Tuesday, January 27, 2009

What Kind of Budget Does Canada Need?

In a little under half an hour we will see if Stephen Harper has learned any lessons from the past several weeks and whether he finally realizes he has a minority government. I know the Liberals will face a difficult choice. I do not subscribe to the view of oppose the budget no matter, but nor do I think we should approach the budget as a blank slate, as we can’t forget all the deception and gamesmanship that preceded this. We have to ask not only is this a good budget but can Harper be trusted to govern responsibly and implement it appropriately in the months ahead. Harper has to send out very strong signals that he gets it. And the budget he puts forward has to be what’s necessary for the time ahead as the coalition document outlined last fall.

I think the Liberals have some pretty good broad tests of what’s acceptable, but within the broad tests, the budget should in my view have the following:

1) Protecting the most vulnerable Canadians:
- Investments in social housing. The $2 billion proposed is actually less than at least the provinces have asked for which is unfortunate, but this could be amended in committee.
- Investments in Aboriginal communities. A re-commitment to carrying out the Kelowna Accords (I don’t care if they use the name as long as the money and goals are the same).
- Investments in poverty reduction. Tax changes along the lines of Dion’s 30/50 poverty plan are more than appropriate in these tough economic times.
- Employment insurance must be enhanced and distributed more quickly.

2) Protecting Canadians’ jobs, today and in every region of the country
- There must be dedicated aid to the manufacturing sector and other hard hit industries
- There must be significant investments in job re-training
- There should be new actions taken to address the credit crisis
- There should be significant investments in the cultural industry which always returns more in revenue than government pays out and that Conservatives have badly neglected.

3) Creating the jobs of tomorrow, and enhanced our competitiveness and productivity without leaving debt and deficit behind for future generations.
- The budget must start the business of greening our economy and invest in alternative energy and green infrastructure, such as high speed rail and public transportation projects. I’m disappointed to hear that it sounds like there will only be $1 billon over two years dedicated towards green infrastructure. Isn’t that the same amount that has been in previous budgets? Hopefully the Liberals propose an amendment in committee on that front as well.
- The budget must help individuals retrofit their homes with greater aid that has been there before.
- The budget should have increased funding dedicated to post-secondary education.
- There should be increased funding given to the provinces for child care. Increased funding for early learning and child care allows more parents to enter the work force, but also enhances our competitivess for the future and helps build a brighter generation for the future. The Scandinavian countries with national child care programs are also doing better economically than us now, it’s time for us to start catching up and get serious on this issue and not stubborn ideology get in the way.
- The budget must avoid a structural deficit. That means no middle class tax cuts that don’t have a sunset. The Budget Office said that cutting $6 billion a year from foregone revenues (e.g., through tax measures) would create a structural deficit so that can’t be allowed.
- There must be plan to get us back to surplus that does NOT include asset sales or ideological cuts to social programs.

I don’t expect all these will be in here and I’m sure I’ve forgot some things (wanted to get this posted before the budget was actually released), but since I expect many of them to be in there and I don’t think Harper is so dumb as to put in the large middle class tax cuts Ignatieff said he would vote against, I expect the budget will pass. That doesn’t mean I think it should pass, but I recognize the difficult decision being made and that our MPs have been inundated with calls against a possible coalition and urging them to pass the budget, not to mention the last polls that say the same. On the whole I think the mood among Canadians is just to get a stimulus package passed as soon as possible so we must live within that context, but not forget that Harper alone was who prevented such a budget from arriving much sooner and that this is the most important budget in over a decade and can't be decided to vote up or down easily. We shall see very shortly how this will all play out.

If there are large middle class tax cuts that don’t sunset in a couple years (which would no doubt cause a structural deficit) then I think the Liberals will have no choice but to vote against though. Otherwise, I hope at the very least they propose amendments to include all those things above that Harper didn’t put in the budget. We have the majority in committee and if Harper is really going to be about “consensus” he should let the will of the majority prevail there and if he doesn't allow any such amendments then that would seem the like the same old Harper that hasn't learned the lessons he has to.

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janfromthebruce said...

Doesn't matter as it is all water under the bridge. So saying it's a crap budget now after voting for it, well talk is cheap. Sir, you had a choice. Iggy chose to bark from the porch - this dog can't hunt.

Danielle Takacs said...

Well Jan this post was written before the budget was presented but amendments can still be proposed at the finance committee after second reading. Many positive changes could still be made, just as they have been on past Conservative legislation (e.g., the Clean Air Act). Or is the NDP only interested in complaining about the past rather than trying to make positive influence in the Parliament going forward? We have to live with the political realities we are dealt.

The best way forward as I see it is proposing sensible amendments in committee. Whether that will actually happen remains to be seen, but you can't deny that the public including a majority of NDP supporters wanted a budget passed as soon as possible so the money could flow. But the public I think would accept some positive changes like those I suggested in the next post on grading the budget.