BUDGET 2017: WHAT YOU NEED TO KNOW

NO MONEY, NO IDEAS, BUT LOTS OF BUZZWORDS. COYNE,

The good news is they’ve run out of money. The nonsense in this nonsense-filled budget might have cost us all a lot more if the Liberals had more faith in the fundamental piece of nonsense underpinning the rest: that deficits stimulate growth. But as the economy has once again failed to play its part in the old fiscal conjuring trick — can it be just a year ago that the Liberals were claiming the multiplier on government spending could reach as high as “between three and four”? — the Grits now find themselves having to finance their ambitions by reallocating existing spending, rather than simply tacking more on top. Give thanks for small favours.

Mind you, they’re still talking the same old game. “There is a general consensus,” the budget declares, falsely, “that fiscal policy is the right tool to grow our economy for the long term.” But while the budget also repeats the usual ritual claims that “the plan is working,” the reality is that growth is coming in well below the levels forecast even last November, let alone way back in March of 2016.

Meanwhile, the fiscal situation continues to deteriorate: deficits over the next four years, forecast in last year’s budget to total $84 billion, are now headed for $101 billion, on the strength of spending that is now roughly $20-billion-peryear over the track laid out in the last Harper budget. The $10-billion deficits originally promised, of course, are but a distant memory; the balanced budget is nowhere in sight or even promised; even the steadily declining debt-to-GDP ratio, last and loosest of the Liberal benchmarks, is gone — it rose last year, is projected to rise again this, and may well rise again the next.

But of course it isn’t just that they’ve run out of money: they’ve run out of ideas. Or at least, good ideas. The Liberals had a good idea in the last budget: the rationalization of several different child-benefit programs into a single, income-tested Canada Child Benefit, albeit at a cost of $4 billion-plus. And they had a bad one: the notion that Canada’s middle class is falling behind, a claim that is increasingly the object of ridicule. The middle class isn’t falling behind — median incomes have been rising steadily for the last 20-odd years — and if it were, the Grits have no sensible plan for remedying it.

What they have are a lot of meaningless buzzwords. I have read a good many tedious, empty budgets in my time. I cannot recall ever reading one quite as mindbendingly empty as this one. Innovation, strategic, wholeof-government, world-class, value chain, smart cities, centres of excellence: the budget burbles happily on for page after page in this vein; one has the strong sense its authors have no more idea of what any of it means than they do “middle class.” Much is promised, but put off until the future: I lost track of the number of plans that “will be proposed” or policies that “will be developed” at some later date.

But as to the here and now: almost none of the promised reform of tax expenditures — credits and deductions favouring this interest or that, to the detriment of general economic efficiency — materialized in the budget. Indeed, the government is adding new ones — for example, extending accelerated capital cost allowance to “a broader range of geothermal projects.” Perhaps they are holding off on this, until they have a clearer sense of what kind of tax cuts the Trump administration has in mind. Or perhaps the very public burial given to the notion of taxing employer health benefits was a sign of things to come.

If there is a theme to the budget, it is of course “innovation.” As with “infrastructure,” last year’s favourite buzzword, the Liberals tend to attach this to virtually everything that catches their eye, including Liberal campaign slogans (“Innovation is, simply put, the understanding that better is always possible.”) But as the budget drones on, it becomes apparent that to this government it means the very latest in advanced, state-of-the-art 1930s-style state planning.

As the University of Ottawa’s Institute of Fiscal Studies and Democracy has lately reminded us, the federal government alone already has 147 different programs with interchangeable names intended to foster innovation. To these will be added, inter alia, an Innovation and Skills Plan, an Impact Canada Fund, a Venture Capital Catalyst Initiative, a Canadian Business Growth Fund and a Strategic Innovation Fund, though in fairness the last is intended to replace several existing funds. Indeed, the budget promises a review — sorry, a “whole of government review” — of current innovation programs. Perhaps they could throw in the new ones to save time.

Talking of sucking and blowing at the same time, I’d be more exercised about the proposal to throw public money at six industries the government is so sure will prove to be winners that it cannot be left to people investing their own money — “Canada can be a world leader in digital innovation,” was one of the things Finance Minister Bill Morneau professed to “know” in his budget speech, a page after confessing “we never could have imagined” the impact of mobile computing — if they were not also proposing to support virtually every other industry.

Some of the subsidy is disguised as procurement: rather than buy the best product at the lowest price for the taxpayer, government will serve as “first customer.” And there’s a truly bizarre proposal to seed what are called, inevitably, “Superclusters” — clusters is no longer enough — on the theory that if we can observe the spontaneous evolution of clusters, in places like Silicon Valley, in retrospect, we can surely envision them in advance, and create them by policy.

Oh, and there’s a chapter devoted to gender-based analysis. The point of this would seem to be that some programs benefit women more than men, and others benefit men more than women. Another data nugget turned up by the same analysis — that men pay 66 per cent of the taxes — seemed to attract rather less attention.