Top 5 howlers in Jim Flaherty’s budget speech
Here are the top 5 howlers in Jim Flaherty’s budget speech, delivered in the House of Commons on Tuesday afternoon after the 2014-15 budget was tabled. 1. Great job creator? “Since the depths of the recession Canada has led the G-7 in job creation.” It sounds good, but there’s a reason Flaherty doesn’t talk about […]
Here are the top 5 howlers in Jim Flaherty’s budget speech, delivered in the House of Commons on Tuesday afternoon after the 2014-15 budget was tabled.
1. Great job creator?
“Since the depths of the recession Canada has led the G-7 in job creation.”
It sounds good, but there’s a reason Flaherty doesn’t talk about a more fulsome measurement: real GDP per capita growth since the trough of the recession.
By that barometer, Canada finds itself in the middle of the pack among the G-7, behind Germany, Japan and the United States. And among 34 OECD countries, Canada stands in 16th spot in real per capita growth.
Bonus stat from the federal budget: Canada’s employment rate remains lower today than pre-recession levels, standing at 66.5% compared to 68.3% in 2008.
2. Household debt problem?
“Here at home, household debt is still higher than we’d like to see.”
That’s an understatement. Check out this debt to GDP chart from the Alternative Federal Budget, and see where household debt sits compared to government debt.
3. Balance budget afficiendos?
As trustees for the public, “we are so committed to balancing the budget and returning Canada to a position of fiscal strength.”
Let’s set aside the massive deficits (totaling $135 billion) Flaherty has run up since 2009-10. But what is so magical about balancing the books in 2015-16, after another projected deficit of $2.9 billion this upcoming fiscal year (with a $3 billion contingency cushion)?
The International Monetary Fund, for one, doesn’t care that the Conservatives want to campaign on a balanced budget in 2015. A recent IMF report warns that rigid plans aren’t always wise, especially if recovery is wobbly.
“Fiscal policy should strike the right balance between supporting growth and rebuilding fiscal buffers,” said the report, released last month. “If significant downside risks to growth materialize, the federal government has room to slow its planned return to a balanced budget.”
Don’t tell that to Flaherty, whose austerity budget locks in aggressive spending cuts. The projected cumulative “savings” (read cuts) since 2010-11 are slotted to jump from $12.76 billion last year to nearly $17.86 billion this year. There’s also an estimated $7.4 billion in savings over six years from cutting public-service compensation.
“Since the depths of the economic recession, employment has increased by more than 1 million. These jobs are overwhelmingly full-time and in the private sector.”
Nice try – boasting about job creation since the depths of the recession. But to judge how well we’re really doing, you should look at the Conservative record since the beginning of the recession in September 2008 rather than from the extreme low point.
This perspective, informed by data from the labour force survey of Statistics Canada’s key socioeconomic database, tells us how far we still are from a full recovery.
Between September 2008 and September 2013, 653,400 jobs were added to the economy. But more than half of those new jobs (53.4%) were in sales and services, the lowest-paid occupational category, with an average pay of just $16.47 per hour. Further, 40.6% of these new jobs were in temporary, rather than permanent, positions.
And with youth unemployment standing at 13.9%, the Canadian Federation of Students says the “miniscule” paid-internship funding in the budget for up to 4,000 positions is “simply not enough for the 384,000 unemployed youth.” Check out this chart from the Alternative Federal Budget to see how poorly youth are doing.
5. Committed to the environment… how exactly?
“Our Government is committed to protecting Canada’s environment. That’s why our Government is promoting safe, responsible resource development that is not bogged down by unnecessary red tape.”
Set aside the fact that the Conservatives have yet to table regulations for the oil and gas sector to curb greenhouse gas emissions. The budget contains “no investment in energy efficiency or renewable energy and fails to mention climate change a single time in 427 pages.”
But what the budget does do is eliminate permanently a tariff as way to provide incentives to offshore oil and gas exploration while taking a pass at eliminating costly fossil fuel subsidies. See how Canada fares with other countries, courtesy of The Climate Institute of Australia, using data from the IMF.
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