Federal budget

March 5, 2010 at 12:56 pm (News, Politics) (, , )

Numbers confuse me. Especially ones that have lots of zeros or the word billion after them. Since becoming an English teacher, I’ve realized how completely terrible I am at anything beyond basic equations. I walk into my ninth grade classroom after the math teacher leaves, and get a little queasy as I rush to erase the massive amounts of lines and numbers and symbols on the board that I don’t even try to understand.

All that to say: I don’t really have much in the way of commentary on the budget the Canadian government released yesterday after all. Instead, here’s some thoughts from people who are infinitely more qualified to write about such things than I.

The freeze, which will affect salaries, administration and overhead, is expected to save $6.8 billion over the next five years, which accounts for the biggest slice of the $17.6 billion in savings squeezed from departments to reduce the $53.8-billion deficit.

The wages of public servants will be allowed to increase this year by 1.5 per cent, as mandated under collective agreements. But departments must fund the increase, which amounts to roughly $300 million, from their operating budgets. After this year, salaries and operating budgets will be frozen for two years.

This is the point: if it were just about today’s deficits, that would be one thing. But the deficits we are running now are as nothing compared to what is to come; the discretionary spending we are merrily running up on our credit cards today is a small fraction of the costs that will engulf us as those aging baby-boomers start crowding the hospital wards. We should be running surpluses in these years, not deficits. And yet the government delivers this empty, almost flippant budget.

Even a year ago, it was still possible to be shocked by this. But now? One is surprised, it is true, by how unconcerned the Conservatives are about the state of the country’s finances, how little they are prepared to do about it — surprised, but not shocked. Those Conservative faithfuls who have been hanging on all these years, in the hopes that, eventually, someday, with one of these budgets, this government would start to act like conservatives, must now understand that that is not going to happen. Conservatism is not just dead but, it appears, forgotten.

In effect, Canada’s relatively paltry budget shortfall has become one of the country’s greatest competitive advantages. The U.S. government’s interest payments are on track to increase by 170 per cent over the next five years, while Canada’s will remain essentially flat.

What that buys Mr. Flaherty is time to wait to see how the economy evolves. If he gets lucky, he might not have to make any more painful cuts.

The Irish, of course, are a sunny lot and Flaherty is no exception. But for his luck to hold (and his figures to add up), interest rates can’t rise between now and 2014, inflation can’t flare up, and there can be no unexpected financial calamity to make nonsense of the minister’s cheery world view.

Flaherty’s calculations are supported, he told skeptical reporters, by private forecasters who are predicting 2.6-per-cent growth this year and continuing moderate growth for five years. Independent, non-government experts. No doubt some of the same ones who didn’t see the recession coming until we were under the front wheels.

Whether or not you agree with the government’s measures, there is some good news for all of us: no election! Liberal leader Michael Ignatieff has already said he will let the budget pass, despite how much he vehemently disagrees with it.

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