Budgets matter. Whether for a household, business, or government, they not only ensure we are being wise stewards of the resources entrusted to us, but reflect our values and priorities. They can be instruments used to bless and enrich the world around us, or they can perpetuate greed and self-interest.
That is why CPJ follows and critically engages the federal budget process each year. The federal government, after all, isn’t them, it’s “us.” As one of the primary institutions of our collective life, it’s entirely reasonable for citizens to expect that the values that matter most are reflected in how the government decides to spend – or not spend – our money.
So what (and whose) priorities will be reflected in the next federal budget? What will it say about our values as a nation?
Balance the books now so we can spend later…but on what?
It’s widely expected that federal Finance Minister Jim Flaherty will table an early budget the second week of February, shortly after MPs return to Ottawa on January 27, and at a time when the attention of Canadians will be very much elsewhere: the Sochi Winter Olympics.
Word is that this budget will be a pretty bare-bones deal. No major new announcements. No new tax breaks such as the ones this government has heralded in previous budgets in order to shore up support among voters.
Why such a low-key affair? By all accounts, this year’s budget is all about “keeping the powder dry” for the “big event” in 2015. Next year’s budget will be highly politicized, meant to set the stage for the general election in October. That 2015 budget will offer targeted, carefully designed tax cuts designed to secure electoral victory.
Budget 2014 is merely laying the groundwork. But what will this budget direction cost?
Narrow focus on fighting budget deficits creates social and environmental deficits
During the last election, the Conservatives campaigned on the promise that they would erase the deficit and return to balanced budgets by 2015-16. To their credit, they’re on track to make good on that promise. After major program slashing and reductions in the size of the public service, there is a projected budget deficit of 5.5-billion in 2014-2015 (down from $33.4 billion in 2010-2011), with eyes on a surplus of 3.7-billion in 2015-16 (these are conservative estimates).
But it’s come at a high cost. Important research, social, and environmental programs are being hollowed-out. Millions of Canadians continue to live in poverty. Our lack of leadership against climate change is threatening the global ecosystem and the sustainability of our economy. Refugees are being denied essential healthcare. The federal government’s narrow focus on “fighting the deficit” has left huge social and environmental deficits.
At the same time, corporate taxes have been slashed, but jobs and investments have failed to significantly increase as a result. The use of “boutique tax credits,” costly measures with little social or economic utility designed to appeal to small, targeted segments of voters, has increased exponentially. The collective impact of these tax cuts is estimated at $45 billion in foregone government revenue annually.
Consumer model of politics
While they won’t likely be in this year’s budget, the federal government has promised that more tax cuts are on the way (including their highly contentious income-splitting proposal). Indeed, the promise of lower taxes will become a major 2015 election issue, and it’s highly likely that more than one party will be unable to resist the votes that the low-tax mantra can buy.
Canada is witnessing the rise of what’s known as the consumer model of politics. As Don Lenihan describes in his book Rescuing Policy: The case for public engagement, political parties avoid “Big Ideas” and instead offer smaller, easy-to-deliver benefits to targeted groups of the population in exchange for their support. The results? In his own words: “Big issues like climate change or poverty reduction are increasingly ignored,” and, “Winning elections, rather than promoting the public good, becomes the driving force behind policy-making.” (Susan Delacourt, Toronto Star journalist and Lenihan’s wife, has written another popular book on the subject, Shopping for Votes).
The need for visionary leadership
If you’re looking for visionary leadership on the big issues of our day, this year’s budget is unlikely to offer much hope.
For those Canadians and people of faith who believe in the positive role of taxation in building a healthy, democratic society, and who believe that self-interest must be set aside for the sake of the common good and love for neighbour and creation, now more than ever we must stand up and have our voice heard.
Read more about CPJ’s 2014 budget recommendations here.
