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Finance Minister Jim Flaherty shakes hands with Prime Minister Stephen Harper after he delivered the federal budget in the House of Commons on Parliament Hill on March 21, 2013.


Prime Minister Stephen Harper is changing the Canadian government in some profound ways. He is closing CIDA, the international development agency, and turning over its responsibilities to Foreign Affairs. He is changing the way job training is done in this country. He is creating a workfare program for aboriginal reserves. All this without an infusion of money. This is the Conservative government in full flight.

The decision to move CIDA inside the Department of Foreign Affairs, making it essentially an arm of Canada's foreign policy, is bold. CIDA has long been a dysfunctional agency. Because of its bureaucratic mindset, it has been change-resistant. Consequently, Canada has been left behind, sometimes years behind other countries in its development policy.

Yet the nobility of its mission had until now protected it. CIDA is a name and virtually a brand, known globally. Such a drastic measure shows the government is not beholden to the status quo. Still, the change has risks. There is a danger here that development will become a political funding envelope for the minister. But there is also an opportunity to bring Canadian aid out of the time warp in which it became stuck.

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In the key area of job training, Finance Minister Jim Flaherty demonstrated an activist approach, which is welcome in the circumstances. The activism is not backed up by much in the way of new money; instead, labour training programs, still largely delivered by the provinces, will be operated according to different principles of trying to match individuals' potential to needed skills – a good idea, but difficult to make into a reality.

At one time, it seemed clear that the Conservatives were true to their decentralizing Reform Party heritage and wanted to limit the scope of the federal government and devolve powers to the provinces. But Mr. Flaherty's job-training proposals represent a genuine reaction to a real conundrum.

The employment rate has not risen as much as one would expect and hope with the economic recovery. But there are abundant grounds to believe that businesses are having difficulty finding enough people with the right skills for a technologically advanced economy. This may have been mostly based on anecdotal evidence, but it is so persistent that it can hardly be dismissed.

Canada has not developed much of a culture of apprenticeship, which has been so successful in Germany; neither companies nor education ministries have shown much enthusiasm. Without such an established tradition, the goal of matching skills to jobs will be hard to achieve – it sounds as if a national government will be trying to micromanage, surely not the preferred approach of the free-market-oriented Conservatives.

Broadly speaking, education and labour are provincial, rather than federal jurisdictions. Ottawa is not proposing simply to go it alone. Most notably, the new Canada Job Grant, though to be administered by the provinces and territories, will give those jurisdictions little leeway to exercise power or discretion on how to spend, because businesses will be able to apply for a specific number of training positions at $15,000 per head. A third of the money is to come from the private sector. It is a good initiative to make business a full partner.

The Conservatives' professed intention in the budget documents to take a hard look at the temporary foreign workers program is welcome. The steady, unintended rise in this population is directly contrary to Canada's justified ambitions as a high-technology economy to improve productivity.

The Harper government is also remaining active in infrastructure, but no longer as a series of hurried, expensive, labour-intensive projects to counteract the recession that erupted in 2007-2008. The budget document forthrightly points out that a very large proportion of public infrastructure belongs to provinces, territories and municipalities, but the Conservatives are making clear that the federal government will have a continuing role, with $47-billion in new funding in the course of a decade, starting in the next fiscal year.

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The workfare provisions for aboriginal reserves will link job training funds to work requirements, in cases of income assistance. It's another attempt to change a seemingly intractable status quo.

Elsewhere, the budget falls back on retail politicking and policy-making, such as the $76-million a year in "tariff relief" for imported hockey and other sports equipment and baby clothing, as if this could materially compensate for the complexities of price structures on the two sides of the Canada-U.S. border.

Critically, the budget lays out a hopeful path to a return to balance in fiscal year 2015-2016. Failure would ultimately mean deeper cuts. Most important, though, it challenges old ways of thinking and doing things. This is Mr. Harper's larger vision.

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