OMNIBUS, OMINUS, AND ODIUS
It’s not very difficult to find words to describe how this government regards Parliament. Their record over the last several years is very clear. Words that quickly come to mind are irrelevant, bothersome, unimportant, waste of time and money. No doubt this list could be enlarged.
Nowhere is this attitude more obvious than with their use of budget omnibus bills. The Harper Government tabled its 2015 Omnibus Budget Bill (Bill C-59) on May 7th. At 153 pages, it’s a pale shadow of previous budget bills.
The 2010 budget bills were 1,056 pages; the 2011 budget bills totalled 716 pages; the 2012 budget bills were 882 pages; the 2013 budget bill was 450 pages; and the 2014 budget bills were 858 pages.
The Harper government for years has used budget omnibus bills to pass legislation that had nothing to do with the budget but by including it in the Budget Bill, it could be passed without meaningful Parliamentary scrutiny, discussion and debate. Parliament was regarded as a waste of good time. This year’s budget bill, tabled just five months before the next federal election, is no different.
The misuse of Budget Bills reflects an arrogance that sees Canadians as not caring about the deeply diminished role of Parliament and the erosion of democracy that they have introduced in recent years. We won’t know if this is true until next October.
As in previous budget bills, the 2015 budget bill contains measures that the Opposition can support. This includes expanding benefits and services for veterans and their families and reducing the small business tax rate.
But it also includes measures that the Opposition Parties may not want to support; for example; the increase in annual Tax Free Savings Account contribution limit; changes to the sick leave provisions of federal employees; and retroactive legislation to protect the RCMP from possible criminal charges with respect to the destruction of data under the Access to Information Act.
But the Opposition Parties can’t pick and choose what they want to support or not support in a budget bill. The Harper Government will not split the Budget Bill into its components. As a result, the Opposition parties will likely vote against the bill and the Harper Government will again use this against them during the upcoming election campaign.
Normally Parliament recesses in mid-June, which implies that there may be only 15 days for committee review of Bill C-59 by both the House of Commons and the Senate. The Government will use every trick in the book to ensure that Bill C-59 receives Royal Assent before the summer recess, including time allocation and closure.
It is now pretty obvious that the delay in the budget to April 21 had nothing to do with uncertainty resulting from the dramatic decline on oil prices. In order to show a balanced budget in 2015-16, the Government needed to book the sale of the GM shares (net $0.9 billion) and changes to federal employees’ sick leave entitlements ($0.9 billion) in 2015-16.
Without these two initiatives, the federal budget would not be in surplus in 2015-16. Proposing these initiatives in a budget tabled before the end of fiscal year 2014-15 would have required that the net savings be booked in 2014-15 rather than in 2015-16.
Bill C-59 contains the details of the Government’s proposed Balanced Budget Act (BBA), that was first announced in the October 2013 Speech from the Throne. At that time, the Government indicated that the proposed legislation “would require balanced budgets in normal economic times and concrete timelines in returning to balance in the event of an economic crisis”.
This BBA has nothing to do with ensuring sound fiscal management. This legislation is all about sending a “message” to the Conservative base that, if elected, a Conservative government will not “run deficits”. Deficits and debt are evil, according to the Conservatives, despite their dismal record over the last seven years. Under the Conservatives, the debt of the federal government has increased by $150 billion.
The BBA is a communication challenge to the other political parties. Either you agree with this ridiculous legislation or you will be accused during the election of being a “big spender” and “tax increaser” that doesn't care about deficits and debt.
The proposed BBA is in fact even “sillier” than the proposal originally outlined in the Speech from Throne.
Under Bill C-59, if the Minister of Finance tables a budget that projects a deficit or if a deficit is reported at the end of the fiscal year, the Minister must appear before the House of Commons Finance Committee within the first 30 days of the House of Commons sitting to explain the reasons for the deficit and present a plan for a return to balanced budgets.
Since 2006, the Minister of Finance has rarely appeared before the Finance Committee to explain the government’s economic and fiscal forecasts. Under the BBA, the Minister of Finance would be required by law to appear before the Finance Committee if there is a projected or actual deficit.
Shouldn’t the Minister of Finance be required to appear before the Finance Committee every year regardless of the economic and fiscal situation?
So how would the BBA work?
If the deficit is due to an economic recession, defined as two consecutive quarters of negative growth in real gross domestic product, or to “extraordinary events”, such as a natural disaster or war, that results in an “cost” of more than $3 billion, then the operating budgets of departments and agencies would be automatically frozen to pay for any wage increases.
In addition, the pay of the Prime Minister, Ministers, Ministers of State and deputy ministers would be frozen. These measures would be in effect until such time as the budget reports a balance.
If the deficit is due to “other factors”, from those listed above, then again operating budgets would be frozen. However, in this case, the pay of the Prime Minister, Ministers of State and deputy ministers would be cut by 5 per cent.
In the November 2013 Update, departments and agencies were not compensated for wage increases. The Department of Finance estimated this saved the government about $550 million annually. This would have only a marginal impact on eliminating the deficit. It is more symbolic than a credible measure to eliminate the deficit.
Take for example what might have happened in 2008 if the BBA had been law. The economy would have been thrown into a much deeper and longer recession than actually occurred; a temporary stimulus program would not have been permitted; departmental operating budgets would have been frozen beginning in 2009-10 and continuing to long past 2015-16; the salaries of all Cabinet Ministers and Deputy Ministers would have been frozen beginning in 2009 and lasting long past 2015.
Contrast that with the current situation where there is no BBA. If the deficit were due to a recession, cyclical factors would return the budget to balance. The “automatic stabilizers” should not be offset. If the deficit was due to “extraordinary developments”, the budget could be in balance the following year, especially if the government maintains its practice of including a risk adjustment factor or Contingency Reserve (normally $3 billion) in its budget projections.
The experience with balanced budget legislation in the provinces and other countries has not been impressive. In many cases, the legislation was changed or abandoned when it was felt that the terms and conditions could not be met.
The bottom line is that if the political will is there, balanced budget legislation is not required.
It would appear the Conservatives don’t have a lot of confidence in future governments, including future Conservative governments.
We can only hope this confidence will never be challenged.