William Watson: What’s new should be what’s news in a fiscal update
When journalists are locked up for a budget or fiscal update—I know, I know, we should just leave them there. When they are off in isolation the two or three hours they’re electronically out of touch is enough time to at least thumb through or, these days, scroll down most of the documents they’re presented with.
If you don’t have that much time to digest a budget or an economic and fiscal update, such as the one federal Finance Minister Bill Morneau published this week, there’s a quick-and-dirty way to find out what’s up in just a minute or two.
My go-to page in the federal documents, the thing I always start with, is a handy chart that shows changes in spending since the last fiscal document was issued. In the past it has been included in the main text of the Fiscal Plan (the main budget brick) or the Fall Update. Recently, Finance has relegated it to an annex. As long as it doesn’t get relegated to non-existence, that’s not a problem.
If you’re reading along in this week’s update, the chart you want is Table A1.4, which you can find on p. 70, in Annex I (which is the only annex). The table is titled “Policy Actions Taken Since Budget 2016 (Not Including Investments Announced in this Fall Economic Statement)”. Not all government documents are always what they say they are (in case you hadn’t noticed!). But this one usually is. This year’s version has 27 separate line items. The budget was March 22, which means we’ve had 33 weeks since then, give or take, so we’ve had close to one new expenditure item a week. It’s not quite the pace at which Hillary Clinton writes e-mails, but it’s impressive.
Some of the new spending isn’t that substantial. “Modernizing the National Energy Board,” which you’d think might actually be an ambitious project, accounts for just (“just!”) $3.9 million this year, $2.7 million next and nothing after that. Similarly, the “Change to Canada Disability Savings Bond eligibility parameters to reflect the elimination of National Child Benefit supplement” is positive in every year through 2021-22 but amounts to only (“only”) $5.9 million.
Other items are a lot bigger. Indexation of the Canada Child Benefit, for instance. Even fiscal conservatives may think that’s a good idea—you can quarrel with the terms of the program or the level of benefits but do we really want those benefits to be vulnerable to the caprices of inflation? In any case, it’s a big item: $505 million in the first year, $1.2 billion in 2021-22 (though of course no one knows exactly what inflation will be in those years).
Similarly, “Enhancing the Canada Pension Plan” is costly. More than $2 billion in total over four years starting in 2018-19.
Another consequential amount is for “Supporting the Immigration Levels Plan.” It costs $1.4 billion over the six budget years accounted for in this table. That’s presumably to help process the new firm target of 300,000 immigrants a year, though not yet the 450,000 the government’s Advisory Council on Economic Growth has recommended. That would be even more costly. (The document says we want to be “talent-friendly,” a term I hadn’t heard before. Being talent-friendly evidently costs.)
In writing budget critiques over the years, usually (as a columnist) a day or two after the document is delivered, I’ve often found little nuggets in this and similar tables. Letting your eye wander, you might notice “Making talk shows eligible for the Canadian Film or Video Production Tax Credit.” That will be $8.0 million this year, rising to $33.0 million in 2021-22, for a total of $135 million over the six years. I missed that announcement when it was made. But I feel a column coming on. Collectively, we’re going to spend $135 million on talk shows? We don’t have enough talk shows as-is? Or we don’t have Canadian-enough talk shows? That does seem hard to believe. Are talk shows actually good for society or are they something we should be taxing rather than subsidizing? And, the usual problem with TV subsidies, will the content actually have to be identifiably Canadian? Or just the production expenses?
My second go-to table is, in this latest update, Table A1.2: “Economic and Fiscal Developments Since Budget 2016.” It shows you, well, it shows you what it says it shows you—how economic events and new fiscal initiatives have hit the major categories of revenue and expenditure. It thus gives you an idea of how much buffeting the fiscal plan has taken because of economic events, as well as how much the government has buffeted back, if you will, by spending.
In this year’s fall update, we get a picture of a government that likes to spend, even in the first year of its mandate, which is traditionally a time for doing what’s tough fiscally. “Money ways! Money ways!” as the prime minister might put it.
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