Harper's Bait and Switch Budget

Phony spending foreshadows future cuts.

By Murray Dobbin 21 Mar 2007 |

Murray Dobbin writes a national affairs column for The Tyee.

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Harper and Flaherty, 'desperate' for a majority

So, this is how Canada as we know it will end. An election called on the Liberals being soft on crime and terrorism, but with a big spending budget for the Conservatives to run on. For sheer hypocrisy and cynicism, it's hard to beat.

Stephen Harper doesn't believe in any of the budget announced Monday -- except the continued transfer of no-strings-attached money to the provinces which further erodes the leadership role of the federal government -- so there are two keys to understanding his plan.

First, Harper desperately wants a majority, so he can get down to serious social-re-engineering, and he will do anything to get it. Second, the only way he can win a majority is to do everything he is viscerally opposed to. Harper does polls and focus groups by the truckload. He knows the Strategic Counsel poll that came out budget day was an accurate reflection of the Canadian reality: 50 per cent of Canadians wanted the surplus spent on social programs, only 19 per cent wanted tax cuts. Actually, the poll was even worse news for neo-cons -- another 15 per cent wanted more money transferred to the provinces, most of which actually goes to social programs.

Right leader, left country

The twists and turns of the Harper government reflect a stark reality: Canada, a social democratic country and society, has an extreme right-wing prime minister. The success of Harper's budget depends on both sleight of hand and a reliance on Canadians' forgetting that much of the "new money" simply replaces money Harper cut previously.

Machiavelli would have liked this budget. Rather than any kind of vision, it contains a series of spending items designed to bolster votes in areas Harper needs to win more seats, urban Ontario and Quebec. That there is no vision or long-term plan in this high spending should come as no surprise. Harper's vision is of "more freedom through less government," the slogan of the National Citizens' Coalition, his favourite organization. The long-term plan is still the same: gut the federal government and harness what is left in the interests of the corporate sector.

The so-called "good" stuff in the budget is mostly smoke and mirrors. Harper and his finance minister, shamelessly stealing the NDP's line, now talk a lot about "working families." But there is precious little there for them. There is $250 million for child-care spaces (a pittance compared to the $1.2 billion over three years pledged by the former Liberal government) and no guarantee that any of it will be spent. There is a Registered Disability Savings Plan, but no deal to ensure the provinces won't claw it back. The $2,000 Child Tax Credit won't help most low-income families. No leadership here on the minimum wage, which in no jurisdiction provides a full-time worker enough to get past the poverty line.

There is no money for housing, $45 million less in fact, despite a 12-year social housing waiting list. Similarly, the Working Income Tax Benefit is a sham, and the provinces are likely to claw it back anyway. And as ACORN Canada points out, working people will be paying $3 billion more in income tax as the lowest tax rate goes up in 2007 from 15 per cent to 15.25 per cent. "Hard working families" are still going to have to go in debt to send their kids to university or college -- only $800 million for post-secondary education is promised for the future. As for aboriginal "working families," not a dime in new spending.

And Mr. Flaherty's Bay Street friends, the big company CEOs? They will continue to earn on average 240 times what their employees in those "hard working families" earn.

As for the environment, it's mostly flash. The surtax on gas guzzlers won't work. B.C. has had one for years and still has the highest percentage of gas guzzler buyers in the country. Plus, it is wiped out by the rebate for fuel-efficient vehicles, which also doesn't work because it's too small. Nothing about stronger regulations or more enforcement, and we will be handing out billions in subsidies to the tar sands for another eight years.

While the Harper-Flaherty team hopes Canadians see the big spending as automatically progressive, they hope even more that they don't see the budget items and trends that truly reflect this government's "vision." There is some new money for sewer and water infrastructure, but it is a drop in the bucket. Municipalities need $60 billion to refurbish themselves. And the new money is all tied to a condition that proponents of projects "will be required to demonstrate that the option of undertaking the project as a public-private partnership has been fully considered." More money for Bay Street financiers.

The most perverse aspect of all the spending, besides the decentralization push, is that it seems designed to have the government run out of money, and sooner rather than later. According to the Canadian Centre for Policy Alternatives, "[i]n less than a year, the Conservative government, largely through ill-advised tax cuts, poorly targeted handouts and an increase in military spending, is well on its way to emptying the fiscal cupboard." The surpluses that Harper has been relying on for his targeted vote-buying could run out as soon as next year, just in time for a majority Harper government, elected on its spending, to revisit the "deficit hysteria" of the 1990s and tell Canadians the pot is empty. By then much of the federal tax revenue will be headed, no strings attached, to the provinces and another big chunk, soon to be $20 billion, will be devoted to the military. Welcome to the real world of Stephen Harper.  [Tyee]

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