Canada Budget 2012: Tories To Lay Down Majority Markers With First Unfettered Budget

CP  |  By Posted: 03/29/2012 4:00 am Updated: 03/29/2012 2:58 pm

OTTAWA - After six years in office, Prime Minister Stephen Harper's Conservatives finally get to flex their majority muscles today with a budget of deep spending cuts and government streamlining.

Everything appears up for a rethink, from the way major resource projects are assessed to how immigrants are selected, research and development is funded and the eligibility age for certain pension benefits.

The first budget since last May's majority victory, Foreign Affairs Minister John Baird boasted Wednesday in the Commons, "will help the middle class by ensuring the long-term prosperity of this great country."

"It will support the priorities of working families, creating an environment for job creation, supporting health care, supporting education. It is going to do great things over the next year on this plan."

The Conservatives have been pushing a "jobs and growth" mantra for months, including some $12 million in pre-budget advertising by Finance and the Canada Revenue Agency.

But a more frank appraisal might frame the budget as short-term pain for longer term gain.

Among the expected measures:

— Cuts totalling about $7 billion, or 8.5 per cent of government program spending, over three years that will have an impact on everything from military spending to environmental monitoring and the CBC.

— Changes in the long term that will raise the age of eligibility for old age security to 67 from 65, affecting most Canadians younger than 50.

— Streamlining the environmental assessment process for major projects such as mines and pipelines.

— More targeted government subsidies for research and development.

— Changes to skills training, the qualifications of economic migrants and some employment insurance programs in an effort to make Canada's labour market more productive.

The official Opposition NDP is already accusing the Harper government of engineering an ideologically driven race to the bottom.

Harper's minority run of politically popular tax cuts and lavish pork-barrel spending, say New Democrats, have set the table for this day of reckoning.

"The Conservatives have caused the problem by gutting the fiscal capacity of the government," Thomas Mulcair, the newly crowned NDP leader, said Wednesday.

"Now they're saying, oh, gee whiz, no more fiscal capacity in the government, we know what we'll do, we'll start cutting the services of the government."

With more than three years of unobstructed majority rule ahead until the next federal election in the fall of 2015, former government ministers agree now is the time for the Conservatives to act boldly.

With so much international economic volatility, Finance Minister Jim Flaherty pushed back the budget date as long as possible.

The spending blueprint, typically delivered in February, comes on the second-to-last business day in the government's fiscal calendar before the April 1 start Sunday of the 2012-13 year.

And despite better-than-expected numbers that have economists predicting the 2011-12 federal deficit could come in as much as $10 billion below the $31 billion projected last November, deep government cuts remain on track.

"Any of the hard things you believe you are going to have to do, you got to get them out of the way early," John Manley, head of the Canadian Council of Chief Executives and a former Liberal industry minister, said in an interview.

"First of all it shows a direction, and secondly it enables you to have time to deal with any political fallout."

Perrin Beatty, president of the Canadian Chamber of Commerce, said that after almost a decade of Liberal and Conservative minorities, it's time for some long-term budget thinking.

"In a majority government, you look at where Canada will be four years from now," said Beatty. "In a minority parliament you look at where you'll be four weeks from now. And that's very different."

And in just under four years, Harper's Conservatives will be going back to the electorate looking to extend their government for a fourth term.

They've already made expensive promises — contingent on balanced books — that would allow them to campaign in 2015 on income splitting for families with children and a doubling of the limit on tax-free savings accounts to $10,000 annually.

Those measures, if enacted, will further erode federal revenues by billions in subsequent years, constraining the ability of future governments to restore program spending without increasing taxes.

— With files from Julian Beltrame

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  • Top 10 Most Expensive MP Pensions

    Welcome to the $3 million club. The following 10 MPs will each receive an estimated total lifetime pension of more than $3 million if they retire in 2019. All the <a href="http://taxpayer.com/sites/default/files/CTFMP-PensionReport-WEB.pdf" target="_hplink">estimates come from the Canadian Taxpayers Federation</a> and are based on an MP retiring in 2019 and ceasing to receive their pension at age 80. The numbers if the MPs retire in 2015 are also included in the caption to each slide.

  • 10. Michael Chong - $3,124,903

    Conservative MP Michael Chong would receive an estimated lifetime pension of $2,684,816 if he were to retire in 2015.

  • 9. Peter Van Loan - $3,194,114

    Conservative MP Peter Van Loan would receive an estimated lifetime pension of $2,462,029 if he were to retire in 2015. (CP)

  • 8. Rona Ambrose - $3,330,876

    Conservative MP Rona Ambrose would receive an estimated lifetime pension of $2,429,149 if she were to retire in 2015. (CP)

  • 7. Rob Anders - $3,643,873

    Conservative MP Rob Anders would receive an estimated lifetime pension of $3,034,089 if he were to retire in 2015. (Jeff McIntosh/CP)

  • 6. Denis Coderre - $3,701,989

    Liberal MP Denis Coderre would receive an estimated lifetime pension of $3,288,821 if he were to retire in 2015. (Graham Hughes/CP)

  • 5. Scott Brison - $3,723,666

    Liberal MP Scott Brison would receive an estimated lifetime pension of $3,113,881 if he were to retire in 2015.

  • 4. James Moore - $3,795,386

    Conservative MP James Moore would receive an estimated lifetime pension of $2,893,658 if he were to retire in 2015. (Althia Raj)

  • 3. Gerry Byrne - $3,996,498

    Liberal MP Gerry Byrne would receive an estimated lifetime pension of $3,450,711 if he were to retire in 2015.

  • 2. Jason Kenney - $4,318,507

    Conservative MP Jason Kenney would receive an estimated lifetime pension of $3,416,779 if he were to retire in 2015. (CP)

  • 1. Stephen Harper - $5,596,474

    Prime Minister Stephen Harper would receive an estimated lifetime pension of $5,456,109 if he were to retire in 2015. Harper's numbers are based on the PM not buying back into the program for his service as a Reform Party MP between 1993-1997. In order to make a political statement, Harper did not contribute to the pension program during his time as a Reform MP. After returning to Parliament Hill in 2002, Harper could have retroactively contributed to the program for his service from 1993 to 1997. According to the PMO, Harper has not and will not make those contributions. MPs are not obligated to disclose this information. If Harper were to choose to buy back in for those years, his numbers would change. If he were to buy back in and retire in 2019 he would receive an estimated lifetime pension of $6,216,858 and $6,233,568 if he were to retire in 2015. His numbers also include the special allowance he will receive as Prime Minister. An earlier version of this story used the numbers based on Harper buying back in for the 1993 to 1997 period. After being contacted by the PMO with the prime minister's pledge not to do so, the numbers were updated. (CP)

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