Federal budget won’t be draconian, says Flaherty

Ottawa will take a moderate approach to government cost-cutting in the budget instead of following in Europe’s austerity-driven footsteps, Finance Minister Jim Flaherty said Thursday.

TORONTO — Ottawa will take a moderate approach to government cost-cutting in the budget instead of following in Europe’s austerity-driven footsteps, Finance Minister Jim Flaherty said Thursday.

“I think Canadians should realize our context, this is not an austerity situation in Canada,” Flaherty said when asked about his upcoming spending blueprint.

“We are not one of the countries, many of them in Europe, that have run up deficits for a long period of time, accumulated substantial debt and must really act dramatically — some of them in a draconian way in order to get their house in order again.”

The federal government grew as part of the Conservatives’ economic action plan during the global recession and “we will have to have some moderation of that,” he added.

“As I say this is not austerity, this is not draconian, it will be moderate in its approach.”

Flaherty’s comments, which followed an unrelated announcement on cancer care, seemingly run counter to signals that he’s preparing a painful, cost-slashing budget next month.

Government departments and agencies have been ordered to cut spending by up to 10 per cent, for savings of up to $8 billion annually.

One of the country’s largest unions said the finance minister’s message of moderation is “totally inconsistent” with earlier warnings about impending job losses.

“I think it’s really difficult for anyone to believe what this government’s saying now,” said Patty Ducharme, executive vice-president of the Public Sector Alliance of Canada.

“Leading up to the election, they talked about (how) any job losses would be done through attrition, and then as soon as they were government, they were talking 10 per cent cuts with jobs and services being eliminated,” she said.

Few details of the cuts have been made public and the opposition parties are calling on the Conservatives to come clean about their plans to curb costs.

“You never quite know what their political game is. Possibly they’re trying to get everybody all frightened and thinking there’ll be massive cuts, and then if they just have moderate cuts, everybody will breathe a sigh of relief,” said Liberal treasury board critic John McCallum.

NDP finance critic Peggy Nash said Flaherty could balance the books without deep spending cuts by axing subsidies to the non-renewable energy sector and other fiscal measures.

“He should also not rule out corporate tax increases for sectors that are very profitable, stable and would remain competitive with a slightly higher tax-rate, such as our banks,” she said in a statement.

Flaherty dismissed the need for corporate tax hikes to put federal and provincial governments on the road to fiscal balance. He said once governments get spending under control they don’t have to raise taxes — and that’s the direction he’ll go in his budget.

The budget is also expected to issue a firm policy direction on old age security centred around raising the age when retirees can start to collect.

Several government sources have said the budget will lay out a path forward, rather than launch a national conversation or policy paper on proposed changes.

The leading option is to increase the age of eligibility from 67 from 65 — an option Prime Minister Stephen Harper has publicly confirmed is under consideration.

One possibility, vaguely referenced by Flaherty earlier this month and then retracted, is to start phasing in the increase in age in 2020, and make the change over five years.

Just Posted

Man and dog dead after early morning house fire in Lethbridge

LETHBRIDGE, Alta. — Officials say a man and a dog are dead… Continue reading

Ottawa fights planned class action against RCMP for bullying, intimidation

OTTAWA — The federal government is fighting a proposed class-action lawsuit against… Continue reading

May says Greens will work with any party that has a serious plan for the climate

OTTAWA — With three months until Canadians vote in the next federal… Continue reading

Joe Hittel rappels down 12 storey building in Red Deer – again

Eighty four year old Red Deerian was not afraid to rappel down… Continue reading

Indigenous nation in Washington State seeks meeting with feds on Trans Mountain

VANCOUVER — The Lummi Nation in northwest Washington state is requesting a… Continue reading

Fashion Fridays: 5 casual summer dress styles

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

Hotels face battle over whether to help US house migrants

DETROIT — There’s a new target in the clash over immigration: hotels.… Continue reading

Thousands visit Illinois governor mansion after renovations

SPRINGFIELD, Ill. — Thousands of people have visited the Illinois governor’s mansion… Continue reading

Canadian high school science courses behind on climate change, says UBC study

VANCOUVER — High school students in Canada may not be getting the… Continue reading

‘Us and them’: influence of Quebec anglos on decline with new Coalition government

MONTREAL — Last March, Quebec Premier Francois Legault made a mocking remark… Continue reading

Japanese Canadians call on B.C. to go beyond mere apology for historic racism

VANCOUVER — Japanese Canadians across the country are meeting to discuss how… Continue reading

Off Canada’s East Coast, a hunt to detect ‘beautiful’ great white sharks

HALIFAX — The great white sharks move torpedo-like through East Coast waters,… Continue reading

ESPN reasserts political talk policy after attack on Trump

NEW YORK — ESPN is reminding employees of the network’s policy to… Continue reading

Tentative agreement averts strike by Quebec provincial park employees

MONTREAL — A full-blown strike by employees at Quebec provincial parks that… Continue reading

Most Read