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Why this budget is a 518-page campaign pamphlet

John Geddes parses the highlights of the 2015 federal budget and the start of the election campaign


 
Justin Tang/CP

Justin Tang/CP

To call a federal budget a political document is a cliché. What else would the annual unveiling of a set-piece plan for taxing and spending be? But in this election year, with every eye in Ottawa squinting ahead to the Oct. 19 fixed date for Canadians to go to the polls, Finance Minister Joe Oliver’s budget is even more political than usual—a 518-page campaign pamphlet.

If there was any doubt about that, Oliver quickly erased it by including in his budget speech a shoutout to every voting group Prime Minister Stephen Harper’s campaign strategists covet. Middle-class parents? Naturally. Seniors, that solid Tory demographic? Of course. Voters in the hotly contested Ontario manufacturing heartland? They get special attention. Immigrants and ethnic communities? New niche programs target them directly.

But Economic Action Plan 2015 (as Oliver’s budget will be branded in the extensive, taxpayer-funded advertising campaign the government will now roll out to sell it) is not designed only around carving Canadians into voting segments. It is also inarguably built to reinforce Conservative messaging around several familiar themes—controlling spending, cutting taxes, and upholding law-and-order and military might.

After nine years in power, though, Harper looked vulnerable on all those key messages—especially, after seven consecutive deficits, his claim to being a careful spender. And so, Oliver’s least surprising declaration of the day came early: “I am proud to announce this budget is balanced. This year, we are forecasting a $1.4 billion surplus, and growing surpluses thereafter.”

But the way he managed to write this budget in black ink wasn’t, strictly speaking, frugality. In fact, Oliver had to take the contingency reserve—the cushion built into the budget against unexpected economic woes—and shrink it from $3 billion, where it was set as recently as last fall, down to $1 billion. If he hadn’t given himself that $2 billion bonus, Oliver’s 2015 fiscal plan would have remained in the red.

Clearly, the government is hoping Canadians will be too busy tallying the benefits the budget contains for them to fret about how Oliver avoided posting another deficit.

 

The big measures were known well in advance. Income-splitting for couples with kids will let them transfer income from the higher-earning to the lower-earning spouse for a saving of up to $2,000. A boosted universal benefit will send more money in monthly cheques directly to families with kids, starting in July. The allowed yearly contribution to Tax-Free Savings Accounts will be nearly doubled to $10,000—a popular measure among seniors. As well, the rules for seniors withdrawing savings from their Registered Retirement Income Funds will be relaxed, a substantial tax saving for retired Canadians.

All this, and more, was packaged in the budget as part of a cumulative Harper-era boon to that adds up to $6,640 in tax cuts and benefits for a fictional couple—the unacknowledged stars of the budget show—“Henry,” who makes $84,000, and “Cathy,” who brings home $36,000. They have two daughters, and their lovely family benefits to the tune of $2,329 from child benefit hikes, $3,293 from tax relief, and $1,018 from GST cuts (that old Tory budget hit of yesteryear).

Nowhere in the budget, however, is another case study, which officials in Oliver’s department found only by leafing through binders they carried into the budget-day lockup for journalists. An unmarried individual earning $36,000, and not eligible for any of those signature Tory breaks for parents, has benefited during the Harper years by an estimated $1,715—not bad, perhaps, but less impressive than that two-parent, two-child family’s haul.

Beyond that complicated personal tax picture, the government targeted spending strategically. Oliver earmarked $11.8 billion for the Canadian military over a decade, although that increase won’t start until 2017. There’s also $360.3 million to extend the non-combat military mission against Islamic State terrorist forces in Iraq and Syria, and $7.1 million for military training in Ukraine. On the thematically related domestic anti-terrorism front, the budget pledges $292.6 million over five years for the RCMP, the Canadian Security Intelligence Service and the Communications Security Establishment.

After putting checkmarks beside “supporting families” and “protecting Canadians,” Oliver needed to provide campaign platform fodder to give Conservatives a chance to pitch their vision for long-term Canadian prosperity. That matters particularly in Ontario, where the manufacturing sector was hit hard by the 2009 recession, and hopes are now high for an export-driven rebound fueled largely by the drop in the Canadian dollar since oil prices tumbled.

So the budget injects up to $100 million over five years into a new fund for Canadian auto-parts suppliers. More broadly, Oliver extended to 10-years an incentive that lets companies write off more quickly any investments in machinery and equipment. On infrastructure spending, he pledged to establish a new permanent fund for mass transit. But that money won’t start flowing until 2017-18, with a planned yearly pool of $1 billion by 2019.

Infrastructure happens to be one of Justin Trudeau’s key themes, and the Liberal leader can be expected to find that transit pledge too little, too slow. In fact, Trudeau’s presence crowded the margins of Oliver’s budget speech. On balancing the budget, Oliver said, “Now, this did not just happen”—a sly allusion to Trudeau’s off-hand remark that, with enough economic growth, the budget would balance itself.

Older Liberal ghosts also haunted the budget, including even Trudeau’s father, the late prime minister Pierre Trudeau. “Their path,” Oliver said of unnamed Liberal regimes of the past, “leads to the crushing structural deficits that plagued this country for years.” Of course, Liberals have a different perspective on budget-making history, a vantage point that highlights the deficit-cutting, and then surplus-spinning, of the era of Jean Chrétien and Paul Martin.

Budget day is a once-a-year political showcase. But Oliver’s 2015 version turned out to be a pre-election survey of the Harper legacy going back to 2006, set against that starkly contrasting version of what happened in the preceding Liberal era. That framing foreshadows an election shaping up as, not a contest merely over this year’s numbers, but about clashing visions of recent decades in Canadian political and economic history. That campaign began today.


 

Why this budget is a 518-page campaign pamphlet

    • Its even more interesting to see why Canadian governments have spent so little time in fiscal balance.
      Starting in 1974 the same Liberal government which nationalized our Bank of Canada (in 1938), slowly stopped using it… Now Canada’s national bank is responsible for only 2% of the money in circulation Today. Since 1974 Canada has borrowed from the same banks as you and me, and a debt of just $18 billion in 1974 (accumulated, since confederation) has ballooned a debt of over $500 billion; 95% of which is compound interest.
      Let us state that again, 95% of our $500 billion debt is compound interest which we would not have had to pay if the Canadian Government had borrowed the money from our national bank. This massive debt was inflicted on us by politicians too stupid, lazy or corrupt (pick whichever one you think is true) to use The Bank of Canada’s ability to loan Canada money interest free.
      On this debt we the tax payers are on the hook for an average of $34 billion per year (that’s $93,150,685 PER DAY, 365 DAYS A YEAR) through various levels of taxation. This is money that is paid to private banks and investors and is the reason that infrastructure, social programs, education, healthcare, arts and culture funding and more have suffered through the years while our taxes kept going up.
      This amount does not include provincial and municipal payments on debt interest which brings the figure closer to $60 billion per year. That’s $164,383,562 PER DAY, EVERY DAY OF THE YEAR coming out of our economy going directly to private international bankers, rather than simply paying off the borrowed money, back to the Canadian population.

  1. This assumes Canadians want these canoaugb things…..and they don’t

    • Sorry….that should read ‘campaign’

  2. What a BS budget. Hey media, why not challenge the liars for why revenue is up and yet economy is down as is the value of money? Investors, savers and pensions are punished in Canada yet again.

    Its why I invest outside of Canada now for years. In fact converted a good chunk of my RRSP to USD to trade outside of Canada. Why invest in a depreciating, devaluing, spiral debt bankrupt country to lose money and lose value? Yet these idiots wonder why we don’t invest in Ontariowe auto after Ottawa loses $5++ billion on auto bailouts and CHMC is holding $600 billion of bad debt.

    Canada is a morally and financially bankrupt nation. Time to send more money to USA now that we have 81 cent dollar money for a few days.

  3. On balancing the budget, Oliver said, “Now, this did not just happen”—a sly allusion to Trudeau’s off-hand remark that, with enough economic growth, the budget would balance itself.

    True – it took some sleight of hand by way of a $2 billion reduction of the contingency reserve. But the basic concept of keeping spending increases below increases in GDP is both what Trudeau was talking about – and, sleight of hand aside, how the CPC got there.

    Though they get a lot of mileage from taking the second half of Trudeau’s quote out of context and by ignoring the first half, the reality is, they did what he was talking about. Just try to get them to admit it, though…

    • Not to mention a one-time $3B bonanza from an asset sale. I seem to recall Jim Flaherty pulling the same move to balance the budget when he was Ontario’s finance minister…

      I wonder what they’ll have to sell next year to balance the budget.

      • Quit your carping! The opp parties were screaming for massive spending then and it was with great reluctance that Harper bought the stock – at the point of a gun almost as the US GM was threatening to close Oshawa to save its own plants if Canada didn’t go along. and so the CPC did that which helped keep the economy out of the deep doo doo and saved a lot of jobs at GM. Whether it will result in GM producing anything but crap remains to be seen. (After 5 rotten GM cars one might consider I am not a GM fan. The GM share purchase was part of that to keep plant workers working, if you remember. Now we are improving and it is time to sell the GM stock – at a slight profit, I think. I feel to see what is wrong in using it to balance the budget – contingency funds are not scared. Election ploy? Probably; so what. Are you folks tryhing to tell me that the Libs never did budget tricks in the year of an election. The NDP are a long, long way from having to worry about it. He

        • LOL you know very well Harp agreed to the spending at the G20 led by Dubya

          And our surplus would easily have covered it….if Harp hadn’t already blown it.

  4. From my perspective, Harper is doing exactly what Canadians want-lower taxes, more supoort for the ederly and children and being actively engaged against terrorism. Even with the borrowed $2G from the reseve fund, it is quite amazing that this government came even close to balancing the budget when one considers the signicant loss of oill revenues. Very well done, I’d say and I hope for many more years of this thoughtful government. One should note that when Martin did his magic to balance the budget, he did it by transferring significant financial burden to the provinces for them to deal with.

    • I have no idea where you’re getting that from. Canadians want jobs and social programs….and haven’t the slightest interest in lower taxes and/or terrorism.

      Oil revenues have always been minor, and Harp had a surplus when he started out. He simply blew it. There was no need for any of this nonsense.

      • Emily-you obviously don’t follow the polls as to what Canadians value. As an example, 82% of Canadians supported Bill C-51. And I guess you don’t view extending EI benefits from 6 weeks to 6 months to care for an elderly family member as a “social program”. I’d also say that Harper managing us through the worse economic disruption since the great depression speaks highly of him rather than your view that he “blew it”. Compare that to the destruction The Ontario Liberals have caused with their scandalls, and frivolous spending and you’ll have a preview of what the man-child Justin might do if he ever got the chance.

        • The polls are up and the polls are down ….and by statistically meaningless amounts. Within the margin of error. Like all our polls for years now.they indicate nothing whatever on an individual basis.

          Trudeau has been trending up for 2 years
          now though….and Harp has been trending ….that’s a long-term trend and important

          Today, Canadians said they’d rather have even a coalition than Harp.

          Canadians don’t support C-51

          A pogey extension is not a social program

          Harp didn’t know a recession was coming, and he had already blown the surplus.

          Ontario is just fine….even elected a majority govt

          Ontario, in fact, contributes 40% of Canada’s GDP. We are in good hands.

          Harp is the worst PM we’ve ever had.

      • No Emily, perhaps oil royalties are minor as far as the feds are concerns but the impact on the economy is NOT minor, although cheaper fuel should help Ontario manufacturers. He did not blow it and if you debatye that you should look at polls to see what Canadians do want.

        • It’s tough on Alberta, with all their eggs in one basket….but everyone else…and Canada….is fine.

          Harp blew the surplus, and he blew the recession, and he blew the economy.

    • It wasn’t Martin; it was senior Min Fin officials who stopped him from spend, spend, tax, tax because Canada’s credit rating was going down the tube. Sure, he then did the necessary but it came off the backs of national health and welfare programs, not to mention defense, although the Libs coould never be accused of spending extra money on defense. But you are right, there was a big shift onto the provinces.

      • So Martin was supposed to fix the economy without cutting back on anything?

        What coven are you in?

        • Emily-you slay me. You cannot accept facts and argue only with leftist emotions. The last several polls show Trudeau has justifiably declined to the extent that both Mulcair and Harper are preferred to be Prime Minister over him. In fact, every time he opens his mouth, hems and hahs and shows how really shallow he is he drops further. The only aspect that Trudeau beat the other two on was “having an hidden adjenda”. It’s so hidden even he doesn’t know what it means!! And if you think Ontario is in good shape you don’t understand anything about responsible government spending. The Liberals there have “blown it” since day 1!!

          • Not a leftie, hon. Never was.

            And my preferred form of govt is a technocracy….THAT depends solely on facts.

            Harp has had his chance…it’s time to heave Steve.

    • Harper is doing exactly what Canadians want – depends on which Canadians you ask. The gullible and the greedy tend to be more easily sucked in by these bozos.

      Even with the borrowed $2G… That’s $2B – a bit of a difference.

      As an example, 82% of Canadians supported Bill C-51. At first. By mid-March only about one third of the population was solidly in favour – and that number keeps dropping. (What were you saying about following the polls?) Basically, anyone who knows what the bill actually contains is opposed.

      Personally, given the CPC are acting not just against the will of the people and against the best legal advice – including the advice of their own privacy commissioner – and engage in McCarthyesque questioning of witnesses at the hearings, I consider their actions treasonous.

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