As far as budgets go, Paul Martin's 1999 version was a yawner. Most of the details were carefully leaked to the media and widely known weeks before the Finance Minister even picked out his new shoes.

While the contents were predictable, what was surprising was the reaction it elicited from Canada's ever vocal business lobby. Martin was sharply criticized for ignoring their pleas for bigger tax cuts and debt reduction. The Finance Minister, they fumed, was abandoning his tight fisted ways for the reckless profligacy of the past.

On the surface, it seemed they might have a point. Martin claimed, after all, that Ottawa will be pumping billions of dollars back into health care -- $11.5 billion was the figure routinely cited. As impressive as it might sound at first, however, that figure represents the cumulative increase in transfer payments to the provinces to pay for Medicare over the next five years. If Martin really wanted to push the envelope, he could have just as easily said the Liberals were spending $100 billion over 50 years. That certainly would have sent shivers up the spines of those in the nation's corporate boardrooms.

But the point is Martin is playing a shell game, making it appear he's reinvesting a lot more on health than is really the case. In fact, when adjusted for inflation and population growth, Martin's so-called health care budget will increase per capita spending by less than 2 per cent per year. The result is that the federal share of total public health care spending, while rising in fiscal 1999 will begin to fall again the following year. After taking an axe to health care, Martin's applied a bandage.

Other programs fare even worse. Despite a ballooning surplus, there is no restoration of the cuts made to transfers for post-secondary education and social services. Even with the modest increase in health funding, total program spending as a share of the economy will continue to decline to its lowest level in 50 years and will continue to fall further in fiscal 2000. Labelling Martin a big spender might make a good sound bite, but as a statement of fact it is simply wrong.

The budget also announced an important change to how the Canada Health and Social Transfer (CHST) will be administered. The CHST, which provides federal funding to the provinces for health, post-secondary education and social assistance, will be allotted on a per capita basis within three years. Currently, the distribution of CHST funds varies because of limits that had been applied to Ontario, Alberta and BC under earlier funding arrangements. Those three provinces will be the big winners in the move to equal per capita funding -- Ontario alone is expected to cash in on an additional $1 billion in the next two years.

The changed formula, while intended to resolve some of the unfairness in the CHST, raises other problems. While no province will "lose" under the new formula, the wealthier provinces will get a larger share of CHST increases. The loud cries heard in Quebec in recent weeks are in protest of this.

The new per capita formula may be unfair in another area too: it ignores the different needs of different provinces. Under the proposed plan, Newfoundland will now receive the same per capita transfer to pay for social assistance as Alberta. But Newfoundland has far higher levels of poverty and greater rates of social assistance recipients. The same could equally be said for provinces that have higher post-secondary education participation rates: no matter what the demands on programs are, all provinces will be given the same CHST per capita transfer.

On a slightly more positive note, the budget did increase funding for research by $1.4 billion over 3 years. To put that figure into perspective, however, Martin's announced tax cuts will cost the federal treasury about $1.5 billion in the first year alone.

Included in the new research spending is an additional $200 million for the Canadian Foundation for Innovation, $430 million for the Canadian Space Agency, $95 million for the Canadian Institute for Health Information, and $140 million over two years to establish the Canadian Institutes of Health Research. Both SSHRC and NSERC also receive modest but desperately needed funding increases.

While the extra money is certainly welcome, there are two reasons to be cautious. First, much of the new funding is tied to private sector partnerships, raising renewed concerns about academic freedom and research independence.

Secondly, the new money is simply no substitute for core funding of Canada's universities and colleges. Post-secondary education, along with social assistance and employment insurance, has borne the brunt of Martin's fiscal belt tightening. The Finance Minister's refusal to restore the severe cuts he made to these programs is particularly unsettling given the fiscal room he enjoys. Even the most conservative forecasters admit that Martin is looking at a surplus of $10 billion in fiscal 1999, more than enough to offset the $3.7 billion slashed from higher education and social assistance since 1995.

It's hard, then, to understand the angry rhetoric emanating from business groups. Martin's 'new' spending is nothing less than miserly. He could have easily allocated at least 3 times as much to the task of rebuilding our social infrastructure than he did -- without jeopardizing the coveted balanced budget.

Even though the fiscal crisis that allegedly motivated the severe cuts in programs is over, Martin's latest budget actually continues down the same path of downsizing and retrenchment. For that, there may yet still be joy on Bay Street.