Budgets are always complex balancing acts, however the task facing Minister Dwight Duncan this year is particularly daunting. The short-term impact of budget decisions on financial market sentiment, financing costs, and economic performance only scratches the surface of the decisions he faces. This budget raises more fundamental questions. Will he embark on a road of fiscal prudence or will he adopt the austerity agenda of his opponents?
A deficit reduction program that relies solely on reduced spending will increase inequality and will produce negative health outcomes. Implementing the Drummond Report’s recommendations on social spending will result in diminished services and reduced incomes for marginalized children and adults. The evidence is clear that this will harm their health. Mr. Drummond’s recommendations also have differential gender impact; women will be disproportionately affected by the cutbacks in public sector services and in public sector jobs. Minister Duncan must consider these impacts carefully while he finalizes this year’s budget.