The 2014 Federal budget was announced yesterday. There had as usual been a big build up to the budget by Minister Flaherty that obsession over budget balance would take a back seat to employment creation and infrastructure. But regrettably once we examine the fine details in the almost 500 page document we discover that the rhetoric is overblown and the program of job creation for young people who suffer from a close to 13 % unemployment rate is miniscule and will make no serious dent in reducing that rate and creating a substantial number of new jobs.
The budget reports a a very small deficit when measured against the GDP, which is actually a very large high employment surplus and even if we simply take into account the built in reserves in the budget is essentially a nominal surplus. It also goes to great lengths to explain how once certain methodological adjustments are made Canada’s unemployment rate is substantially below that of the U.S. That is true. But there is no time series presented showing what these rates were before the crash of 2007/08 so we can see how far above that level the prevailing rate of unemployment is. There are some clear and good programs of infrastructure investment laid out in the budget but the Government could and should have gone a lot further. Finally, unfortunately despite by their own admission Canada has the lowest debt to GDP ratio in the G8 and virtually no deficit, they still are imposing cruel and unnecessary austerity on government employees simply because they can politically get away with it. Finally both of the main opposition parties have made foolish deficit hysteria comments trying to blame the Conservatives for correctly having run a stimulative deficit in previous budgets. All in all a very unimpressive performance.