Budget cuts $500 million from stimulus

OTTAWA – Last week’s federal budget confirmed what observers were worried about--that not only was the government’s stimulus plan faulty, the Conservatives are also cutting back on stimulus spending early.

The 2009 budget promised a $6.4 billion dollar stimulus investment over two years in provincial, territorial and municipal infrastructure. However, in last week’s budget that money was cut by $500 million to just under $5.9 billion.

“At a time when the global economy is still very fragile this government has been telling other countries not to cut back on stimulus prematurely, and now it’s ignoring its own advice,” said New Democrat Finance Critic Thomas Mulcair. “This calls into question the government’s approach to the stimulus and their job creation numbers.”

At the time of the 2009 Budget, the Finance Minister bragged that these funds would be matched by cities and provinces and that the total stimulus spending would actually be three times the federal contribution.

However the government failed to get the funds out the door, leaving almost half of last year’s funds -- $1.5 billion -- unused. Instead of moving that amount forward to this year, the Conservatives cut $500 million from the 2010 budget.

“New Democrats warned of this problem with the last budget. Matching funds is a clunky and inefficient way of creating jobs and stimulating the economy,” said Dennis Bevington, New Democrat Transportation and Infrastructure Critic. “That’s why we were calling for the stimulus funds to be given through the gas tax. That way it cuts the red tape and gives the money directly to municipalities to use right away.”