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Budget cuts are about growth not austerity, Conservatives say

Canada's Finance Minister Jim Flaherty will deliver a budget Thursday that is expected to make significant cuts to government departments and agencies, reducing public-sector jobs across the country. But he insists the cuts will be “moderate.”

Chris Wattie/Reuters/Chris Wattie/Reuters

The Harper government is looking to brand its coming budget as an exercise in long-term employment creation rather than an austerity effort that will balance the books.

Finance Minister Jim Flaherty will deliver a budget Thursday that is expected to make significant cuts to government departments and agencies, reducing public-sector jobs across the country. But he insists the cuts will be "moderate."

The government wants Canadians to see the budget as a growth plan, and not simply a slashing exercise aimed at eliminating the deficit.

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"If you concentrate on savings, you are going to miss out on what this budget is all about; it's about long-term sustainability for jobs, growth and prosperity," a senior government official said Sunday.

The government will lay out five broad themes in the budget: support for innovation and research; overhauling regulation for resource development; investing in training and opportunity; support for families and communities; and ensuring the long-term sustainability of major social programs like Old Age Security.

During a stop in Tokyo, Prime Minister Stephen Harper promised new spending in key areas to promote job growth, even as Mr. Flaherty plans to cut billions of dollars from the overall budget.

"We'll also be making some very significant investments and changes to ensure the growth of the Canadian economy in the future, to ensure that we continue to create jobs, and that we have long-term prosperity and sustainability of our social programs," the Prime Minister said Sunday.

Canada's labour market has gone into reverse in the past five months – losing an average of 7,400 jobs a month since October – even as the U.S. economy has begun to show signs of vigour.

In response, Ottawa is emphasizing measures that it says will boost the economy and job creation over the long term, including streamlining environmental review for major projects and funding training programs so that Canadians can fill the demand for skilled labour in the resource sector.

Canadians can also expect a post-budget advertising campaign promoting the Conservative government's "economic action plan," which will tout measures to boost job growth rather than the cuts needed to balance the budget.

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New Democratic Party finance critic Peter Julian said the government has been sending mixed signals, trying to reassure Canadians that the budget will not be draconian, while promising Conservative audiences that it will impose deep cuts on government programs.

"I think they're worried about the reception this budget may have if it contains some of the elements that some ministers have been bragging about a few weeks ago at the Manning Centre," the NDP MP said, referring to a meeting of Conservative supporters held in Ottawa recently.

Mr. Julian said the Conservatives are feeling vulnerable due to the job losses in recent months, including some high-profile factory closings in Ontario.

"The government has to re-instill confidence in the Canadian public in its agenda and further job cuts and slashes to services to families is not going to restore that confidence. There is no doubt about that."

With the New Democrats' new leader, Thomas Mulcair, due to take his seat in the Commons on Monday, the opposition is primed to take on the government in a number of areas, including changes to environmental protection and proposals to cut back future retirees' public pensions, first suggested by Mr. Harper during a speech at the World Economic Forum in Davos, Switzerland, in January.

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

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