The minister of finance has made his Fall Economic Update. We wanted to hear what he had to say about government spending -- but we didn't. Why? Because the real story is one of austerity.
The federal finance minister promised Canadians a look at what is happening with the economy. On the surface, the job is fairly straightforward. James Flaherty has to say whether the economy is growing, or not; and he has to say what he intends to do about it.
Parliament is back this week, and its focus this fall will be on what to do about the economy. The first order of business should be reducing unemployment, but the Conservatives are more interested in reducing the deficit.
Want to reduce the government deficit? Raise business investment? Improve the standard of living? Moving to full employment -- a job for everyone who wants one -- is the way to go. Putting more Canadians back to work will ensure the economy improves.
The 2010 federal budget stuck predictably to the Conservative dogma that there is no need for a fundamental change of course. One we get past the temporary hiccup of global and national recession, we must return to a world of ever-smaller government to be achieved through continued tax reductions and deep spending cuts.
Despite the fact that unemployment is and will remain very high -- forecast in the budget itself to average 8.5 per cent this year and 7.9 per cent next year -- temporary extensions of EI benefits will expire in September of this year and some 500,000 unemployment claims filed during the Great Recession will be exhausted before claimants can find a new job.
There was a time when the British Columbia Liberal Party had some vision for how the government might reshape the provincial economy to provide good jobs and benefit the environment, said Mark Jaccard, a professor of environmental economics at Simon Fraser University.
"Prior to Christy Clark, Gordon Campbell did contact me from time to time," said Jaccard in a phone interview from Washington, DC where he was attending a meeting. "Green jobs from reducing greenhouse gasses in our province were something BC Liberals talked a lot about. She has changed the discourse."
The Atlantic premiers did two big things at their meeting last weekend. They basically called the Harper government incompetent, having constructed labour market policies on the basis of "anecdotes" and no evidence.
And for the first time in more than a generation -- apart from Newfoundland's mercurial former premier, Danny Williams -- someone from these parts has said "boo" to the federal government.
As both the Bank of Canada and the IMF have now reported, the Canadian economic recovery slowed in early 2013. Sadly, this contains good news.
A return to economic strength would bring an increase in interest rates. This would cause Canadian households deeply in debt to dig down even deeper to make ends meet. With weakness, rate hikes are likely delayed until 2014.
A recent report published by the Canadian Centre for Policy Alternatives, written by economists Trish Hennessy and Jim Stanford, slams the Ontario government's austerity budgets and breaks down how far from solving the province's economic woes -- budget cuts actually exacerbate them.
The report, aptly titled 'More harm than good: Austerity's impact in Ontario,' deconstructs how the much-touted Drummond report manufactured a projected $30 billion deficit out of what even the Liberal government now says is a much smaller $11.9 billion shortfall.