Finance Minister Jim Flaherty is preparing to unveil a "stay-the-course" budget in March that will be far smaller and, the government hopes, less controversial than last year’s sprawling magnum opus, with a focus on innovation and training, but no major new spending or cuts, nor any change in the Finance department’s current timetable for achieving a balanced budget.
The 2013 budget will, however, likely contain some modest, cost-neutral measures intended to bolster aboriginal economic development, according to government insiders – including enabling greater access to private property on reserves, for bands that welcome such reforms, as proposed by First Nations Tax Commission head Manny Jules.
This would ignite further opposition among some within the Idle No More movement, who deem private-property rights tantamount to assimilation. However, many Conservatives believe property reform on reserves is long overdue, as a matter of human rights as much as economics. Such reforms would be in keeping with the government’s emerging aboriginal strategy – that is, to engage on a case-by-case basis with those among the country’s 600-plus bands that express a clear desire to pursue economic growth.
Skills-training measures in the budget, flowing from the Harper government’s stated concern about a looming labour-market crisis, are expected to focus on four specific groups: Aboriginals, older workers, new immigrants and the disabled. There will be modest new investment in innovation, knowledge, science and technology.
As work proceeds on this budget, Flaherty revealed this week that he has been battling a rare skin disorder. However, his office has said it hasn’t affected his ability to do his job.
On the overarching question of balancing the books, the government intends to tread carefully, insiders say: It will reiterate its desire to eliminate the federal deficit by 2015, while making it clear that factors beyond its control – in particular distressed economies in Europe and the United States – could derail that plan. Expectations are for modest economic growth this year of about 2%, or slightly below that, down from 2.2% or slightly higher.
Though there is no plan to impose major new spending cuts, officials are re-examining some proposed spending reductions that were considered but not implemented last year, with a view to finding additional incremental savings. There continues to be a vocal wing in the Conservative caucus pressing for faster and deeper reductions. Last year these hawks were overruled, with an initially expected $8 billion in cuts reduced to just over $5 billion on budget day.
