Jim Flaherty unveils grab bag federal budget

OTTAWA;Finance Minister Jim Flaherty pledged relief for consumers, hit smokers with higher taxes and predicted a long-awaited budget surplus in an economic blueprint that was long on promises and short on immediate help for Canadians.

In a grab bag budget with a little something to catch the eye of almost everyone, Flaherty doled out limited new funding for job training, university researchers, auto industry projects, Parks Canada renovations and dozens of other initiatives.

Some people will say this budget is boring. I consider that a compliment, Flaherty told reporters Tuesday.

As expected, he pledged to introduce legislation to address consumers complaints about paying higher prices in Canada for products that are cheaper in the United States and suggested that Canadians were being targeted because they are relatively affluent.

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The budget said Ottawas competition watchdog would be ordered to put an end to the price gap but there was no plan as to how this would be done or when.

As part of what he called a Consumers First agenda, Flaherty also said the government would look at payday loan practices, credit card merchant fees and the need for more no-cost basic bank accounts.

After years of running budget deficits, Prime Minister Stephen Harper has been steadily reining in Ottawas spending.

This budget defers more than $3 billion in military spending on capital projects, hikes tobacco taxes to rake in more revenue, puts the squeeze on retired civil servants by hiking benefit premiums and freezes the operating expenses of departments. This comes on top of $14 billion in previously announced spending cuts, according to the Canadian Centre for Policy Alternatives.

Canadians can expect to see more and deeper cuts to services and a sluggish economy as a result, David Macdonald, the centres senior economist, said in a statement.

Flaherty, who says the savings are being accomplished through greater government efficiency, forecast a small $2.9-billion deficit in 2014. But if his $3-billion rainy day fund is counted, the government actually ekes out a slim surplus. But Flaherty wants the books back in the black in a big way in 2015 in time for the election so the government is keeping the pressure on to reduce spending.

This years budget is about next years budget, NDP Leader Thomas Mulcair said. That couldn’t be clearer . . . this is all about lining themselves up for the 2015 election.

The budget surplus in 2015 is expected to hit $6.4 billion.

Flaherty told the Commons that Canada’s had surpassed other advanced industrial countries in job-creation in recent years but acknowledged there are still too many Canadians looking for work, and too many employers looking for workers.

To deal with this employment mismatch, Flaherty last year proposed the $300-million-annually Canada Job Grant program, under which Ottawa, the provinces and business would contribute equally to skills training. But implementation of the program ; originally set for April 1, 2014 ; has bogged down in an intense fight with Ontario and some other provinces over the money will be spent.

Tuesdays budget said the Conservatives will stick to the April 1 implementation deadline and, in provinces where no agreement can be reached, the federal government will deliver the program directly by itself. Government officials were unable to say how much, if any, federal funding a province that opts out of the Canada Job Grant program would lose if Ottawa proceeds on its own.

With 1.3 million Canadians out of work, the budget continued the governments focus on jobs and skills training. Ottawa will devote more than $500 million a year to skills training and advanced research programs ; both intended to boost the economy. But a popular $200-million annual hiring credit for small business was scrapped.

The budget included a $12-million-a-year Canada Apprentice Loan program to help apprentices pay for training, $10 million a year to help entrepreneurs boost new companies and $500 million over two years in repayable loans for new vehicle technology.

Universities will receive $150 million annually for research that boosts the economy, Ottawa will spend $25 million a year to help older workers in high unemployment areas find jobs, and the government will forgo $7 million a year in revenues so that students applying for Canada Student Loans wont be denied funding if they own a car.

Business groups praised the budget but the opposition said the Conservatives economic programs were far too modest to spark growth and reduce the current 7 per cent unemployment rate.

This government has run out of ideas and is demonstrating it once again, Liberal Leader Justin Trudeau commented. Its the same promises that were in the speech from the throne without any concrete measures.

The $279.2 billion budget contained no major tax breaks. Harper has tied tax cuts to balancing Ottawas books, so the Conservatives can be expected to produce a big-bang budget next year.

Canadian Taxpayers Federation director Gregory Thomas welcomed Flaherty’s fiscal plan but criticized the government for raising Employment Insurance premiums in recent years.

Canadians would rather see more money on their pay cheque than see $20 million frittered away on snowmobile trails and boutique tax credits, Thomas said.

The budget did not include any measures to boost retirement savings through the Canada Pension Plan.

CARP, the seniors group, said its members will be disappointed by lack of action on pension security, pharmacare and caregiver support. Even on specific promises made in the throne speech, there is only a vague commitment to consult, said Susan Eng, CARP’s vice-president of advocacy.

Flaherty set aside $11.4 million over four years to support the expansion of vocational training programs for persons with autism spectrum disorder.

© Toronto Star