Thomas Mulcair sounded sure of himself reacting to today’s federal budget for the first time as NDP leader. But Mulcair’s main line of attack, his claim that the budget contains “reckless cuts” to Old Age Security and health care, could be difficult to sustain. While Prime Minister Stephen Harper’s speech in Davos led to speculation that OAS was in for deep, wrenching cuts, the 2012 budget announces that the age of eligibility for the benefit will be gradually raised to 67 from the current 65 starting in 2023. As for health care, Flaherty told the provinces late last year he’ll be trimming annual growth in health transfers to about four per cent from the current six per cent year hike, but not until 2017-18. So those are two modest restraint measures that won’t be imposed for a long time. Even Mulcair will have trouble keeping up political pressure on changes so far off.
Bob Rae, the interim (at least for now) Liberal leader, directed his fire first and foremost on the budget’s failure to stimulate employment. “After Canada experienced zero job growth during the last six months, we expected this budget to have one focus – jobs,” Rae said. Again, it’s hard to see this as an easy political winner. While the budget isn’t big on jobs, Flaherty can point to a handful of moves—$205 million to extend a hiring tax credit for small business, another $50 million over two years for youth employment, and $74 million for a pilot project to make sure Employment Insurance recipients who accept work while on EI won’t see their benefits cut by as much as they earn. These are niche programs, but not negligible ones, and will make it harder for Rae to claim the government is doing absolutely zilch on the job front.
Beyond the House of Commons, reaction on specific budget measures included the Canadian Media Guild protesting the move to cut CBC’s budget by 10 per cent, or $115 million less for the public broadcaster in 2015, down from the $1.1 billion it got from the government this year.
From quite a different perspective, the Canadian Taxpayers Federation complains that Flaherty’s spending cuts “are a drop in the bucket.” The federation says the budget will not balance the budget by 2014-15, as Harper once promised. Indeed, the budget cautiously projects no surplus until 2015-16, although RBC Economics, among other private forecasters, suggests the deficit is on track to be eliminated a year earlier, consistent with Harper’s previous pledge.
The Sierra Club of Canada protests that the budget’s plan to speed up environmental reviews of resource projects—including the controversial Northern Gateway pipeline through British Columbia—will “result in weaker environmental assessments and projects being approved without a full understanding of the social, economic and environmental impacts they will have.” There’s little chance the Harper government, increasingly defined by the way it champions the energy sector, will be open to persuasion on this one. But the budget took note of “overlapping federal and provincial regulatory requirements and processes that require a high degree of coordination.” So how far can Ottawa go to streamline reviews without coaxing the provinces on-side? Officials in the budget lock-up for journalists flatly declined to discuss that very pertinent issue.
The Canadian Manufacturers & Exporters, a key business lobby group, was sharply critical of the budget’s plan for changing Scientific Research and Experimental Development tax credits. The credit is going to be enriched for smaller companies, but overall the changes will, according to the CME, cut $1.3 billion out of tax support for business innovation from 2014 to 2016. Flaherty seems determined to shift emphasis from the broadly available tax credits to more targeted government support for innovative companies, a thrust recommended in software executive Tom Jenkins’ report on the issue for the government last year.