Love it or hate it: Provinces react to federal budget

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The federal budget incited diverse reaction from the provinces on Thursday, from sharp criticism to plaudits. Here is how it was received:

Alberta

Alberta seemed to get everything it wanted in the budget. Progressive Conservative Premier Alison Redford, who is running for re-election, said the budget is on the right track – in particular because it clears hurdles for energy projects, smoothes immigration processes for the labour-starved province, doesn't raise taxes and eases in changes to Old Age Security.

"There's much good news in the budget for Alberta," Ms. Redford said.

The budget also followed through on a pledge made four months ago to change Canada's health transfer formula to equal per-capita funding for provinces, regardless if they're have or have-not. It means an additional $1-billion annually for Alberta.

"I'm very pleased, as are Albertans, that we will be treated equally after so many years," Ms. Redford said.

Wildrose Leader Danielle Smith also praised the budget. "It is great to see the Harper government lead by example and cut billions in wasteful government spending. This demonstrates more respect for taxpayer dollars and is a move in the right direction," she said. "The commitment to cutting red tape is particularly good news for Alberta's energy sector and means more jobs and investment opportunities." - Josh Wingrove

Ontario

Finance Minister Dwight Duncan is decidedly less enamoured by the budget. Making Canadians wait until they are 67 before they begin collecting Old Age Security is going to cause "enormous" challenges for society, he said.

The change will hit middle-income earners the hardest because they are not saving enough for their retirement and they are not eligible for other supplements, he added.

"That is going to cause enormous challenges for society in the coming years," he said. "I don't think we are taking this seriously enough as a society. I don't mean just the federal government."

Ontario has long advocated for an expanded Canada Pension Plan as its preferred option for improving pension coverage. But some other provinces oppose CPP premium hikes and the federal government cannot unilaterally change the program.

Ottawa needs to "reignite" debate with the provinces about enhancing the CPP, Mr. Duncan said. The federal government's proposal to create pooled registered pension plans, he said, is a "weak-kneed" response.

"My fear is that the current federal government has just too easily moved off looking at enhancements to the Canada Pension Plan," he said. "Penny wise and pound foolish. That's Jim," he said, referring to Jim Flaherty, his federal counterpart. - Karen Howlett

British Columbia

B.C. Finance Minister Kevin Falcon welcomed the federal budget. "I think they struck the balance between some modest spending discipline without going overboard and jeopardizing a very fragile economic situation in the country," he said

However, B.C. did not win changes to the Canada Health Transfers to provide more health dollars for seniors.

The biggest victory for B.C. was a change to the environmental assessment process, which will allow for faster decisions on major projects.

"We have many major projects on the table today that are in the billions of dollars that could have important ramifications for jobs and employment and revenues," Mr. Falcon, a Liberal, told reporters. "That is a very positive response." - Justine Hunter

Saskatchewan

"One of the concerns in the province of Saskatchewan for decades has been the gap between aboriginal students on reserves, and those who aren't," Finance Minister Ken Krawetz said. "That gap needs to be eliminated."

"There is a commitment from the federal government to move to create a First Nations Act, which will help to ensure on-reserve schools can make their commitments."

Mr. Krawetz, whose Saskatchewan Party tabled a balanced budget last week, was encouraged by the spending restraint in the federal budget.

"We understand the need to ensure that revenue exceeds expenditures. The federal government is moving in that direction."

Mr. Krawetz said Saskatchewan and the other western provinces welcome the move to streamline environmental assessments on resource projects.

"That will be a benefit, especially for Western Canada. ... We're pleased with that."

"Overall, I was looking to see whether this budget was going to be a huge victory or a huge loss for Saskatchewan," he said. "Our initial take is that it doesn't seem to have hugely negatively impacted our province." - Dennis Choquette

Manitoba

"We all recognize that we have to move out of deficits across the country, but we're concerned that this budget does not protect the things that matter to Manitobans, like education and health care," Premier Greg Selinger said.

He said Manitoba is not receiving any transfer payments from the federal government this year, for the third year in a row.

"This budget is a budget that puts jobs at risk and it puts health care at risk," he added.

The NDP Premier also criticized the government for plans to increase the retirement age and scale back Old Age Security payments. He said that will put more pressure on the provinces to pick up the difference.

"We think that being able to retire with dignity at 65 is very important for anybody regardless of what generation they are in and we think it's affordable given the system we have in Canada."

He also worried about federal service job cuts, particularly in the Department of Agriculture, which has hundreds of employees in the province. He said eliminating the penny won't likely impact jobs at the Royal Mint location in Winnipeg, which makes the coin. But he said there still could be job cuts at the Mint.

Mr. Selinger did credit Ottawa for increasing education for first nations people and improving water supplies on reserves. - Paul Waldie

Quebec

The Quebec government is worried about the medium-term impact the federal budget will have on the province's finances.

"In the short term the budget doesn't seem to create any handicaps for us, but in the medium term it does confirm decisions that will hurt Quebec," Finance Minister Raymond Bachand said.

Mr. Bachand said he can't understand why Ottawa refused to reconsider the decision to impose unilateral changes to health-care funding. "It is all the more incomprehensible that in 2016 Ottawa will have important surpluses yet they stubbornly refuse to negotiate with the provinces," he said.

There will be a federal election before then, he added, which allows the provinces to mount a campaign to force the federal government to re-examine its position.

"We have time to put it once again in the political arena so that the citizens of Canada can make their decision at that time," Mr. Bachand said.

Quebec is also concerned over changes to Old Age Security, claiming that the province will have to carry the burden of low-income earners who at age 65 and 66 may be required to receive provincial welfare payments before starting to collect federal money.

"Once again I deplore that this is being done unilaterally. It is something that should have been discussed with the provinces...because people who aren't covered by old age pensions and who are poor will have to collect welfare," Mr. Bachand said.

However, the Liberal finance minister applauded Ottawa's decision to create pooled retirement pension plans for workers without a plan. Quebec unveiled a similar initiative in last week's provincial budget but needed Ottawa to do the same in order to facilitate its implementation.

Mr. Bachand was particularly upset that the federal government is still considering setting up a national securities commission, after the Supreme Court recently ruled it was a provincial jurisdiction.

Quebec also wants to take a closer look at the federal government's proposal to fast-track the environmental assessment process for major development projects. If the proposal is to simplify the process and avoid duplication, " then it is an excellent idea" Mr. Bachand said. But if the result is to avoid proper assessment of projects then Quebec will need to be cautious on how it deals with the change. - Rhéal Séguin

Nova Scotia

Nova Scotia's NDP government is concerned cuts to National Defence spending could affect the $25-billion shipbuilding contract that Ottawa awarded the Irving shipyard in Halifax.

Finance Minister Graham Steele told reporters Thursday that he will be seeking assurances from Defence Minister Peter MacKay, the political minister for Nova Scotia, that an item in the budget delaying capital spending does not mean any changes or delays to the contract.

The contract was awarded with much ballyhoo last fall – and has sparked a new vibrancy in Halifax and other parts of the province.

"We just wanted to be reassured that capital spending has nothing to do with the shipbuilding procurement contract," Mr. Steele said. "We would have preferred to have an explicit statement in the document [saying it would not be affected] We looked for it and we couldn't find it."

He said he would "welcome a reassurance" from Mr. MacKay that "today's budget does not impact that strategy, which is so critically important to Nova Scotia's future."

There are also concerns about military job cuts. Mr. Steele noted that "half or more of the people who draw a federal paycheque in Nova Scotia are in the armed forces."

He said the Harper government has made statements that Nova Scotia will be "relatively spared in the [job]reductions."

"But it remains to be seen exactly what will happen on the ground," he added.

Mr. Steele delivers Nova Scotia's budget Tuesday. - Jane Taber

Newfoundland and Labrador

Tom Marshall, Newfoundland and Labrador's Progressive Conservative finance minister, said the 19,200 jobs being cut in the public service might not affect the province as much as he had feared.

"I understand 7,000 of those are going to be through attrition, and that a third of them are going to be in the Ottawa region," Mr. Marshall said. "So the job cuts, they're not as big as we were scared they might be, and we understand, at least we've been told, that they're going to be proportionate. But we'll wait and see."

Overall, Mr. Marshall said the budget wasn't as tough as he expected. "I was expecting that the cuts could be more draconian than they were," he said. "What it appears they're doing instead of slashing and burning and doing it all once, they're going to do it over a period of time.

"I think that could be a wise thing."

But Mr. Marshall questioned whether the budget helps business or resource development. "They're eliminating for the oil and gas industry and the mining industry the Atlantic Investment Tax Credit, that's a tax credit for people in Atlantic Canada, a 10-per-cent tax credit on their equipment purchases," he explained.

"Corner Brook Pulp and Paper, Vale Inco would have benefited from that and it's being eliminated I think over four years for the oil and gas and the mining industry. So that's going to negatively impact them." - The Canadian Press

Editor's note: An earlier version of this online story incorrectly identified the party that Ken Krawetz belongs to. This online version has been corrected.