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politics

Budget 2012: Apocalypse Deferred

The Liberal budget has little to please and something to annoy everyone. But the only question that matters is, will it cut the deficit?

There’s a through-the-looking-glass feel to watching the budget delivery. First, the government stands up and explains why this is the fairest and most commonsensical distribution of resources since Solomon offered to chop a baby in half. This is immediately followed by the leaders of the two opposition parties proclaiming it the most reprehensible document ever to hoodwink a gullible public.

It is, of course, neither.

No one expected it to be popular. Budgeting in tight times isn’t easy; we can only steal from our future selves for so long before they become our present selves and we have to give something up to pay ourselves it back. Some thoughts:

The Good

Notwithstanding Tim Hudak’s frothing at the mouth over entitled public sector unions, or Horwath’s motherly brow-furrowing over whether the arbitration process is being properly observed, the Grits got it right on their treatment of the public-sector unions.

In an approach telegraphed long before budget day, the Liberals advised that they would be looking for wage freezes and pension concessions, with the expectation that government and unions will “come to an understanding, together.”

Should the unions be unmoved by the call to congenial collaboration, well, there’s a catch or two. For example, if teachers don’t play nice, it just might cost us all-day kindergarten or mandated class sizes, along with some ten thousand jobs. And the government won’t hesitate to “propose necessary administrative and legislative measures.” (Cue devil-child choir music from The Omen.)

Contentious for sure, but given that that compensation constitutes the largest portion of the budget, not dealing with it would eliminate any possibility of eliminating the deficit by 2018, or for that matter by 2118.

Another budget win is the widely-expected postponing of the corporate tax cuts scheduled for 2012 and 2013. Taxes are already respectably low in Ontario relative to competing jurisdictions, and taking them lower is neither necessary nor desirable right now. Along with public sector executive pay freezes, this populist move should buy some NDP and maybe public support before the upcoming vote.

The Bad

The biggest downside is potential labour unrest. Will the unions doff their caps and chirp “Thanks Dalton!” while cheerfully taking their medicine, or can we look forward to work disruptions and grim mobs on the lawn of Queen’s Park a la Common Sense Revolution days? If the Liberal bat isn’t big enough to get the proles to play ball, it could be a long, hot summer.

Also disquieting are the big-dollar savings attributed to as-yet unidentified “efficiencies” in various ministries: $100 million at Citizenship and Immigration, $117 million for the Attorney General, $121 million for Training (Colleges, and Universities).

Overall, the budget talks about $4.9 billion saved here. While these efficiencies may be real (although, why didn’t we think of them sooner?), without deep analysis and detailed planning the numbers included in today’s budget proposal can only be educated guesses at best, and could prove wildly off the mark.

There’s also at least one glaring omission. The budget doesn’t account for the omnibus crime bill recently passed by the federal Tories, which the McGuinty government has predicted will cost the province cost $1 billion in housing for an influx of new prisoners.

Endgame

The government has produced a hard-times budget that walks a middle road, not really pleasing anybody.

Both NDP and Tories responded by flailing around like flies in maple syrup screaming “too much!” and “not enough!”, for predictably opposite reasons. That, however, is the best that could have been expected, and the outrage from left and right may indicate that the Liberals have finally located their cojones and stopped trying to please everybody.

The budget won’t force an immediate election. Tim Hudak has already said the PCs won’t support the minority Grits on the budget, but it’s a near certainty that the NDP will, given that the electorate doesn’t want (and the parties can’t afford) an election.

The budget is far from perfect, and there will be some negotiation before it comes to a vote. Huge changes are going to be required in the way the government does business, and only time will determine if the numbers truly crunch in the right direction to kill the deficit by 2018 as promised. But it’s a fair start.


See also:

BUDGET 2012: PUBLIC SECTOR ON ALERT
BUDGET HIGHLIGHTS
BUDGET 2012: OPPOSITION PARTIES REACT

Comments

  • Guest

    Andrea Horwath’s concerns about collective bargaining rights is “motherly brow-furrowing”? Oh I get it, cuz she’s a woman.

    • Anonymous

      Correct. I didn’t think “avuncular” would fly.

  • Kevin

    I think the failure to incorporate a minimum wage increase looks poor, given that rent increases are typically coming in at around 3% this year. Of course this could be announced separately from the budget, but hasn’t been thus far.

    Clawing back prescriptions benefits from high income seniors is also all well and good; but there is no material help in buying drugs for other low-income earners, something Drummond actually recommended (so as to reduce the so-called welfare wall, and to make sure that patients are not being kept in hospital in order to provide them prescriptions they could otherwise not afford.)

  • Jenny

    The mandated class size sounds nice as a news bite, but as a teacher I know my class size will grow anyway. It’s been growing for the past couple of years. Even though the provincial class size average is 20-21, my hard caps are actually in the 30s. (They can also go beyond the hard cap for two months into a semester. My colleagues started off with classes in the 40s and it stayed that way for weeks.) Also the mandated class size in the current budget only apply to elementary classrooms from what I’ve heard.

    If my class sizes will actually decrease, then I wouldn’t feel as cynical about this whole thing. Instead I’ve been told my classes will increase even more next semester. The media keeps telling me my classes are only in the 20s. I suppose I should tell 10 of my students they don’t actually exist. :P

    This will come off as mean, but if all-day kindergarten hinges on teachers taking cuts to support it, then I rather we get rid of it all together. It’s not that I’m against educating small children. There are many wonderful and long term benefits to early childhood education. I just think that I should pay for it as an Ontarian and not as a teacher.

    • Anonymous

      “I just think that I should pay for it as an Ontarian and not as a teacher.”

      But then who will we single out and demonize for failing to meet the projected 2018 deficit end? You wily public sector employees and your blame-dodging! Tsk tsk…

    • Anonymous

      Smaller class sizes are of greater educational benefit than ever-earlier education. For example, children in Finland don’t start school until they are seven (!) and have an average class size of 18. Their educational system is held to be one of the best in the world.

  • http://www.facebook.com/jamesmmurdock James Murdock

    Still hope for ecoENERGY Retrofit (Job creation & energy savings in Ontario)

    Disappointed the Ontario government failed to create jobs and energy savings by renewing the successful Ontario Home Energy Savings Program.

    Hoping the federal government’s Budget 2012 creates jobs by continuing the popular ecoENERGY Retrofit program for an additional three years.

    Energy efficiency should be at the top of Canada’s energy and jobs agenda, not at the bottom.

    — Budget 2012 – Oilsands first? or Save Energy First?

    Canada is about to spend billions on new oilsands projects, pipelines, nuclear and fossil-fuel power stations, hydroelectric dams, solar projects, and wind farms. But as we prepare to produce more energy, it makes sense to save energy first.

    We need to get serious about energy efficiency. The global economy is struggling and governments want to create jobs. This is a huge opportunity for Canadian governments to help Canadian families save energy. Making our homes more energy-efficient creates jobs in all communities.

    Extending ecoENERGY will Save Energy First, reduce our energy bills, protect the environment, generate net-positive tax revenues, and create local jobs across Canada.

    http://www.SaveEnergyFirst.ca