Flaherty defends budget, touts job creation strategy
John Size, CTVNews.ca
Published Friday, March 30, 2012 9:31PM EDT
Last Updated Saturday, May 19, 2012 7:53AM EDT
One day after Finance Minister Jim Flaherty tabled his budget, layoff notices were already being written up in Ottawa.
The budget will cut about 19,000 civil service jobs over the next three years, but Flaherty said when attrition is taken into account, the number is actually 12,000.
The public service reduction represents only a small portion of the country's 400,000-strong workforce, he said.
Public servants have been told pink slips will start coming out after the Easter weekend.
But NDP Leader Thomas Mulcair said civil servant cuts reduce the service they provide, including food inspection and air travel safety.
"These are basic things that have to do with public safety and public protection and that's the last thing we should be touching," he said.
Mulcair also didn't think the NDP would be crippled by the Conservative majority in the House during the budget debate.
"There are a lot of things we can do, we're a very strong, large Official Opposition, we're structured and we're going to be taking a very strong fight to the Conservatives on this," he said.
Pensions and health care
Flaherty also challenged Mulcair's assertion his budget cuts public pensions and money for health care.
"The budget has nothing to do with pensions or health. In fact, we're increasing health-care transfers to the provinces six per cent until 2016," he said.
The finance minister also said the Canada Pension Plan is healthy and viable for at least another 75 years.
He called the Old Age Security benefit a "social program" that Canadians can't afford over the long term because of an aging population.
The budget changed the OAS eligibility age to 67 from 65, but it wouldn't be phased in until 2023, with full implementation by 2029. Anyone who is 54 or older, as of March 31, 2012, will not be affected.
"Let's get realistic about it and do what every other western country is doing … realize we're living longer, healthier lives," Flaherty said.
Mulcair said changing the OAS eligibility is really a cash grab that takes $12,000 out of the pockets of Canadians over two years.
He also said recent changes announced by the government to eventually link heath funding to the economy jeopardizes the country's universal health-care system.
"What they're doing now is opening the door wide to force the provinces to go toward privatization, or two-tiered health care, one system for the rich and one for everyone else," Mulcair said.
Budget cuts over three years
Flaherty's budget will cut $5.2 billion from government spending over three years that includes a plan to eliminate the penny and change the retirement age for new civil servants to 65 from the current age of 60.
Liberal interim leader Bob Rae criticized the budget for lacking vision, while it takes money out of the pockets of business and working Canadians.
"When you actually look at the numbers, they're taking money away here and saying they're spending," Rae said.
Raising employment insurance taxes by $600 million a year and offering a $1,000 hiring tax credit for businesses takes more out of the system than it puts back, Rae said.
"That's big money for people, for individuals and for companies," he said. "And that's what's going to end up costing people as we go forward."
Rae said the budget also offers nothing for the weakened Ontario and Quebec manufacturing sectors that were hard hit during the last recession.
"Resource economies are growing with jobs and what's happening in central Canada, we don't have a lot of growth and we don't have a lot of new investment," he said.
Another area of concern for Rae is cutbacks in foreign aid of about $378 million, something he said will hurt trade in the long run.