that are leaving the country, something we are well aware of in this province.

 

The emphasis therefore on deficit reduction, is coming at a cost of job growth and that makes the promise of a surplus disingenuous. Clearly, it is a political gamble the Conservatives are willing to take. It is hard to believe that an unpopular government would hope this ploy would work long enough to keep them in favour until the next election.

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