More than a budget, this a blueprint to make over Canada

TheStar.com – opinion/editorialopinion
Published On Thu Mar 29 2012.   By Carol Goar, Editorial Board

In principle, Finance Minister Jim Flaherty is right. Canada must adjust to the demographic reality that it is an aging nation with a shrinking workforce.

In practice, his government has begun the process badly. It sprang a series of upsetting surprises on Canadians, disrupting their plans and pitting generations against each other.

The finance minister rectified some of the damage with Thursday’s budget. He provided a rationale and a road map for some the changes that will unfold in the next few years.

He also put an end to the debilitating speculation caused by Prime Minister Stephen Harper’s vague announcement in January that the government was poised to constrain the growth of Old Age Security (OAS), the country’s basic retirement support program. Canadians know that, starting in 2023, the retirement age will be pushed back to 67. They’ll either have to work longer or save more to finance their non-earning years.

Finally — and most importantly — Flaherty confirmed what has been hanging in the air for months. Deficit-cutting is no longer the Conservatives’ real goal. The Prime Minister intends to use his parliamentary majority to redefine the role of government and rewrite Canada’s social contract.

It would have helped to know all this before last year’s election. But Harper never said a word about reducing the government’s commitment to Old Age Security, capping Ottawa’s contribution to medicare or loosening environmental regulations. He never told Canadians a Conservative government would keep paring public services after the budget was balanced.

All of this, according to Flaherty, is necessary to promote economic growth, create jobs and “make sure our social programs are sustainable in the long-term.”

His budget provides the first comprehensive look at the Harper government’s long-term agenda:

• Ottawa will no longer invest in scientific discovery. It will require government labs to switch to commercial research aimed at improving business productivity. Science and Technology Minister Gary Goodyear has hinted at this shift in priorities for some time. Now it is official.

• At the same time, the government will move from tax credits — popular but ineffective — to direct grants to business that invest in economically productive innovation.

•  It will cut off environmental reviews of major resource projects after 24 months of hearings. This formalizes Energy Minister Joe Oliver’s vow not to let “radical groups” block crude from Canada’s oilsands.

• It will become much more selective about the immigrants it admits, picking newcomers who are young, adaptable and already have the skills to help transform Canada into an “energy superpower.” Those already in the backlog will be removed if they don’t qualify. Minister Jason Kenney has been telling Canadians that the “system is broken” for some time, without saying how far he intends to go to fix it. Now his objective is clear.

• The federal government will cap its share of health spending in 2017, forcing the provinces to either rein in costs or come up with more money themselves. Flaherty stunned his provincial counterparts in December when he announced Ottawa’s intention to reduce the growth of federal health transfers from 6 per cent to about 3 to 4 per cent (the new rate will be pegged to inflation and economic growth). Now he has locked it into Ottawa’s financial plan.

• And the role of government in people’s lives will continue to shrink. They’ll have to lower their expectations, save more, demand less and stop looking to Ottawa to shield them from the rigours of the marketplace.

Is this the realization of the Harper vision?

It certainly has elements of that, although it falls short of the hard-right agenda he articulated before he became Prime Minister.

Is it a pragmatic response to the challenges Canada faces?

It has elements of that, too. Curtailing the escalation of health spending was necessary. So was getting government-funded research out of the lab and onto the shop floor.

Is it a blueprint to remake the economically diversified, socially progressive Canada that past generations have built?

Categorically yes. That is the real story

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