Canadian think-tank slams Flaherty for focus on budget surplus

Finance Minister Jim Flaherty wasn’t the only one sticking to tradition when he stopped by a Toronto shop Friday to purchase a new pair of shoes in advance of Tuesday’s federal budget.

The Canadian Centre for Policy Alternatives, a leading lefty think-tank, indulged in a custom of its own with the timely release of the 19th annual “alternative” budget.

The latest document, entitled “Striking a Better Balance,” is packed with hard numbers and delivers a bare-knuckle punch at the government’s efforts to date to address the country’s largest social, economic and environmental concerns.

On Tuesday “our government is expected to offer you a do-nothing budget for 2014, deliberately showcased for a couple of hours of attention between the luge and snowboarding events at the Olympics (I kid you not) so you can forget about the importance of what’s going on,” wrote David Macdonald, a CCPA senior economist and alternative budget coordinator, in a blog posted to the organization’s website.

By contrast, the CCPA budget outlines a plan to lift 855,000 Canadians (mainly children and low-income seniors, most of them women) out of poverty and aggressively reduce the unemployment rate from 7 per cent to 5.4 per cent.

The plan seeks to tackle what it calls “tax inequality”. It would see families at the bottom of the earnings’ scale pay less income tax while the upper middle class would pay more (about 2 per cent of their incomes). Canadian families making over $150,000 would contribute the most, seeing an average tax increase of 6 per cent.

There are measures, too, to boost our overall quality of life, with special emphasis on First Nations, and our youngest and oldest citizens. Among the CCPA’s boldest proposals are calls for a national Pharmacare program, major investments in public transit and housing, and broadened access to affordable childcare and post-secondary education.

The CCPA has long argued that Flaherty puts too much emphasis on balancing the budget and debt reduction, and that his policies will only mean continued slow growth for Canada.

“Canadians are being shoved down a hurried path to surplus, by cutting services even as revenues rise as a share of the economy,” Macdonald writes in his blog.

The think-tank says its approach will also bring about a balanced budget one year later than the federal plan.

Flaherty has historically rejected the CCPA’s budget proposals and that’s unlikely to change this year.

But, on Sunday, he took aim at some of his sharpest critics, telling CTV in an interview the budget is “all about the economy and jobs.”

“We will be investing, and we will be ensuring that we move forward on the economic front, not just balance the budget,” he said.

Flaherty has been deliberately short on details, but has said the budget will include funding for major infrastructure projects, including bridges, sewers and transit.

He’s also promised help for young people looking to get into a difficult labour market.

The most-recent job numbers supplied by Statistics Canada saw a dip in the unemployment to 7 per cent in January. But for young people finding work remains tricky. The unemployment rate for Canadians between 15 and 24 years is 13.9 per cent.

Flaherty has said the government remains on track to balance the books by 2015.