Federal budget 2012: cuts to Elections Canada, environmental assessment, CBC
Finance minister Jim Flaherty announced the Conservative government's new budget today: highlights include 19,200 government jobs cut, less funding for CBC and the environment, and the end of the penny. New Democrat leader Thomas Mulcair had promised a fight over cuts -- and his reaction was swift.
"This budget attacks the very institutions that make Canada what it is,” Mulcair said in his reaction to the budget. “Conservatives want to balance the books on the backs of seniors who can’t retire with dignity, and families without a family doctor. New Democrats will hold them accountable for that."
This year's deficit is $21.1 billion. Rumours of an austerity budget rang true, but not as far as some had feared -- or others hoped.
Some key figures from the 2012-2013 economic plan:
- $5.2 billion in cuts every year until the 2015 election
- $31 billion reduced from provincial health transfers
- $377 million slashed from foreign aid and international development
- 19,200 federal jobs eliminated over three years
- $275 million more, as promised, for Aboriginal schools on reserve
- 10 per cent trimmed from CBC's funding over three years
- Elections Canada - currently in focus for its electoral fraud investigation - faces $7.5 million a year in cuts
- With the Afghanistan missing winding down, the Armed Forces saw the greatest losses of $1.1 billion by 2015 (but troop numbers are unchanged)
- RIP One Cent Coin - the lucky penny will be no more
- Environmental assessments of industrial projects (like the Northern Gateway pipeline) will be cut off after two years
- In 2023, Old Age Security's age limit will be delayed from 65 to 67
"We are free to choose our future," Flaherty said in his budget speech. "We have made our choice.
"Our government chooses prosperity, for all Canadians. We will take decisive action to ensure our economy will create good jobs and sustain a higher quality of life for our children and grandchildren. In this budget our government is looking ahead not only over the next few years but also over the next generation."
But for some advocates, the cuts proposed don't go nearly far enough – some on the right are decrying the Conservatives' new budget is not conservative at all. In fact, some are outraged that despite plans to balance the books by 2016, the Tories' spending has ballooned.
Not a conservtive budget
“This government is acting like a 'conservative' government in name only,” said Charles Lammam, the Fraser Institute's associate director of budget and tax policy. “Look at what it's done with spending over its tenure – it's ramped up spending massively.
“To call this government a conservative or fiscally disciplined government – the facts just don't square with that claim. Now they have a majority . . . (this is) their first real opportunity to change course, to get Canada back on the right fiscal track, so Canadians can sleep well knowing their government is finally getting their books back in order.”
To get those books in order, Lammam told the Vancouver Observer, Flaherty should act aggressively to reduce the deficit: end subsidies and tax breaks for companies (“corporate welfare”), slash bureaucrats' pay to private sector levels, reduce the public service on all levels.
“That's what all Canadians are looking for: the government needs to get its fiscal house in order,” he said.
Many commentators have referred the Conservatives' economic plan as an “austerity budget,” reflecting the tone of belt-tightening speeches reminding citizens of their obligations to future generations who will inherit our economy.
But Flaherty had, in contrast, referred to his government's cuts as “modest.”
Much had also been made of recent speeches lashing out at the environmental review regime, with natural resources minister Joe Oliver warning that companies are unfairly and arbitrarily burdened by the approval process for industry projects, and risk dying “on the vine.”
On the other end of the political spectrum, progressive economists are warning that spending cuts – the ubiquitous “austerity measures” so unpopular in Europe and the Global South – will only worsen an already-fragile economy.
Spending cuts not necessary
“None of these spending cuts are actually necessary,” said Seth Klein, the Canadian Centre for Policy Alternatives (CCPA) director in BC. “A balanced budget could be achieved just one year later than Flaherty's target, without inflicting any of the damage.
“The economy is really fragile right now – it's more or less stalled. Unemployment levels overall are back to where they were six months ago. The private sector's not investing. We look to the federal and provincial governments not to pile on more austerity in situations like that, but rather to step up to the plate and take things in a different direction.”
Last week, the CCPA released its own "Alternative Budget." Prominent among the left-wing think tank's recommended changes implemented by the government was a dramatic reduction in military spending, a Conservative cut that surprised many.
Earlier this year, the government announced its intention to slash $4 billion in spending, although it later offered hints that cuts may reach $8 billion. This budget ended up coming in at $5.2 billion in spending reductions.
For the Fraser Institute, the rumoured cut turned out to be only ripples in the fiscal pond.
“That speaks to how timid the proposed cuts are,” Lammam said. “(It) is small potatoes when you're looking at the deficit ($21.1 billion).
“It's just a fraction of the deficit. Moreover, if you look at (it) relative to their overall budget, it's even smaller.”
In the much-anticipated lead-up to today's budget speech, the NDP's new leader Thomas Mulcair vowed a “fight” if the budget was too drastic or hurt the middle class.
“Stephen Harper promised jobs and growth, but delivered reckless cuts," he said in a statement. "There’s nothing on jobs, nothing on inequality and nothing to strengthen our front-line health services.
"Mr. Harper is once again looking out for his friends, while he ignores growing inequality."