INDEPTH: BUDGET 2004
Ralph Goodale wants you to know he gets it
Keith Boag, Ottawa Bureau Chief, CBC-TV News | March 23, 2004
As an adviser to U.S. President Bill Clinton and a philandering fetishist, Dick Morris had a particular stake in the techniques of effective apology. In fact, he has devised a framework for it. An effective apology, he recommends, should comprise three distinct components: say you're sorry; admit what you did was wrong; promise it won't happen again.
Ralph Goodale's first budget speech hits all three targets early and more or less dead on. Its objective, he says, is to end the "financial abuses that have so understandably angered Canadians".
"As a government, we not only accept our responsibility for what went wrong we also accept our responsibility to get it right," he says.
And so the government is re-establishing the Office of the Comptroller General of Canada with the promise that it will "rigorously oversee all government spending". That might prompt the astonished question "you mean that wasn't in place already?" In fact such an office has existed before but has not been maintained in recent years. And according to our expert guests in the budget lock-up, Don Drummond of TD Canada Trust and Patti Croft of Phillips Hagar and North, it wouldn't have prevented the sponsorship scandal anyway.
There are other measures to police how government spends through closer departmental audits and that comes with the warning that they will "delve into every corner of every portfolio, no matter how small or seemingly 'special'".
Accountability is a big theme in the budget because it is a top of mind issue for Canadians, probably THE top of mind issue as we inch closer to an election call. But of course there's more to the budget than that.
Balancing the books. Again.
According to the budget speech, the government will record its seventh balanced budget in a row for the first time since Confederation.
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Budget documents released in Ottawa. (Photo via cellphone)
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Something for students and their parents
The budget lives up to the government's promise to help widen access to post secondary education for low-income families. There is an overdue need for this as tuition fees and other costs have risen rapidly in recent years.
To begin, the government is establishing a new Canada Learning Bond for post-secondary education that will provide up to $2,000 for children born after 2003 into low-income families.
The government will introduce a new grant of up to $3,000 for first year, post-secondary dependent students from low-income families and a new, up-front annual grant of up to $2,000 for post secondary students with disabilities.
There will be an increase in the ceiling for Canada Student Loans to $210 a week from $165.
There will be an increase in the income thresholds used for determining eligibility for student loan interest relief.
And more.
The cities agenda
Much of what the budget provides to cities we already knew about. In particular, the relief from GST/HST over the next ten years was announced in January's throne speech and became effective in February. The claim is that it will put $7 billion into the hands of city governments over that time. The throne speech also foreshadowed the budget promise of $4 billion over the next ten years to clean up contaminated sites across the country.
There is a restatement of the commitment to work with the provinces to share with municipalities a portion of gas tax revenues or to find some other fiscal mechanism to achieve the same ends.
As well, there's an acceleration of spending on the $1-billion dollar Municipal Rural Infrastructure Fund with spending over the next 5 years instead of 10.
Health matters
We already knew about the additional $2 billion for the provinces and territories for health care. It was promised in January 2003 and delivered in January 2004. It shows up again here to bolster the government's claim that health care is a top priority. More important to how the issue of health care unfolds may be the scheduled First Ministers Meeting this summer which the PMO hopes will be an historic moment in the renewal of public health care in Canada. That gets a mention in the Budget speech and expect to hear much more in the months ahead.
The budget takes $400 million from Health Canada's current budget to establish a new Canada Public Health Agency . This is a response to events such as SARS and the spread of the avian flu. The new agency is expected to spot those dangers earlier and get emergency response procedures rolling out sooner.
As well there will be $165 million over two years to invest in laboratories and surveillance systems that the budget says will lead to new vaccines and new treatments.
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Budget plan released in Ottawa. (Photo via cellphone)
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There is a promise of a further $400 million to the provinces so that they can improve their immunization programs and another $100 million for something called Canada Health Infoway, the national health information highway.
National defense
A tiny fraction of the budget is likely to gather disproportionate public interest and especially among those who serve with Canada's armed forces on dangerous missions abroad. Canadian soldiers who put their lives at risk in places such as Afghanistan will no longer pay income taxes here in Canada. The government books the cost of that tax relief at $30 million.
In addition, there is $250 million in new money for the Canadian mission in Afghanistan over the next two years and $50 million for Canada's participation in the peacekeeping force in Haiti.
Petro-Canada
The government will get all the way out of Petro-Canada this year when it sells it's remaining share in the company. Our experts in the budget lock-up both made the same point about the unusual way in which this sale is being reported in the budget. Specifically they point out that it is the first time an asset sale has been booked and the proceeds earmarked for spending projects before the sale has actually occurred.
What tax cuts?
The budget includes an increase in the capital cost allowance rate for computer equipment and for data network infrastructure equipment.
Don Drummond saw this as an indication of an important cultural change in Canada. The tax cuts are for business and there is not even a mention of tax cuts for individuals now or in the future. There was a time, he says, that a corporate tax cut of any kind would have been unthinkable in the Finance department (where he served for many years) without first booking a tax cut for the ordinary working stiff. It sets up an interesting dynamic for the coming election.
A pre-election budget?
A typical pre-election budget might offer personal income tax cuts or lots of spending on services that are popular with constituents who vote. This budget does neither, but it should be viewed as an election budget anyway.
First of all, the attention to accountability issues at the beginning of the budget speech is obviously an attempt to deflect some of the anger and criticism that his blown up over government waste and scandals. The message to voters is that Paul Martin and Ralph Goodale have felt their wrath and been suitably chastened.
More interesting is the emphasis on the social side of the policy agenda with initiatives on education health and safety at the expense of more tax cuts. Clearly the Liberals have chosen the ground they wish to defend in an election campaign. Perhaps this is what Paul Martin was alluding to this weekend when he congratulated Stephen Harper on winning the Conservative leadership and said he welcomed the clear choice that would mean voters in the coming election.
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