12/04/2012 05:44 EST | Updated 02/03/2013 05:12 EST

What Harper Could Do With the Budget -- But Isn't


The Harper Conservatives will force another odious "Omnibus Budget Bill" through the House of Commons this week.

A lot of attention is rightly focused on the anti-democratic nature of their "omnibus" procedure, choking off debate and forcing MPs to deal with 50 or more unrelated issues all at once in a single vote. As a result, that final vote is totally meaningless.

But even worse, for all the verbiage in this legislation (more than 400 pages, some 250,000 words), the Conservatives are doing little of consequence to deliver what the Canadian economy really needs -- more growth and less inequality.

In fact, this government is moving in the opposite direction.

Mr. Harper's ideological obsession with austerity drives him to cut the federal government at every turn to make it as irrelevant as possible. The most vulnerable (veterans, seniors, low-income families, the unemployed, newcomers, etc.) are typically the hardest hit. And his cuts risk further weakening the economy by curtailing aggregate demand at a time when Canadian growth is already faltering.

Yes, the federal government must always demonstrate strong management and fiscal prudence. There is never an excuse for waste. But Canada does have a fiscal ace-in-the-hole that gives us some policy flexibility for times like these, and that's our federal debt-ratio.

That ratio compares the size of the federal debt to the size of our economy overall. In the mid-1990's, after 25 consecutive years in deficit, Canada's federal debt-ratio had soared to a paralyzing 70 per cent. In other words, accumulated debt was equal to 70 per cent of the Gross Domestic Product. Thanks to essential decisions by the Chretien/Martin governments, that ratio was more than chopped in half -- down below 35 per cent.

That's what gives Canada some room to maneuver today. We should utilize some of that flexibility to invest in growth and combat inequality.

To start, the Harper Conservatives could stop escalating EI payroll taxes. They claim they don't raise taxes, but that's actually a lie. They are hiking payroll taxes by as much as $600-million each and every year, and that kills jobs.

Secondly, they could make federal tax credits for kids, caregivers and the disabled equally available to all Canadians. The way these credits are structured, people below a certain income level are not eligible. More than nine million low-income Canadians are deliberately excluded. That's perverse and should be fixed.

The government could amend Registered Disability Savings Plans (RDSPs) to correct the current discrimination against those who have been diagnosed with gradual, debilitating conditions like Multiple Sclerosis. They may not be fully disabled today, but they know their future prognosis is problematic. They would like to build some financial security, while they still can, but the rules say "no" -- you have to be fully disabled right now to open an RDSP. Such rigidity is mean-spirited and short-sighted.

The government could focus on first-time jobs for young Canadians who are still struggling with unemployment rates at recession-like levels near 15 per cent. Some 250,000 fewer young people are employed today than before the recession. Another 165,000 have just given up.

The government could help families better cope with the high cost of post-secondary education, through interest relief and more grants than loans.

Squarely within federal jurisdiction for Aboriginal education, the government could remove the "2% cap" that restricts First Nations' access to post-secondary learning. In the K-12 system, the federal government needs to bridge the disgraceful gap between what they invest to educate a First Nations child on-reserve and the much higher amounts that provinces invest to educate each non-Aboriginal child.

The government could also get serious about affordable housing.

They could transfer the entire federal gas tax to local municipalities to help build community infrastructure.

There are many pro-active options to encourage growth and combat inequality, but the Harper government remains indifferent -- paralyzed by ideology, content with mediocrity.