Tag Archives: Budget 2014

Inequities in the do-nothing budget of 2014

 

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For proof that George Orwell was right, look no further than the 2014 federal budget. There, indeed, all men are created equal, though some clearly appear to be more equal than others.

As, increasingly, modern legislatures confer “personhood” on multinational corporations, we may reasonably consider car and truck makers direct, if not actual flesh and blood, beneficiaries of Finance Minister Jim Flaherty’s munificence. How else would you characterize the $500-million top-up to the Automative Innovation Fund, created in 2008, the last time Chrysler and General Motors came poor-mouthing to Ottawa, caps in hand?

“The automotive industry is among Canada’s leading employers and exporters and is a key contributor to our economy,” the budget sonorously declared. “The sector also directly employs more than 115,000 Canadians in Southern Ontario and across Canada from automotive assembly to parts production.”

Never mind that successive Federal and Ontario governments have had to repeatedly bribe the major manufacturers into keeping their operations in Canada more or less intact. Or should we forget the $3 billion in loans and “non-repayable contributions” both levels of government arranged for the carmakers, courtesy of taxpayers, in 2009?

Back then, the companies complained bitterly about the financial meltdown and the great vanishing act of ready credit. But that was a smokescreen, and not a very thick one. North American automakers, then and now, wouldn’t know good productivity tools if they arrived at their front doors in a fleet of Nissan Sentras.

And, still, their temerity is breathtaking.

Apparently, an additional five-hundred-billion bucks might not be enough to satisfy the ravenous appetite some corporations have for found money. As the Globe and Mail reported this week. “Chrysler Group LLC is seeking a contribution of at least $700 million from the federal and Ontario governments in high-stakes negotiations about the future of its Canadian operation.”

Naturally, that’s a threat – the standing operating procedure of businesses that have grown too big and self-important to fail. They strap governments over barrels because, while they may enjoy legal status as people, they’re the sort of people we typically recognize as sociopaths who have no expectation of ever growing consciences. If they can get away with something, they will.

Alas, twas ever thus and ever thus shall be.

Not so, perhaps, for some of the pricier talent – the genuine humans – who actually occupy the upper management ranks at the car companies. Mr. Flaherty now seems less committed than several of his Cabinet colleagues, to the absurdly wrong-headed and patently unfair income-splitting device for rich folks, for which the budget was overtly paving the way.

“I’m not sure that overall it benefits our society,” he said to his eternal credit this week. “It benefits some parts of the Canadian population a lot, and other parts of the Canadian population virtually not at all. . .I think income splitting needs a long-hard analytical look.”

In fact, it’s already had at least one. Back in 2011, the C. D. Howe Institute concluded, in a special commentary on the subject, “The gains would be highly concentrated among high-income one-earner couples: 40 per cent of total benefits would go to families with incomes above $125,000, and the maximum annual gain from federal splitting would exceed $6,400. The maximum gains from provincial splitting would range from zero in Alberta to $5,750 in Ontario.”

What’s more, the Institute said most households wouldn’t see a dime, while the annual cost to the national accounts would likely exceed $2.5 billion. In other words, “income splitting would fail to achieve its ostensible horizontal equity goal.”

That’s economic-speak for “not fair”.

Still, Mr. Flaherty’s deathbed conversion on the issue (he is widely rumored to be drafting his exit strategy from federal politics) is not likely to convince many of his confreres. The ghosts of Ronald Reagan and Margaret Thatcher are far too comfortable haunting the Conservative corridors of Parliament Hill to brook any collective change of heart among the living.

For them, all men are not created equal.

They never have been and they never will be.

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Running our democracy on auto-pilot

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On both sides of the 49th parallel, citizens pause, if only for a frigid winter’s moment, to reflect on the political bargains they’ve made and the consequences of disenchantment.

In the American Capital last night, President Barack Obama delivered his State of the Union Address, a show the pundits unanimously panned in their previews.

This lame-duck Commander in Chief, they declared, has dropped the ball in practically every zone of the playing field. Now, even his once-ardent admirers have turned their backs on him.

What could he possibly say that would reduce the bitter partisan bickering and undo the gridlock in Congress?

In Ottawa on Monday, after one of the longest recesses in some time, Parliament reassembled just in time to receive the federal government’s 2014 budget. And oh, political observers clucked, what a deliberately dull, strategically boring, document that will be when the nation gets a look at on February 11, a month ahead of schedule.

But, then, what else would it be in the run-up to an election?

“It’s an opportunity to just get going early out of the gate and set the tone,” Michele Austin, a former Conservative operative and a top flack at Summa Strategies in Ottawa, told the Globe and Mail. “I’m not convinced that the Olympics has a lot to do with it (the budget’s early release). . .This is a bridge budget. It’s taking people to a surplus budget.”

Meanwhile, Kul Bhatia, an economist at Western, told the CBC, “The indications are that the fiscal situation is better than they’ve let it be known. This is based on some information that they have that is not in the public domain – that’s my hunch.”

Increasingly, we are told, the people we elect ostensibly to safeguard our system of government think of us as customers. That would make them used car salesmen and women, kicking the tires of democracy and pronouncing them sound.

The customer, of course, is never wrong, but sometimes he doesn’t read the fine print – the exceptions to the warranty, the nullifications to the contract we figuratively sign when we dare to vote.

Just like the pre-owned auto we drive off the lot, the government we get is often only just good enough. What qualities it lacks won’t bring it to a grinding halt. But neither will the absence of certain cherished virtues stave off a creeping sense of buyers’ remorse in the living rooms of the nation.

On this score, recent public opinion polls tell a convincing tale.

“Just 21 per cent of likely U.S. voters believe the federal government today has the consent of the governed.” That’s according to a Rasmussen Reports national telephone survey. “Sixty-three percent  do not believe the federal government has the consent of the governed today; 16 per cent per cent are not sure.”

Here in Canada, we’re not much happier with our elected lot. In a piece published online earlier this month entitled, “Democracy and the death of trust,” EKOS Research Associates founder Frank Graves declared, “The rise of mass education, along with more critical media and a more cynical pop culture, has produced a more aware and less trusting public – a shift which poses huge challenges to governments and democratic institutions.”

That may, indeed, be true. But it is also true that we, the unelected drivers of our democracy, must shoulder most of the blame, for it is we who routinely install public servants demonstrating only the profoundest gaps in imagination, only the most thorough absence of courage.

Do we limit ourselves and the well-being of our society by deliberately curbing our expectations of the political class?

What do we actually want? Is it a tax free bank account with the twice the allowable contribution level? Is it a topped-up child tax credit? Is it a national budget surplus of $4 billion?

Or is it better, more open-handed cooperation among political parties – and levels of government – on matters that actually resonate with all Canadians: education, health care, infrastructure?

In the end, all the truly hard decisions fall to us. That is our part of the bargain we keep for posterity.

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