Jim Flaherty and Wes Sheridan
Increase for infrastructure spending likely best deal province gets today
Except for a modest increase in infrastructure spending and some minor tax tinkering, Prince Edward Island shouldn’t expect much from today’s federal budget. Federal Finance Minister Jim Flaherty isn’t going to derail his agenda for balancing the books next year and doesn’t plan a spending spree to woo voters when that is best left for 2015 to sway voters heading into a general election.
So we’ll be left with a neutral budget which will emphasize jobs and economic growth, although Mr. Flaherty has said much the same for the past four years and has largely failed to deliver. The lingering worldwide recession hasn’t helped him and it will be a remarkable turnaround when he presents a balanced budget next year after registering an all-time record federal deficit just several short budgets ago.
Mr. Flaherty was forced to reluctantly spend billions to stimulate the economy and help Canada recover from the crippling recession which struck in 2008. That helped the country spend its way out of recession and we fared better than many other countries in the G-8 family. Analysts have stated that Mr. Flaherty could have balanced the budget this year but his political agenda trumped his fiscal one.
He can boast of moderate job growth but the reality is many retired Canadians are being forced back to work, at least part-time, to make ends meet and the ranks of the working poor in this country are growing. He has increased the overall federal tax burden in each of his last four budgets and the majority of middle-class Canadians hasn’t seen an improvement in real incomes for years. And then we have the monster federal debt burden to take into account. Mr. Flaherty has run six consecutive deficits, adding more than $165 billion to Canada’s overall debt-load.
The Opposition is busy calling for the federal budget to focus on generating the kind of economic growth that will finally help struggling middle-class families and urged the government to invest in infrastructure and education. The NDP and Liberals haven’t offered much to help the budget debate, preferring to simply criticize the federal government’s fiscal achievements.
At least Mr. Flaherty has resisted the temptation to balance the federal books by unloading billions of costs onto the provinces, a procedure perfected by former Liberal Finance Minister Paul Martin. Under his watch, Mr. Flaherty has largely refrained from acting like a drunken sailor but he could act a little less like Ebenezer Scrooge.
And on the other hand
While his federal counterpart toys with a stand-pat or slightly expansionist budget today, P.E.I. Finance Minister Wes Sheridan is facing the inescapable reality of having almost no wiggle room as he continues his public pre-budget consultations across the province.
The province likes to blame Ottawa for causing much of its tight fiscal situation by reducing federal transfers and negative changes to health care funding. The fact remains that while Mr. Flaherty has the luxury of balancing the federal budget either this year or next, Mr. Sheridan is caught between the proverbial rock and a hard place.
His pre-budget consultations are really more about informing Islanders on government’s fiscal plans rather than seeking input. Mr. Sheridan says he wants to make sure Islanders are still on track with what he’s doing fiscally. Few people are going to oppose a balanced budget or finally getting our financial house in order.
Mr. Sheridan suggests the three-year plan to balance the books came straight out of budget consultations. Shouldn’t a balanced budget always be the priority of any government?