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Reading between the lines of the budget

Author: Walter Robinson 2001/05/08
Shortly after 4pm today in the legislature at Queen's Park, Finance Minister Jim Flaherty will table his first budget, and the Harris government's sixth budget since taking power in 1995. Of course, the Sun's Queen's Park team in Toronto, along with Queen's Park columnist Christina Blizzard, not to mention the gang here on Hunt Club road will bring you all the details tomorrow.

Along with this well qualified crew, your less-than-humble Wednesday columnist/agitator will also be in the lock-up pouring over the budget a few hours from now. This week I will take half a step out of my local politics mandate and look at the provincial budget … keeping in mind that my main job is still to discern what it could and will mean for Ottawa.

One of the privileges of my job is the opportunity to meet with elected officials at all levels. Earlier this spring I sat with Flaherty for an hour and advocate for a variety of measures including expenditure controls, further tax relief, a legislated debt reduction schedule, redefining the role of government (read -- more privatization and alternate service delivery) and real health care reform.

At the time, Minster Flaherty was just a few months into his job and still coming to grips with the enormity of his portfolio. In the face of a U.S. led global inventory correction (read -- mini-recession), Premier Harris handed him the task of continuing income tax cuts, reducing debt and capping spending while keeping the 1999 Blueprint commitments on health care and education funding increases.

This is not to say that he was not, or is not up to the task - but rather, unlike his predecessor Ernie Eves who benefited from a booming economy and presided through his five budgets at Finance with the grace of the mythic Apollo, Minister Flaherty by contrast, seems to have been given the task of Sisyphus who was condemned by Zeus to forever push a boulder uphill. By this time tomorrow we will know whether the finance minister is making progress up the incline or whether the boulder has crushed him.

Given the leaks out of Toronto, we already know that the theme of the budget will be one of restraint. Apart from health and education, most other ministerial budgets will be frozen if not trimmed for further "efficiencies."

We should also expect a revised 2001 personal income tax rates schedule (to account for substantive federal changes earlier this year) along with a fair amount of talk about the tax mix (personal vs. corporate vs. sales taxes) and its relation to Ontario's competitive position.

These measures should be welcome news for most Ontarians. As for Ottawa, a little reading between the lines will be in order to ascertain whether local concerns will be addressed.

To start, there is the issue of SuperBuild criteria for municipal projects. While yours truly has been critical of Mayor Chiarelli in past columns, on this issue, he has every right to be upset - and visibly so - with the province.

Since its establishment in last year's budget, SuperBuild corporation - which is supposed to leverage $10 billion in public investment over five years with a matching $10 billion from the private sector for a plethora of local and regional infrastructure projects province-wide - has dithered on the issue of criteria for municipal projects. As a result, the Mayor and his colleagues across Ontario have been handicapped in their ability to plan for multi-year capital projects.

Municipal leaders are looking for an explicit announcement or implicit signal in the budget that the criteria, now six months late, are forthcoming, and quickly. Indeed, they must be announced before Ottawa's smart growth summit next month (June 14 to 18). If not, most of the concepts discussed at the summit will be futile with no potential for financing. And this would run contrary to the summit's raison d'etre, that of being a visioning exercise and a precursor to a workable plan and foundation document to govern future growth.

On the health care front, local hospitals will also be looking for certainty. Two weeks ago Health Minister Tony Clement offered up $42 million in one-time funding to the Ottawa Hospital, despite its fiscal ineptitude, to address its ballooning deficit.

What all hospitals will be looking for is the degree of growth the Ministry of Health's budget to better help them plan their future budgets. And the government may go further and hint at multi-year funding for Ontario's best hospitals along with financial remediation measures for Ontario's worst.

Finally, on the education front, this week's announcement from Minister Janet Ecker broadening the scope of what constitutes instruction time foreshadows a desire for a less adversarial approach to primary and secondary education. In this vein, look for more measures in the budget geared towards universities and business concerns around training and skills enhancement. As for what these be, your guess is as good as mine.

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Franco Terrazzano
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