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An underwhelming response when boldness is required: Budget 2024

Updated: Apr 20

Hello,


A budget response with a bit of a difference. With most parties you already know what to expect, more or less. With a new political project like the Canadian Future Party, we have to do some extra heavy lifting, and show where we’re coming from. So this is longer than the usual letters you get from a political party, but hey – we’re talking about hundreds of billions of dollars and the future of our country, so I hope you’ll bear with me.


In a time of growing national instability, with global war and recession looming, Canada needed a budget that was bold, evidence-based, focused on growth and on measuring results. A budget to unleash the wealth and idea-generating powers of free people and a market economy working together to repair our crumbling infrastructure, address the climate crisis, restore our crippled national defence, and to reform our damaged public institutions.


Instead, what we got was a poorly thought out document that pays lip service to serious issues facing Canadians while continuing government bloat in growth and dangerous deficit financing.


There’s an old folk saying: if you don’t know where you stand, you can’t know where you’re going. Today’s established leaders either don’t know where they are standing or, worse, they won’t admit it. And that’s where the Canadian Future Party comes in.


We know where we stand. To start, we believe in growth and progress. What does that mean, exactly? I like this definition, from Canadian author Steven Pinker:


“Life is better than death. Health is better than sickness. Sustenance is better than hunger. Wealth is better than poverty. Peace is better than war. Safety is better than danger. Freedom is better than tyranny. Equal rights are better than bigotry and discrimination. Literacy is better than illiteracy. Knowledge is better than ignorance. Intelligence is better than dull wittedness. Happiness is better than misery. Opportunities to enjoy family, friends, culture, and nature are better than drudgery and monotony. All these things can be measured. If they have increased over time, that is progress.”


Where government can make a measurable and positive difference, it should. Where it can’t, it should stay out of the way.


I was inspired by my recent conversation with  General (Ret’d) Rick Hillier, who shared his plans to fight the housing crisis and who summed up his approach with this line: “Great countries do great things.” That ambition, and my party’s belief in growth and progress, defines the CFP response to Budget2024. We have a once in a generation obligation and opportunity to rebuild Canada so we can succeed in the complex and divided world evolving around us. We can only get the job done if we’re brave, and if we prepare.


As the Canadian Future Party waits for Elections Canada to confirm our status as Canada’s newest political party, here are some of our team’s thoughts on the big picture painted by Budget 2024.


The big picture


The big picture around the budget is scary – and there’s not much sign of bravery, or of preparation. The national debt has grown so much that GST revenue is completely consumed by debt payments. Think about that: not a penny of GST goes to support our healthcare system, to rebuild our armed forces, or to fight climate change.


That’s a real-life consequence to deficit spending: higher interest payments mean less to invest in programs that matter, and undermine support for the public sector and even for democracy – why would citizens want to send their tax dollars to banks?


Meanwhile, the size of the federal civil service has grown uncontrollably: in 2015, there were 257,000federal civil servants. By 2024 it had reached 368,000. Do you feel our government has gotten faster or better at helping us, during that time?


We need to look at what work the civil service does but also how it works - can we use technology more efficiently or get better results with a different organization of government


THE CFP ALTERNATIVE: A comprehensive program review to eliminate programs not supported by evidence and to strengthen those that need it.  Civil servants need to be empowered to do meaningful work best done by the public sector, and to begiven the resources the best evidence says they will need.


Taxation and tax reform


Taxing the wealthy won’t automatically make life better for Canadians, any more than recent increases in health spending made the health system better. Collecting and spending money is not the same as delivering results, and we need a laser-sharp focus on program design and delivery. There are also a number of complicated tax credits. These come with increases to the civil service to deliver the tax credits and money to non profits to help normal Canadians navigate them. Our Tax code has ignored the keep it simple principle almost to the point of absurdity.


A lot of attention is going to the increase in capital gains tax. When former Finance Minister Bill Morneau says, "I don't think there's anyway to sugar coat it. It's a challenge. It's probably very troubling for many investors," we should listen. These changes will discourage investment, require a complex and expensive bureaucracy to administer, and are unfair –imposing a heavier burden on middle class property owners than millionaire business owners.


THE CFP ALTERNATIVE: A Crown Commission on tax reform to overhaul and radically simplify the Canadian tax system.


Jurisdiction


The Budget is filled with calls on provincial and territorial governments to act – I counted 14! This has got to stop.  The federal government has clear responsibilities under the Constitution. So do the provinces. If the day ever dawns when Ottawa excels in every area of its responsibility, we can talk about realigning responsibilities. Until then, Ottawa has a lot of work to do.


THE CFP ALTERNATIVE: Respect the Constitution. Move existing federal programs from federal delivery to monitoring and evaluation, as part of a new Contract of the Federation that will clarify provincial and federal roles.


Affordability


While the Liberals talk about affordability, it is not a budget priority: barely a tenth of a billion is allocated under this line item.


Chapter II of the Budget is filled with dozens of niche programs designed to win votes from specific groups. Most require more growth in the federal civil service to manage.


For example, there’s a $1.07 billion dollar program to increase student grants and loans. Sounds lovely, until you see all that money is to be spent in 2024 – 2025: an election year. Not a penny for 2026 and beyond. You do the math.


Meanwhile, across our economy, special interests gain benefits that drive up prices for Canadians.


THE CFP ALTERNATIVE: Supply management has made goods more costly without adequately protecting our farmers, who are also under great pressure which climate change will only worsen. We will review our approaches to the agriculture sector to ensure that consumers and our farmers can benefit from a fair price and our agriculture sector is resilient as a key part of our country's security. Remove protections for airlines, grocery stores, telecommunications companies, and other near-monopoly industries that push prices higher and service delivery lower.


Climate change


The debate over the carbon tax is a distraction from the real and growing threat of climate change. It is true that around 80% of Canadians get carbon tax rebate cheques that exceed the amount they had to pay for the carbon tax. So the tax isn’t changing behaviour, it’s just making people mad about carbon pricing.


When the Prime Minister carved out exemptions for home heating in Atlantic Canada, he tied the carbon tax to affordability and focused the exemption on a region where Liberal-leaning voters were angry about the carbon tax.  Once the carbon tax became a political issue it was even easier for the Conservatives to question it.


THE CFP ALTERNATIVE: Fight climate change using a cap-and-trade system that targets polluters, not citizens. Support the expansion of Canada’s nuclear industry domestically and worldwide. Offer rewards for new ideas and technologies to combat climate change. Incorporate net zero technology into plans for new housing starts.


Immigration and housing


Budget 2024 like Budget 2009 stated the governments of Canada would streamline Foreign credential recognition yet the Budget also states that of the 198,000 people in Canada with international healthcare training, only 58% are working in their field. It also points out foreign credential recognition is leading to trade shortages that slow housing starts.


The income share most Canadians spend on housing increased from 35% in 2002 to over 60% in 2023. Rents have gone up at similar rates, while wages have stagnated.


The Budget includes some positive measures around the use of federal land, the sale of federal buildings for conversion to housing, and similar measures.


THE CFP ALTERNATIVE: Work with provinces and territories to establish immigration programs that meet provincial needs, including requiring increased foreign credential recognition programs with a focus on mutual recognition programs to approve regulated workers. Encourage immigration of skilled tradespeople. Develop and share expertise in the construction of low-cost modular housing.


Defence


As the world slides towards global conflict Canada needs to spend more on defence, and to build a military procurement process that works.


THE CFP ALTERNATIVE: Increase defence spending to 2% of GDP within two years, with further increases in the years following, as part of a Comprehensive Strategic Review to guarantee Canada’s sovereignty and to define our role, as a NATO member and guarantor of global security. Create a national civil defence and national service plan to protect Canada. Reform procurement to ensure we have the military we need… when we need it.


That gives you an overview of how the CFP sees the 2024 Budget. We see opportunities missed. Opportunities to define Canadian values and how they apply to spending decisions. We see an opening for evidence-based, values driven politics that sets aside sterile debates about Left versus Right and asks instead: Do we have the courage to do what’s right and, most important, to do what works?


I look forward to hearing your thoughts!


Dominic Cardy

Interim Leader

Canadian Future Party


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