What’s that about a budget?

Making sense of an axed Federal budget and looming election

The new federal budget dropped on Tuesday — and was rejected almost immediately by leaders of the Liberal, NDP and Bloc Quebecois.

Jack Layton, leader of the NDP, seemed most likely to support the budget (he had been in frequent talks with Finance Minister Jim Flaherty during the budget writing process) but he didn’t.

“[Prime Minister Stephen] Harper had an opportunity to address the needs of hard-working middle-class Canadians and families and he missed that opportunity. He just doesn’t get it,” said Layton. “New Democrats will not support the budget as presented.”

At home, Newfoundland NDP leader Lorraine Michael agreed:

“I don’t think the budget is a good budget for people of Newfoundland, for ordinary people, for families,” she said.

The party was looking for support in the areas of a home heating fuel (they asked that HST be eliminated) and the Canadian Pension Plan (they’d asked that the budget be doubled).

Marine cuts

Michael says there are other major issues relevant to this province:

“You have the cuts to the Department of Fisheries, you have cuts to ACOA (Atlantic Canada Opportunities Agency), these are all cuts to agencies that deal directly with the issues here in Newfoundland and Labrador — cuts to Marine Atlantic, I mean 75 million cut in those areas, to DFO in particular, and we don’t know what the implications of that would be. Where would DFO make the cuts to make that work?”

“These are all cuts to agencies that deal directly with the issues here in Newfoundland and Labrador,” — Lorraine Michael

The DFO is actually looking at a net decrease of $145.1 million from last year, but it’s worth noting that a big part of that comes from $182.4 million from programs that ended last year.

The budget plans for an increase of $41.7 million for Canadian Coast Guard patrol vessels, and another $9.2 million for the acquisition of Offshore Science Vessels. But it also decreases federal funding for the maintenance of federal laboratories by $24.5 million, and shaves off $10 million with “cost containment measures relating to collective bargaining.”

ACOA is losing $64.2 million in net spending, mostly because of decreases in the Community Adjustment Fund and the Recreational Infrastructure Canada Budget ($50.1 million and $24.3 million respectively), but both of those were 2009 programs scheduled to end this month.

The budget would actually increase ACOA funding for the Atlantic Innovation Fund and the Innovative Communities Fund by $19.0 million. It would also cut $0.3 million in employee benefits and $0.9 million in personnel costs.

Based on the budget, Marine Atlantic isn’t actually losing money. They’re gaining a net increase of $92.4 million.

The ferry service was allotted $108.8 million in new funding, to renew its fleet and shore‑facilities and to improve the quality and reliability of its services, while loosing $3.9 million. This comes “as a result of rescheduling specific capital projects following revisions to the project requirements.”

No Lower Churchill

The budget also makes no mention of Muskrat Falls, government loan guarantees, or a subsea cable to Nova Scotia — something Newfoundland Opposition Leader Yvonne Jones noted in a press release.

“That raises questions about how the federal government views what is by
 any objective measure a nonviable project in its current form,” she said.

There’s widespread agreement that the rejection of this budget signals a looming election, but the budget could still be important. Bloggers across the land suggested that this budget makes for an excellent campaign platform for the Conservative party. The Globe and Mail’s Brian Milner certainly thinks so.

“Mr. Flaherty plainly crafted it with two potential outcomes in mind: Either it would offer just enough to keep the New Democrats onside and prolong the life of the minority government or it would provide the key fiscal plank for the Conservatives’ next election campaign,” he wrote Wednesday.

Defence Minister (and Nova Scotian) Peter MacKay warned “a business audience in Halifax” Wednesday that an election could delay federal funding for projects in the region, including the Lower Churchill, reported by the Canadian Press.

Based on what happens in Ottawa today, the federal election might be as close as May 2.

All numbers used come from the document’s Main Estimates section. Take a look at the budget yourself, and let us know what we missed.

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