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UPDATE: What will we see in Budget 2012?

Prime Minister Stephen Harper’s first majority-government budget will be delivered this Thursday (March 29). While it’s now being spun as a “prosperity” budget, every indication is that it will be a hard-hitting budget. As Globe and Mail columnist John Ibbitson commented several weeks ago, “Simply put, the Prime Minister, who has never had the luxury of a majority government before, has a year and a half left to be bold before the ticking of the election clock drowns out everything else.”

What might we expect in the budget?

Cutting the public service
Postmedia reports, “Public-sector unions fear thousands of federal government jobs will disappear as part of the sweeping review of operating spending in which the government hopes to find up to $8 billion in annual savings over the next few years. The government has said the budget document won’t contain much detail on the specific cuts to departments. The extent and exact targets of the cuts will become known in the coming months. The Conservative government has, however, already identified some of the departments it’s eyeing for substantial spending reductions in the coming years, including Defence, Human Resources, Public Works and Fisheries.” Last December, Postmedia reported, “Unions are bracing for potentially tens of thousands of federal job cuts from the Conservative government’s operating review… Parliamentary budget officer Kevin Page agreed Friday with unions that thousands of federal job cuts are likely on the horizon if the government is to balance the books. His office, based on government planning reports, expects roughly 6,000 federal public servants could receive pink slips over the next three years.”

Bringing in the ‘Big Society’
Two weeks ago, the Canadian Press reported, “Incentives are key to possible changes to the way the government handles social programs, Human Resources Minister Diane Finley said (in reference to the upcoming budget). She suggested the government is looking at creating ’social impact bonds’, which are contracts between government and private investors to fund social programs. Payment from the government is tied to program outcomes.” Last October, the Globe and Mail reported on this scheme inspired by UK Prime Minister David Cameron’s ‘Big Society’ program. “While the first steps will be small, the government’s ultimate goal is a shift in public expectations as to the role of government in assisting social causes. …As a concrete example of social-investment partnerships (that would be encouraged with this initiative), Ms. Finley points to Habitat for Humanity. By working with private-sector companies like Home Depot, the low-income housing charity and its volunteers can achieve far more social good than they could otherwise.”

Delaying eligibility for Old Age Security
The Financial Post reports, “(The budget is) also expected to extend eligibility for Old Age Security benefits to age 67 from 65, reducing program outlays by $8 billion in 2020.” The Toronto Star adds, “The federal Conservatives could hit turbulence on one proposal expected in the budget — raising the age of Old Age Security benefits to 67 from 65. Sixty-four per cent of Canadians think that is a bad idea.” Andrew Jackson of the Canadian Labour Congress says, “Raising the retirement age will cut a basic building block of retirement security, the OAS pension of $540.12 per month which now goes out to 4.9 million Canadians aged over 65. Receiving OAS also makes seniors eligible for the GIS top up, which provides one in three seniors with a supplement which ensures they have a minimally adequate income in old age.”

Cutting environmental reviews
The Globe and Mail reports, “The Harper government will hand over the environmental review of certain resource projects to provinces as part of a long-promised overhaul of regulations to be highlighted in Thursday’s budget. Natural Resources Minister Joe Oliver said Ottawa is determined to streamline approvals and reduce duplication, and wants to reach deals with individual provinces that would see only one level of government conduct an environmental assessment of a major resource project. …The minister has already said the reviews should have strict time limits… The minister said a review should take no more than two years. The government will also raise the threshold of projects to be reviewed…” Postmedia News adds, “The Canadian Environmental Assessment Agency, the government centre of expertise for ensuring that industrial projects do not harm natural ecosystems, is expected to see its funding chopped by 43 per cent in 2012-13, from around $30 million to about $17 million.”

Gutting the Fisheries Act
The Globe and Mail reports, “(The budget) is expected to introduce changes to the Fisheries and Oceans Act that would reduce the protections for fish habitats from industrial development. Executives from the oil and mining industries have been lobbying aggressively to have Ottawa overhaul its approach to environmental review, saying the process is needlessly bureaucratic and duplicative.” Two weeks ago, Postmedia reported, “The current law bans activity that results in the ‘harmful alteration, disruption or destruction of fish habitat’. The proposed new wording would remove all references to habitat, according to the information leaked to retired federal fisheries biologist Otto Langer. The law would then (only) prohibit activity that would cause an ‘adverse effect’ on ‘fish of economic, cultural or ecological value’, according to the proposed new wording sent to Langer.”

Water, trade and health care
As with past federal budgets handed down by the Harper government, it is expected that there will be insufficient funding allocated to provide safe water and sanitation for First Nations, for the clean-up of the Great Lakes, and that federal funding for water infrastructure will be tied to public-private partnership arrangements; and that the budget will further commit the country to “resist trade protectionism” and support “open markets”. And while it’s not likely to be reflected in this year’s budget, the Harper government has already indicated reduced funding transfers to the provinces for health care post-2017. Postmedia News has reported, “The smaller annual increases in health transfers will cost the provinces approximately $31 billion over the life of the new 10-year health plan, Parliamentary Budget Officer Kevin Page said.”

On March 15, the Canadian Centre for Policy Alternatives released its Alternative Federal Budget. For the past several years, the Council of Canadians has contributed the chapter on water to this budget. To read our water budget, please go to pages 147-156 at http://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2012/03/AFB2012%20Budget%20Document.pdf.

More budget analysis soon.