Wednesday, January 28, 2009

Conclusion: Harper’s Budget fails to meet the three criteria laid down by Ignatieff

This budget should be approved or disapproved based on its own merit (or lack thereof), and not based on its secondary effects on the political fortunes of those in Ottawa. This budget is completely lacking in a vision for Canada, and represents nothing more than a hodge-podge of measures that meet certain political aims as opposed to any clear economic aims.

This budget should be rejected by the Liberals since it fails to robustly meet any one of the three criteria laid down by Michael Ignatieff, as follows;

(1) Protecting the most vulnerable in our society: A permanent tax break for those earning less than $80,000 is not protecting the most vulnerable in our society. Since when is $80,000 the threshold upon which to define “vulnerable”? Furthermore, it is deceitful of Flaherty to portray this as a tax cut for those earning less than $80,000, since those earning more than $80,000 will fully partake in this tax cut as well. The most vulnerable in our society are seniors and the unemployed. Giving seniors another $155 per year is a meaningless measure and the benefits extended to the unemployed in this budget are parsimonious in the extreme. Relaxing the rules on RRIFs will not cost the government $200 million as Flaherty claims. This calculation of this $200 million “cost”, is based on the same grossly flawed methodology used to create Flaherty’s bogus argument that income trusts cause tax leakage. Forced conversion of RRSPs into RRIFs serves no senior’s purpose except the life insurance companies as a captive market for their life annuity product.

(2) Protecting the jobs of today. I fail to see where the jobs of today are being protected in this budget, unless perhaps you work at Home Depot, and your job has been extended by another 13 months under the 15% tax credit for home renovations and building products. I guess it pays to be the CEO of Home Depot Canada and to be appointed to Flaherty’s Economic Advisory Council just in time for the budget. How much of the $85 billion of deficit that this budget will create is being dedicated to protecting the jobs of today? Harper fails to put a number of how many jobs of today are being protected by this budget? Canadians must take it on faith, how many jobs of today are being protected. Faith is not something that should be extended to Stephen Harper, given his past record of faith breaking.

(3) Creating the jobs of tomorrow. To the extent that this budget fails to meet Ignatieff’s criteria of protecting the jobs of today, this budget fails even more miserably at creating the jobs of tomorrow. This is the portion of the budget that requires a vision of where Canada should be headed and in what sectors Canada is best able to compete in creating well paying sustainable jobs for the future. Having such a vision requires leadership, that Harper has again failed to demonstrate. This is the part of the budget where government could begin charting the course for Canada’s involvement in new areas of economic activity. I see nothing in this $85 billion budget that is devoted to creating the jobs of tomorrow. As with (2) above, Harper fails to put a number in how many jobs of tomorrow are being created by this budget?

Based on Michael Ignatieff’s own criteria for evaluating the budget, this budget should be rejected by the Liberals. Approval of this budget by the Liberals will, on the other hand, require that the Liberals answer the question that Harper has failed to do, which is am explanation to Canadians of how the Liberals feel this budget will meet their self imposed criteria?

Even though Harper has failed to set targets for what his budget will achieve, that does not absolve the Liberals from the same exercise. If the Liberals approve this budget, it must be with some expectation about what the budget will achieve. What expectations are either implicit or explicit in the Liberal’s approval of this budget, since Harper has failed to disclose his expectations, apart from the cost side of what properly should be a cost-benefit analysis. What are the benefits as defined by Harper, or by the Liberals if they approve this budget?

After all, when was the last time you spent $85 billion on a budget, without any expectation or assurances by its architects of what those expenditures would achieve?


Anonymous said...

I don't know if you ever watch Rick Mercer's show, but he had a good comment last night. In stark contrast to the transparency and accountability that has moved into US politics with Obama, the Tory government in Canada (should it survive) is about to embark on an unprecedented spending spree with borrowed money at a time that they have effectively shut down access to information. You'll only know that all those infrastructure projects are being built in Tory ridings after the footings have been poured. Here comes the pork barrel!


Anonymous said...


Here comes the pork barrel!.....did you notice that Flaherty’s choo choo train was front and center?

Brent Fullard

Dr Mike said...

Here we go again---no targets equates to no clue.

Cheesy Jim Flaherty was all smiles yesterday because he knows access to many of these programs is limited & therefore the money will not be spent which will reduce his projected deficit without lifting a nail.

No wonder I hate politicians ,especially so-called Conservatives ones.

Iggy , restore my faith , dump this turkey or force them to make it right.

Dr Mike Popovich.

Anonymous said...

Damn it, Brent, what are 'temporary emergency powers' for Flaherty??? Remember what Bush did with his temporary powers...


Anonymous said...

Another problem is that the large majority of the proposed infrastructure spending depends on matching funds from Municipalities and Provinces. They haven't been able to get the money in existing infrastructure fund out the door because either the other gov'ts can't come up with the money or they are mired in endless negotiations over the agreements that will govern these investments. This new money will suffer the same fate and no value other than short term political rhetoric will result. The whole thing is a flop.