The excuse was, of course, nonsense. Budget planning always involves uncertainty. The greater the uncertainty, the more the government needs to prove that it has some sort of plan — a budget, for example.
The decision to postpone the budget was a panic response to the stark fact that the Conservative election plan (pitch major tax cuts in October, then table a balanced budget) had just gone off the cliff. Plan A was falling to pieces; the Conservatives, in their arrogance, never bothered to come up with a Plan B.
News on the economic front has been mostly bad of late. The U.S. recovery may have taken hold but Canada’s is still spinning its wheels. The completely unexpected decision in January by the Bank of Canada to cut the key interest rate by 25 basis points was a clear signal that the Bank is very worried about the lack of real growth.
So now is the worst possible time for Ottawa to signal it doesn’t have a plan. We need a budget that sets out a clear growth strategy, and we need it now. We may not get it. For several reasons, a budget is the last thing the Conservatives want to release right now.
Let’s be clear about one thing: There is nothing in law that compels the government to table a budget every year. The annual budget exercise is — like so many aspects of how Canadians govern themselves — a convention. No budget was tabled in 2002. And there is nothing in law requiring the government to table a budget in any particular month. The government can choose to release a budget — or not — whenever it wants.
Before 2006, Liberal and Conservative governments approached the annual budget as their most important policy document of the year. For the most part, they liked to table them in February. It gave the government a platform to outline its fiscal situation and set out new initiatives. Budgets were seen as strategic documents — even visionary, in a few cases.
The Harper government has never viewed budgets as being important in the same way. It has never treated them as strategic policy documents. When your fundamental fiscal vision is as simple as Prime Minister Harper’s — lower taxes, lower spending, a smaller federal government — you don’t need strategy … or explanations.
The one time Harper deviated from this dumbed-down approach to budgets was in 2009, when the G-20 collectively agreed to undertake massive temporary stimulus spending to stave off global economic collapse. Harper had no choice but to agree. But it also gave him an opportunity in 2010 to reassert his fiscal dogma of deficit elimination even more strongly. It’s been his mantra ever since.
In fact, the only use Harper has for the annual budget is as a Trojan horse. The massive budget omnibus bills that marred the late Jim Flaherty’s time in office — the 2012 omnibus ran to over 1,000 pages — allowed the government to do an end-run around Parliament and push through a vast number of changes to legislation that had nothing at all to do with budgeting.
But Harper doesn’t need an omnibus bill right now. Beyond C-51 he doesn’t seem to have any items of legislation on his plate that are pre-election priorities. And what would a spring 2015 budget say that hasn’t been said already? Finance Minister Joe Oliver and the prime minister had a plan. Low oil killed the plan. That doesn’t mean they have another one waiting in the wings.
Their challenge now is to avoid drawing attention to the fact that they don’t appear to know what to do next. Inviting a few hundred journalists into a budget lockup to review a bunch of dubious documents that parrot government speaking points likely wouldn’t lead to positive spin.
The government doesn’t need a budget to spend money. Spending authority comes with parliamentary passage of the Main Estimates, which were tabled by the government last week, and through enabling legislation. Commons committees are reviewing departmental spending estimates now — but even if they never get a chance to finish that review before the writ drops, under parliamentary rules the Main Estimates will have been “deemed to be approved by Parliament” at the end of June. Additional spending can be added to these estimates under Supplementary Estimates tabled during the course of the year.
The government doesn’t need Parliament’s permission to borrow money, either — not since it did away with that checkpoint in the 2007 budget omnibus bill.
The government doesn’t even need a budget to change the tax code. In fact, the real 2015 budget was unveiled back in October many miles away from Ottawa, when Harper announced his ‘family tax package’ and enhancements to the youth fitness tax credit. The Canada Revenue Agency changed the tax forms in 2014 to implement these changes. The authority to do this was provided through the tabling of the Notice of Ways and Means motion. At some point the government will have to table and pass legislation to bring the tax changes into law — but that’s a mere formality and implies no set time frame. And the government doesn’t need a budget to double the contribution limit for Tax Free Savings Accounts (although, given the recent blowback, you have to wonder why they’d bother).
So if you’re Stephen Harper or Joe Oliver, here’s what you may be thinking: Let’s call the whole thing off.
Going into an election without a budget would be risky. The public and political attacks would be intense, the arguments completely valid. But Harper has gotten away with thumbing his nose at Parliament for some time now; it’s hard to imagine him tabling a budget merely to avoid criticism. To him, it’s the Conservative base that matters — he’s built a successful career out of avoiding eye contact with the two-thirds of Canadians who don’t like him.
Having shaped the conversation about the 2015 budget around a single number — the deficit — all the government has to do now is convince people that it’s living up to its vow to balance the budget this year. Harper doesn’t actually need a budget to do that.
Right now, the government only needs to account for budget outcomes in 2014-15 and 2015-16; no one is all that interested right now in what happens after 2015-16. Ottawa is on track to record a surplus in 2014-15. According to Department of Finance data just released, the federal government posted a deficit of only $0.9 billion for the April to December period. In other words, the government would need to record a surplus of only $0.9 billion over the rest of 2014-15 to post a balanced budget. That shouldn’t be too hard.
The federal government probably can’t post a balanced budget for 2015-16 unless oil prices come back to around US$80 this year — something nobody is predicting. The only real question is how Oliver might massage the data to at least show a balanced budget in 2015-16. No doubt the Finance Department will come up with some one-off adjustments. The budget contingency reserve will be drawn down to zero — and not to pay down debt, which was the commitment Oliver made last November, but is anyone paying attention at this point?
All of this could be accomplished with a late June fiscal update report released by Oliver in another Ontario or Quebec suburb where Harper is hoping to pick up a seat. Doing so would complete Parliament’s descent into complete irrelevance; the budget is the most important annual document they review, after all, so if the government thinks a budget isn’t necessary, it follows they don’t see Parliament as necessary either.
Fiscal and economic management is no longer the government’s trump card; it is, in fact, turning into a point of vulnerability. Terrorism is working just fine for Harper. Why would he want to change the subject now?
Original Article
Source: ipolitics.ca/
Author: Scott Clark and Peter DeVries
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