Fed budget draws mixed reviews

The release of Tuesday’s budget produced mixed reactions acrossthe financial, municipal, health, and public service sectors.

Some are saying its good news, while others feel it leaves a lotto be desired.

The budget, tabled in the House of Commons by Finance MinisterJim Flaherty, had at least one industry expert singing itspraises.

“(The budget) was good news for Canadian cities andcommunities,” said Gloria Kovach, president of the Federation ofCanadian Municipalities (FCM). “First and foremost was thegovernment’s commitment to work with municipalities to resolve thefiscal imbalance.”

On the flipside, the Public Service Alliance of Canada (PSAC)reaction to the budget was “very mixed.”

PSAC was pleased with the announcement of $101 million to armborder officers and eliminate “work-alone posts,” according to EdCashman, PSAC’s executive vice-president.

“But overall, we’re disappointed with the budget,” he said.”Part of the disappointment comes as a result of the announcementof $1 billion of cuts to the public service, with a further $1billion to be cut next year.

“As for what that translates into, at this point we don’tknow.”

Cashman said that because the finance minister announced anexpenditure review, it means within the public service, “they’vegot to find $1 billion.”

“And we don’t know what the details are, we don’t know how manypeople lose their jobs,” he said. “At the end of the day it’ll beless public services provided to Canadians, and certainly a lowerquality as well.”

He added there are new departments that will be receiving extramoney, including defence, immigration, the RCMP, public safety andemergency preparedness, and corrections.

“On the other side of the ledger, you have to assume thatanybody who’s not on the list to receive new money will be cutsomehow,” said Cashman.

Also erring on the side of caution is the Canadian HealthcareAssociation (CHA), who issued a statement that said they welcomedthe funding for pandemic preparedness, but stressed the need forthe government to carefully define its wait times guarantee.

“We urge the federal government to develop the guarantee conceptcollaboratively with the provinces and territories in a way thatrecognizes the complexity of the issue,” said SharonSholzberg-Gray, CHA, president and CEO.

Cashman said PSAC presented a brief to Flaherty about two weeksago on ways the government could improve the public service,including saving money, but that may fall on deaf ears.

“We don’t know if he’s going to be listening to us or not,” hesaid.

PSAC doesn’t know if their suggestions will be heard, the FCMseems to have found a captive audience, as Kovach said thegovernment also sought input from the FCM prior to the budget beingtabled.

“Currently eight cents of every tax dollar goes to Canadianmunicipalities, and (municipalities) are struggling trying to findband-aid solutions to their added responsibilities,” she said.

“That eight cents is getting stretched pretty thin, and I thinkwhat we see from this government is they’re going to put theband-aids into health care, and readdress the fiscalimbalance.”

And like Kovach, those in the financial sector seem to approveof the budget as well.

“It’s a well-crafted budget that delivers on their campaignpromises,” said Len Farber, senior advisor at Ogilvy RenaultLLP.

“They provided benefits right across the board; whether you’rean east coast fisherman, a student or pensioner,” said the formergeneral director of the tax policy branch for the Department ofFinance. “Everybody got something out of this.”

It would have been easy for the new government to pick up fromwhat the previous government did with the same tax cuts, accordingto Farber. “When you compare this budget to the previousgovernment’s proposals in their economic update of fall 2005,they’re delivering twice as much in terms of tax benefits.”

“This was a budget that the Tories wanted to put their imprinton,” he said.

As for who will benefit the most from this, Farber said it wouldprobably be the low to middle income earners.

“Because low to middle-income people tend to spend adisproportionate share of their income on their consumer goods,” hesaid. “The (GST) cut means money in their pocket, almost on a dailybasis.”

Overall, they’ve done a good job, said Farber. “With the limitedamount of time they had, they delivered a fairly good package.”

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