Tuesday, March 26, 2013

A Calculated Incoherence: the 2013 Federal Budget

I have seen several federal budgets cause more commotion than the one that came down in Ottawa last week.   Yet there are several things about it that I find deeply disturbing.  One is its determination to swim against the historical trend by imposing a new top-down shared cost program on the provinces: a “Canada Job Grant” that will not be introduced until the election year of 2014-2015 (though you can be sure it will be frequently referred to in government ads between now and then).   Add to that a feature that has been called workfare for First Nations.    
The self-contradictory and incoherent nature of this budget is most apparent when viewed in a larger context.   The government brags about “closing loop-holes” in the tax system. This may be a great way to claw back $4.4 billion in revenue, but it is ironic when you consider that for years this government was unusually guilty of putting loopholes in the tax code in the first place.  Indeed, Canada ‘s “Economic Action Plan”  added an additional $105 billion to the national debt not only  to build infrastructure, but in order to pay for things like GST cuts and tax expenditures for the middle-class on everything from children’s’ sports to daycare. Some of these expenditures were better than nothing, but they were not the most effective way to fight the recession, and they certainly did not create a very good national daycare system, as shown dramatically by a recent report from UNICEF, which placed Canada tied for last place among 25 developed countries for the quality of its early child care services.   And then there is the government’s breath-taking rush to sign so-called free trade deals, which will make drugs more expensive and even raise tariffs on imports from 72 developing countries--costing consumers hundreds of millions of dollars.  
But underlying each of these politically questionable policy judgments lies a simple, constant un-erring calculation: that this government will only need 37-38% of the popular vote in the next federal election in order to gain another majority government.  In other words, it knows that it can afford to offend the Quebec government, sell working class families short, and impose a job training scheme upon provinces and First Nations.   In that respect, at least, this government’s math is probably correct.

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