Tuesday, October 13, 2015

Politics - Budget

Politics - Budget

Let's talk about the budget. So there's been a lot of people, myself included talking at length about how the Conservative government is running deficits and running up public debt. In the face of that, the common rebuttal is "But he's running a balanced budget projection for 2015!"

So let's look closely at that, because it deserves attention.



So the main points to note out of the budget, tabled for 2015 by Conservative Finance Minister Joe Oliver include:


  • A projected Surplus of 1.4 billion dollars
  • A new fund for transit infrastructure beginning in the 2017 fiscal year, which until the 2019 fiscal year will continue to grow until it  hits 1 billion dollars per year.
  • A 'package' of measures aimed at seniors.
  • Reducing the small business tax rate from 11% to 9% by 2019.
  • Increased spending on Defence, Policing and the National Security Oversight
  • Measures to boost manufacturing and exports.


Transit:
So the one billion dollars per year sounds like a lot of money. And 1 billion dollars is a lot of money, but let's actually look at the math. The problem is that the funding doesn't even start in the upcoming 2016 fiscal year, but the 2017 one, and it actually starts at only 250 million dollars per year. The funding is actually interested in a 'new approach' that is based on long-term loans and more private sector initiatives. The government actually suggested that municipalities would borrow against the revenue to entice private sector growth.

The transit numbers have been chiefly criticized by Ontario Finance Minister Charles Sousa, who noted that Ontario is already contributing a billion dollars alone to build a road or rail line through Northern Ontario. That the federal government is actually contributing practically a "Slap in the face" to helping to develop the transit construction for Greater Toronto.

Security:
The budget proposes a spending of 439 million dollars over 5 years on national security institutions. Chiefly this includes more spending for the RCMP and CSIS in counter-terrorism initiatives. It includes more Parliament Hill security as well. Which by the way, the budget sets aside some 60 million dollars for that, in the wake of last year's attack by a gunman. Of which Oliver had this to say:
“Our government understands the present dangers and is determined to respond responsibly, without moral ambiguity or moral equivocation,”
Draw your own conclusions from that statement. I shouldn't need to point it out.

Defence:
The military budget is going up, it is moving from 2 percent to 3 percent of the budget. The additional money is to "Deploy a combat-capable military ready to serve at home and abroad." The prior National Defense budget by the way was 20 billion dollars. Military spending is one of the most costly elements of the Canadian budget.

Manufacturing:
It should be noted that the 'measures to boost manufacturing', are actually just an extension of the already-existing tax breaks to encourage the manufacturing industry. The Capital Cost Allowance has been repeatedly extended since it was introduced in 2007. At the time of the budget, the government allocated 100 million over 5 years to help auto makers as well, since the signing of the TPP, the government has pledged one billion to compensate what many are calling a 'raw deal' for the manufacturing sector.

Savings:
The budget allows for an increase in the amount allowable for Canadian individuals to save in their Tax Free Savings Accounts from 5000 dollars annually to 10000. Doubling in size. Although it should be noted by critics and experts alike that there are less than 23% of Canadians capable of holding more than 10000 dollars in extra surplus to contribute annually. The actual beneficiaries of such a move are principally the quite wealthy.

Seniors:
This is bizarre to me, but okay. Seniors at age 71 can leave more money in tax-sheltered Registered Retirement Income Funds. You can keep more of your money for longer when you are old and the government won't tax it. How kind. Or something.

Criticisms:
First, and I've mentioned it before a few times in this article, but the budget hinges on a number of projections. One of the foremost ones is that it hinges on oil being 54 dollars a barrel in 2015. It also projects the price of oil to rise to $67 in 2016 and $75 in 2017. So first off, right now, as of this writing, a barrel of West Texas is at 47.10, and a barrel of Brent Crude is 49.86. So. That's considerably lower than the projection. Concerning.

This also brings up a fairly salient point. A LOT of the things in this budget don't happen immediately, or even in the next fiscal year, or even the one AFTER that. A lot of the budget notes are for things that begin in the 2017 fiscal year or later. A lot of them ramp into swing by 2019. 2019. The next federal election. OH. How could that possibly be?

Surplus:
Alright, let's tackle the big thing. The Surplus. This is actually remarkably clear. It is a 1.4 surplus. Oliver's budget states that on the bottom line. At the end of the year, with all these possibilities in motion, if it works out the way they expect, the Conservatives will run a surplus budget for the 2015 fiscal year of 1.4 billion dollars. So where did they get it?

I'll tell you EXACTLY where they got it.

They tapped the contingency fund.


The Conservative budget demands a reduction in the federal contingency fund from 3 billion dollars to 1 billion in 2015.

Surprise. Surprise.

Now. I will grant you, that running an ACTUAL deficit of 600 million dollars is a farcry away from the 55 billion dollar deficit they ran in 2009, the nature of the obfuscation is more troubling. Because they're doing it knowing it was an election promise. And the only way to do it, was to quietly siphon money that is SUPPOSED to be saved for an emergency (the contingency is outlined specifically for that reason), and dump it into their budget. 4 years ago they made the promise they would balance the budget by 2015. And they have. By sapping money from the contingency.

It's a slimy piece of business, smoke and mirrors. But not only that, but Joe Oliver even said of it when called out directly on it "I think Canadians understand how a balanced budget works, if there is more money coming in than going out, then we are good." Well Joe, I hate to break it to you, but here's one Canadian at least who can look, and dig a little deeper. Because that's bullshit.

Let's talk for a moment.

When I read through everything, I was suddenly reminded of 1984. And I'm not going to delve too far into hyperbole here, but think on something. During one chapter, Winston (the main character) notes that the Party delivers the bad news that their chocolate ration will be cut from 30 grams to 20 grams (chapter 2). And the VERY next day (chapter 4) the party is being praised for raising the chocolate ration up to an exuberant 20 grams. In 1984 Winston remembers the events of the prior day. But no one questions the incongruity.

No one says a word. They not only allow it, but they exalt the government which has given them this 'increase' to 20 grams. No one says a word.

We can't not say words friends. We need to share these things, analyze, research and think critically. And finally we need to not be silent, but to call our government on these things. The government is manipulating our sense of memory, and that's the greater transgression than moving a few million dollars here and there. The government we have in power today, that WE put there, that WE elected? They have no respect for us, for our sense of memory, for our right to exist and to be.

Get out there and exercise your democratic right, and prove that we DO remember. And more over that we DO know.



Want to read more, or read my research?

Want to read more about my opinions on the Conservative government policy? I wrote a post a few days ago about that too.

http://ravynnscribbles.blogspot.ca/2015/10/politics-reasons.html

Citations follow:

http://www.theglobeandmail.com/news/politics/budget-main/article24046411/

http://www.thestar.com/news/gta/2015/04/22/its-spin-the-budget-time-keenan.html

http://www.cbc.ca/news/politics/federal-budget-2015-conservatives-dig-into-contingency-to-hit-surplus-1.3041628

http://news.nationalpost.com/news/canada/canadian-politics/canada-federal-budget-2015-tories-slice-out-a-budget-surplus-in-pre-election-books