Did the stimulus fund help? - Macleans.ca

Did the stimulus fund help?

Most wasn’t spent during the slump


One of biggest claims made by Prime Minister Stephen Harper’s government is that their swift, massive response to the 2009 recession helped shorten and soften its impact. Yet new figures reported here show that the lion’s share of the stimulus fund set up in the Finance Minister Jim Flaherty’s deficit-heavy 2009 budget wasn’t spent in the 2009-10 fiscal year. That means the recession was long over before the money was out the door. Flaherty allocated $2 billion for the key Infrastructure Stimulus Fund, but less than $500 million was spent in 2009-10. Of $200 million allotted to the so-called Green Infrastructure Fund, Ottawa spent just $5.7 million in that first year. But the Tories point out that any money not spent in 2009-10 was pushed ahead to be available in the current fical year. That cash, however, must be spent by next March 31.

Ottawa Citizen

Filed under:

Did the stimulus fund help?

  1. John Baird's central planning office set up an application process for provinces and municipalities that was onerous and permitted the minister to favour some projects over others; the database for Action Plan signage went smoothly; the giant novelty cheques made it to the ribbon-cuttings (though invites to non-Tory MPs were mislaid); and Iggy was right all along when he said the Tories should have used the gas-tax mechanism to distribute stimulus funds quickly … in time to matter while jobs were being shed. Tory control and Tory campaign needs came first, however. But at least Harper will be able to re- re- re-announce the same funds during ribbon cuttings this winter.

    • a lot of money has been spent on stimulus projects, but the programs were designed to distribute funding as a reimbursement for approved eligible costs incurred (in contrast with the Gas Tax Fund). It takes quite a while for the municipalities/etc. to incur their expenses and submit their receipts and then for the good people at Infrastructure Canada to review the submissions and send out checks for the federal contribution (only then will it be accounted for as 'spent federal stimulus funding'). The municipalities should eventually be reimbursed for all eligible expenses incurred before March 31, 2011, but it will be a while yet before that federal money gets spent!

    • In August, while spending a weekend at a neighbour's cottage in Tory territory, we went for a drive and laughed our heads off. A road shoulder was paved – about 3 metres long ny 1/2 metre wide – and by it a HUGE Economic Action sign. The sign probably cost more than the work done :-) I've seen potholes filled and the same signs along side. .

  2. I was certainly not alone… but i told ya so.

    • Ha, funny I just posted something similar above….

    • Hey, Stu, there's indeed lots of room for all of us in this camp.

  3. Thanks liberals.

    • No. Stop that. A monumentally stupid decision having been KNOWINGLY made with House confidence maintenance as its sole justification ends up looking EVEN WORSE for the party that made the (knowingly) stupid decision.

      This is the sort of thing a conservative party stands for: NOT making such irresponsible decisions with the nation's future prosperity. It's the sort of thing on which a conservative party worth anything takes a principled stand, defends its position, and advocates forcefully for such a position in any eventual election campaign, if one would have been necessary. This capital-C Conservative Party of Canada, under the leadership of one Stephen Harper, abdicated at all levels.

      It matters not that Canada was in less dire shape to begin with, or throughout. It matters not that we were not nearly as monumentally stupid as many other nations were, or as they continue to be. It matters not that "the Liberals forced us to do this." They own this, and they deserve the contempt of the electorate, particularly those who voted for them expecting them not to behave in a manner exactly opposite to the rhetoric they know to be correct.

      • Our elfin Finance Min brought in 0 down 40 yr mortgages and then went to 5% – 35 yr. mortgages which helped to create a real estate bubble. And guess what folks, CMHC, i.e. we Canadians, are on the hook for potentially many billions should home owners declare bankruptcy. It makes me laugh how Harper takes credit on the world stage for our sound banking system. He was the one who was pro big bank mergers when in opposition. Check out http://americacanada.blogspot.com/2009/07/cmhc-an

      • It was either the Conservative party overlooking the stupid spending or the Liberals with the NDP and Bloc looking over the stupid spending. The prudent thing for Canada was for Harper to bite the bullet and spend.

        If the coalition were in power right now, the debt levels, the taxes, would all be at even higher records. And let's not forget the green shaft. Canada would have instead of helping the world rid itself of the climate scam, would have worked directly against Canada's peoples interests in freedom.

        The coalition would have destroyed this country. Thank God Harper recognized that going against his principles in that one stand saved the country from complete oblivion.

        • The prudent thing for Canada was for Harper to bite the bullet and spend.

          No, No, a Thousand Times No. "Saved the country" is NOT the same thing as "saved my job as PM." There would have been no finer argument in favour of a Conservative majority than that two-and-sometimes-trois-headed coalition monster messing the joint up for a week or two, if it even lasted that long.

          That coalition spending catastrophe would have been Dion's to wear, and would have taught a valuable lesson to the Canadian electorate. The Harper fiscal fiasco is now his to wear, no amount of "wah, they had a gun to my head" will erase the ugly stain, and now NOBODY can claim to deserve to place their grubby paws on the public purse strings.

          • All it takes is for a reasonable person to look at what the options were. You even point out yourself that things would have been worse under Dion. Why would we have to go through Dion's destruction in order to realize how bad it was when we know how bad it would have been? We shouldn't have to go through it before we say "hmm, this sucks, we need conservatives in power." We avoided having an even bigger problem that would need solving but all liberals can now say is "Harper shouldn't have spent because that's an unprincipled conservative!"

            We shouldn't need to destroy the country to know what not to do…

          • You assume the coalition would have self-destructed quickly. Compromise is actually quite easy when all parties agree to fund most of what is on their respective to-do lists. Suppose the coalition lasted a couple of years, and rethink possible end states.

  4. "n early 2009, the United States was engaged in an intense public debate over a proposed $800 billion stimulus bill designed to boost economic activity through government borrowing and spending. James Buchanan, Edward Prescott, Vernon Smith, and Gary Becker, all Nobel laureates in economics, argued that while the stimulus might be an important emergency measure, it would fail to improve economic performance. Nobel laureates Paul Krugman and Joseph Stiglitz, on the other hand, argued that the stimulus would improve the economy and indeed that it should be bigger. Fierce debates can be found in frontier areas of all the sciences, of course, but this was as if, on the night before the Apollo moon launch, half of the world's Nobel laureates in physics were asserting that rockets couldn't reach the moon and the other half were saying that they could. Prior to the launch of the stimulus program, the only thing that anyone could conclude with high confidence was that several Nobelists would be wrong about it." Jim Manzi, City Journal, Summer 2010

    Since I am posting sections from Manzi's article elsewhere, i thought I would include this here.

  5. If the above holds true Sheila Fraser should be fired.

    How the hell can Canadians have gotten "good value" when the stimulus spending missed the window where it would have been most effective? Its like having careful paramedics who wait for a battery of tests to come back before administering CPR.

    On this one, I blame the bureaucrats much more than the Conservatives. I suspect the only option they really made available to the government was the tried&true matching fund scheme developed for the Chretien government.

    • The timing of federal spending isn't an appropriate indicator for whether infrastructure projects and the associated construction jobs started when they were needed most. As I mentioned above, what matters is when those responsible for the projects themselves (the provinces, municipalities, etc.) spent the money, not when the federal government reimburses them. The programs were unnecessarily complicated, and so projects were much slower to start than they should have been (most around here only got going this summer), so it will be a while yet before the federal government reimburses the costs incurred on these projects.

    • as for the different options available/recommended, the matching funding scheme gives the federal government the most visibility and credit. The Gas Tax Fund model has much to recommend it: speed and simplicity of implementation chiefly, but it gives the feds very low visibility. I would imagine that the option was presented to ministers and was quickly eliminated from further serious consideration for this reason alone.

    • Stewart: if the Conservatives had been paying attention, mostly to themselves from just a year or two earlier, they would have understood that "the bureaucrats" could not possibly deliver anything but this expensive abomination of futility. It's what governments do. It's what conservatives KNOW that governments do. It's what conservatives oppose. And, sadly, it is what the Conservatives implemented.

    • That the spending would be slow going out the door was predictable and predicted. The findings shouldn't be surprising to anyone who paid attention during the Dec 08/Jan 09 circus.

  6. Yes, after all, when someone throws themselves on a grenade and you survive, obviously there was no problem to begin with.

  7. Only if you are a guv'mint wurker(?).