Toby’s Budget Notes

Harper “stimulus” budget falls far short

 

Faced with the prospect of losing their grip on power, the Harper government has made a big show of taking action to address the economic and financial crisis, but it still falls far short of what is needed to revive the economy, create jobs and protect the vulnerable.  In particular, the budget fails with any substantial measures to improve public services, help the poor, set a positive new course for the economy, or provide relief for the hundreds of thousands who are expected to become jobless over the next few years.

 

The budget includes dozens of new spending announcement targeted at every part of the country and different sectors of the economy and over a dozen new tax cuts. Some of these measures are positive, respond to real needs and to what CUPE and others have pushed for.  In particular, this includes promises of increased funding for infrastructure, for training and for Aboriginal Canadians.

 

But the promised funding for almost of these measures is temporary—for only two years—conditional on other funding, and is much less than what is required.  Under the “use it or lose it” rules, the funding for these programs may never be delivered, be cancelled, or returned “insufficient funds”.  This is a major problem because the impact of this economic crisis on workers and communities will last much longer than two years and so support will be needed further out.

 

Unfortunately, the budget doesn’t include any measures to increase access to Employment Insurance (which only 40% of the unemployed now receive) or EI benefit levels, nothing to strengthen public pensions, no funding for a national anti-poverty plan, and no significant increased investments in social needs such as early learning and childcare, social services or health care.

 

At the same time, ignoring the advice of virtually every economist in the country, the Harper government is charging ahead with broad-based personal income tax cuts that will cost about $2 billion a year and provide the greatest benefit to those with the highest incomes.

 

Hidden, but still included in this budget are the cuts to transfers, controls on program spending, weakening pay equity for federal employees and the privatization plans announced in Harper’s disastrous November Economic and Fiscal Update.  This includes limiting growth of transfers under the Equalization program and selling off over $10 billion in federal public assets over the next five years.

 

These limits on the growth of Equalization will mean reductions in transfers adding up to about $7 billion over the next two years, reducing the ability of provinces to provide deliver public services across the country.

 

The budget continues with the government’s misguided policies to force municipalities to consider public-private partnerships and other roadblocks to public investment in its flagship Building Canada Fund; and with its $1.25 billion fund to subsidize public-private partnerships, but doesn’t include further measures in this area.