Maclean’s on the Hill: Federal spending cuts, revealed

The Maclean’s Ottawa bureau gives its weekly debrief on the hottest issues in Canadian politics.



Each week, the Maclean’s Ottawa bureau sits down with Cormac MacSweeney to discuss the headlines of the week. This week, associate editor Nancy Macdonald joins the podcast to break down her cover story on Indigenous incarceration in Canada. Among her eye-popping findings during a nine-month investigation: Incarceration rates for Indigenous people in Canada are worse than they were during for Indigenous people in South Africa during the height of apartheid.

Tax hikes on gasoline and diesel could be on the table as the Liberal government negotiates a carbon tax with the provinces. That prospect disturbs Conservative MP Michelle Rempel, who joins the podcast to register her discontent. We’re also joined by an economist who’s pessimistic about Canada’s economic outlook. Finally, the Maclean’s panel parses federal spending cuts since 2012—and muses about a possible Bombardier bailout.

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The full episode

Part 1. Prisons are the ‘new residential schools.’

The multinational catering company just hired by the Saskatchewan government to provide meals at eight provincial correctional centres has been the subject of serious complaints about food quality and other issues elsewhere. (Don Healy/Regina Leader-Post)

(Don Healy/Regina Leader-Post)

Nancy Macdonald’s provocative cover story on Indigenous experiences with Canada’s criminal justice system gives readers a devastating look at systemic racism at every turn, from policing to incarceration. The story caught the attention of Liberal MP Robert Falcon-Ouellette, who commented on it in the House of Commons foyer shortly after it went online. Macdonald joins the podcast with more detail on her investigation.

Part 2. What’s the price of a carbon tax?

(Todd Korol/Reuters)

(Todd Korol/Reuters)

As Environment Minister Catherine McKenna prepares to negotiate a price on carbon with Canada’s provinces, she won’t rule out a tax increase on gasoline and diesel. Conservative MP Michelle Rempel is steadfastly opposed to any such hikes—and urges the Liberals to follow the same strategy as the former Tory government.

Part 3. A Canadian economy sputters.

TMX Broadcast Centre is pictured in Toronto on May 16, 2011. The Toronto Stock Exchange was essentially flat the morning of Thursday June 18, 2015 as U.S. markets and the Canadian dollar registered solid gains. (Frank Gunn/CP)

(Frank Gunn/CP)

Want an uplifting view of the Canadian economy? Good luck. When John Geddes spoke to David Watt, the chief economist of HSBC Bank, pessimism ruled the agenda. Watt explained why low oil prices and a weak Loonie will hurt consumer confidence, why manufacturing exports may not thrive as much as some had predicted, and what sort of federal spending is most appropriate in the near future.

Part 4. Federal spending cuts revealed.

Jim Flaherty Stephen Harper

When the former Conservative government cut federal spending as part of a years-long attempt to balance the books, largely under the leadership of the late Jim Flaherty, the Parliamentary Budget Officer fought with little success for a detailed breakdown of the reductions across departments. Today, the Liberal government posted many of those numbers online. John Geddes and Paul Wells talk about what they learned from the data dump—and how their expectations of the government on transparency have changed. They also muse about a possible federal bailout of an ailing Bombardier.


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Maclean’s on the Hill: Federal spending cuts, revealed

  1. Carbon tax: when I flush my toilet the effluent makes a well controlled journey propelled by water I pay for through pipes I pay for to larger pipes I pay for to a treatment plant which I pay for where pollutants are removed and the remaining effluent goes into the river which further downstream supplies drinking water to 10s of thousands of people; whether or not I like having to pay for all this, I must realize that rationally this is better than the alternative (an outhouse that one occupied the back yard and a night cart that occasionally dumped the accumulation in the river). When we use the air that we breath as a sewer, we should not be totally surprised that we should pay; pollution taxes are merely an inducement to either reduce or clean up, taxation being the governmental soft approach to regulation – when it comes to pollution a putative alternative to firm regulation.

  2. Spending cuts: not very informative as the projections are just status quo. A substantial number of cuts are things rushed into place by the Harper government to show that they could balance a budget although they didn’t and only came close by disposing of a number of assets. I can’t imagine that all will stand particularly egregious (many think) cuts to assistance to veterans and the attempt to write down recent and soon to be created veterans. Some areas like rail and nuclear regulation are of course one incident away from an increase in a reversal of cuts. For Canada to reclaim its image as a global good guy, reversals of cuts in international development and aid seem likely.
    One problem with this analysis is that the numbers only address program spending. Harper turned the PMO into a massive independent division of government: it remains to be seen whether this will be knocked back down with a return to a parliamentary system and an independent senate. Another area not shown is tax spending, tax concessions, low-ball pricing of public assets including natural resources and below value fees. In the past few years, the fossil fuel industry received a net $12B of such benefits in excess of tax revenues – this is not an insignificant form of government spending. The problem here is that this form of spending – or corporate welfare – is plausibly positioned as beneficial to the general public.

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