Introduction
Day after day, the papers report this minority government will soon face a vote of non-confidence and Canadians will be sent back to the polls a year after the last election.
If the Conservatives are successful in ending Paul Martin’s minority government this spring, it will be to take advantage of widespread anger about the sponsorship scandal, not because they oppose the Budget.
In fact, the Liberals have spent the past year governing from the right, and have closely followed the Conservative’s economic agenda.
As a minority government, the Liberals continued their practice of under-reporting the amount of money available for spending. In 2003-04, for the seventh year in a row, the Federal government announced a budgetary surplus. In the first ten months of the fiscal year 2004-05, the surplus reached $13.40 billion. This is up from $8.14 billion from the same time last year.
Economists agree that the federal surpluses over the next three years will be almost double what Ottawa forecast in the Budget. While the government announces a projected surplus of $12 billion, economists appearing before the House of Commons finance committee project a surplus in the realm of $22 billion over the next three years. Since 1997, the gap between government-projected surpluses and actual surpluses has been $80 billion. These surpluses were applied to the debt, without debate.
The Federal Budget 2005
Once again, the federal government rejected the opportunity to use the massive Canadian Budget surplus to address the country’s large social and physical infrastructure deficit. When Canadians voted in a Liberal minority government, we were looking for a progressive budget. Instead what we got was a budget only a conservative could love.
The Martin government asked families and cities to wait five more years before they receive the federal resources for their communities. There are no strings attached to the federal payments to the provinces and territories for programs like child care, health care and urban infrastructure renewal. This means there is nothing to stop for-profit services from expanding in these critical areas of public service.
For the past ten years, federal choices have done little to improve women’s economic security. (Armine Yalnizyan, “Canada’s Commitment to Equality: A Gender Analysis of the Last Ten Federal Budgets”, February 2005). This Budget continues the pattern.
The Budget once again gives more money to the wealthy and the corporate sector, instead of supporting the poor and working people. As a result of this Budget, program spending will level off at 11.9 per cent of GDP. Andrew Jackson of the CLC points out that the government is, in effect, informally freezing program spending at this rate from now until 2010. (“Labour’s Analysis of the 2005 Federal Budget”, February 23, 2005. p.3) This is much less than the rate of almost 16 per cent of GDP when the Liberals were elected in 1993. (Marc Lee, CCPA Monitor, April 2005, p.18).
Despite historically large surpluses, the government continues its “expenditure review” with a goal of imposing $11 billion in cuts to programs, procurement and property management budgets. This will mean selling public buildings, the contracting-out of services, electronically delivered services, and job custs of over 3,000 over the next five years. The government has planned to set aside funds for “contingency” and “economic prudence”, but, as Hugh Mackenzie argues, the real priority of this budget is to “reduce Ottawa’s capacity to raise revenue.” (CCPA Monitor, p.17).
The elimination of limits on foreign investment for pension plans and RRSPs has huge implications. It kicks open the gates for capital flight out of the country and undermines the potential use of pension funds for public investment in infrastructure. It makes pension investments in public bonds for infrastructure development even less attractive in comparison to larger returns from investment in low-wage countries.
There are no fixed targets to implement Canada’s obligations under the Kyoto agreement on the environment. There is little support for post secondary education and housing and a disappointing allocation of resources for Aboriginal peoples.
