Census change is about smaller government

I received a call today from a reporter around noon about what he conceded was “the story that just won’t go away”. He was, of course, talking about the census. He wanted to know if I could pass on a few names of possible interviews for right-wingers that support the government’s stand to scrap the long-form census. Of course, there are the folks over at the Western Standard who are taking up their obvious position against the mandatory “burden”, but in broader view, it got me thinking about who opposes the government’s plan and why the story would not just go away.

Every day it seems that there’s a new group of people lining up to bemoan the Industry Minister’s announcement that the census would forego the long-form. Certainly, this illustrates a serious problem that Stephen Harper faces as Prime Minister. Facing an opposition that can’t get its act together is one thing, but a nation where the voices of special interests are louder than ordinary citizens is another.

Indeed in this country, there are two groups of people. In fact, some would call these groups the haves and the have-nots. This is an not inaccurate way of describing it, but those that would might have the two switched. Canadians form two groups: those that receive from the government and those pay to the government. Those who form — or are constituent to — organizations dependent on government policy (and spending) are firmly against the changes to the census. Those on the other side are largely ambivalent because they are the large, unorganized and unsubsidized net taxpaying masses.

The conservative/libertarian Fraser Institute think tank’s motto is “if it matters, measure it”. The untruth of the inverse of this statement is at the centre of why this government should follow through. “If you measure it, it matters” is the motto of those net tax receiving organizations who only matter if they can make their case. Prime Minister Stephen Harper has tried the ideological argument against these groups for years. But ideology is by its nature debatable; removing the framework of debate is his shortcut to victory.

If Stephen Harper succeeds in moving in this direction, he will be in the initial stages of dealing a huge blow to the welfare state. If one day we have no idea how many divorced Hindu public transit users there are in East Vancouver, government policy will not be concocted to address them specifically. Indeed if this group were organized (the DHPTUEV?) and looking for government intervention, they’d be against the census change. The trouble is that in Canada, the non-affiliated taxpayers not looking for a handout have not organized. Indeed, the only dog they have in this fight is the amount of tax they pay (aka “transfers”) to sustain the interests of others.

QMI’s David Akin exclaimed surprise that from his cell within the beehive of special interests that is Ottawa, he was shocked to find that a full half — that other half — of Canadians aren’t upset about the changes to the census when it seems that’s the only thing the other bees seem to be buzzing about. The story that “just won’t go away” is a flurry of activity “inside the beehive”, because until you go outside, you can’t see the forest for the trees.

The other recent Lockheed Martin-related news story of the past couple of weeks was the Conservative government’s huge sole-sourced $16 Billion contract with Lockheed Martin to buy F-35 fighter jets. Perhaps I was a bit naive to think that every part of that sentence should be offensive to the Ottawa media… sole-sourced… American arms dealer… flying war machines… Conservative government. No, this largest military purchase in Canadian history didn’t even make a significant blip on the Ottawa establishment radar, simply because it didn’t challenge the position of any special interest groups. There’s no bevy of community/cultural/government organizations ready to line up to criticize/laud such a move. If the government had taken $16 Billion out of HRSDC’s $80+ Billion annual budget to pay for it, however, there’d be a swarm.

I believe that this Prime Minister has a few objectives in mind as he integrates seemingly transactional initiatives into something transformative. First, he merged the Progressive Conservative party and the Canadian Alliance to challenge what seemed to be entrenched Liberal electoral domination. Through initiatives such as financial starvation via election finance reform and ideological force-feeding on the policy front, Stephen Harper seeks to diminish or destroy the Liberal Party to replace them with the Conservatives as Canada’s default choice for government. His greatest challenge is to dismantle the modern welfare state. If it can’t be measured, future governments can’t pander. I imagine that Stephen Harper’s view, Canada should be a country of individual initiative, not one of collective dependence “justified” through the collection of data.

Stakeholder reaction to the 2010 budget

National Citizens Coalition

Instead of fixing the job crisis as it promised in yesterday’s Throne Speech, the Harper government appears to be coasting on last year’s stimulus budget, offering no meaningful new initiatives to get Canadians working again.

Today’s budget measures are a good step in the right direction, but more needs to be done to put Canada back on the road to sustainable economic growth.

Responding to today’s federal budget, National Citizens Coalition President Peter Coleman commended the Harper government for introducing measures that will limit the size of government, and address the bloated spending that has become pandemic in Canada. At the same time, the NCC criticizes the budget for not going far enough to secure the country’s financial future.

“This is a matter of fiscal leadership, and doing what is right for Canada,” added Coleman. “This government needs to go further in their efforts to reduce the size of the civil service, and more needs to be done to reduce spending.”

Fraser Institute

Fraser Institute senior economist Niels Veldhuis had harsh words for today’s federal budget, saying the $105 billion in budget deficits over the next five years will prevent the government from making improvements in competitiveness that would lead to a stronger economy.

“The 2010 federal budget does little to strengthen the Canadian economy. By putting off balancing the books for at least five years, the federal government is sacrificing Canadian competitiveness,” Veldhuis said.

“With revenues expected to rebound this coming year, the government could have balanced the budget within two years. Instead, Finance Minister Flaherty has chosen to keep the spending taps open and saddle Canadians with $104.6 billion in deficits over the next five years.”

Canadian Wind Energy Association

The Canadian Wind Energy Association (CanWEA) today expressed its serious disappointment with the federal government’s failure to expand and extend its very successful ecoENERGY for Renewable Power Program in the 2010 federal budget. Despite its expressed desire to harmonize climate change and clean energy policies with the United States, the federal government is now clearly moving in the opposite direction with respect to efforts to attract wind energy investment and jobs.

The Canadian Taxpayers Federation

The Canadian Taxpayers Federation (CTF) responded today to the 2010 Federal Budget expressing with great dismay that the Harper government continues to delay efforts to balance the federal budget.

CTF Federal Director, Kevin Gaudet, said “a plan to balance the budget should actually balance the budget and this doesn’t do that. Restraint delayed is restraint denied. Taxpayers have heard similar promises of restraint before. Canadians will believe it when they see it.”

Canadian Chamber of Commerce

The Canadian Chamber of Commerce today welcomed the federal government’s strategy to achieve its recovery plan, to return to balanced budgets and to promote a more innovative and competitive economy.

Canadian Restaurant and Foodservices Association

Hidden in today’s budget is the government’s plan to significantly raise employment insurance rates – which means employers will be paying a much higher price to create new jobs during the economic recovery.

Higher EI premiums will cost the restaurant and foodservice industry nearly $30 million a year starting in 2011.

In pre-budget consultations the 33,000-member Canadian Restaurant and Foodservices Association (CRFA) opposed an increase in employment insurance premiums, calling it a tax on jobs. According to the federal budget, the EI premium rate for employers is rising by nine per cent in 2011 and will continue to increase through at least 2014.

Canadian Alliance of Student Associations

Budget 2010 is making intelligent investments to help students find their way into post-secondary education, and assisting new graduates in finding employment, but has announced little for existing students facing over $500 million in lost income, due to the recession last summer, and are having difficulty paying for college and university.

“Unfortunately the federal government did not recognize the needs of students that are currently facing a cash and credit crunch due to last year’s recession,” said Arati Sharma, National Director of the Canadian Alliance of Student Associations, “Students lost $500 million in income last year due to high unemployment but there were no new investments in the summer jobs program, no increases in the Canada Student Grants Program, and no changes to the student loan system so students can pay the bills they are facing today.”

Budget 2010 also included one-time funding of $30 million in wage support for Career Focus, a program to help businesses hire recent college and university graduates. It also announced up to 140 fellowships for recent graduates of doctoral programs of up to $70,000 per year for two years to do research in Canada.

Canadian Federation of Students

Today’s federal budget contains no measures to address record high tuition fees and the student debt crisis.

“Chronic underfunding of Canada’s post-secondary education system has resulted in skyrocketing tuition fees and record high levels of student debt,” said Katherine Giroux-Bougard, National Chairperson of the Canadian Federation of Students. “With a record number of Canadians enrolled in college or university, this budget does nothing to help students and their families afford an education.”

The Investment Industry Association of Canada

The federal budget, released today, charts a prudent course to support recovery of the Canadian economy and bring public finances back into balance. The government has set out a realistic plan to reduce the $54 billion deficit to near fiscal balance in five years. The Investment Industry Association of Canada (IIAC) supports the commitment to spending restraint to achieve fiscal objectives. The responsible fiscal actions taken in the past four years underlie the credibility in the fiscal projections.

“The measures in the Extraordinary Financing Framework previously introduced by government were timely and effective and have contributed significantly to improved credit and economic conditions,” said Ian Russell, President and CEO, IIAC.

Federation of Canadian Municipalities

FCM applauds the federal government for protecting core investments in cities and communities as it reduces the federal budget deficit. These investments will help local governments – and Canadian property tax payers – build the infrastructure that is the backbone of our economy and quality of life.

The government is standing by its promise to permanently invest $2 billion a year in gas tax revenues in safer roads and bridges, quality public transit, and clean drinking water. This commitment, along with funding for affordable housing and the GST Rebate for municipalities, is helping local governments build greener communities that can compete for new jobs, talent, and investment in the post-recession world.

The Canadian Urban Transit Association

The Canadian Urban Transit Association (CUTA) is pleased that today’s Budget maintains existing investments that support public transit infrastructure.

“Transit investment stimulates the economy, and builds sustainable transportation choices for the future,” says CUTA President and CEO, Michael Roschlau. “Canada’s transit industry recognizes and supports the recent progress made by the Federal Government in addressing transit needs.”

While CUTA is thankful that the federal government will maintain existing commitments to the $4-billion Infrastructure Stimulus Fund, the $8.8 billion Building Canada Fund and the $2 billion per year Gas Tax Fund, the lack of investments dedicated to public transit will make it a challenge for transit to fully meet the growing needs of Canadian communities.

The Canadian Federation of Independent Business

The Canadian Federation of Independent Business (CFIB) is pleased to see some measures to tackle the deficit and recognize the contribution of small business in growing the economy and creating jobs but more could have been done. “Building confidence among small business owners will do more to create jobs across Canada than any other measure,” said Catherine Swift, CFIB’s President and CEO.

Addressing paper burden and regulations has always been a top priority for CFIB members and the establishment of a Red Tape Commission is welcome news. “Providing clear leadership, committing to measuring and publicly reporting on the number of regulations, as well as putting some constraints on regulators will make this initiative a success,” said Swift. “CFIB is a strong supporter of moving this process forward as it really is a low cost way of making our economy more productive and efficient” added Swift.

CFIB was also pleased to see measures to curb government administration costs. “The federal budget deficit cannot be tackled unless the government gets a handle on reducing costs in the public sector,” said Swift. “Many in the private sector have had to make sacrifices during the past year and so must the public sector to help get Canada’s books back in order. This is just a start, however, and much more needs to be done on public/private sector salary and benefit inequities”.

Canadian Centre for Policy Alternatives

The Harper government’s budget fails to measure up to its own job creation promises, says the Canadian Centre for Policy Alternatives (CCPA), a progressive think tank.

Cardus

Ray Pennings, Director of Research for Cardus, expressed concern that although today’s federal budget rightly focuses on returning the books from deficit to surplus, it pays too little attention to imminent deficits in elder care, charitable service and broad social architecture.

“It’s a good budget, but it’s not visionary,” said Pennings. “Canada will begin facing down critical problems in the coming decades that need bold fiscal leadership, and by that standard, today’s budget is focused too much on short-term physical stimulus, and not enough on helping institutions outside of government build capacity for providing critical services over the long term.”

Certified Management Accountants of Canada

Certified Management Accountants of Canada (CMA Canada) welcomes Budget 2010’s focus on making Canada more globally competitive and encouraging greater investment in Canada.

The budget contains specific measures that will help Canadian businesses increase their capacity to innovate and become more productive.

While CMA Canada welcomes the new investment in public sector R&D included in Budget 2010, the government must continue to encourage business-led R&D, which is a critical source of innovation. To this end, the government should consider CMA Canada’s pre-budget recommendation of enhancing the Scientific Research and Experimental Development (SR&ED) tax credit by enhancing the refundability provisions.

Canadian Auto Workers

“This budget does little to help Canadian workers secure their footing during a period of severe economic instability and is rooted in government-destroying, deeply ideological values,” CAW President Ken Lewenza said in response to Federal Finance Minister Jim Flaherty’s budget today.

The budget shifts the Conservative government policies further in favour of businesses and corporations, to the detriment of average Canadians. It outlines a series of plans to reduce the federal deficit through major spending cuts, including $6.8 billion from the public service budget. The budget also highlights the government’s intent to further reduce tariffs on manufacturing inputs, deregulation of the telecommunications and uranium mining sectors, an expansion of free trade, and boasts that Canada will have the lowest corporate tax rate in the G7 by 2012.

The Direct Sellers Association of Canada

The Direct Sellers Association of Canada applauded the federal government for the extension of the GST/HST collection mechanism currently used by thousands of small businesses across Canada and for continued measures to create jobs for Canadians.

“The amendments to the GST/HST collection rules for direct sellers announced in the federal budget confirm this government is committed to creating an environment where entrepreneurial activity can grow and jobs can be created,” said Ross Creber, President of the Direct Sellers Association of Canada (DSA). “The changes Minister Flaherty announced today will benefit thousands of independent sales contractors in the direct selling industry.”

United Steelworkers

“The federal budget provides no new support for green jobs or general investment in manufacturing,” said Ken Neumann, United Steelworkers’ (USW) National Director for Canada. “It projects a higher unemployment rate this year than last year, but proposes only token improvements to Employment Insurance (EI) benefits.

“The government should significantly enhance the accessibility, level and duration of regular EI benefits. It should stop deducting severance pay from EI benefits and shorten the two-week waiting period.

“While the budget continues previously announced stimulus spending, it provides almost no new money to create jobs or help unemployed workers,” says Neumann.

The Association of Universities and Colleges of Canada

The Association of Universities and Colleges of Canada welcomes the government’s strategic choice to invest in university research as announced today in Budget 2010.

“Given Canada’s fiscal outlook, we are pleased that the government is continuing to invest in university research and innovation to create jobs today and to build the economy of tomorrow,” says Michel Belley, chair of the AUCC Board of Directors and rector of the Université du Québec à Chicoutimi.

The $32 million annual investment in the three major granting councils will help universities to pursue the kinds of research that will drive innovation and produce the highly skilled workers that all sectors of the economy need. The budget also provided $8 million for the Indirect Costs Program.

Canadian Youth Business Foundation

In today’s federal budget, Prime Minister Stephen Harper strengthened the government’s partnership with the Canadian Youth Business Foundation (CYBF) with the announcement of $10 million in funding. The funds will ensure that CYBF continues to help aspiring young entrepreneurs open businesses in communities across Canada, creating jobs while strengthening Canada’s economic recovery.

“At CYBF we know that youth entrepreneurship is fundamental to Canada’s economic recovery and long-term competitiveness,” explained Vivian Prokop, chief executive officer of CYBF. “The government’s continued investment in CYBF is recognition of our role as an important partner in job creation, economic development and building a culture of entrepreneurship in Canada. This federal funding, coupled with effective public and private partnerships, demonstrates an understanding that young entrepreneurs have great potential to generate ideas and drive innovation in Canada’s communities from coast to coast.”

Communications, Energy and Paperworkers Union

“All political parties should vote to bring this government down now,” says Communications, Energy and Paperworkers Union President Dave Coles in reaction to today’s budget.

“Yet another budget, filled with rhetoric and platitudes, that does nothing for workers, families and communities in hundreds of forest-dependent communities,” says the leader of Canada’s largest forestry union.

“We saw the same show in last year’s budget,” says Coles. “In fact, in the past year, the Conservatives made many announcements about aid to the forest sector, yet we saw a record number of bankruptcies.”

“Mr. Harper and Mr. Flaherty are simply continuing to milk the media for their own gain.

The Forest Products Association of Canada

The Forest Products Association of Canada (FPAC) today welcomed the spending initiatives and direction announced in the Federal Budget saying it will strengthen the industry’s plans for renewal.

“From a forest industry perspective, the Government has its priorities right: investing in green jobs of tomorrow, stimulating the economy through clean energy technologies, and inviting investment by changing the Accelerated Capital Cost Allowance, will give Canada the edge it needs to move into the new bio-economy,” says Avrim Lazar, President and CEO of the Forest Products Association of Canada.

“The Next Generation Renewable Power Initiative leverages the industry’s ability to make a significant contribution to Canada’s vision of becoming a clean energy superpower. This is a win for the environment, economy and the next generation work force.” says Lazar.

Canada’s Chartered Accountants

Canada’s Chartered Accountants (CAs) are cautiously optimistic about the federal budget giving it a B-plus rating.

“This is really a wait and see budget,” said Kevin Dancey, FCA, president and CEO, Canadian Institute of Chartered Accountants (CICA). “We won’t know if this is a successful budget until the government demonstrates that it has the ability to rein in costs.”

It also is a transition budget as the government prepares to move away from its stimulus spending to restraint. The budget confirms $19-billion in new federal stimulus under the second year of the government’s Economic Action Plan. It also charts a course to return Canada to fiscal balance but only brings the deficit down to 1.8-billion by 2014-2015.

Certified General Accountants Association of Canada

Although it includes no major initiatives, the Finance Minister introduced a budget that lays the groundwork for economic recovery and emphasizes productivity and innovation, says the Certified General Accountants Association of Canada (CGA-Canada).

“The budget addresses the right priorities – continuing with necessary economic stimulus, focusing on innovation, and charting a course for a return to budget balance,” says Anthony Ariganello, CGA-Canada’s President and CEO. “The fact that there are no major new initiatives is not a surprise. Nonetheless, the budget contains a number of interesting smaller measures, especially those related to innovation.”

VANOC

The Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC) today commended the Government of Canada for committing an additional $17 million annually in funding in support of the Own the Podium program: $11 million for winter athletes and $6 million for summer athletes. The funding announcement came as part of the Government of Canada’s release of the federal budget.

“The Prime Minister and Government of Canada have today confirmed that sport counts in Canada – that sport is an important and vibrant part of the fabric of life in our country,” said John Furlong, VANOC’s Chief Executive Officer. “Canadian winter athletes, through their stellar performance at the 2010 Olympic Winter Games and at the upcoming Paralympic Games, are making a significant impact on the country, inspiring national pride and a showing what can be done when confidence is raised to the highest level through strong support. Our summer athletes have tremendous potential as they prepare for the London 2012 Games,” he said.

Jim Flaherty at the Fraser Institute

Last night, supporters of the Fraser Institute gathered in the Adam hall of the Chateau Laurier to listen to federal finance minister Jim Flaherty deliver an assessment of the Canadian and global economies. On Thursday, the minister will be delivering a sobering fall economic update in the House of Commons and last night, we got a hint of what might be to come.

Flaherty was introduced by former Ontario PC Premier Mike Harris, the finance minister’s former boss and mentor. Harris disappointed the crowd saying that he was not about to return to politics but that a deep-rooted fixation on Canada’s future prosperity is one that both he and Preston Manning hold. Manning and Harris are the authors of Canada: Strong & Free, a six-volume set of books describing Canada’s ideal path along internationalism, economic freedom, federalism, and education among other topics. Last night’s dinner was held to mark the release of their sixth summary volume called Vision.

In minister Flaherty’s speech, he described Canada’s position in a rapid yet sustained decline of the global economy and while trumpeting Canada’s economic leadership among G7 nations, we are simply the country that is sinking the slowest. Indeed, at a recent meeting of the G20 finance ministers, Mr. Flaherty revealed that not one minister was optimistic about their economies domestic or international. Flaherty will project a surplus through the end of this fiscal year ending April 2009, however, as he conceded the next fiscal year will present “a challenge”. The minister sketched a fiscal portrait in broad strokes declaring that the crisis will not end tomorrow, next week or in the next few months and warned that we have not yet seen the worst of the situation.

Yet despite its faltering position, Canada is an economic leader among its economic peers. Flaherty described the economic measures implemented by the federal government to prepare for such an eventuality saying that they’d never apologize or regret cutting the taxes of Canadians or bringing in more stringent regulatory frameworks to maintain Canada’s economic structure. Indeed, the IMF, as Flaherty noted declared Canada to be the best economic shape going into the global economic downturn.

In the United States, President-elect Barack Obama has conceded that he will delay the rollback of the Bush tax-cuts and in Canada, Flaherty suggests that this Conservative government will maintain Canadian tax-cuts to retain this increased spending power among Canadian consumers.

Perhaps the worst-kept secret in Ottawa is that this government will project a deficit in the near future. Flaherty has declared that he will sing from the same songsheet as other national government and use the federal treasury to stimulate growth, or rather stem the “negative growth”. For this, infrastructure minister John Baird will become a hero of sorts in Ontario as federal dollars are channeled through on road, rail and other contruction projects sustaining jobs. Prime Minister Harper days earlier declared that some deficits provide opportunity and are necessary. Flaherty promised that the stimulus would be underway by March 2009. The pairing of the temporary and artificial sustenance of Canadian jobs via government spending with the consumer spending power of a less-tax-burdened population may help the good ship Canada weather the global economic storm until it subsides. Or at least the theory goes.

Deficit spending will be accomplished in order to sustain the “real” economy. Flaherty promised no ‘structural’ deficit.

For my part I asked the minister during the dinner about conservative opportunity describing this as a time when Conservatives in power could be allowed to make cuts to government spending and suggested that a reduction in the size of government rather than its growth would help balance the books in a real rather than artificial way. The finance minister unfortunately balked at the question suggesting that some areas of growth are necessary such as the rescue of the state of the armed forces. If given a follow-up, I would have suggested that some cuts are necessary too. Even in a recession, the government is a growth industry. The minister described a treasury board review of all programs to measure value for money and promised to extend this review through both core and non-core assets.

As for the public sector, wages will not increase faster than the private sector. This has caused some concern among public sector employees and the minister reached a deal with PSAC, it’s largest union late yesterday. The two parties have settled on a wage increase of 6.8% over the next four years.

On interprovincial trade barriers, the minister promised to break these down and suggested that the current economic climate behooves governments to allow uninhibited trade within Canada. The minister welcomed a cooperative spirit among provincial and territorial ministers on addresses the economic downturn domestically.

The minister declared that the government would not artificially engineer a surplus. Perhaps this is a reflection by the minister on Paul Martin’s method of balancing budgets by slashing transfers to the provinces and “fixing” healthcare for a generation. Ontario has warned Ottawa not to balance its books on the back of the province and what is needed is economic stimulus in the province through reduction of its corporate tax rate. For the part of the Conservative federal government, Flaherty described a $37B debt reduction, a reduction of the tax burden by $200B and a 2012 projected corporate tax rate of 15%.

On securities regulations, the minister promised the creation of a single national securities regulator. The federal government will seek to regulate leverage and large pools of capital. A more transparent market infrastructure is needed according to Mr. Flaherty.

The sum of Flaherty’s speech was to say that this government is acting to sustain economic activity for the foreseeable future as economies around the world reconfigure to recover. Taxes will remain low, spending is temporary and a deficit would be a temporary and an short aberration from Canada’s economic plan.