Harper’s ho-hum budget didn’t rattle as many cages as feared
In the end it was neither the intensely political document that has characterized the Harper government’s tenure in power until now nor the Canada-redefining blueprint long feared by many opponents of the current federal government and its agenda.
Budget 2012 — which will be old news by the time you read this — is a document that manages to combine caution in the short term with at least the potential for large-scale economic and public sector reform for future generations. But a radical reshaping of Canada as we know it, it is not.
If there is one overriding theme that can describe Prime Minister Harper and his government’s approach to power since taking it in 2006, it has been cautious incrementalism. In the minority setting under which Harper governed from 2006 until last year, such an approach was the only way to survive.
Flexing majority muscle
I was a staffer on Parliament Hill from 2005 until 2008. I witnessed first hand all of the arguments against Harper in his early years as Prime Minister. From the standpoint of the opposition parties under minority administration, they amounted to this: if Harper ever gets a majority, look out. We won’t recognize Canada when he’s done with it.
To be fair, there was always a certain amount of political rhetoric to such arguments. But many of the people making them truly believed what they were saying. Now we have before us the very document that those arguments — if true — would cite as exhibit one in the hidden agenda to remake Canada into some foreign place, entirely divorced from the values that have built it into the country it is today.
Politics 101 teaches that all the painful stuff must be done in year one of a majority. And yet here we are, in the midst of debating the first budget crafted under majority Conservative rule since 1992, and no one has been able to identify the terrifying hidden agenda we were warned about for so many years. If anything, Budget 2012 looks remarkably like the minority-era documents that preceded it; with a few exceptions, of course.
Seniors affected
The most headline-grabbing policy in the budget was a very gradual increase in the age at which Canadians will be eligible for Old Age Supplement (OAS) from its current level of 65 to 67. No one born before 1958 will be affected by the change; such is the nature of its 2023 implementation date. But that has not stopped critics from decrying the shift as an all-out attack on Canada’s most vulnerable seniors.
To be sure, as we get older and as there are fewer working-age Canadians for every retired person in this country, we will have to shift policy accordingly. OAS is but one piece of this ever-growing pie. The Guaranteed Income Supplement will continue to exist for the lowest-income seniors, as well as a selection of provincial programs.
Though much less than a revolutionary policy shift, this measure will save the federal government many billions of dollars per year starting a decade from now. The first to be affected by it are today 52 years old and so should have ample time to prepare.
The much-publicized cuts to other government programs contained in this year’s budget are likely to bite into federal program delivery at a certain level, but do not amount to the slash and burn rhetoric we’re often treated to in the press. Over the next few years Ottawa will trim $5.2 billion from its annual program expenses envelope.
Set against the $270 billion in cheques Ottawa writes every year, this is a small sum. However the cuts are coming from only a fraction of that global amount. Most of what the federal government does is writing cheques to people and provinces, and paying interest on the national debt. Once those bills are paid, the feds only spend about $80 billion per year in direct program spending, about five per cent of GDP. Everything from defence to foreign aid to fisheries and jobs training is paid for out of this envelope.
All of the $5.2 billion in ongoing annual savings will come from this $80 billion, which will mean a real reduction in some government services and payrolls. But it does not amount to anything like the wholesale gutting of the federal government long warned about by Harper’s opponents. Due to the massive bills for health and social transfers to the provinces, equalization and debt interest, not to mention economic and population growth, total federal expenditures increase every year. It would take a much bigger budget axe to reverse this trend.
So this year’s budget manages caution and boldness in one document. Despite the warnings many have been making for years, I suspect we will still recognize Canada when it is passed into law.
