The Curious Case of the #PhonySurplus

Here’s the headline Stephen Harper & Co wanted to see following today’s budget announcement:


Strictly speaking, this is an accurate assessment of the budget – but only because of creative accounting.

Which is to say, the government is lying.

The $1.4 billion surplus announced by Federal Finance Minister Joe Oliver a few hours ago relies on a few tricks. First of all, the government is withdrawing $2 billion from the federal contingency fund.

The contingency fund exists for emergencies, natural disasters, and major unforeseen expenses.

For instance, if a massive earthquake hit the West Coast, and Vancouver and Victoria were levelled, and hundreds of thousands of people needed immediate assistance, the federal government would tap into the contingency fund.

Or if one of the 40+-year-old Enbridge pipelines criss-crossing the GTA burst and huge amounts of tar sands bitumen were flowing through our watersheds and into Lake Ontario, we’d be relying on that contingency fund.

Or if the price of oil bottoms out, and Stephen Harper desperately needs to balance the budget to keep an election promise, but the numbers just aren’t adding up, he’ll tap into the contingency fund.

The government also announced a few weeks ago that it was selling its $2.7 billion stake in General Motors, with the proceeds going towards – you guessed it! – balancing the budget.

Now wait, you say – the surplus is $1.4 billion, but the government is withdrawing $2 billion from this emergency fund, and selling assets worth $2.7 billion, just to make the surplus possible? How is that a genuine surplus?

The answer is: it isn’t! It’s a #phonysurplus and that needs to get pointed out at every opportunity.

Not that a surplus is a desirable thing at this particular historical moment! This budget was actually delayed by several months because of the precipitous drop in the price of oil and the potential impact that price drop has on the Canadian economy. See, the HarperCons have gone all in on positioning Canada as a petrostate, assuming falsely that prices would never go down. Hence their scrambling to find a way to get to surplus territory – the income streams from oil revenue they were relying on dried up when oil prices went south last fall.

And that drop in revenues corresponds to a real-world loss in jobs, income, and financial security for many Canadians. In fact, it wouldn’t be surprising if Canada found itself in a recession in the not-so-distant future. Add to that the increasing worry over the overpriced real estate markets in many large municipalities, the sluggish growth in jobs over the past few years, the increasing debt load many Canadians face, the unwillingness of businesses to invest and hire, the crapification of work for many people, and the clear and urgent need to transition away from a petroleum-based economy and energy infrastructure, and you have a clear-cut case in favour of deficit spending.

Instead we have this kabuki budget, where the only real increases go to seniors (who are way more likely to vote, and vote Conservative, than any other demographic), the wealthy (ditto on voting Conservative disproportionately), and security agencies (red meat for the base).

The wealthy in particular cash in big-time as the government increases the maximum contribution to tax-free savings accounts from $5500 to $10 000, meaning the rich can invest twice as much without paying tax on their investment income.

(To be fair, just as the law equally forbids rich and poor from sleeping under bridges and stealing bread, the budget allows both rich and poor to save $10 000 tax-free every year. If they can afford it.)

NDP leader Tom Mulcair estimates that simply by reversing the TFSA increase, his party can afford a national$15-a-day childcare program, which, if true, shows where the Conservative Party’s political priorities truly lie. That’s not an endorsement of Mulcair’s plan – just a simple observation that budgeting is political.

As for security spending, the budget document seems kinda vague, and maybe I’m just not good at sorting through these bureaucratic doorstops, but news reports indicate that the RCMP, CSIS and CBSA are getting almost $300 million over the next five years. Note these were the agencies involved in the INSET program I documented last week as being desperate for more cash to entrap more useful idiots.

The HarperCons also announced $360 million for combating ISIL/ISIS/IS/Daesh in Iraq over the next year alone – this despite the fact that Parliament only approved a short-term mission there. Again we see the government using the budget document for political advantage.

Now, all government budgets are political documents with political priorities. The fact that the Conservatives have tabled a political budget is the least surprising thing since the sun rose this morning, and it’s not why I’m attacking this budget. I think it’s an awful budget because:

  • It prioritizes meaninglessly fulfilling a meaningless campaign promise over the actual well-being of actual people
  • It ignores the needs of actual people – well-paying jobs, action on environmental issues, relief for indebted students, housing for the indigent, etc., – in favour of bolstering key constituencies in the run-up to an election
  • It makes us more vulnerable to future disasters by spending emergency funding on partisan goals

In the long term, I would love to see participatory budgeting implemented in Canada, to take some of the partisan politics out of the process and give the people more voice in how we spend our collective wealth. But in the short run, what I would love most of all is push-back against surplus fetishism and the ridiculous notion that a balanced budget is a good budget, no matter what it costs. Let’s condemn this #PhonySurplus as a ridiculous imposition on our collective wealth and a waste of our collective time.

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