inance Minister Jim Flaherty and Prime Minister Stephen Harper make their way to the House of Commons to deliver the federal budget on Parliament Hill in Ottawa today. — Photo by The Canadian Press
OTTAWA — Finance Minister Jim Flaherty sampled liberally, if frugally, from his political adversaries with a federal budget stuffed with populist goodies in the face of a possible spring election.
The highly politicized Conservative spending blueprint delivered today includes boutique programs such as a return of the home energy retrofit program, tax credits for caregivers, improved pensions for the very poorest seniors, and tiny tax breaks for tots’ art classes and tutoring.
The actual benefits to select Canadians are modest — the art-class tax credit works out to about $75 for each child, and caregivers might recoup $300.
“Leadership is about finding a balance between needs,” Flaherty told the House of Commons.
New program spending worth $2.3 billion is largely offset by cuts elsewhere as the original, recession-fighting budget of 2009 finally expires.
It’s all packaged in a conservative document that forecasts the huge federal deficit receding slightly faster than predicted, down to $40.5 billion the year just ending, $29.6 billion in 2011-12 and virtually eliminated four years from now.
“Frankly, I thought heading into a possible election we would have seen much bigger (spending) measures,” said Doug Porter, deputy chief economist with the Bank of Montreal.
Total federal spending in 2011-12, including debt charges, is projected at $278.7 billion, up from $276 billion in the year ending March 31.
The sixth-straight minority government budget from Stephen Harper’s Conservatives sets up a glass-half-full dilemma for critics — particularly New Democrats — who must decide whether the modest nods to their various demands are enough to save Canadian voters a trip to the polls.
“There’s nothing in this budget the opposition parties couldn’t vote for,” Chisholm Pothier, Flaherty’s spokesman, told a briefing inside the budget lockup.
“There is no poison pill in this budget.”
Among the new measures:
— The shelved ecoENERGY Retrofit-Homes program has been revived, with $400 million earmarked in 2011-2012 to help make homes more energy efficient.
— Some $300 million to boost benefits for the poorest of low-income seniors by up to $600 a year, or $840 for couples.
— A new Family Caregiver Tax Credit which would save about $300 a year for people caring for sick or disabled relatives.
— Some $9 million annually for student-loan forgiveness for doctors and nurses willing to work in rural and remote areas.
The modesty of the measures is illustrated by some other government announcements: the health-care provider initiative, for instance, is dwarfed by the $24 million over two years committed to improving the health of hogs; there’s $17 million over five years to fight plum pox.
“We’re seeing the proliferation of these small credits,” said Bruce Flexman, chair of the tax policy committee at the Chartered Accountants of Canada.
“They’ve obviously trying to sprinkle these amounts, (but) there’s not much money there.”
Little wonder. Canada’s total federal debt will climb in 2011-2012 to $586 billion, up $67 billion since 2009 when the global recession began to bite.
However, as a share of the country’s gross domestic product — essentially our national wealth — the debt load has barely moved, climbing slightly to 34.4 per cent from 34 per cent two years ago.
It’s within that dangerous deficit and debt landscape that the budget’s finely tuned political antenna emerges.
The NDP was seeking home-heating fuel rebates, a home retrofit program, help for seniors pensions, and millions more to improve access to doctors and nurses. The budget delivered — if only partially — on three of Jack Layton’s four demands.
The carrots, and sticks, don’t end there. When the NDP checks the fine print, they’ll see $150 million for an all-season road between Inuvik and Tuktoyaktuk — right through New Democrat MP Dennis Bevington’s riding. There’s also $4 million for a Thunder Bay, Ont., cyclotron, a project that two area NDP MPs have been advocating.
Defeating the budget could put all three New Democrat MPs in an awkward spot in the election campaign that would immediately follow.
The budget doesn’t neglect the Liberals, either.
Liberal Leader Michael Ignatieff wanted corporate tax cuts rolled back to 2010 levels, a non-starter for the Conservatives. But the Liberals have also signalled their next election platform will include help for higher education and caregivers — two areas the Conservatives undermined with modest measures.
There’s an additional $34 million a year for Canada Student Loans and Grants, and $10 million in tax relief to Canadian students pursuing post-secondary education abroad.
The budget also has an extra $37 million a year for three federal research granting councils and $53.5 million over five years to create 10 new Canada Excellence Research Chairs.
Gilles Duceppe of the Bloc Quebecois had been demanding some $5 billion for Quebec, and was given short shrift by Flaherty.
However, the Conservatives softened up the voting turf with pre-budget announcements such as $238 million for Montreal’s Champlain bridge and $50 million for airport improvements in Quebec City.
The budget’s signature achievement may be in rebranding the two-year-old, recession-fighting Economic Action Plan as a continuing initiative.
The plan, introduced in the 2009 budget, was explicitly supposed to expire this March 31, but was extended last fall to permit infrastructure projects to wrap up by October this year.
Flaherty’s 2011-12 budget, however, is subtitled “The Next Phase of Canada’s Economic Action Plan,” signalling the branding exercise continues. The phrase is peppered throughout the documents.
Even the photos on the budget cover are of the same actors who appear in the taxpayer-funded Economic Action Plan ads that have been blanketing the airwaves for the last two months.