Canadians will be dissecting this week's federal budget in the days ahead to determine the impact of the Harper government's strategy for the next fiscal year, but at first glance, it appears to be a continuation of spending restraint with some repackaging of funding.
What is clear is Finance Minister Jim Flaherty's determination to balance the budget by 2015, no doubt to prepare the Conservatives to enter the next election campaign on a record of responsible fiscal management. Whether that deadline is a realistic one depends on whom you talk to, but the intent to do so is a guiding tenet in this budget.
Balancing the budget will be a challenge, given that the deficit in the current fiscal year stands at almost $26 billion, up noticeably from the $21.1 billion projected last year.
Nevertheless, government seems intent on reaching its goal, in part, by curbing new spending. According to The Canadian Press, total spending is up less than one per cent, and direct program expenses are projected to drop almost $4 billion this year and another $2.5 billion next year.
Along with its balanced-budget goal by 2015, other government priorities seem to be infrastructure renewal, job skills training and closing tax loopholes to recoup lost revenue. Details on these are still sketchy, though; funding for job skills training, for example, will come through negotiations with the provinces and employers.
While the full impact of program spending cuts are difficult to determine at this point - experts are still trying to assess the full effects of departmental and program cuts ushered in by last year's budget - there's some optimism in this province about the $9-million increase in 2013 transfers to the province. National Revenue Minister Gail Shea, MP for Egmont, was quick to inform Islanders about this increase, and of Ottawa's commitment to renewing the federal infrastructure fund. That's something the provinces and all municipalities have been eagerly awaiting, including Island Finance Minister Wes Sheridan who has identified a third underwater power cable as the number one infrastructure priority. In response to the budget Thursday, he said he hopes the new infrastructure program can aid this project. No doubt community leaders across the province are equally pleased with the announcement of new infrastructure money coming this way.
But as with other budgets, the devil is in the details. On job skills training, for example, will the provinces and employers be able to match the funding required to take advantage of it? And how will the drop in direct program spending - almost $4 billion this year and another $2.5 million next year - be felt across the country? Islanders have only begun to feel the impact of this past year's cuts to EI, the Atlantic Canada Opportunities Agency and Veterans Affairs in office closures, job losses and the streamlining of services. With further cuts in spending scheduled over the next two years, Canadians should brace themselves for more of the same.
These nasty little details never form the backdrop for the photo opportunities finance ministers like to pose for on budget day, but that doesn't make them any less real or any less painful for Canadians when they occur.
