Grading the Budget: Some Positive Short-Term Measures, but an Utter Failure to Invest in Our Future / Where Liberals Go From Here

This week has not allowed me any time to blog meaningfully up until now, but with the budget now passed first reading last night I thought it would be a good time to finally add my two cents and where we go from here. I had fully expected the budget to pass and it seems polls have validated the decision as something that enjoys widespread public support, particularly with the quarterly reports amendment. That said, given that we know there are many flaws in this budget, I would have much rather seen 50 Liberal MPs vote against it (and the rest stay home) and still let it pass than see any Liberal MPs stand up to support it (I just don't like the idea of Liberals voting for a Conservative budget, I took the same position under Dion, and I'm not sure Liberals have ever happened voted for a Conservative budget before). I also would rather have seen the caucus vote as one because I'm concerned about the precedent being set of allowing one province of MPs to vote different from another on a budget vote. But I can accept I may hold a minority view on those two fronts and I suspect the public really doesn't care (and may have very soon forgotten) about those latter two distinctions anyway. Above all it seems the public just wanted to see the stimulus money flow and Parliament to get back down to work.

So on to the budget itself...

1) Protecting the Most Vulnerable Canadians: Grade: C +

I had said I was hoping for significant investments in social housing, aboriginal communities and poverty reduction along with enhancements to EI.

On the first three in truth there was more there than I would have expected a few weeks ago from these guys, and while I would have liked to have seen more significant investments on these fronts (and I know the savings could have been found by eliminating funding for other less-pressing projects and subsidies of which there were many in this budget), it's a long overdue step in the right direction and Liberal must keep pushing them further.

However, where the budget really does fail on protecting the vulnerable is with EI. Harper himself says this could be the worst downturn since the depression and he doesn't think that warrants extra help for the unemployed? He doesn't think they deserve to get their first cheque sooner when layoffs are increasing dramatically? It was positive to see him extend the length people could be on EI, but it was not enough.

I also have huge reservations over their revival of the pay equity attack from the fall fiscal update which seems like a slap in the face from a party that claims to be more conciliatory now, but since that I believe would be dealt with in separate legislation I won't get overly hung up about it, but when such legislation comes Liberals must vote against it.

2) Protecting Canadians’ jobs, today and in every region of the country: Grade: B-

I had said I was hoping for dedicated aid to the manufacturing sector and other hard hit industries to protect jobs in those areas, that there must be significant investments in job re-training, investments in infrastructure, the culture industry and new actions taken to address the credit crisis. I think the Conservatives did a reasonable/passable job on these fronts.

However, I'm not impressed with the scatter gun way it seems the infrastructure money will be distributed or that it will be need be matched by municipalities that may not be able to afford it.

3) Creating the jobs of tomorrow, and enhanced our competitiveness and productivity without leaving debt and deficit behind for future generations.
Grade: F

I said the budget should take major steps to begin greening our economy (though major investments in alternative energy and green infrastructure), provide greater aid for home retrofits, increase investments in early learning and child care (to invest in our children's future) and post-secondary education, and have a clearly mapped out plan to get us back to surplus that does not involve asset sales or ideological social program cuts.

With the exception of some money for home retrofits (that I believe only starts if you have $1000 to spend) the budget failed on all of these fronts. The investments in green infrastructure and the environment in general were paltry especially in comparison to what other countries are doing or even what past Liberal budgets have done. There was NO attempt to green the economy as our neighbours to the South it seems will be doing anyway in our absence.

There were no meaningfully investments in post-secondary education aside from helping build infrastructure on campus. Universities need much more than that to compete with the funding they get in the U.S. and to adapt to the reality of a growing percentage of the population seeking college and bachelor's degrees.

There were essentially no investments in early learning child care despite that fact that countries with national child care networks are greatly outperforming us economically right now and we were rated DEAD LAST in the western world in our investments on this issue.

The budget also inexplicably cuts funding for research councils and provided ZERO funding for the Genome Project (which Canada may now to have pull out of as an international partner) and other key medical research programs. That is a complete travesty and has to be addressed at the Finance committee. How do you justify taking away significant funding from key projects in the biggest spending budget ever?

And the plan to return to surplus was extremely brief, based on surely faulty estimates and did involve questionable asset sales. I have no faith in said plan to return to balanced budgets whatsoever. I do believe deficits were inevitable given the global economic downturn but the Cons terrible management of the public finances with reckless spending and their GST cuts (that few people have really noticed and haven't helped economic productivity) have made the deficit far worse than it ever had to be and it's appalling that they really seem to have no idea of how to get us out of it.

I'd love to hear a sound argument from anyone as to how this budget really helps "create the jobs of the future" or doesn't saddle future generations with debt. The budget is an monumental disappointment on that front.

Overall Grade: C-

This budget lacked any clear focus and was just so all over the map that they lose points for that because Canadians deserve so much better in these tough times. There's also many subsidies in there for people to do things they would already be doing and others will be out reach to those at the lower income spectrum. To boot there are modest middle income tax cuts financed by deficit spending (which never makes sense for funding tax cuts) that won't stimulate the economy and will make it more difficult to get back to surplus (much better as economic stimulus while also helping the poor would have been to increase the GST rebate). At the same time, the Conservatives went a lot farther on some progressive issues that I had thought they would so the budget wasn't a complete disaster. But given that I agreed with Michael Ignatieff's statement before the budget that the most important criteria to consider was "will it create the jobs of tomorrow?" I can't help but give that the biggest weight in the big picture of how good this budget is for Canada. It's for that reason I cringe where I hear this being called a "Liberal budget" as the Liberals would never have produced something so shoddy. While I'm sure the Conservatives really could care less what a lowly Liberal blogger thinks or how she grades their budget (or how Calgary Grit or economists grade it for that matter), we can't forget where this budget fails badly and have to keep reminding Canadians why they deserve better.

So given that the budget badly underperforms in key areas, but Canadians badly seem to want to see a budget passed ASAP that provides economic stimulus I hope we propose sensible, reasoned, amendments in committee after second reading (which is what I suggested as well before the budget was tabled). Committee votes aren't votes of confidence and there is no threat of bringing the government down there. The opposition has a majority and should set aside differences to get meaningful results and if the Conservative obstruct reasonable proposals and delay their own budget they will be the ones looking worse for it. If the other opposition parties refuse to support progressive committee amendments that's just as unforgivable.

We obviously can't overhaul the budget but we can fix many holes. For instance, funding can surely be found for the Genome Project it would be travesty not to when so many other projects were funded. The budgets of the Tri-Councils (SSHRC, CIHR, NSERC) for research should also not be cut. We could also remove the two week waiting period for EI and remove the need for matching funding from municipalities for infrastructure funds to be doled out. We could attach greater strings to ensure infrastructure money goes to more green projects to make up the budget's major shortfall on the environment. As well, I honestly believe the home renovation rebates should only be for green home renovations that increase energy efficiency and not for things like paving your driveway. That would SAVE the government tons of money to free up elsewhere while also being better for the environment. Those are just a few possibilities (though I know the last won't happen because there would outcries from people who had already gone ahead with plans for non-eco related renovations, but it would be far better public policy).

But regardless of what pans out with this budget, a very sad political reality remains: time and again, it seems is that to be successful politically means placing priority on the "here and now" well above any considerations of the long-term. I believe that is a major reason why a carbon tax, amongst other sensible policies (e.g., large investments in Green infrastructure projects), have been difficult to sell. And I believe it's why this budget that does reasonably well on the here and now front is popular, despite its failure to look beyond the horizon. But until we get a Prime Minister that has his/her eyes on the next decade ahead, and not just the next election, our country will remain in deep trouble.

So where do we go from here? If we are honest with ourselves we have to admit that with the passage of this budget (regardless of any amendments in committee) we return to a 1993 financial situation (I believe the deficit numbers will turn out much worse than the budget currently predicts: Bob Rae provided some good reasons why here). It took Liberals at least 5 years to be able to start making any major social investments again once we took power and it required very painful decisions in order to bring us back to that situation of being able to make such investments. The passage of this budget (and of course the economic realities that have decimated federal coffers apart from the budget) means our platform in the next election will likely only be able to promise a fraction over the next 4 years of what we promised last fall. So within that reality we need a long-term vision badly (and not one based on vagaries with specific ideas for the future and that won't be drop after just one election), but we also need the short-term ideas that win elections. People mocked the 10 year $70 billion infrastructure plan because of sticker shock but in reality 10 year plans are what the country needs, but it's a big job to convince the public of that, though it's not one we should shy away from.

So I hope the Liberal Party can find the right balance between short-term political gains and long-term policy goals in the months ahead, because Canada desperately needs it to. This government doesn't get it, they won't get it, and with each year they remain in power the further the rest of the Western world will be leaving us in the dust.

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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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Good Child Care Policies Are Good Economic Policies: Time for Stephen Harper to Wake Up

While everyone is most focused on how to get us immediately out of the current economic/financial crisis, it's important for government to be focused on medium and long term goals as well. This government has proved itself completely incapable of taking the long view on anything. The environment is one example of that, but another is child care. Good early learning and child care policies are good economic policies. When you invest in early learning and child care you allow more parents to enter the work force, as right now some are unable due to lack of affordable or available care for their young children. At the same time, quality early learning centres allow children to enter formal school better able to meet their full potential. But as Scott noted, a recent UN report comparing the approaches to child care of 25 developed countries, ranked us dead last, even behind the United States. It's time for our government to wake up and get serious on this issue. No one can dispute that changing our approach wouldn't be good for our economy in the medium and long term.

And it is affordable to take action now. Harper's "universal child care benefit" costs TWICE the amount of the original Liberal child care program. I was glad to see that the coalition agreement included a commitment to increased investments in child care before its term is up (as the first priority business will still remain addressing the current economic crisis). But Harper still has a chance to get on board. Given that investments made now matter for where our country stands economically a few years from now I still think the next budget should have increased revenue devoted to rebuilding a national child care program. Why not have the $100 a month cheques be means-tested (say a family with a dual income above $150,000 or $200,000 a year does not receive them anymore) and use the savings to go towards rebuilding a national child care program again? Does anyone dispute that wouldn't be more sensible policy? On what basis would such a policy be opposed? The monthly child care cheques would only be taken away from those who never needed them to provide child care in the first place and the savings can be used to actually create more quality and available child care spaces for those who desperately need them.

The opposition parties hold the cards here and Harper has lost their confidence through his own incompetence and gamesmanship, so there's no reason Harper should get away with doing what he was planning to do anyway. We should get him to commit to doing this and I know we would find support among the general public for doing so. 62% of people voted for parties that support a national child care program and polls have consistently shown that Canadians preferred the Liberal plan to the Conservative one. We have an opportunity to force Harper to do what's right, let's make use of that because we might not get another opportunity if the budget ends up passing (for if it does pass with few concessions and commitments on Harper's part, then within a matter of months he could easily be back to his old ways of reckless repeated confidence votes with the coalition threat then gone). If Harper's not willing to budge then he is clearly taking our support for granted. As of now Blogging Tories and Conservative pundits alike are all gleefully musing that the Liberals will support the budget no matter what's in it. We should send a clear message then we won't just accept a few token concessions. I see that message has started to be spread by Liberals but I think perhaps we should lay down some non-negotiables for what has to be in the budget in order to earn our support.

Our economy and international competitiveness, not to mention families across the country, will undoubtedly be better off with a real universal child care program that the dead last approach we have now. If Harper won't listen then he clearly hasn't heard the voices of the electorate, he clearly doesn't understand the economy. And someone who doesn't understand the economy clearly won't be the best person to get us out of this economic crisis. If Harper's not willing to change his approaches to governing on not just this issue, but on fiscal stimulus, helping those most hard hit by the economic crisis, abandoning his brazen abuse of confidence votes, showing us the the real state of the nation's finances, amongst many others, then he clearly hasn't realized he's in a minority and he deserves to be brought down and replaced.

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Day 11 Recap: The Choice on Child Care and Education

Notwithstanding the recent Tory troubles...I'd still hope it wouldn't completely overshadow the excellent Liberal policies that the Liberals put forth. Education and child care are two major issues where there is a stark difference betweens Cons and Liberals.

EDUCATION
I was very impressed with the Liberal Post-Secondary Education plan. I believe it is the strongest we've ever seen proposed. Students will be far better off. Currently, most students don’t earn enough money to take advantage of education tax credits, I know I have experienced that. The Liberals would make the tax system simpler and fairer for all students, ensuring they receive up front support throughout the school year adding up to approximately $1000 per student combined with the GST rebate, instead of only receiving that money as tax credits after they've graduated and have a full time job. Students who work while in school would receive another $250 (as outlined in the Green Shift plan). The Liberals would also improve student aid so that no matter how much money you or your parents make, you can get financial support. The education plan would also provide 200,000 bursaries of up to $3500 a year and 100,000 access grants for disadvantaged groups of up to $4000 a year (by the 4th year of the plan). The plan would further make all students (regardless of parental income) eligible for guaranteed student loans of $5000, reduce interest rates on loans, and extend the grace period to two years for repaying them.

It's no wonder this policy has been fully endorsed by the Canadian Alliance of Student Associations fully endorsed it:"CASA believes the measures proposed by the Liberal party will help students and families cope with the accelerated costs of education," said Zach Churchill, national director of the alliance. "The proposed plan, if implemented, can significantly enhance access to post-secondary education system, by providing funding to students who need it the most, while helping to lower the epidemic growth of student debt in this country."

The plan does not only focus on making PSE more affordable though, but also in helping to drive the ideas of tomorrow through support to Research and Development. Research funding has given us cures for diseases and technological innovations such as the Blackberry, but to be a world leader in the knowledge economy we need to go much farther. Liberals understand that. The Liberals would bolster funding for the indirect costs of research by 60%, increase support to Canada’s research granting councils by 34% (which would help graduate students and faculty alike), fund greater support for interdisciplinary research, and extend the tax credit for private sector R&D.

It’s about time we had a party willing to take the reforms necessary on education. The Conservatives by contrast offer no plan on education except to give students less than $10 a month for textbooks, I think we know who cares more about our post-secondary education system. Conservatives seem to think we don't need universities as they mock all those who attend and teach at them. Well the Liberals understand that the knowledge economy will crucially depend on a well educated population and well funded research. We know how to manage the economy and our education system, Conservatives don't.

EARLY LEARNING AND CHILD CARE
The Liberals are also taking us in the right direction on child care. The Liberals remain committed to a national high quality early learning and child care system. By the 4th year of the plan the Liberals would spend $1.25 billion annually. This would be in addition to maintaining the $100-a-month cheques that have children six and under (as many have come to rely on these) and the new refundable $350 child tax benefit for every child under 18 (mentioned in the Green Shift plan) . The Liberal plan would also make federal maternity and parental leave programs more flexible for parents by providing them with the choice of taking a shorter leave with higher benefits, or a longer leave (up to 18 months) with lower benefits. Finally, the Liberals would provide up to an additional $1, 225 to low-income families with children under 18 as part of a new Guaranteed Family Supplement.

The contrast with the Conservatives could not be more clear. They offer $1200 a month to some parents, but this hardly creates "choice in child care" since without spaces there is no choice and the Conservatives haven't created any child care spaces. The Liberal plan gives MORE money to parents, particularly those with low income and will create well over a hundred thousand child care spaces. That's the system families in this country need. Without a national child care system, families continue to have to choose between work and family and that's not fair to families or our economy, yet the Conservatives just don't seem to realize. That's why they can't be trusted with the economy during troubled times: they don't understand it.

The Liberal plans will be carried out with prudent budgeting, with the entire platform including the $3 billion surplus cushion Mr. Flaherty DID AWAY WITH in his last budget. Liberals would never put us in deficit, but I'm quite concerned Mr. Flaherty already has though, just as the Harris/Eves government did (of which he was Finance Minister) when they claimed they balanced the books when there was really a $5.6 billion deficit. Mr. Flaherty's budgetary projections have been far off in the past, the Conservatives simply have no credibility to be preaching about fiscal responsibility. It's completely obvious which party has the better record on protecting public finances.

So on education, child care, and yes certainly fiscal responsibility, there's just plainly no competition. The choice is clear: The Liberal Party once again has the best plan.

UPDATE: Day 12: Strong plan for infrastructure for the Liberals Vs. “Controversy dogs Tories.” More later….

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