THE BLOG

Will Harper Keep His Promise on Budget Day?

03/21/2013 09:05 EDT | Updated 05/21/2013 05:12 EDT
AP
Canadian Prime Minister Stephen Harper delivers a statement regarding the federal government review of the $15.1-billion takeover of Nexen Inc. by China's CNOOC Ltd. and the $6-billion takeover of Progress by Malaysia's Petronas, Friday Dec. 7, 2012. (AP Photo/The Canadian Press, Fred Chartrand)

Stephen Harper won his majority in 2011 -- on his fourth attempt -- because of certain promises he made. He promised to control spending. He promised to balance the federal budget in 2014-15. And he promised to deliver tax relief once the budget was balanced, by extending income splitting to working families and by doubling the amount we can all put in our Tax-Free Savings Accounts each year.

This year's federal budget will show us if he's serious about keeping the promises that got him his majority.

Despite the Prime Minister's strong mandate for fiscal discipline and tax relief, a chorus of naysayers is singing the siren song of spending, more loudly than ever, ahead of this year's budget.

"While it is essential to balance the budget over the business cycle, it is poor economic policy to enact fiscal austerity in a context of weak economic growth," warned Toronto MP Peggy Nash, the NDP finance critic

Bay Street seems to agree with the NDP. In the Globe and Mail Doug Porter of BMO capital markets said he "would be just as happy" if the budget wasn't balanced until 2016-17.

Former senior officials in the federal finance department mock Harper's "ideology." They urge the government to "put aside its sole policy commitment of eliminating the deficit by 2015-16, and introduce a medium-term strategy to support job creation and economic growth."

"There is no fiscal crisis, they argue. 'There is not even a serious fiscal problem.'"

Since the financial meltdown in 2008, the Harper Conservatives have run five deficits in a row and added $150 billion to the federal debt. They plan to run seven deficits in total and borrow a further $30 billion or so by 2015. But according to these critics, all this borrowing and spending isn't nearly enough.

Canadian taxpayers have good reason to fear these powerful voices. As recently as last November, federal Finance Minister Jim Flaherty appeared to cave in to the pressure. Saying "balanced budgets are not an end in themselves," Flaherty forecast deficits until 2016, before the Prime Minister corrected him two days later.

Canadians know that debt is not the cure for a sluggish economy. If it was, the United States would be booming: since the financial meltdown, the U.S. government has borrowed and spent $7.2 trillion dollars to keep its economy moving -- nearly 50 times as much as Canada has borrowed.

And Canadians can hardly support higher government spending when they see how Ottawa spends money. Consider runaway payroll costs: average yearly compensation cost for a federal employee was $114,1000 last year, up from $86,000 when the Harper Conservatives took office. The Parliamentary Budget Office expects that number to reach $129,800 by 2014.

In addition to three to five weeks of paid vacation, federal employees also take an average of 18.5 sick days -- three and a half weeks of paid time off. More Canadians book off sick on any given day from their federal government jobs than actually show up for work at General Motors and Chrysler combined.

And Ottawa's School of the Public Service, the elite institution responsible for training federal mangers in ethical behaviour, recently suspended two senior managers after they rigged contracts so former colleagues on pension could collect hundreds of thousands of dollars without competing for the work.

In the 2011 election campaign, Stephen Harper promised to cut waste, balance the budget, and leave more money in the hands of working Canadians, to truly grow the economy and create jobs. Here's hoping he delivers on his mandate on budget day.

Canada Budget 2012 Highlights