Prime Minster Stephen Harper’s ruling Conservative Party rolled out the 2012 budget for Canada late last week. That’s a boring, non-event for the majority of NCPR listeners. But it matters in Canada, and to the sizable public-sector workforce in the Ottawa/Gatineau region. And offers some parallels to similar issues in the U.S. So, here are various links, opinions and counter opinions.
How to summarize a budget? Well, the English version of the Economic Action Plan 2012 runs 498 pages, so I’d rather not, thanks anyway. The Montreal Gazette has this bullet point summary. For policy wonks who care, here’s a hefty compilation from the National Post. Happy reading!
Some main points include: a claim of no new taxes, spending cuts designed to return to a balance budget by 2015-16, federal workforce reductions to the tune of 19,200 actual warm bodies (through lay-offs or attrition), Old Age Security eligibility would move from age 65 to 67 (starting in 2023), increases in duty-free allowances for cross-border shopping and getting rid of the penny. There’s lots more, of course, but the whole list is exhaustive.
Here’s the funny thing, as I see it. The right and the left in Canada seem equally annoyed by this budget. (Reminding me of the sound bite from Karen DeWitt’s NY State budget story of 3/29/12 on how “budgeting is the allocation of disappointments.”)
For a handy summary demonstrating that point, see this list from Chris Selley, introduced as “The enigma of Budget 2012: Disgrace to fiscal conservatism? Or cunning stratagem by Harper the Destroyer? You decide.” Including a dash of Schadenfreude (you know, that useful German word for taking pleasure in the misfortune of others):
The Post‘s Jonathan Kay is just thankful to live in a country where tough-but-necessary budgetary measures are met by “robotic bitching” from the opposition, then passed and forgotten, as opposed to in a country like the United States, which has lost its freaking mind.
David Akin has a list of NGO and other reactions to the budget here.
The right’s dismay goes like this: conservatives are finally in power, finally able to make fundamental changes, and what do party leaders do? Next to nothing!
The Montreal Gazette’s Michael Den Tandt called it “a tepid document” and likened its roll-out to great head fake:
Signal that you’re going to throw the Hail Mary pass, an epochal transformation. Scare the daylights out of the public-service unions. Rattle the opposition parties’ cages, leading them to rear up on their hind legs, shake their fists and promise a fight for the ages.
Then deliver a budget that, while it does reiterate some previously announced, common-sense, longer-term reforms in immigration, resource development, research and old age security, and proffers some public-service layoffs, is not revolutionary at all. It’s rather humdrum. It’s downright inoffensive.
Not surprisingly, other factions disagree. You can see new NDP Leader Thomas Mulcair critique the budget on this TVO interview with Steve Paikin. Liberal Party Leader Bob Rae’s budget response can be viewed here. In a media release, Green Party Leader Elizabeth May said this:
“This budget continues the Harper Conservatives’ assault on the environment in more ways than one. The cuts to seniors, veterans, cultural institutions, and overseas development assistance, are all deeply disturbing. We identified areas of waste equal to those areas chosen for cuts in this budget. The Prime Minister had a choice where to cut and where to invest. He made the wrong choices. Greens are incensed by this government’s callous disregard for the things that matter most to Canadians.”
A majority of the workforce reductions are expected to happen in the Ottawa/Gatineau areas, as reported in this Ottawa Citizen article:
The Conference Board estimates that job reductions in these areas will mean Ottawa-Gatineau will absorb about 60 per cent of the planned trims to the total federal public service. And this translates to 11,500 jobs that will disappear from the National Capital Region by 2014.
That’s a lot of families facing uncertainty and pain ahead. At the same time, some ask if the layoffs represent real cuts, after looking at long-term growth of government employees. As detailed in another Citizen article, there are significant costs to letting employees go:
The process for handling layoffs is laid out in the workforce adjustment agreement that’s embedded in all employees’ contracts. It’s a highly complicated process that could take as long as 16 months
Inevitably, how people are laid off raises arguments too. What’s fair? Some private sector analysts think government workers get too many perks, as discussed in this National Post article:
“Layoffs are an absolute necessity to balance the budget, but it’s how it’s done that I take issue with,” said David Whitten, a partner at the Toronto law firm of Whitten & Lublin.
In the same article:
John Gordon, president of the Public Service Alliance of Canada, defends the existing policies for public employees. He said the measures are necessary for employees who are let go against their will and have to look for jobs in the private sector that don’t translate directly from their public experience.
Maybe you care about federal job cuts, maybe you don’t, but just about everyone has a stake in when they can retire and expect to collect Old Age Security (OAS) and the Guaranteed Income Supplement. (Similar to Social Security in the U.S.) For those born after April of 1958, that age is set to ramp upward from the current 65 to 67 starting in 2023. Here’s a useful Q & A on that from the Ottawa Citizen.
Not surprisingly, there’s disagreement on the justification and effect of that change. It’s being presented as a necessary demographic adjustment - people are living longer, healthier lives. But critics say this hurts those on the lowest rungs of society and is not even necessary. Parliamentary Budget Officer Kevin Page has found the existing system is sustainable without increasing the retirement age. According to this article in the Huff Post:
..the government may have other reasons for making the changes, but inability to pay for the benefits is not an issue either in the short term or long term. In fact, not only is the OAS sustainable, but Ottawa has room to sweeten benefits.
The Harper government is often accused of being secretive and defensive, reserving special ire for groups like environmentalists. Does this budget move from hostile words to preemptive harassment? Some non-profit groups say they are about to be targeted for closer examination, with a boost in funding for the Canada Revenue Agency to spend on what the budget labeled “education and compliance”.
The fear is that non-profits deemed to engaged in excessive amounts of political activity might lose their charitable status. (Something similar occasionally comes up in the U.S. too, as when churches were told they should be careful about specific political advocacy in recent elections.) As explained in the Hill Times:
The main budget document noted charities are allowed to engage in political activities, centered primarily on advocacy, as long as the activities are related to their charitable goals and represent a limited portion of their resources—no more than 10 per cent for larger charities.
This Globe and Mail editorial gave some background to the controversy:
The real target is obvious – environmental groups, especially those opposed to the Northern Gateway pipeline proposed to run from Alberta through British Columbia, to take oil-sands bitumen to ocean tankers for delivery to Asia. In January, Natural Resources Minister Joe Oliver issued a public letter – diatribe, more like – denouncing “environmental and other radical groups” who “hijack” regulatory bodies and “use funding from foreign special interest groups to undermine Canada’s national economic interest.”
Here’s a Q&A on the subject from the Canada Revenue Agency. The Hill Times article says Finance Minister Jim Flaherty explained the increased scrutiny this way:
“Quite frankly, we’ve had a lot of complaints and concerns expressed by Canadians that when they give money to charities they expect the money to be used for the charities purposes, not for political or other purposes.”
Besides looking at the books of environmental groups, the budget proposes a “one project, one review” reduction of the time it takes to get environmental reviews for large natural resource projects. Green Leader May, long associated with environmental causes, put it this way “”It’s a shocking anti-nature budget but it’s also anti-democratic.” Sierra Club of Canada Executive Director John Bennett responded in a media release: ““The government has done a great injustice not only to the environment but to all Canadians and future generations.”
Another Hill Times article details other cuts and changes seen as efforts to weaken environmental reviews:
In addition to “streamlining” the environmental review process, the federal government will also make significant reductions to the budgets of two departments with central roles in regulating the environmental impacts of large-scale industrial projects.
Environment Canada’s budget will be reduced by $88-million over the next three years, while the Department of Fisheries and Oceans will see its budget cut by $79-million over the same time period. The National Round Table on the Environment, and the Economy, which was a source of comprehensive environmental analysis and gave advice to the government, will be eliminated. The NRTEE’s budget was $5.2-million.
OK, by now you can see why certain constituencies are upset by this budget. But wait, there’s more. Anyone familiar with the culture wars as they involve NPR funding in the U.S.can easily grasp a similar quarrel about funding the CBC in Canada.
Unlike NPR, the CBC gets a majority of its funds right from tax coffers. Like NPR, critics charge CBC with an ingrained bias that favors liberal views and labor issues. And why should tax payers fund TV and radio anyway?
This budget cuts the CBC’s budget in the range of 10% (or slightly more, depending on how the numbers are crunched).
Richard Stursberg, a former executive vice-president of CBC English Services, offered this defense, writing “Unless care is taken, CBC may be so badly damaged that it will be unrecognizable in the future.”
Meanwhile TV critic John Doyle weighed in with some blunt language: “Suck it up, CBC. You should have seen this coming.” I’ll quote from that here, because the column discusses ideas worth considering for those involved in public broadcasting:
But the main thing to keep in mind is that the CBC has been asking for trouble. It has failed to defend itself adequately. It has been naive. For CBC, and all its radio, TV and online platforms, this Prime Minister is an implacable foe, as imperious in his dismissal of Canadian TV news as he is in dismissing anything that smacks of that European welfare state. For the government, the CBC is a symbol that must be diminished and denigrated.
And, here’s the crazy thing – the CBC does not merit that stature. In recent years, CBC has failed to transcend mediocrity and forcefully explain what it does.
Least you think Doyle is fundamentally anti-CBC, he closes with this admonishment:
It’s a defeat in a war and it’s not over. Gird yourself, CBC. Get serious, do better and become worth defending.
At a recent forum on the CBC, a participant thought the CBC might do well to take a lesson from NPR stations:
Judy Adler, a self-described computer “geek,” said the CBC should model itself upon U.S. National Public Radio (NPR), which is adept at building strong local community support.
“The CBC does nothing to build connections to the community while NPR goes out of its way to build the connections to its listeners,” Adler said.
Clearly this summary still leaves a lot out (probably including something you feel is important!). Space simply doesn’t permit discussing everything. But keep an additional detail in mind: Stephen Harper remains a polarizing figure.
Just as Presidents Bush and Obama evoke strong reactions and partisan divides in the U.S., Harper has admiring fans and fierce detractors across Canada.
But if you’ve ready this far, congratulations, you’re a policy wonk!
What aspects of Canada’s 2012 budget please or concern you, if any?
Comments and civil discussion are always welcome.