One election, two budgets and your money

“You can’t live without money. You can’t make life on hungry belly.”

Those lyrics have been purposely stolen and changed from an old calypso, in order to make two points abundantly clear. The first point is that this year’s federal election, the federal budget presented on April 21 and the Ontario government’s budget of April 23 are all about your money. The second point is that you should never allow anyone to convince you that there is little or nothing that you can do about how the “official” participants in those three events get to spend your money.

Let us have a look at how the Conservative government proposes to spend your money in its federal budget. As average or below-average income earners, you can see at least five items that can offer you some more money: the tax cut for small business will benefit those who own such ventures and those who will find more work in labour intensive small businesses; the new / expanded child care benefit is small but it is something additional; seniors who can afford to have TFSA’s  and RRIF’s will gain from the increased ceiling on tax-free savings accounts and the relaxation of the rules for withdrawals from their Registered Retired  Income Funds; the reduction of Employment Insurance premiums as of 2017 may lead to a slight increase in employment levels; and $200 million has been allocated for Aboriginal education.

Those positive aspects of the federal budget are significantly outweighed by the not-so-rosy aspects of the price that you will have to pay for them if the current government has its way with your money. One public policy analyst is not amused by the irritating realization that too many of the federal budget’s offerings for your cash-flow and the public services you need will not take effect until two or more years from now, if the Conservatives win another term and if they keep their promises.

For example, the Public Transport Fund and its complicated selection and disbursement criteria will be in operation over the period 2017-20. Do you have an extra nest-egg of $5,000-$10,000 to take advantage of the increased cap for TFSA’s? Do you have enough income to benefit from the effects of the income-splitting tax policy which will cost you $2.4 billion in this budget? Would you prefer to have this $2.4 billion used to improve the delivery of health and education services, other public services or social support programs for children, youth and seniors?

Now that you have seen the titbits offered in Mr. Harper’s federal, future-based budget, will you fare any better in Premier Kathleen Wynne’s provincial budget for Ontario? Basically, the premier is claiming to improve your life in three ways. First, by leaving your taxes at existing levels, her budget will not take more tax money directly from your pocket. Her second proposal is to offer you the improved and additional roads, subways and other infrastructure you need for work and quality of life purposes, in exchange for two things: the revenue from the partial sale of Hydro One, a major asset among your income-earning public properties; and a reduction in the staff positions and program expenditure in most provincial ministries and agencies. The third advantage that is being promoted as an integral part of the budget package is the open and transparent management of the task of finding a balance between what you need and what you can afford.

In other words, Wynne’s budget is presented as a model of financial governance in which you get to see exactly what you are getting and what you are paying for it. However, the public sector unions do not appear to be disposed to forgive her for the public sector cuts and the fact she did not allocate to the private sector a fair share of the sacrifices required.

The unions will therefore be hammering away at the fact the premier did not include in her budget the restoration of the tax cuts given to the private sector by her predecessor, Liberal Premier Dalton McGuinty.

That may or may not be an oversight, one never knows. One thing is certain, though. Whatever the strategic intention of this omission, the premier has not compromised the Liberal brand as much as may be the case with the Liberal government in Quebec.

Do your reactions to the Harper budget and to the Wynne budget encourage you to entrust the management of your money to Mr. Trudeau rather than to Mr. Harper in this year’s federal election?