What to expect in Harper’s 2015 Federal Budget
More help for manufacturers on the way.
OTTAWA — It’s budget day in the national capital and with a federal vote due to arrive by – if not on – the fixed date of Oct. 19, it’s also the unofficial launch of the 2015 campaign.
Finance Minister Joe Oliver will deliver his first budget – the 11th since Stephen Harper’s Conservatives came to office in 2006 – and the headline fact is already known.
“Our government is committed to balanced budgets and the good news is that … Canadians will see the minister of finance stand and deliver a balanced budget that will create jobs,” Kevin Sorenson, Oliver’s understudy at finance, told the House of Commons on Monday.
The parliamentary budget office predicted the books were actually balanced in 2014-15, a number that should become clearer in today’s budget but won’t be finalized until all the accounting is done sometime next fall.
Regardless, the election-year surplus is all that matters to a Conservative government seeking to extend its life into a second decade in power.
The financial battle plan was kicked off last Oct. 30 when Prime Minister Stephen Harper rolled out a five-year, $27-billion package of improvements to family benefits and targeted tax cuts.
Shortly after, the bottom dropped out of global oil prices, casting the Conservatives’ rosy budgetary projections into peril.
Still, every Canadian voter with a child under age 18 can expect a nice government cheque (retroactive to Jan. 1) this July as they contemplate an October visit to the polling booth.
And after selling more than $3 billion worth of GM shares acquired during the 2009 financial crisis, the government appears supremely self-assured of remaining in the black in 2015-16
“We’re looking at zero growth,” NDP critic Nathan Cullen groused, adding it’s time the Conservatives changed their budgetary playbook.
“Are the Conservatives going to choose their own electoral fortunes over the economy?”
Liberal Scott Brison joined Cullen in criticizing Conservative tax breaks the opposition parties say favour the wealthy at the expense of the broader taxpaying public.
“They’re focusing relentlessly on their base in a pre-election budget that will be full of goodies that will look fine in the store window, but will have a lot of buyer’s remorse for Canadians,” said Brison.
Here are some things to look for when Finance Minister Joe Oliver unfolds the budget road map:
The Conservatives are making permanent a program that provides loans to immigrants so they can cover the cost of upgrading their education and training to match Canadian standards, sources familiar with the budget’s contents said.
The project was launched in 2012 and last year, the government said more than 1,000 people had taken out the loans, worth up to $15,000.
There will likely be targeted infrastructure funding for major public transit projects, spending the government will promote as “green” to help cover a weak environmental policy flank while wooing those suburban commuters Calandra referenced.
And there may be measures to bolster manufacturing, small businesses and skills training as the Conservatives attempt to buff their job creation credentials.
Until last fall, the federal government was thought to be barrelling toward a comfortable surplus for 2015-16. Then oil prices began their late 2014 free fall – a plunge that chopped crude prices in half between June and mid-winter. The government has predicted the price collapse will indirectly starve federal coffers of billions in revenue per year.
Observers believe the government had to scramble to achieve balance, something that appeared to be an easy layup only six months ago. Oliver projected a $1.6-billion surplus in November as the oil-price tailspin was only starting to accelerate.
In November, the government predicted the fall in oil prices would drain about $2.5 billion per year out of the federal piggy bank. At the time, the calculation was based on the fact the per-barrel price of crude had tumbled to US$81, from last June’s high of US$107. Since November, oil prices dropped to around US$45 before climbing back up to about US$56.
Oliver’s 2015-16 fiscal blueprint should provide an update on how much the government expects the cheaper oil to eat into revenues. A meagre surplus would also provide few fiscal leftovers for the Conservatives’ political rivals to transform into campaign promises ahead of the October election date.
Since the unexpected decline in oil prices, Oliver has said his budget’s rainy-day reserve could be in play. The budget will show whether the government will have to dip into the fund, which is meant as insurance against surprises such as natural disasters. In its November fiscal update, the Finance Department said it would continue to set aside $3 billion per year for contingencies until 2019-20. Any unused portions will be used to pay down the federal debt.
The Tories trotted out the pledge during the 2011 election campaign, contingent on a balanced budget. The measure would allow Canadians to claim up to $500 in eligible fitness registration fees, trimming federal revenues by $69 million in its first year and $275 million the following year.
The government has already announced other 2011 measures, including income-splitting for families and doubling the children’s fitness tax credit. Oliver has also hinted at the 2011 pledge to double the contribution limit on tax-free savings accounts to $11,000. When it comes to the fitness measure, however, Oliver has been far more coy.
© 2015 The Canadian Press