Canada is suffering from three crippling deficits – ecological, fiscal, and democratic. The Harper government 2010 budget fails to address any of the three, and, in fact, worsens them.
Proroguing Parliament to evade accountability, to shut down hearings into the Afghan detainee scandal, and to avoid any embarrassing questions into Canada’s Copenhagen performance was defended as “recalibration” of the government’s agenda. At the time, Andrew Coyne observed this excuse was “bilge” and bilge it is now proven to be. Nothing in the budget suggests mental exertion in applying any new thoughts to anything. Ned Franks, Queens Professor Emeritus in Political Science, suggested Stephen Harper should be called “King Stephen the First of Canada.” King Stephen has forgotten, or merely dislikes, the fact that the Prime Minister serves at the pleasure of the House; the House does not serve at the pleasure of the Prime Minister.
Given the status of a minority parliament, the Prime Minister should have sought political consensus prior to tabling a budget. An effort should have been made to really listen to concerns of the Opposition MPs.
Instead, this budget continues on the “stay the course” path of the government. What additional measures are included, for the most part, do damage to the other pressing deficits.
In the case of Canada’s economic health, this budget risks stalling economic recovery by dramatically increasing payroll taxes in the form of higher EI premiums. Flaherty had announced last year that the freeze in EI premiums in the 2009-2010, and 2010-11 budget years had created a deficit and would be recouped through hikes in premiums in 2011. Strangely, few in media have picked up on this tax increase. The 2010 budget confirms it will collect $29 billion more in EI between now and 2015. Small business and labour have condemned this job-killing tax.
Meanwhile, the government has moved hard-right in cutting tariffs on manufacturing inputs and expanding free trade. It will take a while to assess whether unilateral elimination of these tariffs will assist Canada’s economy or not.
The words “structural deficit” do not appear in this budget. Harper wants us to believe he can, like another King, wave his hand and hold back the sea of deficits. The magical deficit reduction relies on some very optimistic assumptions of revenue growth from corporate taxes of nearly 40% over 5 years. This increase is even more questionable against the planned cuts in corporate tax rates. Other elements of deficit fighting are in cuts to government (described as “administrative costs of government”) of $6.8 billion by 2014-2015. This is, I suppose, whatever Stockwell Day wants to cut. Shockingly, the government also freezes funds to CIDA. There are two smoke and mirrors elements to these cuts. First, the budget text says it will support international development assistance; then the fine print says they will cut nearly $4.5 billion by 2015. The truth is that the annual 8% increases in CIDA funding end this year. There never was a government commitment to continue to reach 0.7% of GDP to Overseas Development Assistance (the “Make Poverty History” target). Government is hurting CIDA by freezing spending, but it is also exaggerating the impact of deficit cutting by targeting money that was never there.
Lastly, we come to the most unforgiving and unforgiveable of deficits: the ecological deficit. Here we are in 2010, two years from when our legally binding Kyoto target calls for Canada to be 6% below 1990 levels by 2012 (and, yes, despite Harper’s contempt for Kyoto, it remains legally binding international law) and our target is to be 3% above 1990 levels by 2020. And even for that irresponsible target we have no plan. The 2010 budget continues with billions to Carbon Capture and Storage, which is essentially a disguised subsidy to the tar sands, and hundreds of millions to nuclear energy. The successful ecoEnergy Technology Initiative to support wind energy is not being revived. 2008 was its last fully funded year.
Among the G-8 nations, Canada is the only country whose economic stimulus package was designed to exclude green projects. Even the so-called “Green Infrastructure Fund” was not green. While some projects in waste-water treatment were funded, most projects involved transmission lines that could carry electricity from any source – green, brown or black. Mass transit just did not fit the criteria. “Shovel-ready” applied perfectly to highways.
The most alarming change in environmental regulation in years is that all energy projects will no longer face environmental review under the Canadian Environmental Assessment Act. They will be reviewed through the National Energy Board, or, if nuclear, by the Canadian Nuclear Safety Commission. Neither of these bodies has the experience of the CEAA, nor are they designed to enhance public participation as CEAA was. We must push back against such changes. The environmental review process is not useless red tape. It is integral to good planning.
All in all, the 2010 budget is a fair reflection of this government’s priorities. It perfectly illustrates how far the Harper government is from the values and priorities of most Canadians.
