Economical with the Truth

If this spring’s federal budget is a prescription for what ails Canada and its economy, it should come with a bright, red warning label: “This budget will do nothing to address job creation, tax evasion, environmental protection, or public safety.” That at least would have fulfilled the government’s obligation to speak truthfully about the budget’s consequences. But as former Parliamentary Budget Officer Kevin Page revealed, Conservative budgets have little to do with the truth.

Take, for example, the Conservatives’ proposal to “connect” people to jobs in a budget that largely holds the line on austerity – including ensuring that the unemployed don’t get too comfortable receiving the reduced benefits to which they’re entitled. The plan is unlikely to produce anything remotely resembling the surge in employment that’s envisioned or needed. What’s needed is a real job creation strategy. What the budget offers are more weak gestures towards creating the right incentives for private sector employers to produce jobs? Ask any unemployed Canadian (especially the young) how that’s been working out for them and you’re likely to find growing disillusionment and resentment. Austerity doesn’t grow an economy. Just ask the International Monetary Fund, which last October broke with convention by acknowledging that austerity in Europe has led to higher unemployment, slower growth and lower government revenues. Turning Canada into the lowest corporate tax haven among G8 countries hasn’t produced credible growth in job numbers (much less government revenues), and the government’s latest dating service for jobs is unlikely to improve the situation.

Then there’s the government’s new Stop International Tax Evasion Program, announced with great fanfare in the budget, which is intended to recoup what the Canada Revenue Agency (CRA) says is over $4.5 billion in accumulated unpaid taxes. As one private tax lawyer recently pointed out, it’s unlikely that this government will recover even a fraction of the expected amount. For one thing, CRA’s Voluntary Disclosure Program is already under-staffed and the agency is still absorbing over $300 million in cuts, $60 million of it announced in this budget. For another, the threshold for proving tax evasion is extremely high, which suggests the need for more, not fewer, professional staff capable of undertaking such investigations.

The problem with a government intent on controlling its message is that it ends up communicating very little, even to its own employees. Economic Action Plan 2013 follows a now- familiar pattern of big announcements with disturbingly little detail. In effect, Budget Day has become meaningless. In announcing this spring that a further $33 million will be cut from the Department of Fisheries and Oceans (DFO), the government refused to deviate from its non-communications strategy. Instead, the party line was that the cuts won’t affect frontline services. The last time DFO was told that was just before this government closed the famed Experimental Lakes Area, the only large-scale outdoor research program of its kind and credited with providing the data that led to legislation reducing acid rain production. We also heard it when it was reported last year that the Canadian Food Inspection Agency was to absorb $19 million in as-yet- undisclosed cuts to its Food Safety program.

In fact, if there is any warning to take from this and previous Conservative budgets it is that public servants – and the public generally – will be kept uninformed about the real impacts of government austerity as long as possible. There seems always to be some previous funding commitment that is repackaged as this year’s investment in infrastructure, or some “operational efficiency” that disguises the death of another world-renowned Canadian program. Is it any wonder why public servants are more than a little sceptical about the government’s latest action plan to “ensure that the public service is affordable, modern and high- performing” by proposing “changes to the labour relations regime?”

In the final analysis, the enormous cuts in the wake of previous “Economic Action Plans” are taking their toll and far outweigh the few, small spending increases announced this year. The promise to get tough on international tax cheats is as ineffective as the commitment to reduce national unemployment numbers. As former Parliamentary Budget Officer Kevin Page forecast in his last year, the 2012 budget will actually slow economic growth in 2013 by nearly 1 per cent and result in 69,000 fewer jobs in the public and private sectors combined. This year’s budget does nothing to change that trend. But then the Conservatives no longer have to contend with Kevin Page, and it’s uncertain how long the Parliamentary Budget Office will remain a force for accountability. Truth, as far as this government goes, is an “operational efficiency.”