What to look for in the budget

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Sean in Ottawa
What to look for in the budget

I was surprised not to see a thread dedicated to the budget itself.  While I have not written here for a bit I figured this might be worth de-lurking. Since the Conservatives are the authors of the budget let's consider their objectives.

In the long run they believe in smaller government. To assume that they have seen the light and are now adopting Keynsian economics is naive. To assume that this budget does not serve a neo-conservative purpose, that they have somehow given up, is dangerous thinking. So what then is the end game?

This budget is Act 1 of a two Act play. In the long run even if the stimulus works there will be a political cost for it. The government may be able to say, once the spending spree is over and people start looking at the deficit, that it is the opposition parties that made them do it. They will reach out and take credit if it works and pass it off if it does not. But that is not the extent of the possibilities available.

The real plan, I believe, has its roots in the long-term planning of the government. The government does not believe in stimulus for the economy and this has not changed. The objective over the long run is to reduce the size of government and the role it plays in the economy-- not for the purpose of paying down national debt but for ideological reasons. In that context it serves the government's purpose well to shoot the budget bolt now when there is cover to do so and then pull up the reins sharply later.

Indeed you could argue that there could be a neo-con version of Keynesian economics. In standard Keynsian economics you spend enough to keep the economy afloat in the bad times and pull back a little in the better times -- all the while making sure there is stable funding for key public sector activities. A perverted neo-con Keynsian plan would be to overspend so much in the bad times, with cover of opposition approval, then use that as cover to deny stable funding for the public sector activities later. The result to the public sector is ironically similar if the government overspent than if it underspent right now-- at least in certain areas. By underspending now those key sectors can fold under the weight of the current demand for support during hard times but to overspend now gives the excuse for the deficit fighting that can do much more damage if the government gets its way a couple years from now.

Conservatives always say they do not want what they call structural deficits but in fact that is precisely what they need. They need to always have a deficit to fight in order to justify saying no to the things they do not believe in or want government to do. It is no accident that it is governments that want to deliver on a social agenda that tend to balance budgets in order to be able to do so and ones that always talk about the danger of deficits that keep bringing them in.

A large stimulus budget is perfect cover for Act 2 which is the deficit cutting that comes later-- that is the part when we will be told that we cannot afford public education, culture and health care. (National security bleatings will defend the law and order and military budgets.)

In this context you will see the explanation for what the government will do today. It is not their main purpose to stimulate the economy because while they would like to see the economy do better they do not believe this can be done or that this is the proper role of government. The purpose will be to shovel out the money to diminish the government capacity over the long term. Giving it to the provinces would allow the provinces room to do all those things the government does not want to do and sets up more stable funding over time for programs they do not believe in so expect provincial transfers to be highly targeted.

Instead look for tax cuts as the Conservatives keep advocating, even while they know better, that tax cuts will stimulate the economy. They have been told by economists that in difficult times people will save the tax cuts not spend. But tax cuts are the most efficient way of reducing the size of government over the long term- there is a lot of resistance to tax increases so they are largely irreversible. Ideally, I expect the government would have preferred just to empty the government capacity with significant tax cuts and spending cuts but right now there has been so much discussion of this that the public knows better and wants direct spending. In this budget period, the government can only do this in a limited way. Look for as much of this as possible however. even though the tax cuts will represent a small proportion of the deficit now, because they are permanent they will help guarantee that the government finances will not pay down the debt too quickly allowing for continuation of current government programs.

Tax cuts now will be measured in billions-- this is important because at the bottom of a recession the money given up will look small as the tax base is at its smallest. But these cuts will be worth far more when the economy recovers. In other words a 2 billion dollar tax cut today might be worth, with no changes, 4 billion two or five years from now once the economy recovers.

The second best way to shovel out the money creating stimulus noise now but limiting government later is through P3s. P3s are a combination of up-front government activity with long-term privatization and additional public expense down the road. The government can use billions of public money now to effectively turn over key institutions and activities to the private sector leaving the government with a bill that will serve the purpose of continuing the process later under cover of deficit fighting.

The third way is to use the excuse of the need to move quickly to sidestep government regulation and oversight. This is an opportunity to remove substantial public control over government spending and allow private industry the ability to avoid such concerns like the environment, Canadian content and labour considerations.

The fourth way you can use spending to transform government into a Conservative ideal is to distort priorities in the spending envelopes of each department. If you increase in one area you can cut in another while claiming you have made no overall cuts. For example- if you spend in one area of the arts it can sound like an increase but it can be used as justification of cuts to an area you want reduced while still allowing you the ability to say you have not cut arts spending.

Then what would you expect not to see in neo-con perverted Keynsian economics? You will not see significant transfers to provinces for them to spend money on programs without government control. You will also see the government try to avoid equity positions. It will not want to enter into any situation where the government might actually make money over the long term- the money that will be made will have to be in the private sector. You won't see the government spend much where there will be a significant federal asset or income when this is all done unless it is one that can be readily sold.

What ought to be done in a good budget is to solidify key public sectors, bolster the ability to look after the vulnerable through enhanced EI and make significant investment into public assets including those that will save or make money down the road as well as the infrastructure that both the public and the private sector rely on. I expect the government will pay lip service to most of this while really delivering the money to the private sector.

Look for all of these before you judge if the government has really brought in a budget that will serve anything other than long-term neo con interests. One thing you have to recognize with this particular group of neo-con operatives. They are patient and look into the long term implications of what theya re doing. It is important that critics also spend time considering what happens over the long term. 

Unfortunately the government could announce the money but save the method of delivery (P3 and privatization initiatives) for later so we might be impressed with the money being spent on public needs now only to be disappointed later when we see that this could end up being a massive subsidization of privatization initiatives. (it would not be the first time a Conservative government pays the private sector to take valuable public assets of its hands.)

There is my guide to interpretting the budget.

Hoodeet

NAPO and CCPA have an alternative budget circulating and on their sites.

Worth looking at today, as it offers a useful checklist.

 

 

Hoodeet

One concern about the Herpetic budget (or one the Liberals might have introduced) needs to be that Canada not imitate the private-sector-worshippers south of us:  most of the stimulus money should go directly to non-profits, community groups and local and provincial governments or at least to small, local employers, NOT to pay largely for private contracts.

In fact some (all?) provincial governments, which have moved in the direction of PPP, have been forcing municipalities to adopt partnerships with private companies before any money is granted for public projects. We need to keep our eyes and ears open for more give-aways of taxpayer money to for-profit outfits.  Especially given the huge deficit that's steamrolling us.

ottawaobserver

Sean, that was a very interesting and worthwhile analysis.  Thanks for taking the time to write it and post it for us.

KenS

I agree, good analysis.

I'll offer the following, where the emphasis may be a bit different, but probably not the implications.

I don't think it requires that Harper Crew does not believe in stimulus. They may well beleive that it is sometimes neccesary. In the neo-con universe, if we do everything "right", you don't have such problems.

When they come: "Oh well. Time for ad hoc."

Nor do I think it is, or needs to be, a plan per se.

Its just opportune to have their cake and eat it too. "We do have to do some stimulus. And not to worry about those huge deficits- it will be that opportunity for some serious downsizing that has elluded us."

The end result is the same. And its just as deliberate even if not explicitly planned. And even if they do beleive given the circumstances that stimulus is required.... they'll decide "job is done" at the first opportunity.

So I don't think my variation on the motivation/'plan' makes a substantive difference even if it is true.

M. Spector M. Spector's picture

Quote:
Let's imagine, for a moment, how different the public debate would be today if it had been unions that had caused the current economic turmoil.

In other words, try to imagine a scenario in which union leaders - not financial managers - were the ones whose reckless behaviour had driven a number of Wall Street firms into bankruptcy and in the process triggered a worldwide recession.

Needless to say, it's hard to imagine a labour leader being appointed to oversee a bailout of unions the way former Goldman Sachs CEO Henry Paulson was put in charge of supervising the $700 billion bailout of his former Wall Street colleagues.

My point is simply to note how odd it is that the financial community has emerged so unscathed, despite its central role in the collapse that has brought havoc to the world economy....

One would think that those who pushed this agenda so enthusiastically would, at the very least, be a tad embarrassed today.

But so influential are those in the financial elite - and their hangers-on in think-tanks and economics departments - that they continue to appear on our TV screens, confidently providing us with economic advice, as if they'd played no role whatsoever in shaping our economic system for the past quarter century.

Of course, we're told there's been a major change in their thinking, in that many of them are now willing to accept large deficits in today's federal budget, in the name of stimulating the economy.

While this does seem like a sharp departure from the deficit hysteria of the 1990s, a closer look reveals the change may not be that significant.

In fact, financial types have always accepted deficits - when they liked the cause. Hence their lack of protest over George W. Bush's enormous deficits, which were caused by his large tax cuts for the rich and his extravagant foreign wars.

What they don't like is governments going into deficit to help ordinary citizens - either by creating jobs or providing much unemployment relief.

So the Canadian financial community has been urging that the stimulus package consist mostly of income tax cuts - even though direct government spending would provide much more stimulus and do more to help the neediest.

If the Harper government follows the financial community's advice, we will simply move further along with the small government revolution launched by Ronald Reagan in the early 1980s.

Of course, tax cuts are not the same as financial deregulation. But they are twin prongs of a bundled package aimed at reducing the power of government to operate in the public interest.

[url=Linda">http://rabble.ca/columnists/financial-elite-have-no-shame][=mediumb... McQuaig[/][/url]

kim elliott kim elliott's picture

Toby Sanager from CUPE, fresh out of the lock up, published this piece on progressive economists:

 "Harper "stimulus" budget falls far short

Faced with the prospect of losing their grip on power, the Harper government has made a big show of taking action to address the economic and financial crisis, but it still falls far short of what is needed to revive the economy, create jobs and protect the vulnerable. In particular, the budget fails with any substantial measures to improve public services, help the poor, set a positive new course for the economy, or provide relief for the hundreds of thousands who are expected to become jobless over the next few years."

Full entry here

Sean in Ottawa

There is not much comment on this as yet. The infrastructure spending is going through the building Canada fund. This is important because all funding through this is conditional on consideration of P3s.

the match requirement and P3 requirement and the sunset of 2 years means most of the stimulus will never happen.

Might be enough to sucker the Liberals since it follows the great Liberal tradition of promise much deliver nothing. I expect the Liberals to vote for it.

The removal of the right to go to court for pay equity is maintained...

 

CEP Local 341

Good budget. I'm happy with it. I like the tax cut.

 

Air Liquide tech

Webgear

I was wondering if today's budget was good for Canadians?

From my point of view, parts of the budget seem every good (increase to social housing, and extend Employment Insurance) however parts were not necessary (cutting business taxes, short-term loans to the auto industry).

Overall the budget presented was better than I expected however I admit economics are out of my league.

 

 

______________________________________________________________________________________________ We are like cloaks, one thinks of us only when it rains.

Boom Boom Boom Boom's picture

Ken Georgetti of the CLG ravaged the budget because of the lack of UI improvements at the starting point. As for housing, someone (I forget who, maybe Mulclair or DuCeppe) said on Newman's show that it's mostly for renovations to existing housing, not new housing construction. Duceppe said there's very little for forestry and manufacturing in Quebec. Mulclair said on Newman's show the whole budget is a fraud.

Webgear

Thanks Boom Boom. I was wondering about details of budget, however once again the media just glaze over the inportant information.

 

______________________________________________________________________________________________ We are like cloaks, one thinks of us only when it rains.

Tommy_Paine

The lack of attention to the U.I. problem is going to hurt Harper in Ontario, if not elsewhere.   It's a no brainer.   There's at least 50 billion that the governement stole from the fund anyway, that should be put back for starters.

There are also problems down on the farm, and so far I haven't seen much help sent that way, either.   

Harper seems to have forgotten who voted for him, and who he needs to vote for him.

 Also,  Harper has crafted this budget in the context of the Canadian political landscape as it existed a month ago.   Unfortunately, that's not the context in the public's mind.

All eyes have been to the south, on Barak Obama.  His stimulus package looks a lot more dynamic and timely, than Harper's too little, too late package.

I think Canadians are first in the world in a lot of things.  However, I think we were last in line when they dished out political instincts.

 

 

martin dufresne

After ackowledging a few good points, Lina Bonamie, president of Quebec's Fédération interprofessionnelle de la santé du Québec (health workers union), blasts the federal budget's failure to facilitate access to the UI system, changes to the perequation system that will strip Quebec of a billion dollars, and Harper's announced intention to make pay equity a negotiating chip:

o o o o o o o o o o o o  

Un budget mi-figue, mi-raisin

Montréal, le 27 janvier 2009 - Pour la Fédération interprofessionnelle de la santé du Québec - FIQ, le budget présenté par le ministre des Finances, Jim Flaherty, comporte un ensemble de concessions. « On se doit de constater que le gouvernement conservateur nous présente un plan plus substantiel que l'énoncé économique de novembre dernier. Par contre, les priorités demeurent conservatrices et le budget est, en plusieurs points, nettement insuffisant », de dire Lina Bonamie, présidente de la FIQ.

Pour la Fédération, il est complètement irresponsable de baisser les impôts alors que le Canada s'apprête à vivre des mois difficiles. «Diminuer la capacité fiscale de l'État en temps de crise est difficilement explicable. C'est doublement incohérent puisqu'au même moment où le gouvernement baisse les impôts, ce dernier concède un déficit. Il ne fait aucun doute que ces baisses d'impôts sont purement idéologiques et qu'elles ne stimuleront en rien l'économie», de poursuivre la présidente.

Par ailleurs, la FIQ considère que l'annonce d'augmenter de cinq semaines la durée des prestations de l'assurance-emploi est une compensation bien mince pour les gens qui sont ou se retrouveront sans emploi. «Il aurait été plus bénéfique de faciliter l'accès au programme et d'augmenter significativement les montants des prestations pour les milliers de personnes se retrouvant dans une situation financière précaire», de souligner madame Bonamie.

Les modifications apportées à la formule de péréquation auront des conséquences énormes sur les finances du Québec. «Notre province se verra amputée de sommes considérables, ce qui aura un effet direct sur son propre budget. Le Québec perdra plus de 1 milliard de dollars par année ce qui est particulièrement élevé dans le contexte économique actuel».

L'équité salariale
La présidente de la Fédération s'indigne de constater que le gouvernement conservateur récidive dans son désir de s'attaquer à certains droits fondamentaux. «L'équité salariale constitue la correction d'une injustice historique commise à l'endroit des femmes. Elle ne devrait jamais faire l'objet d'un enjeu de négociation comme le veulent les conservateurs. Utiliser la période d'instabilité économique pour poursuivre son idéologie est carrément odieux», de conclure la présidente.

o o o o o o o o o

ottawaobserver

What is interesting is that there's a revolt unfolding against the budget over at the Blogging Tories aggregator.  They don't think it's Conservative enough.  Perhaps someone should point them to Sean's analysis to calm them down. ;-()

Fidel

 Iggy actually said something pertinent in front of the cameras recently. He said something to the effect that the Harpers are now suggesting they will do things with the budget that are completely different to what they said they would do only weeks ago before perogy fest.

The Tories are now wanting to do things they said they didnt believe in doing before. 

And Iggy said now the job of the opposition is to figure out which of the two Tory plans for the economy is more believable. Let's hope Iggy and Liberals still think the Harpers are untrustworthy on Wednesday. 

KenS

Wonders of the new improved Babble.

I posted a comment here.

The thread comes back with a "unauthorized to comment" and the reply box is gone. [If I was unauthorized then why were there reply boxes?]

I open another thread- at least now the reply box isn't there to lure me.

There's no prompt I can see anywhere for logging in. So I go looking on TAT or somehwere and find an obsure Log-In tab. When I log-in my Recent Post list comes up- which I did not ask for, but have never figured out how to find when I did want it.

And sure enough- the vanished post shows as the most recent... done at the right time. But when I click on, its not in the thread.

KenS

Bear in mind that the Conservatives being able to execute this end game depends on an economic recovery.

They ASSUME one is coming very soon.

Thats the pattern. First they see no need for stimulus: faith in 'the fundamentals' and 'the economy'.

Then they are forced, and then realize, the overconfidence- so they make what are for them are [only] ad hoc [temporary] adjustments.

But 'the economy' is going to take care of things very soon. Of course.

They may be lucky and that turns out to be true.

If not, their ideological certainties will bite them again and they'll be backpedalling some more.

The only Blogging Tories who would be some reassured by the analysis here are the pragmatists. I don't know if there are any of those animals.

And if there are, more realistic pragmatists will see the flaws: that the promised end game is always over the horizon.

KenS

I think it was Brian Laghi who pointed out that there is a built in political price to many of those temporary programs Harper Crew has put out. Having sunset provisions doesn't change that.

They can run against any- even all- of the raised expectations. But the political pricing is cumulative and this government has abandoned torpedoes whenever a price has appeared they had not expected.

Boom Boom Boom Boom's picture

Andrew Coyne said last night on CBC the Conservatives have now become Liberals.Laughing

ceti ceti's picture

Well not Martin Liberals with their hell or high water approach to deficits. I don't know, I really don't like to see Canada go into the red so much, especially when other factors -- cough, Afghanistan -- are involved.

Danny Williams has come out swinging against it for the fine print -- massive cuts to equalization payments.

The rest is just bribing the Canadian public with their own money.

Bookish Agrarian

This budget is a sham.  People who can be bought off with a paltry 200 bucks in tax cuts while their neigbours lose their homes because EI pays so little are fools.

Most of the so-called spending will never happen, or has so many strings attached it would be best it wasn't. 

The word is that the Liberals will back this sham budget for the measly price of a few extra updates.  What a disgrace. 

Meanwhile Rome burns

Scott Piatkowski Scott Piatkowski's picture

Boom Boom wrote:

Andrew Coyne said last night on CBC the Conservatives have now become Liberals.Laughing

That makes sense, since the Liberals are Conservatives. Long live the Liberal-Conservative coalition government!

Sean in Ottawa

Bookish-- agreed for the most part.

The right thing is to vote against the budget because it is bad for Canada. However, the best political move may be what the Liberals are doing. They may recognize that with the media in their pocket, the Conservatives will win the debate about the budget and the opposition slammed for taking it away. By asking for accountability only the conservatives are hard put to refuse and if they agree then the Liebrals can bring them down over broken promises/performance which is a better issue to go to the polls about. 

I think most Canadians want to see what the budget will do and would punish a party that brought on an election. This sets the stage for a defeat of the governmetn taht the opposition would benefit from. 

I think the NDP should respond by establishing what benchmarks the governmetn has to reach in the reports. There we can include things not in the budget that we would need to see.

thorin_bane

BA with then new aqueduct for your home tax break, we don't need to worry about Rome. It seems that is about the time period  they shot for with that one anyways. Why not make conservation a priority instead of new grass and maybe a hot tub. Plus it only helps if you have the money on hand to do it.(Cuz you know the anks aren't going to lend you money for a new anything)

martin dufresne

In the Conservative budget, scholarships granted by the Social Sciences and Humanities Research Council in 2009-2010 and 2009-2011 are deemed to be focused on business-related degrees!!! (CHECK THE QUOTE BELOW)

Please distribute this disturbing development widely, especially to Graduate Students in Arts, Department Chairs and Deans of Arts. Ask them to contact Chad Gaffield the President of SSHRC and their MPs before the budget is passed.
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Further Developing a Highly Skilled Workforce

Canada's ability to prosper in today's global, innovation-driven economy
ultimately depends on the skills, knowledge and creativity of Canadians.
Further developing a highly skilled workforce and ensuring that this talent is well applied is a priority.

Budget 2009 builds on investments made in the previous two budgets by providing an additional $87.5 million over three years, starting in 2009-10, to the federal granting councils. This funding will temporarily expand the Canada Graduate Scholarships program, which supports Canada's top graduate students.

This includes $35 million for each of the Natural Sciences and Engineering Research Council of Canada and the Canadian Institutes of Health Research, and $17.5 million for the Social Sciences and Humanities Research Council. These funds will provide for an additional 500 doctoral scholarships, valued at $35,000 each per year for three years beginning in 2009-10, and an additional 1,000 master's scholarships, valued at $17,500 each for one year, in both
2009-10 and 2010-11. Scholarships granted by the Social Sciences and Humanities Research Council will be focussed on business-related degrees.

Budget 2009 also provides an additional $3.5 million over two years to offer an additional 600 graduate internships in science and business, through the Industrial Research and Development Internship program launched in Budget 2007."

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saga saga's picture

martin dufresne wrote:

In the Conservative budget, scholarships granted by the Social Sciences and Humanities Research Council in 2009-2010 and 2009-2011 are deemed to be focused on business-related degrees!!! (CHECK THE QUOTE BELOW)

Please distribute this disturbing development widely, especially to Graduate Students in Arts, Department Chairs and Deans of Arts. Ask them to contact Chad Gaffield the President of SSHRC and their MPs before the budget is passed.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Further Developing a Highly Skilled Workforce

Canada's ability to prosper in today's global, innovation-driven economy
ultimately depends on the skills, knowledge and creativity of Canadians.
Further developing a highly skilled workforce and ensuring that this talent is well applied is a priority.

Budget 2009 builds on investments made in the previous two budgets by providing an additional $87.5 million over three years, starting in 2009-10, to the federal granting councils. This funding will temporarily expand the Canada Graduate Scholarships program, which supports Canada's top graduate students.

This includes $35 million for each of the Natural Sciences and Engineering Research Council of Canada and the Canadian Institutes of Health Research, and $17.5 million for the Social Sciences and Humanities Research Council. These funds will provide for an additional 500 doctoral scholarships, valued at $35,000 each per year for three years beginning in 2009-10, and an additional 1,000 master's scholarships, valued at $17,500 each for one year, in both
2009-10 and 2010-11. Scholarships granted by the Social Sciences and Humanities Research Council will be focussed on business-related degrees.

Budget 2009 also provides an additional $3.5 million over two years to offer an additional 600 graduate internships in science and business, through the Industrial Research and Development Internship program launched in Budget 2007."

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Is this a reduction of existing grants to other disciplines, or a focus only for NEW money?

 

Fidel

martin dufresne wrote:

In the Conservative budget, scholarships granted by the Social Sciences and Humanities Research Council in 2009-2010 and 2009-2011 are deemed to be focused on business-related degrees!!! (CHECK THE QUOTE BELOW)

What thundering nit-wits they are. As if we need more paper shufflers and suits running things into the ground even further with their ninny economics and finance. And the Liberals are backing them up, because they dont have a clue as per usual. Ignatieff is second toady to the Harper lap dogs. God help us.

Fidel

Canada's 75 Billion Dollar Bank Bailout The $64 Billion Federal Budget Deficit is intended to Finance Canada's Chartered Banks

Quote:

No Parliamentary Debate 

The $700 billion US bank bailout  under the Troubled Assets Relief Program, was the object of debate and legislation in the US Congress

In contrast, in Canada, the granting of 75 billion dollars to Canada's chartered banks was implemented at the height of an election campaign, without duly informing the Canadian public. 

Canada's media and financial press bears a responsibility in this regard. The matter was barely mentioned. It passed virtually unnoticed a few days before a federal election. 

Media coverage was minimal. There was no parliamentary debate. No discussion, no debate as one would have expected from the opposition parties at the height of an election campaign as well as in its aftermath. 

Nobody seemed to have noticed. Most Canadians do not know that there was a 75 billion dollar bailout of Canada's financial institutions. 

And for the record, Brian Masse(NDP) did mention the big bank heist in the House of Commons on December 1st

Quote:

It is interesting, because the Conservatives talk about distancing themselves further when the banks have received over $100 billion of support from provisions of the federal government.

Specifically we have federal government CMHC purchases, pooled together mortgages from the banks, $75 billion for that; a bank account that offers short term credit through PRA to banks, $50 billion-plus for that; the Bank of Canada offers short term credit through PRA to private money markets, $5 billion there; the Bank of Canada established a new term loan facility to assist banks and others, $8 billion there; the Bank of Canada releases treasury bills to investment dealers, $10 billion there. Also the federal government agrees to guarantee loans to private banks and the Bank of Canada accepts asset-backed commercial paper as collateral. What do we get from that? Not a single thing

 

Another big time bank bailout-heist on the backs of Canadian workers. Will these idiots ever learn?

 

 

laine lowe laine lowe's picture

Did Ignatieff and the Liberals miss a few conflict of interest items in their careful line by line review of the budget?

[url=http://www.canada.com/topics/news/national/story.html?id=1228330]Conflict of Interest Issues[/url]

Quote:

The Home Renovation Tax Credit will provide a 15-per-cent tax credit to homeowners who undertake home improvement projects by Feb. 1, 2010. The government expects the program to cost $3 billion over the next two years, and 4.6 million families to take advantage of the measure.

Finance Minister Jim Flaherty gestures during his post-budget speech at the Whitby Chamber of Commerce brunch in Whitby on Wednesday.Finance Minister Jim Flaherty gestures during his post-budget speech at the Whitby Chamber of Commerce brunch in Whitby on Wednesday.

But one of the members of Flaherty's 11-member panel is Annette Verschuren, the president of Home Depot Canada and Asia.

Under the HRTC, costs associated with a renovation are eligible for up to $1,350 in tax credits, including new carpeting or hardwood floors, paint, kitchen cabinets, cedar decking - even new sod for the lawn.

The plan is expected to accelerate spending on home renovation goods and services.

The budget also provides $50 million to build a new research facility for the Institute for Quantum Computing, a research centre based at the University of Waterloo. Mike Lazaridis, the president and co-CEO of Research in Motion, helped found the institute, sits on its board of directors and has donated his own money to it. Lazaridis is also on Flaherty's economic panel.

When asked about the appearance of a possible conflict of interest between these two panel members and measures in this week's budget, a spokesman for Flaherty said that "everything's above board."

Chisholm Pothier said that the finance minister consulted the ethics commissioner about the advisory panel and "there were no problems identified.

"The key thing is the minister asked them, they did not ask the minister. They did not lobby the minister."

And what of the other panel members? Did they benefit from any of the [url=http://finance.sympatico.msn.ca/budget/article.aspx?cp-documentid=172069... items[/url] found in the budget?

Quote:
-$12 billion for a Canadian Secured Credit Facility to support financing to buy or lease vehicles and equipment

-Buy an additional $50 billion under the Insured Mortgage Purchase Program in the first half of the 2009-10 financial year, on top of the $75 billion already purchased.

-Increase the maximum eligible loan amount small businesses can access under the Canadian Small Business Financing Program for loans after March 31 to $350,000 from $250,000, and to $500,000 for loans for acquiring real property...

-Create the Canadian Life Insurers Assurance Facility to provide insurance on the wholesale term borrowing of life insurance companies.

-Increased flexibility for the Canadian Deposit Insurance Corp., including the ability to own shares in member institutions...

Panel member Jim Pattison of the Jim Pattison Group:

[url=http://www.jimpattison.com/automotive/default.htm]Jim Pattison Lease and Auto Group[/url]

Panel member Paul Desmarais Jr. of Power Corp:

[url=http://www.powercorporation.com/index.php?lang=eng&comp=investorsgroup&p... Group Financial[/url]

[url=http://www.powercorporation.com/index.php?lang=eng&comp=londonlife&page=... Life Insurance Company[/url]

And what about the budget commitment of $175 million to buy and maintain new Coast Guard vessels.

Panel member James D. Irving might have a vested interest:

[url=http://www.irvingshipbuilding.com/index.html]Irving Shipbuilding Inc.[/url]

As for the $30 million for Canadian magazines and periodicals to replace the subsidy on postal rates, or the continuation of the Canadian Production Fund ($200 million) and $28.6 million over two years to the Canada New Media Fund, which creates interactive digital content:

Desmarais' [url=http://www.powercorporation.com/index.php?lang=eng&comp=gesca&page=profi... Limitée[/url] produces television programming, pulishes specialty magazines and books, and operates several Internet sites.

And then there is a shopping list of $800-million in the federal budget aimed at helping support the tourism:

Pattison's [url=http://www.jimpattison.com/entertainment/default.htm]Ripley Entertainment[/url] might benefit directly and certainly indirectly.

Flaherty claims that there are no conflict of interest issues because these advisors are not lobbying government.

Blogger Joe Kucta of [url=Owls">http://owlsandroosters.blogspot.com/2009/01/public-consultation-takes-ba... and Roosters[/url] suggests otherwise:

Quote:

Public consultation takes back seat to Finance Minister Jim Flaherty’s closed-door pre-budget roundtable discussions with Canadian business leaders

...Geoff Beattie (Thomson Reuters), Paul Desmarais Jr. (Power Corporation), George Gosbee (Tristone Capital), Mike Lazaridis (Research In Motion) and Annette Verschuren (Home Depot Canada) work for member companies of the aforementioned Canadian Council of Chief Executives whose president and CEO Thomas d’Aquino seems to enjoy unparalleled access to the corridors of power.

A search of the federal lobbyists’ registry shows that from July 10, 2008 to Nov. 29, 2008 d’Aquino met with various government officials a total of 38 times. Some of the visits include two to the Prime Minister’s Office, four to the Privy Council Office, three to Finance Canada, two to the Bank of Canada, three to Industry Canada, and a whopping 22 to meet with officials at the Department of Foreign Affairs and International Trade Canada.

Other members of the new Council include multi-billionaires Jim Pattison (Jim Pattison Group) and Jim Irving (J.D. Irving Ltd.).

Apparently it isn’t enough that Irving got the opportunity to meet with Flaherty in the closed-door pre-budget consultation in Saint John, and then show the minister around his family’s paper mill, but now he gets sit on the Council and provide further input.

The Council is not a representative group. No labour representation, no Aboriginal reps, no one from the social or non-profit sector whatsoever. Thus, the groups most likely to be affected by the recession have no voice on this panel. Instead, it’s stacked with individuals whose companies could potentially benefit from the advice they give and the access to power they will get...

Like billionaire James D. Irving, Desmarais Jr. seems to have the privilege of not only being a member of Flaherty’s Economic Advisory Council, but he also gets the added bonus of taking part in other high-level meetings.

Harper then attended a business roundtable meeting in Vancouver on Jan 12. This time he was accompanied by other members of the Conservative caucus. The event was held at the party’s regional office. A similar meeting was also conducted in Calgary on Jan. 13.

Calgary Herald’s Jason Fekete reported that George Gosbee, CEO of oilpatch brokerage and investment bank Tristone Capital, and a member of the Economic Advisory Council, is participating in the Calgary meetings with Harper. [Calgary to guide PM on budget (Calgary Herald, Jan. 13, 2009)]

Gosbee, who is also a member of the CCCE, joins a growing list of advisory council members that are attending private meetings with senior politicians that appear to be separate from the Council’s deliberations...

 

 

 

Hoodeet

The Liberals will go along with anything they think will attract more money to their coffers from Bay Street and from the narrow-minded but wealthy business "leaders" from the penny-pinching exploiters in the Maritimes to the "New Canadian" (mainly Asian) entrepreneurs. 

It's been said in another thread -and  I tend to agree- that Crown Prince Igor is basically wary of the left and  will probably seek to rebuild the LPC to the right, probably also to regain ground in redneck and fundamentally conservative new-Canadian  constituencies where the Cons have been making big inroads.  So why be surprised that the favouring of funding for business-oriented grad students should not be an issue that Ig & Co. will contest at all?  It's right up their alley.

martin dufresne

saga asked: "Is this a reduction of existing grants to other disciplines, or a focus only for NEW money?"

The sentence doesn't specify "these new scholarships" so it logcally extends to all SSHRC scholarships.

Also, what is "new money" when each year's allotment is described as "additional" to that of the preceding years? No core funding is guaranteed to such organizations, so each allotment can be trumpeted by the government as "additional" funding.

And even if did only apply to part of SSHRC's funding, we would be entitled to protest the Harperites' arrogance in redefining this body's mandate to limit its funding choices to "business-related degrees" when there are crucial needs in social work, psychology, urban planning, justice, Native and women's issues, etc...

This is one blatant example of how the business community is gradually taking over the commons.

saga saga's picture

martin dufresne wrote:

saga asked: "Is this a reduction of existing grants to other disciplines, or a focus only for NEW money?"

The sentence doesn't specify "these new scholarships" so it logcally extends to all SSHRC scholarships.

Also, what is "new money" when each year's allotment is described as "additional" to that of the preceding years? No core funding is guaranteed to such organizations, so each allotment can be trumpeted by the government as "additional" funding.

And even if did only apply to part of SSHRC's funding, we would be entitled to protest the Harperites' arrogance in redefining this body's mandate to limit its funding choices to "business-related degrees" when there are crucial needs in social work, psychology, urban planning, justice, Native and women's issues, etc...

This is one blatant example of how the business community is gradually taking over the commons.

It isn't even subtle ... and I bet this doesn't disappear as long as Harper's in charge. sumbeach

Scholarships granted by the Social Sciences and Humanities Research Council will be focussed on business-related degrees.

 I'll bet there's a lot of clinkers like this in there.

Tongue out

oldgoat

CEP Local 341 wrote:

Good budget. I'm happy with it. I like the tax cut.

Air Liquide tech

 

I'm not.  According o some charts I've seen in the paper, My family will benifit more from tax cuts than most other financial demographics.  If the purpose of this budget was supposed to at once stimulate economic recovery, and protect those most vulnerable to these hard times, helping me out is missing the boat by a pretty wide margin.  I'm actually pretty secure through all this.  The tax cut I'm getting will just disappear into general stuff and go unnoticed, along with the GST cut that's supposed to have benifitted me so much.

 

There may be a kernal of a good idea in the renovation rebates, but personaly I'm unlikely to do anything within the timeframe that I wasn't going to anyway.

RevolutionPlease RevolutionPlease's picture

Nice breakdown here about the scam this budget was:

 

http://www.thestar.com/comment/article/579356

 

Quote:
Behind a thin veil of rhetoric about helping those most in need is a set of long-term tax cuts that seek a much-diminished role for governments in future. Because of this inner conflict, the tax side of the budget directly undermines the goals of the spending side. Here's why:

1 The broad personal income tax cuts are not well targeted to lower and middle earners, the folks most likely to spend every extra dollar on consumer goods.

The expansion of the brackets gives nothing to those earning less than $35,000 who are already taxed at the lowest rate of 15 per cent. Let's call this Group A, which encompasses more than 60 per cent of tax filers, most of them women. Some will be able to claim the increased personal credit, but this only reduces tax by $33 per annum.

The largest cut will go to those earning more than $80,000, a group more likely to save its extra dollars or use them to pay down debt. This is Group B and they are the top 8 per cent of tax filers, most of them men. These cuts make no sense, either as a stimulus measure or as targeted help for those most in need. They only make sense if the goal is to diminish, over time, the government's role in moderating income inequalities.

Doug

The Conservatives have committed a major error here in slashing research funding.

At the University of Calgary, neurobiologist Samuel Weiss, who last year won a prestigious Gairdner Award for discovering the brain's ability to make new cells, was struggling to understand why the budget offered no new money for research operating grants at Canada's three federal funding agencies — the Canadian Institutes of Health Research, the Social Science and Humanities Research Council and the National Science and Engineering Research Council. The federal budget suggests these key granting agencies are to find $87.2-million in savings over the next three years.

"The tri-council funding is the bedrock in advances in health and innovation," said Dr. Weiss, whose own work, now being tested in patients with spinal cord injuries, began in mice.

http://www.theglobeandmail.com/servlet/story/RTGAM.20090130.wscience30/BNStory/National/home

Michelle

Gary Shaul has an excellent critique here about the way environmentally-friendly infrastructure has been almost completely ignored in the budget.

remind remind's picture

Welcome to the first step back into the dark ages, brought to us by Harper and Iggy.

However, Global news reported last night, that 58% of Canadians do not like the budget, as opposed to 24% who do. How this will play out will be interesting.

Also, how can people spend money on rennovating their houses if they are out of work? Useless program and budget line that was.

Even more ineteresting, I wonder how the CONservative base is going to respond to Harper's being in bed with Paul Desmarais Jr and the Irving family, seeing as how they were having hissy fits over the Liberals being in bed with them, as they perceive(d), or were told to perceive, these 2 as being the manufacturers of a one world order. 

Maybe with their  church backed operant conditioning they will have forgotten that they believed so?

___________________________________________________________

"watching the tide roll away"

Fidel

I think Steve Harper is the brother Iggy always wanted [url=but">http://frum.nationalreview.com/post/?q=MjMwZWJmN2YzNWNiZWZhZTA1ZDUxN2EzY... was stuck with Andrew instead.[/url]

Doug

Oh well, at least some Conservatives hate it too:

http://www.thestar.com/comment/article/580054

madmax

CEP Local 341 wrote:

Good budget. I'm happy with it. I like the tax cut.

Air Liquide tech

  Considering that I am watching Air Liquide lose numerous customers through plant closures of profitable operations.

I expect that you will be taking that tax cut all the way to the unemployment line, like many workers who used to like their tax cuts.

You have to be completely out of touch with your industry to make such a statement. 

 

madmax

I would like some thoughts and input.

If I recall correctly, all parties including Jack Layton were promoting balanced budgets in September. 

1) Does the NDP support balanced budgets or do they support deficit spending?

2) Jack Layton is on the record as saying, if the revenues didn't come in he would reduce programs. Does he still believe in that?

3) Do New Democrats support decreasing revenues on purpose, like the Conservatives and Liberals have endorsed, and increasing Spending?

PS, as someone who might be described as fiscally conservative but believes in Social programs such as Public Health Care etc. I find this budget a disgrace.  I do see it as corporate welfare with the taxpayer paying for years?

So, is the federal NDP more like Bob Rae or Tommy Douglas?

And what would the NDP do under the current economic climate?

 

KenS

Jack is on record as saying that things have changed, we have to do deficit spending.

I'm not surprised you haven't heard him say that, but it would seem kind of an obvious no brainer.

Your point 3) and after as it relates to questions about the NDP [if they are questions]: I can't decide whether they are straw person set-ups or simply irrelevant. Maybe both. It might be the way you express it.

madmax

3) Revised: Does the NDP support Tax Cuts and increased Spending?

And no, I haven't seen that Jack is in support of deficit spending?  I cannot find speeches or comments or now that you have me looking, anything on the NDP website that says to run deficits?

How much is the government spending?

How much revenue will be lost from the tax cut? 

RevolutionPlease RevolutionPlease's picture

A nice little find I had.

http://www.torontosun.com/money/2009/01/27/8167986.html

edit: You need to go to the scroll bar under the graph and find "Personal Income Tax".  It's the last item.

The link also has a number of other graphs and charts relating to the budget.  So, if the link is working properly you can see that those making <40,000 get 32% of the tax relief.  40-80,000 get 43% and 80+ get 25%.

Now, I thought Iggy said his support hinged upon the lower and middle class being the priority.

From the article I linked to earlier:

http://www.thestar.com/comment/article/579356

Quote:
The expansion of the brackets gives nothing to those earning less than $35,000 who are already taxed at the lowest rate of 15 per cent. Let's call this Group A, which encompasses more than 60 per cent of tax filers, most of them women.

So, the most vulnerable, more than 60% of taxpayers are getting only 32% of the $20 billion.

Who's getting it?

Quote:
The largest cut will go to those earning more than $80,000, a group more likely to save its extra dollars or use them to pay down debt. This is Group B and they are the top 8 per cent of tax filers, most of them men.

This 8% who don't need it will get 25% or $5 biillion of the tax cuts.

That leaves the 40-80,000 group.  Since those making <35 make up more than 60% of taxpayers and >80, 8%, I can safely estimate they are in the 30% of taxpayer range and will receive 43% of the cuts.  I also assume they are a much more active voting demographic and will be happy they got theirs.

So budget priority:

25% to 8% of the richest taxpayers.

43% to 30% of the well to do.

32% to 62% of those who will need it and would spend it.

For shame Canada.

Doug

It's interesting to compare what's in our stimulus package to what's in the package announced in Australia:

By providing free ceiling insulation to 2.7 million Australian homes, the government plans to reduce household power bills as well as Australia's greenhouse gas emissions.

The scheme would save 49.4 million metric tons (54.5 million U.S. tons) of greenhouse gas emissions that are blamed for dangerous global warming by 2020, documents said. An existing subsidy to householders for installing solar hot water systems would also be increased.

The government plans to build 20,000 houses for military personnel and low-income earners and every one of Australia's 9,540 schools will get a new or upgraded building.

In a move aimed at getting Australians to spend some money, more than half Australia's population of 21 million will be eligible for $950 tax bonuses or grants.

The government will also spend on infrastructure, while also encouraging business to invest in expansion through an investment tax break.

http://business.theglobeandmail.com/servlet/story/RTGAM.20090203.waustra...

 

Yes, we definitely could have done a lot better.

 

KenS

madmax wrote:

And no, I haven't seen that Jack is in support of deficit spending?  I cannot find speeches or comments or now that you have me looking, anything on the NDP website that says to run deficits?

The website is chronically out of date. And I don't even discern in a pattern in what happens to be recent on the website. I suspect its just the vagaries of what staffer is prepared to get it there.

I heard Jack on the radio at least twice say pretty much what you could easily predict he would say about deficit spending, things have changed, etc.