Finance Minister Jim Flaherty released Canada’s 2013-2014 budget yesterday, and my, what a conservative document it is.
Just not in the ideological sense.
With expenditures totalling over $250 billion, federal spending remains as high as, well, the previous six years of Conservative rule, and even with a much-vaunted decrease in the growth of spending (now .7%, the lowest since the 1990s) Ottawa is still poised to keep spending more in absolute terms than ever before. Canada’s unprecedented post-2008 spending spree, initially an ideological deviation excused by the emergency need for of recession-battlin’ stimulus, will now become a permanent part of what Minister Flaherty calls a 10-year “Building Canada Plan” where the government embraces a permanent role as a subsidizer-in-chief of infrastructure investments and make-work projects across the nation.
A few Tory principles did sneak their way into the thing, to be fair. There are $4 billion in vague, though overdue cuts to that most abused of budgetary categories, “discretionary spending,” and all revenue gains will be obtained solely through closing tax loopholes and cracking down on deadbeats. In two more years Canada’s deficit will be wiped out and a surplus will be restored, which is great because that’s when the next federal election is coincidentally scheduled.
Overall, however, Flaherty‘s was a budget liberal enough to make it hard for liberals to criticize. Watching Canadian reporters prowl the halls of parliament yesterday looking for anti-budget commentary from the various left-wing opposition parties, it was striking how mild and unideological their critiques were. Sure, the Harper government was accused of being “deceptive” and “dishonest” with some of their figures, and “gimmicky” and “superficial” with some of their cuts and kickbacks (particularly a cut-heard-round-the-world to lower the tariff on imported hockey equipment, this year’s abolished penny), but overall, one didn’t get the impression a Liberal, NDP, or even —lord help us — Green Party government would do things that differently, had they been asked.
Perhaps the most insightful commentary came from Thomas Mulcair, the NDP boss.
“There is nothing in this budget to prepare Canada for a 21st-century economy,” he fumed. “The Conservatives are leaving a huge environmental, social and fiscal debt to our children.”
Canadians need a budget that stimulates the growth of a diversified economy with a medley of industries, he continued, as opposed to Mr. Harper’s plan to keep “all our eggs in the [oil] extraction basket.”
Mulcair is a bit of a Johnny one-note on this topic. In his mind, almost everything that’s wrong with this country’s economic situation, from unemployment figures to the decline of the manufacturing sector to a shrinking base of federal revenue, can be traced back to the Albertan oil industry in one way or another. It’s an elegantly inclusive pander to the various factions of his left-wing coalition; urban yuppie greens are appeased by his hard line against the grimy “tar sands” while working class union-types in the eastern provinces are impressed by his single-cause thesis for their suffering.
As energy development steadily envelops a larger and larger chunk of the Canadian GDP, the Tories have been quick to brand such critiques as evidence that Mulcair simply hates the Canadian economy and can’t be trusted to run it, but I’m starting wonder if he might be on to something. One should always be curious about the sort of questions politicians have the least interest in answering.
A couple days before the big budget release party, Harper’s resource minister, Joe Oliver, traveled to British Columbia to announce a bold new federal initiative in the exciting realm of offshore tanker surveillance. A special fleet of spill-watching planes will constantly monitor the coast of B.C., tanker inspections will be toughened up, and you better believe there’ll be a lot more buoys.
The declaration was born more from desperation than anything else. Oil’s useless without someone to sell it to, and the Harper administration badly wants the government of British Columbia to approve a trans-provincial pipeline, known by the codename “Northern Gateway,” to flow Albertan oil to the Canadian west coast for easy export to hungry markets in Asia.
Virtually no one in the B.C. political establishment is down with this plan. The environmental risks are too high, the economic benefits to B.C. are too low, and the partisan gains practically non-existent. Last July, Christy Clark, the Liberal premier of British Columbia, created a rather absurd checklist of preconditions for approving the thing, with demands ranging from the vague (aboriginal Canadians must be “provided with the opportunities to benefit from these projects”) to the patently unconstitutional (B.C. must be given a “fair share” of Albertan royalties). Oliver’s oil tanker scheme was an admitted sop to Clark’s second precondition — “world-leading marine oil spill response, prevention and recovery systems” — but she’s yet to declare it sufficient.
Not that it even matters what she thinks, mind you. Clark is an enormously unpopular woman, and she will almost certainly lose this spring’s provincial election to the head of the provincial NDP, whose pipeline intolerance is intense and unapologetic, as is his opposition to tankers on the B.C. coast, period.
Good time for a Plan B — but unfortunately that’s exactly what Northern Gateway is. Exporting oil to Asia via British Columbia was supposed to be an alternative to sending it to the States, a prospect that’s looking steadily more dubious as the Obama administration continues to waffle on the fate of the Alberta-to-Texas Keystone XL pipeline. As we discussed previously, the President’s been giving continuous signals that he intends to make combatting climate change one of the signature causes of his second term; vetoing Keystone may be his single biggest opportunity.
Should he make that decision, one imagines Obama will emphasize recent studies claiming that oil production within the United States is advancing so quickly the nation may be energy independent by the mid-2o30s. This is one of the unsettling secrets of the burgeoning Canada petro-state; though we enjoy proudly reminding oblivious Americans that our country, and not Saudi Arabia or wherever, is Uncle Sam’s largest source of foreign oil, there’s no guarantee that’s destined to remain an impressive title.
Minister Flaherty‘s 2013-2014 budget predicts Canada’s rate of GDP growth, which has been rather low recently, will make a dramatic one-point jump in the coming year, then rise steadily at about 2.5% annually ’till at least 2017. Obviously it’s a supremely political prediction that presumes all the subsidies and job training initiatives and infrastructure investments that the finance minister says will work, will work, and that nothing big or economically destabilizing — like, say, the back-to-back rejection of two enormous trade and construction initiatives — will happen between now and the red-to-black year of 2015.
Talk about conservative.
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