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Editorial: Red-ink blueprint

Finance Minister Bill Morneau delivers the federal budget in the House of Commons in Ottawa on Tuesday, Feb.27, 2018. Sean Kilpatrick/
Finance Minister Bill Morneau delivers the federal budget in the House of Commons in Ottawa on Tuesday, Feb.27, 2018. Sean Kilpatrick/ - The Canadian Press

Atlantic Canadians are still assessing the impact of last week’s federal budget on the region and on their pocketbooks.

On paper, the spending measures unveiled by federal Finance Minister Bill Morneau appear solid, holding the promise of boosting our economy and improving the daily lives of millions of Canadians.

It’s estimated that federal pay equity changes will raise wages about $80 million to $100 million in the Atlantic region.

Atlantic Canada is home to an estimated 130,000 Indigenous people, almost eight per cent of Canada’s total. The $4.7 billion committed during the next five years will be a significant boost for Indigenous people and the regional economy.

Morneau has also promised more money to low-income workers — the working poor — which holds out hope for many in this region.

The budget, however, is proving to be a shifting document. The sudden backtracking on a national pharmacare plan is one example.

It leaves us wondering what other surprises are forthcoming.
It’s becoming apparent that billions from the federal infrastructure program won’t be spent until after the next federal election, and that’s a major headache for cash-strapped provinces.
Morneau seems to be simply hoping for the best with NAFTA talks while neglecting to make any contingency plan for the worst. He suggests a strong economy is allowing Canadian officials to push for a better NAFTA deal. To suggest that a collapse of NAFTA wouldn’t have a major impact on Atlantic Canada is to ignore reality. This region depends heavily on exports to the U.S. and we risk being severely exposed and imperiled.

There are other issues in the budget that failed to get much attention but which present significant impacts here. For example, there are no planned changes to the level of federal transfers to the provinces — bad news for this region. The Atlantic Canada Opportunities Agency will receive an additional $28 million in the next five years, which is some good news.

The Atlantic region will also benefit from increased federal government investment in small craft harbours, which includes funding to build additional berthing space to reduce overcrowding in Charlottetown and Southern Labrador. Changing the Working Income Tax Benefit will improve access for many Atlantic Canadians who had some of the lowest program take-up rates.

The budget also proposes changes to employment insurance which will benefit Atlantic Canadians by using regional unemployment rates which can positively affect seasonal workers’ access.
The biggest criticism of the budget is its reliance on questionably optimistic economic forecasts.

If the economy is flourishing, why do we continue to spend more money than we take in? The government has adopted dangerous deficits and red ink as routine, with no attempt to balance the budget.
In fact, the federal government’s overly optimistic budget seems more like a political tool for the next election rather than a realistic financial blueprint for the future.

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