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Hill Dispatches

karl nerenberg's picture
Karl Nerenberg has been reporting on federal politics from Parliament Hill for rabble.ca since September, 2011. In his long career, he has won numerous awards as a broadcaster and documentary filmmaker.

Budget 2013: Smoke, mirrors and very few details

| March 22, 2013
Budget 2013: Smoke, mirrors and very few details

Finance Minister Flaherty's budget says newly announced spending cuts will amount to $600 million over six years.

On the revenue side, budget 2013 promises that a variety of tax measures, including closing loopholes and cracking down on tax cheaters, will yield an additional $7.9 billion over the next six years.

That sounds like a lot of new money coming in, versus spending reductions.

But we may have to wait for the fine print in the budget implementation bills to find out how it will all really shake out.

Impact on public service jobs is (deliberately?) vague

On the spending side, the budget promises cuts in government travel, savings through modernizing technology, providing more government services online rather than in-person, and something blandly called "more efficient government operations."

The latter two measures will have an impact on staffing levels, but the budget is very vague and high-level on that issue.

It makes only passing reference to "overhead reductions" (read: jobs), and that is with regard to only one "Guinea pig" department : Fisheries.

But we can be pretty sure that further public service job cuts will come. Where they will be and how they will affect services to Canadians is not yet clear.

As the Minister rolls out his budget, the Parliamentary Budget Officer (PBO) is in Federal Court trying to get details on the cuts in the previous budget.

If the knowledgeable and determined PBO has been unable to find out the full details of the government's plans, what hope is there for the rest of us?

In any case, the current PBO, Kevin Page, will very soon be the ex-PBO, and his interim successor is, believe it or not, the Librarian of Parliament.

Henry ll addressed his entourage and asked of the Archbishop of Canterbury, Thomas Becket: "Will no one rid me of this meddlesome priest?" . . . and Becket was soon dead.

We don't know what instructions the government gave the Librarian of Parliament about the Budget Office, but we can be fairly sure it was not: "Keep up Kevin Page's good work!"

Sneaky on sick leave, too

There had been news stories leading up to the 2013 budget predicting that it would claw back public service sick leave.

And this budget does that, sort of.

The budget says, buried in the chapter on "more efficient government operations," that the government will "examine its human resources practices" in a number of areas, including disability and sick leave.

The goal of this  examination, budget 2013 says, is to ensure that "public servants receive appropriate servces that support a timely return to work."

The only tangible commitment on sick leave, for now, is for the govenrment to consult key stakeholders in the coming months.

There is no mention in the budget of  targeted savings to be achieved through limits on public service sick leave.

But, given the fact  that the government has not charted a clear path to the balanced budget it promises for 2015, the Finance Minister has almost certainly set his sights on public servants, expecting them to give even more at the office than they have thus far.

No frontal attack on the union movement

Unions, both private and public sector, had worried that the 2013 budget might contain draconian measures that would have an impact in their ability to spend monies they raise as they see fit. If the Conservatives have that up their sleeves, they chose not put it into this budget.

The one measure that relates specifically to organized labour is the elimination of the Labour Sponored Venture Capital Corporations Tax Credit.

This measure provides an incentive for investors to put their money into labour-sponsored funds, such as the Quebec-based "Fonds de Solidarité."

The budget phases this investment incentive out over the next three years. The budget paper argues that the original purpose of these funds, providing needed venture capital to small business, is no longer valid. Plus, it adds, many analysts, including those of the OECD, have suggested eliminating this special boost for labour funds.

Unions may not be happy, but it is a marginal change for them, not a frontal attack.

Re-allocating labour market money and giving the program a new name

A good part of the 2013 budget focuses on, in its words, "connecting Canadians with jobs."

This is typical of the current Conservative government's practice of putting all kinds of disparate policy pronouncements into what used to be a government's simple, over-arching statement of fiscal policies.

On the jobs front, the issue the government wants to address is the fact that there are skilled jobs going begging while we have tens of thousands of unemployed people.

The Minister of Finance says he heard about this conundrum from people across the country -- from labour as well as from business.

What the budget announces in this area is not, however, any new spending, but rather re-purposing of existing programs.

Currently we are nearing the end of a 6-year, $300 billion Labour Market Agreement between the federal government and the provinces and territories. When that expires in one year, the 2013 budget announces, the federal government will re-negotiate the agreements with the provinces and territories.

The new program the federal government is proposing will require participation of businesses, and will feature what the government calls a Canada Job Grant.

There are few details, and it all has to be negotiated with the provinces, but the budget says that $15,000 or more will be available to qualified Canadians who seek to upgrade their skills.

The hitch in all this is that employers will very much be in the driver's seat. Workers will only have the right to apply for the grants under the aegis of employers.

There is no talk of training opportunities for those who might, for instance, seek to hang out their own shingles, not work for someone else.

From a fiscal point of view, this labour market announcement is really smoke and mirrors. It is a matter of shuffling existing spending allocations, not injecting new money into new programs.

Finance continues to poach on other departments

The whole area of training properly belongs not to the Finance Department, but to the Labour and Human Resources Development Ministries.

If the government sincerely wanted to engage Canadians in forging new and more effective training policies and programs it could have openly and transparently consulted with workers, unions, schools and colleges, provincial governments, and the business community.

Instead, the plan announced with very few details in the 2013 budget seems to have been hatched, for the most part, out of the Minister's mostly closed door consultations with the business community.

Not quite so over-the-top, omnibus as last time

It may be only a question of what we have grown used to, but -- mercifully -- the 2013 budget seems to be much less of an omnibus affair that its most recent predecessors.

While the sections on resource development and the environment in the 2012 budget were brutal, the "protecting Canada's Natural Environment" chapter of the 2013 budget is, by contrast, inoffensive, if not very ambitious.

On the environment, the 2013 budget announces an additional $20 million for the Nature Conservancy of Canada; $10 million over two years to "support partnerships with local groups to improve conservation of fisheries habitat" (after having gutted the Navigable Waters and Fisheries Acts in previous budgets and implementation bills); the munificent sum of $300,000 a year from a "Salmon Conservation Stamp” to the Pacific Salmon Foundation; $4 million for “marine conservation activities" (as the government continues to gut environmental science in so many ways, including closing the Experimental Lakes Area); and $4million to monitor ballast water regulations .

There are a few other equally small and modest environmental measures (which are far outweighed by previous budgets' assaults on environmental protection and regulation).

One of those timid initiatives is the tiny ($1 million over two years) tax support measure offered for clean energy.

Even Aboriginal communities have their place on the margins of this budget

The budget even manages to find six pages worth of small-scale announcements of spending on Aboriginal communities.

There is nothing new for priority areas in crisis, such as education and housing, areas where former Auditor General Sheila Fraser argued the federal government was failing badly in meeting its obligations.

A grandly titled announcement “Improving Health Services to First Nations Communities” turns out to be $48 million invested in tele-health and video-conferencing services -- nothing for food and nutrition or actual health services on the ground.

One third of a small Aboriginal mental health "enhancement" of six million over two years will, in fact, be for data collection and reporting of mental illness and mental health.

And as for loopholes and tax cheaters?

The 2013 budget's ambitious targets for increasing revenue through closing loopholes and ending tax fraud may be as much wishful thinking as hard calculation.

As it stands now, the budget does not show how the government will achieve its revenue expectations through these measures.

All Flaherty could say was that it was worthwhile to invest in the Canada Revenue Agency, because that sort of investment always brought in more money than it cost.

We will have to take the Minister on faith, for now.



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