Greg Weston: Jim Flaherty's wish-list budget

There is much promised recycling, renegotiating and reallocating in this newest federal budget, Greg Weston writes. Also in the details-to-follow category is how Ottawa plans to rid itself of $26 billion in red ink.
Federal Finance Minister Jim Flaherty presented his budget document called Jobs, Growth and Long-Term Prosperity in the House of Commons Thursday.

Canadians hoping the federal budget would explain exactly how the Harper government is planning to spend all the money it filches from their weekly paycheques might as well hit themselves over the head with a duty-free cricket bat.

Finance Minister Jim Flaherty's eighth (and possibly last) budget eliminates the import duties on baby clothes and a wide range of sporting goods from skates and skis to cricket bats.

That much of the budget is clear. The rest, not so much.

The much-hyped centerpiece, for instance, turns out to be a vague job-training program yet to be developed, to provide up to $15,000 in grants under rules unknown, the costs of which would be shared with provinces and employers that haven't agreed to anything.

Political dreams are made of this — a budget of mostly wish lists and recycled programs with new names.

All of the initiatives aimed at skills training, apprenticeships, job creation and economic growth don't add up to even $1 billion in new spending.

Instead, the government is "renegotiating" some training programs run by the provinces; "reforming" another scheme that helps train people with disabilities; "extending" funding for another handicap initiative; "reallocating" money to promote education in fields where there is high demand from employers.

Similarly, the budget is promising to provide long-term funding to the provinces and municipalities to repair roads, sewer systems and other aging infrastructure — an eye-popping "$53 billion in investments, including $47 billion in new funding over 10 years."

Look more closely, though, and the whole scheme merely extends existing infrastructure programs for another decade with new marketing slogans and no significant increase in annual federal spending.

The budget also commits to provide special assistance to the Canadian aerospace industry, and to the national space program – details to follow.


In short, the budget document called Jobs, Growth and Long-Term Prosperity is 433 pages of much ado about not much, a fiscal plan that has no important new spending initiatives, no big cuts, no tax hikes, and no grandiose giveaways to anyone.

All of which should put a smile on the faces of fiscal conservatives, and surprise no one.

With two years to go until the next election, it is no secret the Harper government desperately wants to balance the books and eliminate the deficit before facing voters again.

Exactly how it plans to get rid of $26 billion of red ink in less than three years, however, involves a lot of wishful thinking.

It won't happen from deep cuts to spending. All of the government's new initiatives to trim costs this year barely add up to $100 million.

And it won't happen from finding new sources of revenue.

The government's only promise on that front is to generate $400 million from closing some tax loopholes and cracking down on Canadians with money stashed in offshore bank accounts. Officials admit they're guessing on that one.

That's it for direct government actions to reduce the deficit.

The government says that all the rest of the money to get rid of the deficit is going to come from the economy growing and producing increased tax revenues without any increase in rates.

Well, almost no rate increase.

Foggy budget breakdown

Year after year, the Harper government has quietly increased Employment Insurance premiums paid by Canadian workers and employers.

Over the next three years alone, those increases will generate an extra $5 billion a year in revenues, the equivalent of wiping out about 20 per cent of the current deficit.

But the government is banking on growth in personal income taxes to provide the biggest flood of cash, estimating the take from private pockets will increase a whopping $22 billion by the end of 2015.

In fact, according to the finance department's own estimates, taxes from individual working Canadians are the only source of government revenue that will grow faster than the economy. Ouch.

The only problem with all these rosy forecasts for eliminating the deficit is they are just that – forecasts, and in a world full of economic turmoil and domestic uncertainty, all the best laid plans can go completely out the window in a matter of weeks, much less years from now.

Notably, last fall, Flaherty's department was predicting economic growth this year of about 2.4 per cent. It is actually closer to 1.8.

The budget shows the Harper government's operating costs magically dropping by about $4 billion.

But don't ask which departments are going to get more money to serve Canadians – and which ones will get less.

Flaherty's budget describes only a couple of relatively puny reductions in operating budgets at fisheries and the tax department.

But there is no breakdown for the budgets of all the other departments and agencies as there was in the previous budget.

By sheer coincidence, as Flaherty was preparing to table his fuzzy fiscal plan in the Commons on Thursday, the parliamentary budget officer was in Federal Court trying to force the government to release details of departmental cuts in last year's budget.

Some things never change.