Budget once again fails on long-term planning and vision

post-election budget, as expected, tracks with the pre-election budget with only
two significant changes – $2.2 Billion for Quebec to harmonize sales taxes, and
the phase-out of one part of public financing for federal political

The Green Party of Canada remains concerned
by the Harper Government’s approach.  It has no long-term vision
and this budget has not provided for long term fiscal planning.  As
departing Auditor General Sheila Fraser noted in her final speech as AG (May 25,
Ottawa Canadian Club), without long term planning it is impossible to see how
the government can respond to pressing issues.  Fraser noted three
key areas of persistent failure identified through AG audits: the plight of
First Nations communities, the threat from crumbling infrastructure federally
and throughout all governmental sectors, and the crisis posed by a rapidly
changing climate.   None of these threats are properly addressed in
the budget, although some token measures are included in each

Ironically, in several places in the budget,
climate impacts are mentioned as threats to global economic recovery, without
mentioning the connection to climate change. Food prices are linked to
“weather-driven supply constraints” at page 37. Meanwhile, Canadian
infrastructure and compensation due to extreme weather events requiring spending
in the 2011 budget is also driven by climate change. These include: melting of
permafrost has compromised arctic ice roads leading to the need for $150 million
for the Inuvik to Tuktoyaktuk highway (page 102), $470 million to farmers
following extraordinary spring floods, and $72 million to repair small craft
harbours damaged through storm surges (page 105). These amounts are the tip of a
very large iceberg, as the former Auditor General has warned. In contrast, the
three areas identified by the former Auditor General were core elements of the
2011 Green Party Platform. 

There are also threats to the relatively
rosy fiscal picture presented by the government.  The federal
government has benefitted from relatively low interest rates on Canada’s debt,
due to the US Federal Reserve’s tendency to keep interest rates low in times of
crisis.  The interest rates may not remain low.  As
well, the questionable strength of the US economy leaves room for concern about
on-going growth and health in the Canadian economy.

The current government approach has not left
room for resilience in the face of any nasty shocks in the international
picture.  It also does not anticipate the threats of climate
impacts and of collapsing infrastructure. 

The sole focus of the budget is deficit
reduction while maintaining tax cuts for corporations.  The
accelerated cuts to the deficit remain to be revealed following Strategic and
Operating Review in next year’s budget.

“Our approach would differ.  We
agree that Canada needs to eliminate the deficit, but we do not agree Canada
needs to increase tax cuts to corporations.  Given global
uncertainties, we think Canada needs to rebalance its position in the OECD to be
closer to the middle of the pack in terms of government tax revenue and focus
less on program cuts.  Overall, we need to think beyond 2015 to see
how we can best strengthen our economy while eliminating the deficit and having
some flexibility to cushion unexpected shocks,” noted Elizabeth May, MP for
Saanich Gulf Islands and leader of the Green Party.  “This budget
and fiscal plan only works if nothing goes wrong.  Prudent planning
would build in a longer-term view and a margin for error.” 


Kieran Green
Director of