A savvy but short-sighted political budget

Posted on March 23, 2011 in Governance Debates

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TheStar.com – opinion/editorialopinion
Published On Tue Mar 22 2011.    By Carol Goar, Editorial Board

Jim Flaherty’s sixth budget is a cleverly crafted political document. It has just enough restraint to convince fiscal hawks the Conservatives can tighten belts in Ottawa. It offers just enough help to low-income seniors, homeowners and middle-class families to exceed the low expectations the finance minister set. And it contains nothing to irritate Canadians who don’t care what’s going on in Ottawa.

For those who do care, it is a stark reminder of how much Canada has changed under Prime Minister Stephen Harper. The old “Canadian way” — sharing the risks and benefits of nationhood — has given way to a new imperative: warding off threats at home and abroad. This means pouring public money into crime suppression and national security, while cutting or freezing virtually all other programs.

As an election blueprint, Tuesday’s budget stacks up rather well.

As a strategy to use the $249 billion in taxes Ottawa will collect this year to solve national problems and improve people’s lives, it fares less well.

On the positive side:

The budget affirms that the economic recovery, which looked shaky last summer, is firmly underway. Even those who aren’t benefitting have the hope of better days ahead.

It shows that the deficit is shrinking. The government is on track to eliminate it by the end of 2015. Most Canadians, regardless of political allegiance, want to get back to a balanced budget.

For the first time, Flaherty has tabled a budget that keeps the growth of government expenditures below the projected rate of inflation. Fiscal conservatives needed proof that the Harper government could rein in federal spending. (Those who look closely won’t find much retrenchment. Most of the savings will come from the phase-out of Ottawa’s stimulus program and the closing of several tax loopholes).

It provides tightly targeted benefits to the poorest seniors in the country, parents who enrol their children in arts programs, homeowners who retrofit their residences, family caregivers, volunteer firefighters and medical graduates who work in remote and rural areas. Although they are modest and widely scattered, they will take the sting out of accusations that the government is heartless, doesn’t care about the environment and doesn’t listen to Canadians.

And it deftly steals policies from both the Liberal and NDP platforms. The Conservatives’ new caregiver tax credit is a cheap version of the Liberals’ family care plan. Its pension top-up for the country’s 600,000 most impoverished seniors is a low-cost adaption of the NDP pledge to increase the guaranteed income supplement, which goes to 1.8 million low-income seniors.

The budget won’t entirely satisfy anyone, but it covers a lot of bases.

On the negative side:

The budget does nothing to address the widening gap between rich and poor. In fact, it will probably exacerbate the trend, putting a large share of the nation’s wealth into the hands of corporate executives and highly skilled workers.

It overlooks those stuck at the bottom of the economic ladder. New immigrants and members of racial minorities are increasingly ghettoized in precarious, low-paying jobs.

It pays little heed to the bread-and-butter issues 3.5 million Canadians face: a shortage of jobs that pay a decent wage, a shortage of affordable housing, a shortage of child care and an inability to save enough for retirement. The signs of stress are everywhere. Food-bank use is climbing. Construction of subsidized housing has ground to a near halt. A chronic underclass is developing.

It offers no support for charities overwhelmed by the swelling demand for assistance. At a time when both individual and corporate donations are falling, Flaherty could have encouraged Canadians to give more by increasing the tax credit for charitable donations. He didn’t.

And it does nothing to alleviate concerns about the cost of locking up many more young offenders, a strategy that has proved so expensive in the U.S. that many states are abandoning it.

The bottom line:

It is a prudent, election-ready budget that will ruffle few feathers. The only significant risk is that a majority of Canadians will decide their tax dollars have become so disconnected from their values that they can no longer tolerate the Harper government.

It is gamble the Conservatives are clearly willing to take.

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