Jim Flaherty is prudent. Or so he told reporters this week, when he announced the date of his upcoming budget.
“I’m not a big spender,” said the finance minister who has spent more than $60 billion on tax cuts to corporations. “We always have to make sure that we – as my mother would say – save for a rainy day.”
There will be no trumpets for the February 2014 budget, no flags beyond a yellow sticky note reading “stay the course.” This will be a humble, housekeeping budget, Flaherty warned, a budget in its apron and slippers, that remembers folksy things its mother used to say. A budget so unassuming, it’s going to be released during the Olympics, when nobody will be watching.
Having whittled his record-setting $50 billion deficit down to a mere $17 billion, Flaherty now has “no doubt” he can deliver a better-than-balanced budget by election day in 2015, not by 2013 as previously promised.
“We are doing this without raising taxes, we are doing it without cutting transfers to hospitals, to social services, to education in the provinces, unlike the previous government,” Flaherty boasted. And it’s true, there should be no need to raise taxes. He’s already raised personal income tax to the tune of $15.6 billion since he took office.
Not only has he raised income taxes to cover tax breaks for corporations, by jacking up EI premiums and reducing eligibility, Flaherty has turned an insurance system for workers into a cash cow for government. The surplus from this scam will have raised $13.8 billion by budget-balancing time, prudently screwed out of the working stiff.
What remains of the deficit after higher taxes and EI premiums do their work is to be slain by the economy heating up and creating jobs. This is to be a function of those corporate tax cuts we’re all still paying for. According to the plan, corporations will spend the money creating jobs, a plan in which Flaherty is a true believer, despite its total lack of success to date.
What happens if you take $60 billion out of government revenues and stick in corporate bank accounts? What happens to jobs when billions of dollars that might have been spent on, say, fighter jets, energy upgrades, or daycare, money that could be circulating in the economy and making things work, sits in banks gathering dust?
According to Employment and Social Development Canada, “in 2012, the percentage of adult Canadians who were holding a job was 61.8 per cent,” leaving only 38.2 per cent jobless. For the young, things weren’t quite so rosy, but still, 54.5 per cent of Canadian youth had jobs. And because we have prudent hands at the helm, the economy only bled 45,900 more full-time jobs last month.
That same month Canadians’ personal debt-to-income ratio reached a historic high of 165 per cent, demonstrating how efficient our economy has been at getting people to buy things they can’t afford. Meanwhile the dollar is plummeting in value and the national debt just soared to a record-shattering $600 billion, and according to Time, Canada now has its very own housing bubble which “many analysts” believe is about to burst.
In case you’ve forgotten, a housing bubble occurs when extremely low interest rates cause a boom in sales, sending prices soaring, and driving many to foreclosure when interest rates inevitably rise. A collapse in the U.S. housing market was the first domino to fall in the chain reaction that led to the world-wide recession of 2009.
The only talent Flaherty has ever displayed is the ability to con people into believing he’s a sound money manager. He left Ontario with a $5.6 billion deficit despite being finance minister during an economic boom. He has run the Canadian economy with all the facility of a cheap con artist, overseeing a steady upward shift of wealth, and somehow managing to present this as prudent policy.
Flaherty needs to talk to someone besides corporate lobbyists and wealthy supporters, on whom the sun always shines. It’s time to break out some of those rainy-day funds. For more and more ordinary Canadians every day, it’s pouring out there.
Al Pope won the Canadian Community Newspaper Award for best columnist in 2013. He also won the Ma Murray Award for Best Columnist in B.C./Yukon in 2010 and 2002.