Tory budget: Will it help Hamilton?
The Canadian Press
The Canadian Press; The Hamilton Spectator
http://www.thespec.com/News/Local/article/502548
Five days of advance peeks at the billions coming in today's budget have left opposition MPs and cities such as Hamilton impatient for details.
How Steeltown will share -- if at all -- in a $7-billion infrastructure plan revealed yesterday is of high importance to Mayor Fred Eisenberger and team.
Infrastructure funds are meant to spur the economy, create jobs and kick-start municipal projects.
But the latest information from the Tories in a pre-budget public relations drive did not answer the critical question of whether cities must match government funds.
If local cash is mandatory, hard-pressed cities such as Hamilton may not be able to participate at all.
"The reality is, if we had money for these projects, we'd have done them already," he says. "We don't."
Eisenberger says it may be a number of days after the budget before details are made clear.
Since late last week, the government has pre-announced $13 billion worth of programs, including:
* $4 billion for municipal roads, bridges and sewers
* $2 billion on college and university maintenance
* $1 billion on green infrastructure projects
* $2 billion for social housing
* $1.5 billion for retraining
* $1-billion relief fund to help hard-hit communities
* $500 million for farmers
* $150 million for forestry
A gloomy throne speech set the tone as Parliament reopened.
MPs remain enmeshed in continuing political turmoil and the prospect of a government defeat.
"It's really important for everyone to try to figure out if this budget is designed to save the prime minister's job, or is it designed to save the jobs of hardworking Canadians," said New Democrat Chris Charlton, Hamilton Mountain MP.
Stephen Harper must convince new Liberal Leader Michael Ignatieff and the other opposition parties not to proceed with a plan devised in December, with the Tory government on the brink of collapse.
A vote against the budget would defeat the Tories and open the door to an election, a coalition government or a new option still to be determined.
Charlton, deputy NDP finance critic, says there is huge concern about how cities will be asked to participate in infrastructure plans.
The only way for some cities to proceed would be to raise property taxes at a time when thousands are losing their jobs, she said.
The other outstanding question for opposition members is what kind of tax cuts are planned.
Harper and Finance Minister Jim Flaherty -- reportedly at odds behind the scenes over how to configure this budget -- have both said publicly that tax cuts are key.
"What we don't know is, are they income tax cuts, or a cut to the GST?" said Charlton.
Critics say that in good times, consumers spend their tax windfalls and politicos get plaudits for using government surpluses wisely. But in bad times, tax relief is funded by deficits and consumers are more likely to put the money in their pockets or pay off debt.
Ottawa's spending on a Canadian economic rescue package will cause a $64-billion deficit over two years, the first deficit in a dozen years.
Betting for today is on a split between spending and tax cuts.
"No single move is perfect, no single move does everything economists want it to do," said Douglas Porter, deputy chief economist with BMO Capital Markets.
"So, maybe the best plan is to sprinkle it among a couple of different areas and that's what it looks like they will do -- between infrastructure, worker retraining and some kind of tax relief."
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