Assume you are Canada’s minister of finance for just one day: budget day.
Since the budget day tradition includes new shoes, it’s a great excuse to do some shoe shopping. If you’re going to put the boots to ’em, reach for the steel toes.
Now for the serious work: you look at the books and see there’s enough revenue to balance Canada’s federal budget for the first time in five arduous post-recession years.
The end of public service cuts! Time for renewed investment in the people, especially the jobless!
Right?
Now let’s look at what Jim Flaherty, the man who has been minister of finance since 2006 and presided over those years of deficits and service cuts, decided to do with that surplus: he gave it a pass.
Flaherty says Canada’s deficit has dwindled to $2.9 billion, which in the federal budgeting business is akin to a rounding error. But wait, he also has an extra $3 billion in the bank to wipe out that deficit out this very minute.
So did he? Nope. Another pass.
Instead, he tucked it into a “contingency fund” and went on about 2014 being the year his government would go after the benefits of retired public servants and the wages of active public servants.
As Canadian Centre for Policy Alternatives economist David Macdonald notes, the federal government remains on course to make $14 billion in program spending cuts since 2010 as well as new ones announced in this year’s budget.
Those cuts have consequences: Canadians will lose vital services. (A sub-zero walk to the community postal boxes, anyone?)
Tens of thousands of jobs will have been stripped from the economy at a time when good jobs with decent wages, benefits and pensions are increasingly hard to come by.
It doesn’t have to be that way. On paper, the budget is already balanced.
But officially balancing Canada’s federal budget in 2014 is politically inconvenient for a government intent on reducing public services and shrinking the role of government. Not to mention a year too early for a government positioning itself for re-election in 2015.
How can you maintain a political agenda of service and job cuts when the budget is well and truly balanced?
Assume you are a cabinet minister in the Harper government. And Canada’s federal revenues are now at the lowest point as a percentage of GDP than they’ve been in 50 years.
Do you (a) realize that takes us back to the days before Canada even had national health care and sober up with a plan to regenerate federal revenues, or (b) boast about the fact that you’re emptying the public coffers at a time when investments in people are needed?
If you’re Minister of Employment and Social Development Jason Kenney, you brag about how you’ve dreamed of this day of all-time low revenues since you belonged to the tax-hating group called the Canadian Taxpayers Federation.
Meanwhile, the job losses and program cuts continue, with no concern about the diminished capacity (and desire) of government to address those issues.
The tax cuts continue, too, with no acknowledgement that they mean service cuts and fewer supports for Canadians who are vulnerable to long-term labour market restructuring, to recessions and to greater financial insecurity.
What of the long-term unemployed – those who lost work in the recession and, because full-time job creation has lagged, have been unable to return to their previous standard of living?
What of the young Canadians who arrive at adulthood more highly educated than any earlier generation but are still unable to find work?
What of the seniors who remain in the workforce well past the age of 65 because the federal pension plan that was supposed to keep them out of poverty in their golden years has fallen seriously short?
There are days when I fear we’ve been trained too well to accept a greatly diminished federal government and its ideological aim to reduce its role to irrelevance, leading to a society with low expectations. We seem to have been desensitized to the myriad cuts and declining living standards – but another world is entirely possible. That $3 billion surplus tells me so.
This year’s federal finance minister didn’t take the opportunity to do what’s possible, but it’s not too late for us to think about the world we want next year. In 2015 there’ll be a multi-billion-dollar surplus that no fiscal sleight-of-hand can possibly hide, contingencies be damned.
Now is the time to ask, if we were finance minister for a day, what could we do – not as taxpayers, not as individuals, but as social citizens who know a better Canada is possible?
Trish Hennessy is director of the Canadian Centre for Policy Alternatives’ Ontario office.
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