KAIROS Analysis of the 2012 Federal Budget

Provisions of the 2012 federal budget have important implications for several KAIROS priorities, including justice for Indigenous peoples, and ecological sustainability as well as the quality of Official Development Assistance.


Equity for Indigenous Peoples in Canada

The budget announces $275 million over three years for First Nations education ($100 million for early literacy and other programs, and $175 million to build and renovate schools on reserves). This is only half what is needed to bring reserve schools up to Canadian standards. Anishnawbe Aski Nation Grand Chief Stan Beardy says that in discussions with Ottawa on this issue, “… it was $500 million to try to bring education to an equal footing.” [1]

Nonetheless, the fact that the government put First Nations education in the budget is a testament to the dedicated awareness-raising work of people like Cindy Blackstock, Executive Director of the First Nations Child and Family Caring Society, and the youth ambassadors who carried the message of discrimination in First Nations education funding to the United Nations Committee on the Rights of the Child earlier this year. The government responded to this issue because ordinary Canadians who heard their stories made it clear that First Nations education matters to them.

The budget also calls for a 2.7% cut to the Aboriginal Affairs and Northern Development spending. It is important to remember that since 1996 funding for the Department (formerly the Department of Indian and Northern Affairs) has been capped at 2% per year, when an increase of 6.3% in annual education funding is necessary just to keep up with inflation and the growing First Nations population.

It is also disheartening that the government did not respond to the housing crisis in First Nations communities across the country, a crisis most recently made manifest in Attawapiskat. The 2012 budget has nothing set aside for First Nations housing. More encouraging is the budget’s $330.8 million over 2 years for water on First Nations reserves. Although according to Professor Pamela Palmater this is only about 5% of what is needed, it is at least a step in the right direction.[2]


Ecological Sustainability

The budget’s promise to streamline environmental assessments of major industrial projects and its continued subsidies for the oil and gas industry are of great concern as Canada deliberates on the construction of the Northern Gateway pipeline and, by implication, expansion of tar sands production.

The budget provides some funds to enhance Indigenous participation in environmental assessments, but by reducing the timeframe for the assessment process, it may also be preventing those with valid concerns to be heard and considered in the decision-making process. We are particularly concerned by statements from Finance Minister Jim Flaherty that this legislation would retroactively constrict the timeframe for the Northern Gateway pipeline hearings currently underway. We believe that thorough, publicly-funded consultation and environmental assessment are required.

While the budget removed one subsidy to the oil and gas industry (a phase-out of the Atlantic Investment Tax Credit for oil and mining), it leaves the bulk of the $1.4 billion in annual subsidies to the petroleum industry in place.

Meanwhile, the budget creates a new set of subsidies for the tar sands and offshore oil and gas industries in the form of


  • $35.7 million over 2 years for “responsible energy development”, which includes money for assisting oil tanker navigation that will benefit the Northern Gateway bitumen export project. This item also promises “legislative and regulatory frameworks related to oil spill and emergency preparedness,” an admission that spills are likely to occur;
  • $13.5 million over 2 years to strengthen pipeline safety through more inspections and audits, another admission that pipeline ruptures and spills are likely to occur as diluted bitumen is more corrosive than conventional oil;
  • Assistance to industry for collecting offshore seismic data.

There is no budget commitment to addressing climate change. On the contrary, by dismantling the National Roundtable on the Environment and the Economy, the government will silence a public voice warning about the dangers to life on Earth posed by climate change.

The budget fails to restore funding to programs for retrofitting buildings to increase energy efficiency or for public transit. While no new funding is announced for renewable energy development, there is a small $2 million provision for an accelerated capital cost allowance for investments in equipment to generate energy from waste or plant residues.


Quality of Official Development Assistance (ODA)

The budget signals a troubled future for Canada’s foreign aid program.  The International Assistance Envelope will see a 9.7% cut over 3 years, with the cumulative amount reaching $377.6 million by 2014-15. Most of this amount, $319.2 million, will be taken from the Canadian International Development Agency. It is not clear which CIDA programs will suffer most as the budget document refers to streamlining its management, “strengthening its focus, improving efficiency and increasing accountability.” However, it also says CIDA will “concentrate its efforts where it can have the greatest impact,” without reference to the poverty reduction and human rights mandate laid out in the ODA Accountability Act (ODAAA). It also makes no reference to the ODAAA’s requirement to listen to the perspectives of the poor. With CIDA’s recent focus on fewer developing countries to the exclusion of some of the neediest populations, especially in Africa, we continue to be concerned about not just the quantity but also the quality of Canada’s foreign aid program.


Increased contributions to development assistance and investments in energy conservation and renewable energy programs could indeed be possible if the corporate tax cuts granted in earlier budgets were reversed. Reinstating the federal corporate tax rate to its 2007 level would raise $5.3 billion in 2012-13; $10.5 billion in 2013-14 and $13.6 Billion in 2014-15 according to the Alternative Federal Budget compiled by the Canadian Centre for Policy Alternatives.



[1] Cited in Toronto Star. March 30, 2012.

Filed in: Indigenous Rights

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