Call it a pre- pre-election budget. A few goodies here, a few tweaks there, with the big emphasis on showing a surplus in 2015. An election year, but that’s just a coincidence.
For 2014, Finance Minister Jim Flaherty rolled out what he called a boring budget. It features some of the boutique tax breaks the Conservatives have come to love, targeting those voters they think will pay dividends. There’s some more money for education and research, with a particular, and overdue, emphasis on aboriginal communities. A bit of mostly meaningless attempts at appeasing teleco consumers. A smattering of tax relief. Not surprisingly, the no-new-taxes refrain was highlighted.
Also bound to be popular is a pledge to cut spending by reducing the entitlements among public sector workers, to the tune of $7.4 billion. Wage caps, sick days and benefits are on the table as the government goes into labour negotiations.
Spending cuts top the Conservatives’ agenda. Various analyses show this budget contains the largest annual cuts yet implemented.
The Canadian Centre for Policy Alternatives (CCPA) says there are $14 billion worth of spending cuts announced in previous budgets that will come into effect this fiscal year.
Little in the budget is aimed at helping those who need it most, reducing the assault on the middle class or making the economy more equitable.
Despite the government’s claims, it has done little to help a weak economy, nor to help the unemployed, the CCPA maintains, with only one in five of those who came off unemployment rolls since September 2009 finding a job, while four of five gave up looking.
As the anti-poverty coalition Campaign 2000 points out, the budget has no clear strategies to address Canada’s 14.3 per cent child poverty rate. The group is calling on the government to dedicate half of the $6.5 billion projected surplus for 2015 to poverty reduction this year.
Failing to address poverty adds up to a $86.1 billion annual price tag that is paid by Canadians, it argues. When government ignores poverty, there are significant lost opportunities for low-income children whose education, health and employment prospects are jeopardized by poverty. Noting that one in three children living in poverty has a parent who works full time, the group also calls for jobs programs to be at aimed low-wage workers in order to improve their earning potential. Likewise, there should be more in place to deal with the increasingly troublesome youth unemployment figures.
With a surplus on the horizon, talk has turned to the Conservatives’ pledge to introduce income splitting. Aimed at married couples with children under 18, the tax changes as now discussed would cost about $2.5 billion. Estimates show some 85 per cent of Canadians would not benefit from the practice, with most of the advantages going those with higher incomes – 40 per cent of the benefit to those earning more than $125,000 a year, for instance.
The criticism that has surrounded the idea since it was pledged in 2011 appears to be sinking in with Flaherty, at least, as he’s backed away from it in recent days. If forced to answer honestly, the government would have to admit the $2.5 billion would go much further if directed at those who really need it.
That would, however, involve the government putting what’s right and proper ahead of politicking. As such, don’t count on it ever happening.