IN THE SPOTLIGHT APRIL 3: Dissecting the 2013 federal budget

Minister of Finance Jim Flaherty announced his budget recently and MP Alex Atamanenko says it leaves a lot to be desired.

The finance minister made his budget speech on March 21.

As I sat in the House of Commons and listened while I browsed through the glossy budget literature, it actually did not sound too bad.  However, as I read through various analyses of the content, it became clear that Budget 2013 left a lot to be desired.

Let’s have a look at the announcement of infrastructure spending. According to David MacDonald of the Canadian Centre for Policy Alternatives (CCPA), the $14 billion over 10 years infrastructure announcement is not what it appears to be.

The government is just re-announcing existing programs like the gas tax transfer and 75 per cent of this money is actually going to be spent in or after 2020.  In 2014-15, there will be a $1 billion cut to the infrastructure transfers to the cities.

As Mr. MacDonald goes on to say, “The Building Infrastructure Fund is one of the foundations for federal-municipal infrastructure spending. It is currently spending $1.25 billion a year and expires in 2013-14.

The Federation of Canadian Municipalities (and the Alternative Federal Budget) was looking to have this fund renewed and significantly increased.  Instead, spending in 2014-15 has gone from $1.25 billion to only $210 million – a significant drop.”

The current P3 fund is being renewed at $1.25 billion over five years; however, many cities are not using it. Apparently, it gives control to the corporate partners and cities are left to pay more in interest on long-term projects.

According to the CCPA, the previous P3 fund has spent only about 30 per cent of its total and has allocated 50 per cent of the allotted funds.

In regard to training, Budget 2013 outlines a three-point plan to address Canada’s labour market needs: The Canada Job Grant, Creating Opportunities for Apprentices and Supporting Job Opportunities for all Canadians.

According to the Canadian Labour Congress (CLC), Canada is falling well below the OECD average in the average hours of job-related non-formal skills training for employees, and in employer investment in skills training generally.

The position of the CLC is that Canada needs a skills development strategy in response to a growing skills gap, an aging work force, and the need for greater educational opportunities for groups such as First Nations, recent immigrants and youth.

The Canada Job Grant will take $300 million per year from the current Labour Market Agreements (LMA) going to provinces and will allocate it to a grant for job-related training. Employees will apply for grants up to a maximum of $15,000 per employee. The province, federal government and employer will each provide one third of the funding.

Adequate literacy is the one key skill that many Canadians lack. The current LMA is the sole source of government funding for workplace literacy training. This program is successful, so the question is, why does the government wish to re-allocate money for literacy into the hands of employers?

In regard to apprentice training, this budget reallocates $4 million over three years to harmonize apprenticeship requirements across Canada.

According to the CLC, this measure will improve the certification process and mobility of workers and will assist them in finding jobs in their field across Canada. The budget also ensures that federal projects and projects with federal funding will employ apprentices.

As far as supporting Job Opportunities for All Canadians, the budget puts in place targeted measures for specific groups under-represented in the labour market. This is a good thing.

For example, there will be increased support for internships for recent post-secondary graduates consisting of $70 million over three years for an additional 5,000 paid internships on top of the 3,000 already announced in Budget 2012.

Unfortunately, however, there is nothing in Budget 2013 to assist women in their labour market integration. The main point to retain here is that in spite of the steps to better connect unemployed and under-employed and workers with better jobs, only 15 per cent is new money. The rest of it (85 per cent) is money shuffled around.

Finally, according to the CCPA analysis, austerity measures in 2014-15 will have reduced federal spending by $11.8 billion due to cuts in the last three budgets.  It is estimated that the total employment impact due to austerity will be approximately 90,000 fewer positions in the public and private sectors.

One has to wonder what will happen to these people and what effect it will have on the communities they live in.

Alex Atamanenko is MP for the B.C. Southern Interior