Blueprint in red ink

Atlantic Canadians are still assessing the impact of last week’s federal budget on the region and, more importantly, on their pocketbooks. On paper, the spending measures unveiled by federal Finance Minister Bill Morneau appear solid, holding the promise of growing our economy and improving the daily lives of millions of Canadians. But dangers lurk within.

It’s estimated that federal pay equity changes will raise wages about $80-$100 million in the Atlantic region. Atlantic Canada is home to an estimated 130,000 Indigenous peoples, almost eight per cent of Canada’s total. The $4.7 billion committed during the next five years will be a significant boost for them and for our regional economy. Morneau promises more money to low-income workers – the working poor. It holds out hope for many in this region.

The budget, however, is proving to be an evolving document. The sudden backtracking on a national pharmacare plan is a good example. It leaves Atlantic Canadians wondering what other surprises are forthcoming.

As details roll out, it’s apparent that billions from the federal infrastructure program won’t be spent until after the next federal election. The slow pace of infrastructure spending is becoming a major headache for cash-strapped provinces.

The minister is simply hoping for the best with NAFTA talks while ignoring any contingency plans for the worst. He suggests that a strong economy is allowing Canadian officials to push for a better NAFTA deal when he might want to make concessions to the U.S. since we seemingly can afford them. To suggest that a collapse of NAFTA wouldn’t have a major impact on Atlantic Canada is ridiculous. This region depends heavily on exports to the U.S. and we risk being severely exposed and imperiled.

There are other issues in the budget that failed to get much attention but present significant impacts here in Atlantic Canada. For example, there are no planned changes to the level of federal transfers to the provinces – bad news for this region. The Atlantic Canada Opportunities Agency will receive an additional $28 million during the next five years, which is some good news.

The Atlantic region will benefit from increased federal government investment in small craft harbours, which includes funding to build additional berthing space to reduce overcrowding in Charlottetown and Southern Labrador. Changing the Working Income Tax Benefit will improve access for many Atlantic Canadians who had some of the lowest program take-up rates. The budget proposes changes to employment insurance which will benefit Atlantic Canadians on EI, by using regional unemployment rates which can positively affect seasonal workers’ access.

The biggest criticism for the budget is its reliance on questionably optimistic economic forecasts. If the economy is flourishing, why do we continue to spend more money than we take in? The government has adopted dangerous deficits and red ink as routine policies, while balancing the budget is ignored.

The federal government’s overly optimistic budget seems more like a political tool for the next election rather than a realistic financial blueprint for the future.