Jim Flaherty will never be Bay Street’s favourite Finance Minister. But the man who authored the largest deficit in Canadian history is not deaf to the mood of business, and his fifth budget proves it.
The government’s new fiscal plan strikes a tone that is nearly identical to the one that prevails in corporate Canada right now. Many business executives, still absorbing the shock of the sharp economic downturn of 2008-09, are sitting on their hands, going slow, waiting for firm signals of recovery. So is Mr. Flaherty. They’re biding their time before they make the hard decisions about what to do next. So is Mr. Flaherty.
The result is a budget that lacks ambition. The document might be most accurately described as a stimulus plan for the paper industry, as it consumes 450 pages where 100 would do. If you’re looking for bold tax moves or creative spending cuts, forget it. Instead, much ink is spilled rehashing the 2009 budget. There are more than a dozen references to the home renovation tax credit – which expired more than a month ago and isn’t being renewed.
“Look, this is a tough budget,” the minister said yesterday. “This is probably the smallest budget in terms of new spending in about 10 years.”
“Tough”? Not so much. When you are planning to spend $94-billion more than you’re taking in over three years, you are not exactly straining your arms to swing the axe. Yes, the growth in program spending this year is very modest, less than $12-billion. But that’s because last year’s spending was so massive. By fiscal 2012, by which time the government’s recession stimulus plan will no longer exist, Ottawa’s spending on programs will still be $33-billion higher than it was in fiscal 2009.
