Yesterday Finance Minister Jim Flaherty introduced his government's budget plan for Canada. My Liberal colleagues have rightly renamed it Canada's Economic (In)Action Plan. It is in reality a political smoke screen, replete with gimmicks designed to convince Canadians that the Conservatives, somehow, are in fact balancing the books. This could not be further from the truth.
We are facing many challenges, with high youth unemployment, hundreds of thousands of unfilled jobs placing a serious strain on economic growth. In yesterday's budget there was no new or increased funding for skills training, infrastructure projects or Aboriginal education, an area that is particularly important for Canada's future prosperity.
On job creation, despite asserting that fixing labour shortages is the most important issue facing the country, this Conservative government did nothing to address the issue. They simply repackaged existing programs under new names, as is the case with the "Jobs Grant." This program will not be up and running for another five years, and will require cash-strapped provinces to come up with funding they don't have to help pay for the program. At the same time, the budget freezes skills training funding at 2007 pre-recession levels, which when factoring in inflation, actually represents a 10% cut to training dollars for provinces and territories. The skills shortage is a real problem and the government needs to step up with a real investment.
Budget 2013 will hurt Canada's already weakened economy, and the EI premium hikes contained therein will cost Canadians. The job market still hasn't recovered from the recession, and with 220,000 more unemployed Canadians than before the recession hit, it's even more difficult for young Canadians to find a job. But all the government is offering up is a $19 million advertising campaign, an initiative that will translate into zero new jobs or improved skills for our youth.
Meanwhile, the Conservatives' much-touted infrastructure plan is, in fact, a reduction in current funding. New funding for the Building Canada Fund drops from $1.7 billion in 2013-14 to $210 million for each of the two following years. So ask yourself, does Canada actually have no real infrastructure needs over the next two years or is this just a cynical move designed to meet a politically imposed deficit elimination deadline? Canada's needs have clearly taken a back seat to the needs of the Conservative Party.
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Revenues for 2013-14 forecast at $263.9 billion, spending at $282.6 billion, deficit at $18.7 billion. Deficit projected to drop to $6.6 billion in 2014-15 and become an $800-million surplus in 2015-16. With files from Althia Raj and The Canadian Press.
The Tories plan to create a Canada Job Grant that will provide $15,000 or more per person -- up to $5,000 provided by the federal government, the rest matched by the province/territory and the employer. Nearly 130,000 Canadians are expected to benefit when the new grant is fully implemented in 2017-2018. Essentially, this is the government saying it is taking training out of the hands of provincial governments because it hasn’t worked and placing it in the hands of individuals. The Canada Job Grant will replace the Labour Market Agreements the feds signed with the provinces, which expire in 2014.
Manufacturing and small business get tax-credits introduced in past budgets extended to help spur investment and growth. There will be $1.4 billion in tax relief for manufacturers by extending the temporary accelerated capital cost allowance for new investment in machinery and equipment. And hundreds of millions for small business owners.
The government has pledged more than $53 billion in infrastructure spending, including $47 billion in new funding over 10 years. This includes $32.2 billion over 10 years for a “Community Improvement Fund” to build roads and public transit as well as recreational facilities and other community infrastructure projects. The Fund will consist of an index Gas Tax Fund and the incremental GST Rebate for Municipalities.
Military spending will be re-jigged that it is modeled on the ship building strategy and aimed at creating more jobs in Canada and key domestic capabilities with an eye towards exports.
The budget has cancelled the Canadian International Development Agency, the primary agency responsible for foreign aid. Its duties will be merged into the Department of Foreign Affairs.
The government says it is aggressively going after tax avoiders/and closing tax loopholes. They are launching a “Stop International Tax Evasion Program” where the Canada Revenue Agency will pay individuals with knowledge of “major international tax non-compliance” a percentage of the tax collected as a result of information provided. The CRA will only pay a reward if the information results in total additional assessments exceeding $100,000 in federal tax.
Two departments -- Canada Revenue Agency and the Department of Fisheries and Oceans -- will see big cuts. Departments will see a 5 per cent cut in their travel budgets. The government also says in the budget it intends to work with the public sector unions to “further align overall compensation with other public and private sector employers.”
The federal budget says new projects related to Canada's perimeter security deal with the United States will go ahead as planned, despite budget woes south of the border. The federal budget has given the green light to almost a dozen information-sharing and infrastructure projects related to the Beyond the Border initiative between the two countries. The vaunted deal was announced with fanfare by Prime Minister Stephen Harper and U.S. President Barack Obama in December 2011 at the White House. The plan aims to speed the flow of goods and people across the 49th parallel while protecting the continent from a terrorist attack.
The government wants to reduce import tariffs on a number of goods including baby clothing, skis, snowboards and gold clubs. But it plans to offset the $76-million revenue loss from that by hiking excise taxes on chewing tobacco and other manufactured tobaccos, to bring them in line with cigarette taxes.
Finance Minister Jim Flaherty's spring budget commits Ottawa to five more years of funding through the Investment in Affordable Housing program. The level of commitment is the same as in the past: $253 million a year over five years, which needs to be matched by the provinces and territories and can be spent on new construction, renovation, home ownership assistance, rent supplements, shelters and homes for battered spouses. But there's a new twist to the funding. Home construction in the program will support the use of apprentices so that newcomers to the construction trades can build up crucial experience. The budget also commits $100 million over two years to build 250 more units of affordable housing in Nunavut, where homes are so crowded that illness spreads easily and poverty abounds.
As I said last night, the rule in politics remains that when you have nothing to announce, you announce the number over ten years; Mr. Flaherty seems to have adopted this approach too enthusiastically in promoting his "new" infrastructure plan.
Finally, and of great importance, is the Conservatives' continued failure to support Aboriginal Peoples in Canada. The Aboriginal population is significantly younger when compared to the rest of the country , and represents the fastest growing demographic in the country. Unfortunately, in 2013, they continue to endure the worst education outcomes in Canada.
After promising to improve the education and skills of Aboriginal Canadians, Mr. Harper's budget provided not one new dollar for First Nations K-12 education, depriving the economy of a rapidly growing pool of talent, and denying Aboriginal Peoples a prosperous future.
For these glaring weaknesses, among others, the Liberal Party will be opposing this budget. We will be standing with all Canadians who demand a fairer, more sustainable and more prosperous Canada.
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