Commentary  Editorial: Budget throws money in all the wrong places

The opposition parties demanded a stimulus, and the Tories heard this loud and clear Tuesday. With their fourth-straight record spending budget, big-C Conservatives are being criticized by small-c conservatives for abandoning any semblance of restraint and increasing the federal debt in two years by a massive 14 per cent, to the level it was at in 2001. While this willingness to provide economic stimulus is an improvement from Prime Minister Stephen Harper’s denial of the recession just three months ago, the Conservatives have failed to target these funds properly. In short, Canada’s chance to spend big is being wasted.

Perhaps the most disappointing trend throughout the budget is the government’s choice to put environmental concerns on the backburner in the name of economic progress – rather than realizing the potential to use the moment to address both crises. For instance, the government’s plan to accelerate municipal access to infrastructure funding removes vital environmental assessments from the process, and a $12-billion fund to encourage the purchase of new equipment and vehicles apparently contains no requirements for energy efficiency.

Similarly, the new $3-billion tax credit for home renovations isn’t targeted to increase energy efficiency, putting new countertops on par with better insulation. These funds would have been better allocated to the smaller $300-million for the ecoENERGY Retrofit program and $1-billion for renovating and increasing energy efficiency in social housing units. The home renovation credit is also bizarre in the context of Canada’s progressive tax structure, as it provides no help to renters or homeowners who can’t afford renovations. Further, of the respectable $12-billion allotted to infrastructure over five years, just $1-billion of that will support sustainable energy – showing the Tories’ claim of “real action on climate change” as empty as oil execs’ promises to do all they can to maintain the environmental integrity of the Alberta tar sands.

The Conservatives also failed to adequately aid funding problems at postsecondary institutions. Although the budget allocates over $2-billion to knowledge infrastructure at universities and colleges, it actually cuts funding to the federal granting agencies, and spends a paltry $87.5-million for scholarships, all for graduate students. Speaking to the Globe and Mail, Principal Heather Munroe-Blum was just as confused as we are about buying microscopes while reducing the budget for researchers. “I’m mystified at any move to cut operating support at the very time they are sending such a powerful signal on their priorities by investing in infrastructure and scholarships,” Munroe-Blum said.

However, there are some measures that will help stimulate the economy progressively over the short- and long-term: adding a third track in key parts of the Montreal-Ottawa-Toronto corridor to improve passenger train service, expanding programs to train and retrain workers, and helping calm credit market jitters by strengthening securities regulation and increasing financial literacy. But eligibility for employment insurance has barely been expanded, and as we highlighted above, the government is neglecting the environment at a time when green stimulus is so desperately needed.

We doubt the Conservative Government will properly steer the country’s economy out of this storm by manning the Liberalesque budget they just introduced. As NDP leader Jack Layton said in a press release, we have “no confidence in Harper to implement policies he’s spent a lifetime opposing.” But jumping ship in the middle of this storm will plunge us deeper into troubled waters, as it will take months to pass a new budget in a new coalition government. The opposition needs to make a few quick, intelligent amendments to this budget, get it passed, and let the spending start. But considering an Ekos poll last week that showed support for a coalition government ahead of that for a Conservative one, we can’t wait much past the spring’s first bloom to re-evaluate who should be running this country.