More public sector cuts, real comparisons and details: What you won’t find in Carney’s mini-budget

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Past projections, understandably, for example, were unable to account for recent governments’ new spending on everything from dental services, a massive expansion of the public service, or the pandemic.

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Similarly, this spring update, which includes economic projections that stretch out over more than three decades, does not include the inevitable extra spending.

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Seriously? More government?

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This economic update trumpets the creation of the Defence Investment Agency as a stand-alone agency.

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The new $103.8-million agency will be set up, according to the economic update, to deliver “more timely and transparent procurement.”

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Is this not a core part of the mandate of the Department of National Defence?

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This is not the first time that Carney has given a clear indication that he thinks he needs to set up a new government agency — remember the Major Projects Office? — to ensure that things can get done quickly enough.

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If that’s the case, wouldn’t it be better to just fix the core problem within the existing government body?

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Details

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The devil may be in the details, but we’d still like to see them anyway.

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Whether it’s the new sovereign wealth fund or the various national strategies (trade diversification, nature, housing, and the latest for auto), the government seems long on identifying big-picture problems and short on specific plans and tactics to solve them.

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There may be times when the big-picture vehicle needs to come first. But this seems like a pattern.

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Crisis? What crisis

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Pretty much every economist in the country, including the prime minister, has commented on the Canadian productivity crisis that has stretched back at least a few decades. While it’s undoubtedly a nerdy word that makes people think about just about anything else, economists insist that it’s very important and is directly tied to economic growth and our standard of living.

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And yet, there was in this economic update — like with the fall budget — no big swing to tackle this big problem.

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What would a big swing look like?

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Ottawa could, for example, return the federal component of consumption tax — with consumer spending rarely a problem — to seven per cent and use that extra revenue to dramatically lower those taxes, such as corporate income and payroll taxes, that hamper productivity and our economy to a much greater degree.

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Taking a bigger slice out of the federal bureaucracy, including the regional economic development agencies, and reallocating that money to productivity-enhancing policies would also qualify as bold.

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Instead, the Carney government added some modest changes to the Scientific Research and Experimental Development tax incentives and launched a $25-billion sovereign wealth fund to invest in projects that may turn out to be very important. But we can’t really evaluate this new fund yet because of the dearth of details that have been announced.

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The update also unveiled the launch of a “whole-of-government competition plan” designed to strengthen productivity and affordability by promoting greater competition in government policies. The connection to tangible results is also yet to be clarified.

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National Post

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