This budget is not stimulating

Last week’s federal budget reminded me of the forlorn tramps
in Sam Beckett’s Waiting for Godot, especially when Estragon
says to Vladimir, “Don’t let’s do anything. It’s safer.” I’m sure those
forlorn federal comedians Steve H. and Jim F. spoke words like those in
private, but publicly they’re trying to stay in power by pretending to
ease the pain of a worldwide recession. So they brought in a budget
with a few billion dollars in tax cuts and a few billion in
construction spending. Of course, tax cuts are useless for creating
jobs and most of the construction won’t happen unless the cash-strapped
provinces and municipalities come up with billions of their own to
match Laurel and Hardy’s largesse. And they’ll have to do it before the
end of next year when the federal money disappears. Meantime, there’s
little in the budget for the people who need help most and only tepid
support for projects to build a greener, 21st-century economy.

“Yesterday’s budget is a flawed document,” Liberal leader Michael
Ignatieff declared after a night of mulling things over. “It doesn’t go
far enough to protect Canadians who have lost—or will lose—their
jobs.” Iggy was bang on. But instead of forcing Abbott and Costello to
“go far enough,” he announced the Liberals would vote for the budget as
long as the Tories agree to provide regular updates on how their
“flawed” plans are unfolding. Iggy’s decision to climb into Steve and
Jim’s king-size bed means he’ll wear his fair share of the blame as the
recession deepens, unemployment soars and voters see the folly of the
Tory tax cuts.

Economists agree there’s no way tax cuts will suddenly persuade
people to buy more Canadian goods and services. Those cuts will give
middle-class families about $300 next year or $25 extra per month. Not
much of an economic stimulus there. Steve and Jim could have given more
to the poor who are pretty well forced to spend every extra nickel they
get, but instead, the budget’s income tax cuts give low-income people a
maximum of $33 a year. To be fair, there is a more substantial tax
benefit for the poorest of the working poor—those earning less than
$15,000—but overall, only five percent of the budget’s tax cuts will
help the most economically vulnerable. Meantime, the Tories are
pressing ahead over the next few years with $60 billion in corporate
tax cuts that will help profitable giants such as banks and oil
companies while doing nothing for money-losing manufacturers like the
auto makers.

The worst thing about the federal budget is that there are no
substantial improvements to Canada’s unemployment insurance system.
Sure, the budget gives five extra weeks of coverage so that in Halifax,
an unemployed worker can now get a maximum of 41 weeks of payments. But
only 42 percent of workers actually qualify for benefits even though
nearly all pay into the plan. The budget does nothing to boost
eligibility, nor does it increase benefits. Putting more money into the
pockets of the unemployed would provide a huge economic stimulus, but
the Tories won’t do it and Iggy was too chicken to force them.

The budget is also starkly unimaginative. For example, the Tories
could have created thousands of jobs by investing $2 billion over five
years to extend high-speed internet service to outlying areas. Instead
they allocated a measly $225 million over three years, a tiny fraction
of what’s needed. Commentator Chantal Hebert nailed it perfectly when
she called the budget a backward-looking relic of the 1970s.

In Waiting for Godot, Estragon tells Vladimir “People are
bloody ignorant apes.” Obviously Steve and Jim think so too, or they
wouldn’t have tried to pass off this budget as an effective way of
staving off rising unemployment. Iggy may be willing to support these
jokers, but I predict the rest of us bloody ignorant apes won’t. [email Bruce Wark]

This article appears in Feb 5-11, 2009.