The budget that the Harper Government (of Canada) presented to Parliament yesterday has left me feeling as though a wet blanket has been thrown over Canada. Except for a few things like the cost of hockey equipment and a few other little things, there was little in the budget to make us feel anything but pessimistic. The essence of the budget was geared to achieving balance between budgetary income and expenditure by 2015 -- that is, in two years. So, without being very specific on what and where, a central concern appeared to be cutting programs and employment wherever possible. Several thousand civil servants have already been laid off; several thousand more will now be laid off. What the budget contained and the achievement of balance in two years is, moreover, dependent on achieving a higher rate of economic growth than is current in Canada, a very difficult thing when governments are downsizing.
The assumptions underlying the budget raise several questions. One is whether a higher rate of growth is going to happen. This probably depends on whether some of massive project that are currently stalled, most notably the Keystone and Gateway pipelines, will in fact move forward. The continuation of a high level of activity in the Alberta oil sands depends on them. There really isn't much else that one can think of as providing Canada with a higher level of growth in the short term. As well, one has to wonder why it is necessary that the budget be balanced by 2015; that is, in two years. What if major resource based projects remain stalled? Will the government continue its spending cuts in the face of growing inactivity and unemployment? Might it not have to accept that bailout expenditures will be needed? Might it not have to kick the budgetary balance can down the road? In sum, the budget raised more questions than it answered. Indeed, in my opinion it didn't answer very many. Ed
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