Few surprises in cautious budget.
Opposition parties will have a hard time scoring points off the Conservative government’s federal budget.
In part because key measures were revealed well before budget day, such as the plan to raise the age of eligibility for Old Age Security payments, or the new timetable for healthcare transfer payments to provinces.
In part also because Canadians are unlikely to feel much direct impact from this budget for some time.
The OAS adjustment, affecting when payments can start, will be raised from the present age 65 to 67. But the change will come into effect only in 2023 and not affect anyone now 54 or older.
Health-care transfer payments will increase at the present six-per-cent annual rate for another five years before being pegged to economic growth and the inflation rate.
If anything, the most noticeable change in most Canadians’ daily lives as a result of this budget, which includes no tax cuts or hikes, will be the decision to stop making pennies by the end of this year. It is a sensible move considering that a one-cent piece costs 1.5 cents to produce.
The other direct impact people will notice is the increase in the exemption limit for goods that travellers to the U.S. can bring back home.
Beyond that, fears in some quarters that this would be an ideologically motivated slash-and-burn budget were not borne out. Yes, the government will cut spending, but by a relatively modest $5.2 billion, considerably less than the $8 billion that had previously been touted.
Even with the relatively more modest cuts, the federal budgetary deficit is now projected to be eliminated by 2015, a year earlier than previously projected.
As for where the cuts will be made, much of that remains to be seen and is unlikely to be readily felt.
Much the same is true of the downsizing of the civil service. The budget provides for the shedding of 19,200 civil-service jobs, but is vague about the time frame in which this will occur, and who will be affected. Many of them can be expected to be eliminated by attrition, and even once the target is reached there will be considerably more federal civil servants than when the Conservatives took office.
The most controversial measure will perhaps be the plan to speed environmental-impact studies for major resource projects, including the highly contested Northern Gateway oilsands pipeline to the B.C. coast.
But then resource revenue is becoming increasingly critical to the sustainable funding of the social programs so dear to the more environmentally concerned opposition parties – especially as the country’s manufacturing sector has declined.
There is a welcome response to recent criticism of the way the government encourages innovation, and research and development. The previous system of doing so by way of tax credits was found wanting and the budget’s shift to more direct grants should allow for better targeting of such funding.
An unwelcome development is the decision to cut the Katimavik program introduced by the Trudeau government in 1977. It has been an inspired program that allowed young Canadians between the ages of 17 and 21 to travel for stays in other parts of the country where they would engage in volunteer work.
It is a workmanlike budget on the whole. It is forward looking, but also restrained in its immediate impact. In that respect, the most stinging criticism of its provisions might well come from the hard core of the Conservative base that had pushed for far more stringent cuts in spending and the size of government than this budget delivers.