Infrastructure spending yet another budget scam

February 6, 2014

The federal budget in 2013 was delivered with a lot of Conservative bafflegab about jobs and growth.  But as things turned out, Canada’s economic growth rate was a disappointing 1.6% (even worse than the anemic performance of the year before), and job creation was equally poor – the worst since the recession – leaving unemployment stuck stubbornly at 7.2%.

So that budget was a failure, famous only for cutting services to Veterans, a fictitious “Jobs Grant” that still doesn’t exist, millions wasted on ludicrous government advertising, and more Conservative tax increases (payroll taxes, consumer taxes, small business taxes, credit union taxes, etc.).  In fact, it was the fourth budget in a row in which Stephen Harper increased the overall tax burden on Canadians.

For municipal governments across Canada, probably the biggest let-down – some would say betrayal – in Budget 2013 was the deceptive Conservative song-and-dance around “more” money for community infrastructure.  They made a big claim about “increasing” their so-called Building Canada Fund which is due to expire this year.

But it’s a shell-game.  Mr. Harper used a ploy you might call “bundle and postpone”.  Simply put, he wanted to LOOK like he was making a big infrastructure investment without really putting up the money – all because of his political boast about balancing the books next year.  So his infrastructure promise bundled 10 future years together and postponed most of the funding to the end of that decade – i.e., to many years down the road, well after the Harper government is long gone.

The reality in the meantime is a big infrastructure cut.  The Building Canada Fund will plunge from its existing level of about $1.7-billion per year, down to a meagre $210-million in 2014-15.  It will stay at that reduced amount for 2015-16.  That’s a cut over the next two years of close to $3-billion.  And it’s not projected to get back to its current annual value until after 2019.

The attached graph makes this point very clearly.

You can see the huge infrastructure hole Mr. Harper has created.  And remember, everything to the right-hand side of that hole is not locked in.  It’s just a “promise” – like Mr. Harper’s other promises never to tax Income Trusts and never to cut Old Age Security and never to appoint Senators and never to let down our Veterans and never to run a deficit.  Because of his multiple violations of the public’s trust, close to two-thirds of Canadians say they simply don’t believe Mr. Harper on anything anymore.

The immediate slashing of infrastructure is only one of the problems facing municipalities.

Another is the share of the meagre amount of money remaining that will actually be available for local government priorities, and how much will be gobbled up by national or provincial projects?  Has some of it been pre-committed already?  As well, with the 2014 construction season looming on the horizon, the federal government still has not settled the terms-and-conditions or the application process for Building Canada this coming year.

No wonder municipalities are frustrated.

Hon. Ralph Goodale, PC, MP (Wascana)
Deputy Leader of the Liberal Party of Canada
Canada’s Finance Minister from 2003 to 2006

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This article was also published on Newswatch.