So could Justin Trudeau and the Liberals take a lesson from the City of Weyburn in how to set up a budget? On one hand, the federal finance minister admitted on Monday that their deficit will be a huge, whopping $18 billion this year, while on the other hand, the City of Weyburn put forward a balanced budget with only a modest increase in taxes.
Now, to be sure, this could be viewed as more a case of apples and oranges instead of oranges and oranges, since the federal government deals with a far bigger budget for services that are available to the entire country of Canada, whereas the City’s budget only has to do with the 11,000 or so people who reside in this southeast Saskatchewan city.
The other major difference is that as an urban municipality, the City is required by law to balance their budget, as are health regions and school boards.
With that said, the Liberals are stepping out onto a slippery downward slope by predicting a deficit of $18 billion a month before their budget is actually going to be released, and the reality is the deficit will be much worse. One reason is, their estimates are assuming a $40-a-barrel price for crude petroleum, when the reality is the price has been at or below $30 a barrel. This will translate into many lost millions of dollars of revenue.
The Liberals did campaign on a promise of some $10 billion of infrastructure grant funding, none of which has come forward yet in spite of many municipalities asking when it will be available. The claim is that this blob of money will create jobs and try to help the economy start moving again — but spread over all the provinces, with all the infrastructure needs that are out there, how many jobs will this really create, and more importantly, will they be sustainable jobs that will last and make a real impact?
The City, on the other hand, could have done a similar approach in tough times, and could’ve either cut services or raised taxes, or both — but instead, they worked department-by-department to ensure the operating budget presented was one that only required a 2.9 per cent increase on the municipal side. On the total tax bill, the increase will work out to be 0.8 per cent, which is fairly modest, and in the tough economic times we’re in, is a more responsible approach to a budget.
While the Liberals are dealing with a far bigger picture in their budget, they need to realize they’re gambling with our children’s future with a huge deficit. — Greg Nikkel
