The federal budget passed on March 29 is designed to help get people back to work and encourage economic growth, according to Wellington-Halton Hills MP Michael Chong.
He said he believes the government will do just that because, “We’ve got a good track record. We’ve created 610,000 new jobs since the recovery [from the recession] began in July 2009.”
The budget extends the hiring credit for small business and $50 million will go into a program to help younger people gain skills and experience for the workforce, Chong said. There is also a program to help workers over age 50 to get back into the workforce.
The government has also limited employment insurance premium increases to just five cents “so employers have incentives to hire workers.”
Chong said the budget is based on growth projections of 2.1 per cent this year, and 2.4% in 2013, and he added those are private sector calculations and not the government’s.
One of the more controversial moves in the budget was the change to Old Age Security (OAS). Chong said the government has been reasonable about the way it is increasing the collection age from 65 to 67. First, he said, it will start only in 2023, thus giving people time to prepare for that change.
Plus, he added, it will not change immediately at that date. Those who turn 65 that year will be forced to wait only an extra month to start collecting OAS. That age eligibility will continue to rise until 2029 when the wait will take full effect.
Further, he said, the government has set provisions allowing people to defer collecting the OAS immediately. Their reward will be a higher payment when they do start to collect it. That choice is available starting July 1, 2013.
“This is a very modest and reasonable response to the fact our population is ageing and putting pressure on our finances,” Chong said.
Spending cuts
Chong said the government is committed to fighting the deficit and to expense reduction.
The budget cut spending by $5.2 billion, which represents a decrease in cash in various departments of 6.9%.
Chong said that means cutting the federal civil service by 19,000 jobs. That service had added about 29,000 jobs over the past ten years.
“We expect that 7,000 of those 19,000 will be achieved through attrition,” Chong said.
The result of those cuts and spending reductions means, “We will return to balanced budgets in the next three years.”
Plus, he said, the debt-to- gross-domestic-product (GDP) rate has dropped to its lowest level in decades. At the end of the Second World War that figure was 100%. A few years ago, it was about 40%. Now the federal debt-to-GDP ratio is 29%, Chong said.
“We’ll be in a better position than at any point in the 1990s or at any point in the 1980s … to weather future circumstances,” he added.
He also noted the cuts are modest. He said they are 2% of federal program spending, and that amounts to a $2,000 spending reduction for a household with an income of $100,000.
“I expect that Canadians expect us to be prudent with their tax dollars,” he said. “Two per cent is very reasonable.”
Municipal help
After much lobbying by the Federation of Canadian Municipalities, there will continue to be cash coming to repair existing infrastructure projects.
The federal government has worked with the municipalities for several years now, and Chong noted the provinces have also been a part of that three-way infrastructure spending (Ontario dropped out of that commitment with its budget two days prior to the federal budget).
As well, Chong noted there is $105 million for Via Rail spending to improve its operations.
Help for workers
Chong said the budget also took steps to help protect workers when companies run into difficulties.
All federally regulated companies will be forced to take out insurance on their long-term disability programs for employees. He said that will protect those workers even if the company gets into financial trouble so “applicants will receive the benefits they are entitled to.”
Those companies include banks, telecom companies such as Bell, Rogers and Telus, as well as airlines and radio and TV stations.
Increased cash
Chong said there are no reductions to such things as health care spending, unemployment or education.
“We’re increasing those transfers,” he said.
The government has promised to increase health care spending by 6% for several years, and then it will tie increases to the GDP.
Chong reiterated the budget is “prudent. This will help us achieve a balanced budget in the next three years.”
Schellenberger pleased
Perth-Wellington MP Gary Schellenberger was also pleased about “keeping taxes low and returning Canada to balanced budgets over the medium term.”
He said in a press release, “Our Conservative government is squarely focused on what matters to Canadians: jobs and economic growth.”
He noted the global economy remains fragile and too many Canadians are still looking for work, so the focus is on job creation.
Among the programs he cited are:
– encouraging innovation, entrepreneurship and world-class research with over $1.1 billion in spending for research and development, $500 million for venture capital, support for increased public and private research collaboration;
– improved conditions for businesses with responsible resource development streamlined for one project, one review, expanding trade to open new markets, and keeping taxes low;
– spending in training, infrastructure and opportunity for Canadians by extending the hiring credit for small business; investing in programs to help youths, Canadians with disabilities, Aboriginals and workers over 50, reforming the Employment Insurance system to promote job creation and remove disincentives to work by allowing those receiving EI to earn more at part-time work and keep it, and spending for community infrastructure; and
– bringing pension plans for public sector employees and parliamentarians in line with Canadians in the private sector, and closing tax loopholes.
He said the budget also demonstrates the government’s support for Ontario through record federal transfer support for hospitals, schools and other critical services.
Totaling $19.2 billion in 2012-13, that transfer support represents an increase of nearly $8.4 billion (or 77%) from the previous Liberal government.
“While the Liberals gutted transfers for health care and education when in power, our Conservative government is protecting and growing them to help support the services that Ontario’s families need,” Schellenberger said.
