Monday, March 19, 2007

Budget 2007

I know most of my fellow Libloggers will classify today's budget as everything from "a disaster" to "the end of Canada". Personally, I'd say it's not bad. I mean, with the Canadian economy in the shape it's in, it's hard to deliver a bad budget. Harper resisted the urge to go down the typical conservative route of massive upper class tax cuts, massive middle class tax cuts, massive corporate tax cuts, and military spending. It reminds me a lot of the kind of budgets Ralph Goodale delivered during the Martin months; lots of scattershot spending with no real theme and enough pre-election goodies to satisfy everyone and cut off the opposition. With that in mind, a few general comments:

1. There's some good analysis of the budget here and here.

2. Via Wells comes this gem from Mario Dumont:

The premier called Dumont "an empty shell" last week. Now Dumont says, approximately: "Well, I say he's a hermit crab. You know what a hermit crab is. It's those little creatures that have no shell of their own and need somebody else's shell to live in. Mr. Charest has no record to run on, so he has to run on Stephen Harper's."

The BQ supporting the budget certainly is good news for Charest who I still think can salvage a minority win.

3. Andrew Coyne was, predictably, in a bad mood calling this the most free spending budget in the history of confederation.

4. Not that Phil Fontaine is ever happy, but he certainly wasn't happy with the budget.

5. Danny Williams waging war with Ottawa has become somewhat comical outside of Newfoundland, but I suspect there may be some repercussions for the flip-flop on equalization on the Rock. There are also some votes to be lost in Saskatchewan. That said, there are a lot more votes in Quebec and Ontario than Newfoundland and Saskatchewan, so I doubt Steve will lose much sleep over this.

6. The Liberals and NDP have both been rather ineffective at communicating why this is a bad budget. I've watched the coverage and read the press releases and it's hard to get a clear message or theme as to what's wrong with the budget from either of them. Obviously Flaherty has done a good job of not giving them anything to latch onto.

7. If Harper was going to "fix" the "fiscal imbalance" by spending in provincial jurisdictions, he should have directed more to education. The post-secondary component of this budget is a joke. More for the RESP program won't improve access or quality to higher education for any Canadians.

8. Like I said bellow, anyone who thinks this will mean the end of the provinces asking for more from Ottawa needs to lay off the ganja.

So, when all is said and done, a very political savvy budget which won't do much harm but won't do anything to drastically improve the lives of Canadians either.

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  • Did you notice the increase in funding for student NSERC, SSHRC, and CIHR grants?

    I can't say that I disagree with that.

    By Blogger Josh Gould, at 11:04 p.m.  

  • Bang on Dan. Not a bad budget. Not terribly inspiring or focused, but nothing to get too angry about.

    I particularly agree that anyone (cough cough Antonio) thinks that this is the end of federal-provincial snipping needs to lay off whatever drug they are on (frankly I doubt ganja is strong enough for such delusions).

    By Blogger KC, at 11:36 p.m.  

  • I don't know if I would call a 40% increase in post-secondary spending (from the feds) a joke. At least not any more of a joke than spending on post-secondary education already is. I honestly think we need to keep the riff-raff out.

    As for the SSHRC... excellent... I'm against government waste, but it isn't waste if it could benefit me. I might like solve all wars or invent a new kind of government or something, you never know.

    By Blogger hosertohoosier, at 11:51 p.m.  

  • I quite agree that the Liberals/NDP have done a peepants job of articulating what the heck they dislike in this budget.

    I don't love it, but it seems okay to me.

    Continuous failure to articulate why they're raging against the machine is not a clever strategy, really....

    By Blogger Jason Bo Green, at 11:54 p.m.  

  • I agree Dan, not a bad budget.

    By Blogger Charles J, at 11:58 p.m.  

  • Well, I shouldn't give them a pass on the granting councils all the same. The mention of funding for the granting agencies is pretty wrong-headed:

    Budget 2007 is providing $85 million per year in new resources for the granting councils. This will include:

    - $37 million for NSERC, targeted to research in energy, the environment and information and communications technologies.
    - $37 million for CIHR for research in the health sciences.
    - $11 million for SSHRC, targeted to research in management, business and finance.

    First off, this supposed focus for NSERC is ludicrous because no research program fits easily in a simple category. Research in, say, the numerical solutions of PDEs isn't obviously relevant to energy or the environment, but it's crucial for lots of hard problems in physics and engineering.

    Second, CIHR is all about "health sciences", and little (if anything) else. Third, SSHRC is the social sciences and humanities research council, and it is inappropriate to alter its mandate as this would seem to.

    The councils will collaborate in managing these targeted resources, in order to combine the strengths of various disciplines and achieve the greatest impact.

    Huh? How will this be accomplished?

    The Government will strengthen the governance of the councils and improve tracking and reporting on the impacts of research expenditures to enhance accountability and value for money.

    This is code for more bureaucracy and pointless oversight of research activities (which already have to go through lengthy applications for funding). If you want to waste money, the best way is to hire accountants with no particular expertise in research to determine "value for money". How will this be determined anyway? Number of publications or presented talks?

    By Blogger Josh Gould, at 12:38 a.m.  

  • I fully concur. In fact with a huge surplus, it would be pretty difficult to deliver a terrible budget. As for the provincial-federal sniping, it will never end. No matter how much you give the provinces it won't be good enough. The real question is will this be enough that the public will turn on their premiers and consider their demands unreasonable, or will they continue to support them. Unfortunately too many Canadians seem to put the interest of their province ahead of the country as a whole. Having family in Alberta, lived most of my life in British Columbia, and now living in Ontario I guess that allows me to have a little more of a national perspective.

    By Blogger Miles Lunn, at 12:46 a.m.  

  • On CPAC:

    "Mr Layton, what about the bonus for fuel efficient vehicles?"

    "That's piddely, they do nothing to prevent the bad vehicles" -JL

    "Uh... what about the penalty for gas guzzlers?"

    "That will just drive jobs out of the province" -JL

    (not exact quotes ;)

    Man, it must suck trying to come up with opposition on the fly.

    By Blogger Technetium, at 1:09 a.m.  

  • Oh, some questions! There was no "broad based tax relief", but I heard there was a tone of money going into the debt... which from what I recall will now give a return in the form of tax cuts? Can anyone explain how this works?


    By Blogger Technetium, at 1:11 a.m.  

  • The real problem with this budget? Its dithers all over.

    We were hounded for being a party, in our later years, with no direction, just paying off everyone we could. Henseforth, its such a funny turn to see Harper do this to 10x the degree.

    This budget does nothing particularly well. When I look at the combonation of major features, I see no cohesion, no common thread that would hint at a purpose for governing.

    Decisiveness is fine, but its vision that makes a leader.

    Visionless Stephen Harper is NOT a leader!

    By Blogger Les Dionistas, at 1:38 a.m.  

  • 4. Not that Phil Fontaine is ever happy, but he certainly wasn't happy with the budget.

    You trade away a half a continent and you get apartheid? I wouldn't be happy either.

    - $37 million for NSERC, targeted to research in energy, the environment and information and communications technologies.
    - $37 million for CIHR for research in the health sciences.
    - $11 million for SSHRC, targeted to research in management, business and finance.

    JG is totally right. This is a terrible investment and continues the obsession with practical instead of basic research. And not to mention that it appears as if most of the reinvestment through the granting agencies occurs through the Canada Graduate Scholarships, which are already extremely lucrative.

    For SSHRC, it's $35,000 a year (tax-free by the way). It's entirely possible thatwill be increased or the numbers of those will increase.

    Either way, a graduate student does not need $35,000 tax-free to live, when many of his or her colleagues are living at or near the poverty line. Spread the wealth for maximum effect.

    By Blogger Simon, at 6:13 a.m.  

  • The real problem is they cut things in last years budget that they reintroduced today. They cut all funding to SWC a couple of months ago and then reintroduced funding in this budget. Does that mean they gave the status of women a 100% funding increase??? NO it doesn't. Go back to Liberal funding for the environment post secondary, provincial transfers women the homeless etc and you will find that the Tories have increased taxes and decreased program spending unless you are a corperation or very rich and can use that extra $310 per child. There is no funding for aboriginals or early childhood learning, homelessness etc.

    Ask yourself what kind of budget the Tories would have brought down if they had a majority?

    But don't tell me they have increased program spending on the environment or the provinces or women etc because they haven't. They have just reintroduced most of what the Liberal had in place before they took power with extra taxes, but not for aboriginals, children, or the very poor.

    By Blogger s.b., at 8:55 a.m.  

  • Doesn't it bother you at all that billions of dollars are being given to rich families with children? This budget barely deals with the real issues of the day.

    By Blogger Jason Cherniak, at 8:55 a.m.  

  • For SSHRC, it's $35,000 a year (tax-free by the way). It's entirely possible thatwill be increased or the numbers of those will increase.

    To clarify, the $35,000 figure applies only to the highest PhD awards (CGS-D). The lower PhD award (PGS-D) is about $18,000 which is good but hardly exhorbitant (and, at present, goes only to the top students).

    Either way, a graduate student does not need $35,000 tax-free to live, when many of his or her colleagues are living at or near the poverty line. Spread the wealth for maximum effect.

    I agree in principle - there's little reason to expand the CGS-D awards, as they go only to the very top students - but I do favour an increase in the number of the lower valued awards at the doctoral and masters level. It makes Canadian graduate funding more competitive and allows more flexibility for allocation of funds within universities. But the policy as a whole is still crap. (I wasn't clear on whether the greater number of scholarships came out of the funding increases announced elsewhere in the budget document.)

    By Blogger Josh Gould, at 9:23 a.m.  

  • Can the Income Tax Act become any further complicated by deductions? I almost would support a flat tax at this point.

    The winners: income tax preparation companies.

    The winners: organization gurus who teach people to save receipts and old bus passes.

    The losers: anyone who expected a Conservative budget.


    By Blogger Peter, at 10:38 a.m.  

  • "The Liberals and NDP have both been rather ineffective at communicating why this is a bad budget."

    Here you go:

    By Blogger Robert Vollman, at 10:56 a.m.  

  • Jason Cherniak wrote:
    //Doesn't it bother you at all that billions of dollars are being given to rich families with children? This budget barely deals with the real issues of the day.//

    Define rich.

    I don't think that is a line of attack that Dion will want to be using in the campaign, when squeezed middle class families are getting $620.

    Bob Rae defined rich in the early nineties as basically a family with an income of $60K, and began the top marginal tax rates there, dooming the NDP for maybe forever.

    Dalton (and Steady Ed) is(are) getting the health and social transfer fixed, the end to double equalization, i.e. per capita funding for health and post-secondary education.

    The federal Liberal government had how many surplus budgets and were unwilling to fix this.

    Harper is giving Dalton this money strings free, and fixes the system permanently so Dalton doesn't have to beg.

    By Blogger whyshouldIsellyourwheat, at 1:32 p.m.  

  • It's refreshing to see your view of this Tory budget - clear and concise analysis with not a lot of partisanship.

    Most liblogger posts on this particular budget have an awful Cheniakian slant to them that is all but unbearable.
    There really isn't much to grab on to to hate and use to poke the Tories with. There's also no hit-out-of-the-park item for the Tories to gloat over. Everyone gets a little something, but nothing more than marginal. The Bloc is placated with the money for Quebec, so at least one party is on side, which is all Harper really had to have.

    It certainly does draws parallels to a Liberal budget done in a time of prosperity. I'm not moved at all by Dion slagging the budget on such shallow points - it doesn't reflect well on him.

    By Blogger Amanda, at 1:32 p.m.  

  • Yeah Jason (Cherniak), the poor will be a lot better under Dion's income and corporate tax cuts. Plus they will be able to make lots of money from their un-taxed income trusts.

    I guess I don't like the business/management focus of the SSHRC. Business only does sketchy research, unlike political science. I mean we invented duverger's law (does not apply in Canada or India) and um... we are a science... we should be eligible for NSERC, dammit.

    Oh, and I could totally misspend a ten billion dollar surplus. Please, oh please, Harper, give me the chance to prove this to you.

    By Blogger hosertohoosier, at 1:54 p.m.  

  • As for SSHRC being a lot of money - the thing is that while you may get it in one year, you don't necessarily spend it in one year. I know if I got an SSHRC grant I would save it up in case I don't get funding from my department one year.

    By Blogger hosertohoosier, at 1:54 p.m.  

  • Jason; It's not how I'd spend it but it's a lot better than last year's budget. And it could have been a lot worse (and it likely would be given a majority).

    By Blogger calgarygrit, at 2:46 p.m.  

  • well Dan, I got to say I am disappointed in your analysis about this budget. I can give you a couple things that are wrong with this budget:

    1) Giving tax cuts for having kids is just wrong. That is a personal choice, I have no idea why I as a single person with a natural aversion to small children should have to actually give money to individuals for having kids.
    2) Not a single tax cut for a single income earner in this budget
    3) The fact that once again we are paying Quebec to stay in the country. As a western Canadian, I am getting sick and tired of having to pay these guys off. They get 1.6 Billion in additional equalization, and the government is only giving out an additional 1.5 billion total. Someone is getting screwed, and as per usual it is the RoC
    4)Reneging on a promise to NFLD and also the promise on Capital Gains taxes.
    5) No environmental plan other than taking investment away from the oil sands. That is pretty disappointing.
    6) Allowing married people to split their income, but not other individuals. I guess we are going back to the 1800's when man and woman become one upon marriage. Yet another tax benefit for getting married.
    7) Nothing for Natives. Natives are at the bottom of the heap for Conservatives, which is not a surprise

    Most importantly, if there is something to get angry about in this budget it is the continued social engineering by the Conservative government encouraging women to stay at home and Canadians to get "married". That is disturbing for sure.

    By Blogger fartcatcher, at 3:56 p.m.  

  • 1. I don't understand the basis on which Quebec receives more money - what is the mechanism or is there merely a "PQ: $X" line item?

    2. Jason: not every program needs to be means-tested, and we have the broad catch-all of progressive income taxation. To illustrate, would you support a user-fee for your personal access to healthcare, but not in the case of bakers, because you happen to be a lawyer? (i.e., French system, sort of)

    3. Fartcatcher: the fact of the matter is that families are cohesive economic units. It's a bit of a fiction to tax people at different tax rates when they're in the same immediate family. As to kids, I think they're expensive and it's a collective good to help families feed and clothe them. Perhaps there are better mechanisms of doing so, but I take no umbrage to the principle of government programs targeting children.

    By Blogger matt, at 9:56 p.m.  

  • JG,
    sorry, yes, I'm aware, there's a lower doctoral fellowship. As far as I understand, though, the SSHRC investments are specifically targeted at the CGS scholarships (the super SSHRCs).

    By Blogger Simon, at 12:46 p.m.  

  • Could you maybe try and throw some process into your denigration of RESPs? The entire point of them is that they improve access and encourage savings. But maybe you have a study saying that a capped grant targeted at lower middle class families discourages people from going to University.

    No one I know had an education savings account, bu then everyone I know paid for school out of petty cash.

    The SSHRC grants are horrible. There shouldn't be an SSHRC, just a bunch of critical gender theorists whining about the patriarchy. More grad students in this is a net loss to our society. NSERC and CIHR don't reward obscurantism, while SSHRC celebrates it.

    This budget was absolutely atrocious. could have increased military spending by $20B and still cut spending by $40B.

    By Blogger Hey, at 5:26 p.m.  

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