Business Beat by Matt DeBock
A recent This Hour Has 22 Minutes joke got it right: Paul Martin’s budgets are like the Olympics. They only come along every two years, a lot of money is spent and Canadians come away with nothing.
After months of saying there was no need for a budget, the finance minister has now announced that he will present one in December.
Let’s take a quick look back.
In February, Martin claimed the economy was strong and a budget would be unnecessary in light of the brilliant contents of his pre-election “mini-budget.”
Here in Ottawa, most people knew better. Nortel stocks, often quoted locally as a benchmark for our beloved high-tech industry, had already lost three-quarters of their value from the previous summer.
Canadians had already collectively lost millions upon millions of dollars and thousands upon thousands of jobs.
As spring turned to summer and summer to fall, “slowdown” began to be replaced as the catchphrase for the economy. The dreaded “R word” – recession – began creeping into our vocabulary as the high-tech crash continued and lay-offs became the norm in almost every sector of the economy.
Then came Sept. 11.
Terrorist attacks brought a renewed sense of chaos and uncertainty, which left Canadians bewildered. With an economy so closely tied to the U.S., no one can predict the long-term economic effects of the attacks.
Then Air Canada came looking for a bailout, admitting that even before the attacks, such a move was necessary.
The loonie has never been strong under the current government. Now it is sinking again, reaching record lows.
New spending on national security and the war on terrorism has been necessary, but what will be given up to pay for these expenditures?
Possibilities range from cuts to other government programs to tax hikes to deficit spending.
Martin himself has admitted he could not say how well Canada could weather such chaos. With no new budget in more than a year and a half, there was no way he could know.
Now, after months of pressure, from the economy, the opposition parties and the media, Martin has finally announced that he has given in. Nearly a year late, we will have the needed budget.
Unfortunately, we still do not have political leadership able to see the warning signs that were there all along.