Battle lines to be drawn over budget

I would like to take this opportunity to wish everyone a happy, safe, and healthy 2014.
As we enter the new year, there is no shortage of political and economic developments to keep tabs on. It may be fitting, then, to look at the year ahead.
The main political battle lines will be over the race to balance the federal budget. Not whether or not to balance the budget, but when and how the finance minister should do so.
After running up more than $160 billion in new debt over the past six years, Finance minister Jim Flaherty suddenly is now in a race to balance the books by 2015-16, and possibly earlier to help his party’s re-election efforts.
To do so, he is cutting everything—and I do mean everything. He is closing Veterans’ Affairs offices like the one in Thunder Bay. He is making every Canadian born after 1957 work two years longer before collecting their pension.
He even is closing down decades’ old scientific research facilities like the Experimental Lakes Area (ELA) to save just $2 million one time.
The NDP would like a balanced budget as soon as possible, but not at the cost of destroying our institutions or our future.
To be clear, New Democrats also would have run large deficits at the onset of the economic recession of 2008-09. We would have spent money on infrastructure as this government did, but likely also invest in science and universities, and on other programs designed to return to some value to Canadians in the future.
To balance the books, however, New Democrats would take a much different approach. For instance, we would slash the $2 billion (about $60 from each of us) in direct subsidies that Ottawa gives away to the largest and most profitable oil companies in the world.
We also would slash the $140 million in partisan advertisement (those Economic Action Plan ones), and we would revisit that $47 billion we are spending for just 65 of the over-priced and ineffective F-35 fighter jets.
The truth is that the federal government has a lot of different choices it can make if it wants to balance the books in the next two years, but the big question is how will they do it?
The March budget should offer some more information on the Conservative plan but I predict it will be painful and of little use in the end to most Canadians.
This year also brings many questions about energy, with the biggest being the approval or rejection of several pipeline projects. The Keystone XL pipeline will be the largest pipeline that will have its fate determined this year.
For the first time in 50 years, the U.S. is energy self-sufficient, meaning it produced enough oil and gas in that country for its entire population. Is there a need for 800,000 barrels of heavy Canadian oil from the oilsands when you have all the light sweet crude you can burn available in your own country?
The other major project is the Northern Gateway pipeline in British Columbia that is running into heavy opposition from First Nations and municipalities that sit in the way and would directly suffer from any breaks or leaks.
Will there be an agreement or not?
Other things to watch this year include the state of the Canadian economy. The housing sector, as in recent years, is another economic story to watch. Will home prices continue to rise by double digit percentages or will 2014 be the year of the great “price correction”?
Economists also will be waiting to see whether economic growth finally will rebound in Canada, or if we’ll continue to trail the U.S. in GDP growth for the third-straight year.
Finally, household debt levels are shaping up to be a big economic story, with households now holding an astounding $168 in debt for every $100 they earn. How long can this continue and how will it end for families, businesses, and the economy?
These are just a few of the stories that I suspect will make news in 2014, but I’m sure there are others.
No matter what happens, I want to wish you, your family, and friends a happy, safe, and healthy year ahead.

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