Tuesday, February 23, 2010

2010 Federal Budget

And you thought the nation's fiscal planning couldn't get any less exciting.

The Globe and Mail is reporting on the Conservative government's plans for the 2010 federal budget, and boy is it a bowl of oatmeal.

The Conservatives are going to focus on reducing the deficit and reigning in spending (you can almost hear that last one in Tina Fey's impression of Sarah Palin), while ensuring that health care, education, and public pensions are not affected. Even the military will see its proportion of the budget shrink in the coming years.

No new spending is planned, and a lot of the fun little incentives from last year's budget will not be extended. No more home renovation tax credit.

Clearly, the Conservatives are trying to repair some of the damage done to their assumed reputation of being good economic stewards. In part because of the economic crisis and in part because of their own decisions, the government's finances are in a lot of trouble. They believe it's time for some belt-tightening to get us back to surpluses.

Along with sincere hopes to rectify the situation, the Conservatives are hoping Canadians will be happy to see their party working on reducing the deficit. A responsible budget in shaky times.

It isn't a bad strategy. People like when parties act responsibly. It will certainly resonate with some Canadians who are very worried about the deficit. But it will not exactly attract a lot of voters to the Conservatives.

From the Opposition's perspective, this is actually a pretty easy budget to work with.

The NDP, who aren't exactly opposed to government spending, will not see much in this budget that they will like. They want spending on social issues. They want work to be done on the environmental file. They want to ensure those hard-working Canadians going through tough times that the government will have their back.

The Bloc Quebecois, also not exactly ideologically opposed to government spending, will not see much in this budget either. The federal debt is not much of a concern to the Bloc Quebecois when they see pressing Quebec needs that Ottawa is not addressing. Good fiscal management is more important in Quebec City than in Ottawa. Why would the Bloc support this?

For the Liberals, this budget only addresses the problem of the deficit. The deficit, they argue, is a structural one created by the Conservatives. Rather than addressing those structural problems, the Conservatives are going to cut spending. What's even better for the Liberals is that they don't have to offer much to Canadians to be offering much more than the Conservatives. Rather than having to out-spend a generous Conservative budget, the Liberals can propose modest measures which would demonstrate them to be responsible, but also offering something tangible to voters.

Would the Conservatives want to go to an election on a budget like this? Fiscal conservativism, moderation, and responsibility can be a good message, but will not make the top story for many of the 40 days of an election. It isn't a vote loser, but it also isn't exactly a vote winner. Going to an election on this budget will not be an easy thing for the Conservatives. The Liberals, NDP, and Bloc don't have to propose much to gain more attention.

But we probably won't be pushed to an election. Although reports so far are very basic, there is no notion of a poison pill, and with so little to offer the Conservatives are making a lot of room for compromise. They only need the support of one of the three opposition parties, and when they are planning to announce no new spending projects, it will be easy to find room in the budget for one or two new items of government spending that will gain them the support of the NDP, the Bloc, or the Liberals.

It's actually shaping up to be one of the least political budgets of the Harper government.

Now we have to wait and see what wrench is thrown into the works between now and next week.


(Amazingly, Threehundredeight.com is on Twitter. Be there!)


  1. So parliament was ostensibly prorogued to recalibrate, and plan the federal budget.

    What is the government saying now?

    The budget is containing essentially nothing.

  2. My thoughts exactly...where is this grand RECALIBRATION that we were promised? In the end it sounds like the Tories needed three months off to come back with...NOTHING!

  3. Guys deciding what gets cut and how you do it takes just as much care, planning, and finesse as spending huge gobs of the tax payers money.

    Prorogation was clearly needed to go through the budget with a fine tooth comb and find waste.

    Most shocking is the reduction in military spending. Then again we are getting out of Afghanistan soon so less money will be needed.

  4. As I understand it. Recalibration was refering to the reorganization of the Senate since the Tories now have a plurity of seats they wanted to be able to set the agenda.

    Secondly, the parliment was only going to be sitting for about 3 weeks anyways. So 3 months is a misnomer off is a misnomer.


  5. The government has THOUSANDS of bureaucrats at its disposal who can go through every penny of government spending with a fine toothed comb 20 times over - this happens regardless of whether parliament is in session or not. If the Tories are saying that they are incapable of putting together a do-nothing budget while also having Harper make his once weekly appearances in the House - then this is a government of total incompetents.

  6. I like how we go through this entire drama of prorogation, then we come out on the other side with a run-of-the-mill budget with little incentive and ambition built into it. It's very disappointing.

    But, I suppose its what is to be expected. I didn't think there would be a poison pill this time around. Harper isn't that stupid, not after prorogation. I suspect that the Liberals will most likely support this, especially if they get some of their own measures in. If they don't, well.. I dunno. What would be fantastic though is if all parties supported the budget. That'd be amusing.

  7. Shadow,

    I did read in an earlier thread that you did say prorogation was needed to gain control of the senate.

    I do not recall if you said it was needed for budgetary considerations.

  8. Volkov,

    I doubt that all the parties will support based on the fact, that since the 2006 election it has not happened. And Mr. Layton liked to go on about the fact that he hadn't supported a government bill in 80ish times. (that changed in the fall of course) But it would be interesting if they did. It would make the budget a non issue.

    49 Steps,

    I don't believe that the prorogation was needed for budgetary considerations, but I am not sure.


  9. Rocky,

    I believe gaining a plurality for the conservatives in the senate, was one consideration for prorogation of parliament.

    Another was to shut down the committee investigating the Afghan detainee issue.

    Some embarassing revelations were going to come out for the conservatives.

    They are still refusing to hand over documents pertaining to that issue.

  10. Ah yes... the conservatives and the urban legend of 'Financial Stewards'. They should do a Mythbusters episode devoted to that - Busted!.

    Amazing how that can last even though conservative governments on boths sides of the border (and the Atlantic for that matter) have done nothing but leave behind a trail of economic destruction and havoc on budgets. Facts are facts and cannot be denied regardless of the talking points.


    Even the military will see its proportion of the budget shrink in the coming years.

    Does this make the conservatives "anti-military" now?

    When the Liberals, who have an excellent financial track record, cut back on all spending fronts, the cons regarded this as 'anit-military'.

    It will be both interesting and comical to see just how badly they bend over now and try to play it as being "soooooo different" this time.

    I've got my beer and popcorn ready, please go ahead and entertain me!

  11. You know the actual chances of poison pills are pretty good Volkov.

    Just think of the fiscal responsibility of cutting that public financing of political parties. The Tory spin meisters could have a field day with that beating on the Coalition!!

    And there are lots of other "nasties" available to the Tory axe !! Things that benefit special interest groups, women etc. I figure this will be a real cold shower budget !!

  12. 49 Steps said...


    I did read in an earlier thread that you did say prorogation was needed to gain control of the senate.

    I do not recall if you said it was needed for budgetary considerations

    Well, to be fair to Shadow, he does change the story and talking points whenever it suits him.

    He is consistant that way.

  13. If the Tories were 15 points ahead and an election was very likely to give them a majority - then I could see them putting in their so-called poison pills. But now that they are in a dead heat - they are scared shitless of an election - so they will walk on egg shells to have a budget that is as inoffensive as possible.

  14. Now that we are under performing at the olympics, the conservatives can't wrap themselves in olympic glory.

    Where is Stephen Harper?

    Haven't seen him in a few days.

    If anybody wants to see something hillarious go over to youtube and watch Mike Duffy and Nancy Greene.

    Just priceless

    "Our strong Leader"

    Shades of North Korea

  15. Hi 49 steps.

    I'll just start by reminding Josh of Eric's commenting rules because I believe he broke them.

    A 24 hour prorogation could have shut down the detainee investigation (the committee can't be reformed without the gov'ts permission) and taken control of the senate.

    So given the three week length instead of a shorter time frame its obvious that they wanted to take time to prepare the budget.

    Part of it was the delicate issue of telecom and broadcasting deregulation that they hammered out at Meech Lake.

    You'll see that in the job creation roadmap that comes with the budget.

    The other part of it was finding where they could cut things without provoking an election/public outrage.

  16. Just to add, as i understand it the gov't has agreed to reconstitute the Afghan committee.

    So the investigation will go ahead.

    Not really sure how that counts as shutting down anything then.

    Kinda blows that whole line of thinking out of the water doesn't it ?

  17. I still don't see why preparing a do-nothing budget and parliament being in session are mutually exclusive. Throughout Canadian political history - governments have managed to bring down budgets while Parliament was in session. In fact this has always been the norm. For some STRANGE reason its only Harper who can't seem to walk and chew gum at the same time and claims that its just too much work for him to work on a budget while also making his occasional appearances in Parliament.

    I think the reason they prorogued as long as they did was because they thought they could get way with it. They did it because they thought they could.

    The canadian people thought differently.

  18. Shadow,

    Good one again

    When are the conservatives going to hand over all the UNREDACTED
    documents pertaining to the Afgahn file.

  19. You know that Harper's never going to raise taxes under pretty much circumstances, so this was really all he could do.

    I'd like him a lot more if his earlier budgets had also looked like this. I would like top point out that this is exactly what his 2009 budget was going to look like before the opposition formed a coalition demanding spending.

  20. First of all, Harper probably will find underhanded ways of raising taxes by raising payroll taxes and EI and CPP payments etc... and then he'll try to claim that these are not really tax increases.

    This budget is not "just like what Harper would have done in 2009" since it continues the extra spending of 2009 for another year.

    Anyways, if Harper really didn't want to spend more in the 2009 budget - all he would have had to do was stand his ground and refuse to make any concessions at all to the Liberals - and dare Ignatieff to either follow through with the coalition or retreat. I wonder why he didn't do that?

  21. I think standing his ground there would have been a winning political strategy, but if the G-G decided to hand the country to the coaltion then they would have damaged the country very badly with their knee-jerk budget.

    I still wish he'd done it, though. That the opposition voted for the throne speech, and then immediately said they had no confidence in the government even though NOTHING ELSE HAD HAPPENED made them look horribly capricious, and because they supported the throne speech I think the proper action from the G-G would have been to call an election.

  22. DL those things aren't really taxes.

    They are self sustaining programs that people are required to pay into on the basis that they'll be able to draw upon them in the future.

    Requiring people to buy car insurance isn't a tax either. A common term for these things is "mandates".

    As for Harper's feb '09 budget nothing had changed since the fall. It was either gamble on the GG doing the right thing or give into the opposition.

    Harper's a pragmatic guy and knows when to retreat.

    For us fiscal conservatives who are worried about the deficit when faced with big spenders like the BQ/NDP/Liberals its a no brainer to go with Harper.

  23. Except that supposedly the only reason why the Liberals voted for the Throne Speech in January 2009 was that Harper had assured Iggy that billions of dollars of "stimulus" would be in the budget that came down a few days later. Either Harper would have had to have lied to Iggy just to get the Liberals to support the Throne speech and then double crossed him a week later with a budget that contained none of the things promised OR Harper would have had to have made it clear right from the start that he would not take any of the views of the opposition under consideration - in which case either Iggy would have buckled or the opposition would have voted down the Throne speech in January right away. There was never never the slightest chance that the opposition was going to pass the Throne Speech and then vote down the budget a week later.

    Face, Harper sold out. He proved that we would eat ANYTHING (and I mean ANYTHING) in order to stay in power. I can't wait to see what happens after the next election when he's desparate the cling to power after losing seats - how far will he go in humiliating himself and begging and pleading with one of the opposition parties to prop him up. It'll look good on him.

  24. I think that the income tax is a self-sustaining program that people are required to pay into on the basis that they'll be able to draw upon it in the future.

    In any case case, CPP and EI are not "self-sustaining" when the premiums are increased to wayyyy beyond what is needed and the extra money finds its way into general revenues. Which is what the government is all most certain to do.

    If it looks like a tax and quacks like a tax - its a tax!

  25. Ah yes!!!

    The great Stephen Harper

    He balances budgets

    He supports our troops

    He is the only patriotic one. Well him and his party.

    Dare not question the wisdom of the great Stephen.

    After all to question the divine one and his party is to be un-canadian, unpatriotic, and just downright treasonous.

    I bow down to your greatness Stephen.

  26. This government is trying to put off any unpleasant business as long as possible whether it is finally taking action on the environment or Afghanistan. So look for them to play to the galleries in this budget and fudging the real economic outlook rather than address the serious problems of aging population, terribly low productivity, etc.

  27. Harper will do just about anything to retain power.

    That's what he is all about.

    He wouldn't know what the truth was if it came up and smacked him right in his kisser.

    I have never been so ashamed of a government in my life as I am ashamed of this one.

  28. DL your partisanship is showing. EI premiums are being raised because there is a deficit in EI. Unlike the past EI can no longer be used as a cash cow for government.

    If CPP payments are raised that's because the extra money is needed to pay benefits to old cranks like me and younger cranks like Shadow who will qualify for CPP in years to come. It might even help a younger crank like you in your retirement. NONE of the money is at the government's disposal.

    There won't be any poison pills in this budget. If Harper is unwilling to do something that might would be seen as fair and that is raise the employees contribution to their pensions to 50% like provincial plans then he's not going to do something stupid to cause an election. The pension issue would be vote winner as long as it wasn't punitive. I doubt many Canadians would see moving the Federal employees to the same standard as their provincial counterparts as bad. If the opposition opposed such a move I think Harper would have a good issue on which to fight an election. I can see this one being saved until the polls are better.

  29. To everyone out there;

    Seeing as how we have been talking alot about the coalition that was threatened to take place in early 2009. Would any of you support a coalition government again?

    I would support a coalition government under the following circumstances. In the next election if the Libs, Dippers and Bloc annouce ahead of time that if the Conservatives fail to get a majority government (which appears likely at this point) they make it there policy and publicly state it during the campaign. (ie: run on the premise of an a coalition) Then they would have my support.

    That being said. I still don't think that it would be in the best interests of the country to have a coalition government, but if they were open with the people and not trying to do a repeat of what occured earlier. I would support it.

    What do others think?


  30. DL how is the income tax a self sustaining program ?

    A tax is a mechanism for raising general revenue. A fee is a mechanism for generating specific program revenue. A mandate is a requirement to pay into/buy insurance.

    A program is something the government does.

    Taxes pay for programs.

    The income tax is NOT a program, its a revenue raising mechanism.

    Words have definitions for a reason.

  31. Rocky,

    I think most canadians would reject the idea of any formal coalition that involved the BLOC.

    It will be interesting to watch after the next election though if the Libs/NDP have a greater number of seats than the conservatives.

  32. Hi Rockey.

    While technically legal the coalition that was suggested was democratically illegitimate.

    Dion put forth the arguement that each individual MP is elected with a mandate to form government.

    While this is true its incomplete. We know that when people cast votes they also keep things in mind like the party they're voting for, the type of government they want, the platforms of the parties, and all kinds of strategic reason.

    Usually big issues are put to the electorate in an election, preferably before they are enacted. Parties earn a mandate to do certain things, put forward certain programs.

    Dion had lied to the people and said there would no coalition with the NDP.

    He did not earn a mandate from the people to form government under those circumstances because he had lied to them.

    If an opposition leader is honest and gives the people a chance to weigh in during an election I think a coalition government would be both legal and democratically legitimate.

  33. DL to be very clear. EI and CPP are self sustaining programs. Money from either can no longer be used to supplement tax revenues. This was always the case with CPP.

    The one problem that did happen with CPP was that in order for the provinces to approve federal intrusion into provincial jurisdiction the provinces required that the surplus that would be generated in the CPP accounts had to be lent to them at below market rates. The surplus reached $50 billion and the provinces refused to repay the money. That was one of the reasons that CPP premiums had to be hiked so much. Check it out! It is a sad story of theft from Canadians by provincial governments of all stripes.

  34. Earl just to add,

    its true that the Liberals took something like $50 billion from EI during the 90's to "balance" the federal budget.

    But small bussiness owners sued the feds and about a year ago the case finally wrapped up and the court ruled that what the Liberals did was illegal.

    The ruling didn't offer a remedy at the time (the group wanted the money repaid before anymore contributions were collected) because we were on the brink of that huge economic disaster.

    But its very clear now that EI funds can't end up in general revenue ever again.

  35. New poll for anybody interested

    "More than 40% of Canadians put the PMO ahead of senate as the institution most deserving og having it's wings clipped.


  36. 49 Steps,

    I agree with your assessment that it would be unpalitable for most candidates to say that they would rely on the Bloc for support. But as it was proposed last time around the Bloc was a member of the coalition.

    Yes, I know that the agreement was signed by the Dippers and Libs, but Gilles Duceppe was up there on the podium with Dion and Layton at the annoucement of it. So it is my opinion they were members of the coalition.


    I agree. Dion did lie to the people saying that there would be no coalition with the NDP, so that is why in my previous statement I said that in order for it to be palitable to me they would have to come out and run on that platform.

    I still don't think that a Coalition between the NDP and Libs would be the best thing for the country. (but that is just my opinion)

    Just like others opinion is that Harper is an international disgrace and the worst thing that has ever happened to the country. That is their opinion, not matter how much I may or may not disagree with it.


  37. Rocky,

    It was an agreement between the Libs/NDP. The Bloc agreed to support them on confidence motions for 2 or 3 years.

    The Bloc would have no seats in cabinet.

    I agree the optics of it were horrible.

    Most Canadians objected at the time because the NDP/Libs did not have nearly as many seats as the conservatives.

    Also Monsieur Dion had just been massively rejected by the public, so the idea of him as Prime Minister was completely unacceptable to Canadians.

    I don't know how Canadians feel now.

  38. 49 steps that's an interesting poll.

    The weird thing is that we know from budget documents that the PMO spends far less under Harper then it did under Martin.

    Either Harper is really good at saving money or the notion that he has concentrated power in the PMO is a media and opposition driven falsehood.

  39. 49 Steps: If the Liberals and NDP are open to a coalition then they should so state in any election campaign. If they are not then they shouldn't engage in talks after an election. This is an issue that is more important and fundamental than a change in policy like the income trusts, free trade, price and wage controls or the abolishment of the GST and NAFTA, all policy changes by various governments.

    Policy changes are dictated by changing times. Coalitions denied in an election campaign and entered into shortly after a campaign are a misuse of the voters's trust and of the democratic process. While technically legal, a coalition denied and then entered into after an election campaign is both morally wrong and out of place with Canada's unwritten constitution. Further such a move makes all of ever more cynical about those that govern us.

  40. People keep going on about coalitions. But I don't think that's on the agenda regardless.

    Let's say hypothetically that in the next election campaign - Ignatieff says that he will not form a COALITION with anyone but he will not rule out other arrangements in the event of a minority government. Then let's say the election gives the Tories have 120 seats, the Liberals 108, the NDP 35 and the BQ 45.

    So what if the day after the election Layton and Ignatieff start to negotiate an accord that involves policy concessions on both sides but no cabinet seats. Then they then announce - we have 143 MPs committed to a 3 year accord for government, compared to the Tories 120. We will take our chances of whether the Tories or the BQ choose to support us on confidence votes over the next few years. It's really no different from the current Tory minority government - which survives as long as one of the opposition parties is willing to bite the bullet.

  41. Dl that kind of arrangement would be fine by me. It would also lead to CPC gains as voters would be unlikely to distinguish it from a coalition. I think it unlikely that Canadian voters want the NDP which receives 18% of the vote to be influencing government policy. It doesn't matter if the NDP had cabinet seats or not, Canadians don't want Jack Layton near the levers of power. If they did, they would vote for him in much greater numbers. After all he has spent the last two elections unabashedly running for Prime Minister. However bad you think Harper is, most Canadians think Layton is worse. Put another way, approximately 82% of Canadians voted against the NDP in the last election and that's good indication of the lack NDP support in most elections although it was over 90% in 2000.

  42. Earl,

    Just a hypothetical question for you.

    Say the Libs/NDP run as their own entities and end up with more seats than the conservatives.

    They decide they have no confidence in the Harper government.

    Harper has to survive with just the support from the BLOC on confidence motions.

    Given Harpers anti separatist rhetoric should Harper state

    "After the next election if the Libs/and the NDP have more seats than myself, and I have to rely on support from the BLOC on confidence motions I will resign"

  43. DL you'd still need the BQ for such an arrangement.

    Sitting PM always gets to bring in a throne speech. Harper would present a speech. The BQ would have to go along with the plan and tell the GG they have no confidence in the throne speech.

    Then they'd have to tell the GG they did have confidence in the Liberal throne speech.

    If you can get the BQ to agree to that then fine. Arrangements, coalitions, parternships, accords - whatever they're all fine as long as a leader is honest about them during an election.

  44. 18% of Canadians wanted Jack Layton near the levers of power. 26% of Canadians wanted Stephane Dion near the levers of power. 37% of Canadians wanted Stephen Harper near the levers of power.

    "Canadians" were not unanimous in their decision. So, it is incorrect to say things like "Canadians don't want Jack Layton near the reigns of power." Most Canadians don't, but not "Canadians".

    I find statements like that insulting to the millions of Canadians who voted for Jack Layton. Ditto for when people say "Canadians don't want the Bloc..." etc. etc.

  45. 49 steps there is a categorical difference between entering into an arrangement with the BQ and surving a confidence motion because some BQ MPs voted yes or abstained.

    I'm completely comfortable with the latter but not at all with the former.

  46. Hey 49 Steps - you stole my question! I have wondered that myself. Harper should promise to resign if he gets fewer seats than the Liberals and NDP combined and declare in advance that any support on any bill from the BQ is unwelcome.

    The NDP has influenced government policy many times in the past. I honestly think what makes people really nervous is the thought of Bob Rae influencing government policy - but he's a LIBERAL.

    The Liberals and NDP negotiated an accord in Ontario in 1985 and it was extremely popular - neither party campaigned on such a thing in advance. The NDP and the Liberals also didn't campaign in advance of the 2004 election saying "if you vote for either of us we will forge a last minute deal on the 2005 budget".

    Anyways, the proof will be in the pudding. Harper can spend the entire next election campaign ranting and raving about "coalitions with separatists and socialists" bogeymen - then a majority of seats in Parliament go to Liberals, Socialists and Separatists - he can admit defeat and resign. If Harper runs that kind of campaign than anything other than a Conservative majority government will be total defeat.

  47. Eric do you object to the statement:

    "Canadians don't like rapists"

    Its not unanimous. There's probably a fraction of 1% of Canadians who thinks its acceptable behaviour.

    Am I insulting those individuals by making such a statement ?

    Since there's next to never unanimous agreement on anything should we just stop all blanket statements ??

    When there is 70%+ agreement on something I think its safe to make such blanket statements.

    Its generally understood that they don't literally include EVERY. SINGLE. CANADIAN.

  48. In December 2008 the BQ was willing to promise to support the Liberal/NDP coalition for two and half years in exchange for.....NOTHING. It was enough for them to kill off Harper.

    The same will be true next time. The BQ doesn't need to make any formal deal with anyone. All they have to do is declare the day after the election that will vote against Harper at the first opportunity and that they will let someone else have a chance and that they will reserve the right to bring down the new government whenever they want. How is that any different from what we have now?

  49. DL see above.

    Categorical difference between forging an agreement with the socialists/seperatists and relying on their votes or abstentions to pass your legislation.

    They are not the same thing at all. To suggest otherwise is deliberate obfuscation.

  50. Well, I don't think we should worry about insulting rapists.

    But more seriously, 1 in 5 Canadians voting NDP is a significant amount, and worthy of some recognition.

    Plenty of Canadians want Jack Layton near the levers of power. A lot of them, actually.

    And considering that neither Harper nor Dion (or Ignatieff now) has anywhere near majority support, people should be wary in telling us what Canadians want or don't want.

    If you want to say Canadians don't want the CHP or ML in power, I'll agree with that.

  51. The Bloc could also abstain, removing any pointless and meaningless rhetoric from opponents of how our system, and democracy, actually works.

  52. Shadow,

    Harper excoriated the agreement between the Libs/NDP as one of "Socialists and Separatists. I believe he even called it an unholy alliance at one point.

    After such strong anti separatist language he should stand by his vaunted principles and categorically state

    "After the next election if the Libs/NDP have more seats than myself, and I have to rely on the BLOC for support on confidence motions "I will resign"

    If he really and truly believes what he stated then support from the BLOC would be unacceptable to him.

  53. 49 Steps and DL,

    My question is why would or should Mr. Harper step aside. Yes, he may lose the confidence of the house, but so be it. He would return to his default position of Leader of the Official Opposition. I don't understand why he should promise to resign.


  54. DL and 49 Steps,

    I see you beat me to the punch.


  55. Okay People;

    Here is another question for you. Do you think that at some point enough people will be tired off all of the sabre rattling and such that we have had for the last 6 years and will vote for either the Libs or Cons and give them a majority so we are not in constant election mode?

    Or could we even maybe see a "Grand Coalition" between the Libs and Cons. Harper as PM and Ignatief as Finance Minister. Etc.


  56. 49 Steps: What you are talking about is an entirely different situation. The Bloc is not dictating any policy positions nor is there a formal accord. Martin's government needed Bloc support to survive and took it willingly. I suspect that should Iggy get the most seats in the next election he will accept the support of any party that gives it as he governs.

    As I said the accord is different matter from a coalition. As long as the NDP and LPC state in the campaign that they may enter into some kind of an alliance short of a coalition I have no problem with it. If the Liberals get the most seats and the NDP decide they want to support the Liberals that's the way it goes. An accord on the other hand gives a small fringe party a hand in governing Canada. If Harper were to enter into an accord with any party I'd be just as opposed. Call an election and let people know what you are going to do. I'd even be opposed if Harper when pressed and his government's life was on the line made concessions to the BQ that would benefit only Quebec. That's wrong and is misusing Parliament. I suspect that if the CPC gave in to Bloc demands of the nature described above that they would be punished severely in the next election.

  57. Eric I qualified my statement in the same post by stating that 82% of Canadians don't want Layton near the levers of power. I'm merely turning around the coalition argument that 63% of Canadians voted again the CPC. That argument was used by those supporting the Coalition in 2008.

  58. A positive argument is always better (the coalition argument was that 62% voted for those parties in the coalition), because a majority of people always vote for someone else.

  59. Anyway, the idea that voters would be unhappy that the local MP they voted into office would be part of the government, without changing parties, is bizarre to me. I'm not sure why they would prefer to have the guy they voted for in the Opposition.

  60. Earl,

    I stand by my statement about Harper.

    He did excoriate the BLOC, and the NDP as "Socialists" and "separatists"

    After his very strong anti separatist language, I do not even know why he would even want their support on anything.

    My point is he should stand by his vaunted principles and categorically reject their support on anything.

  61. Eric,

    It is a misnomer to suggest that a majority of people voted for someone else. Because for a long time no one has achieved a majority of the votes based on our system. It was Mulrooney who last had a 50% Majority and before him Diefenbaker.

    No one seemed to have a probelm when Chretien was winning majority governments with only 40% or so of the votes. More or less depending on the election.


  62. Unless we have a majority government- HORROR OF HORRORS - parties are going to have to talk to each other.

    I seem to recall a poll not too long ago that showed that a majority of Canadians would prefer a stable coalition government with a defined term in office and a negotiated platform - over a minority government that has no arrangement with any other party where every day in Parliament is a game of Russian roulette.

    The fact is that as long as the BQ exists - we WILL have minority governments forever - its just a question of how we can best make them work.

    In the 2006 election, I don't recall Paul Martin promising that if the Conservatives formed a minority government, his party would support them on all confidence votes for the next two and a half years.

    I think if I voted Liberal and the Liberals then decided to prop up Harper for the next few years in exchange for nothing rather than work with the NDP - I would feel betrayed by my party.

  63. 49 steps i'll explain the difference between the BQ propping up the CPC and the Liberals negotiating an agreement with them.

    When the BQ votes for a piece of Harper's agenda he wins. Canada wins. His strength has forced them to comply.

    (I'm just explaining his thinking on this).

    When a party makes concessions to another party to win their support like Paul Martin's NDP budget they lose. Canada loses. Their weakness forced them to give in.

    So why on earth would Harper promise not to take votes from the BQ ?

    Its a victory every time he does, not a sign of working with socialists or seperatists.

  64. "For us fiscal conservatives who are worried about the deficit when faced with big spenders like the BQ/NDP/Liberals its a no brainer to go with Harper."

    No BRAINER ??? That's you mate. Because the only Govt in the last three decades to actually tackle the DEFICIT was a succession of LIBERAL Govt's !!!

    Get real !! The Liberals know how, the CRAP has no idea !!

  65. Peter,

    That's why I said "Another good one"

  66. Peter: Grow up. Your hatred of the CPC is obvious. I may dislike certain politicians and parties yet I can be civil when talking about them, surely you are enough emotional maturity to do likewise. Incidently there would have been no deficit for Martin to deal with had not Trudeau created a bloated budget with a huge deficit that just got bigger year after year! The father of the deficit the Liberals dealt with ( and dealt with well) was also a Liberal.

  67. Peter you must not mean Trudeau who put us on an unsustainable fiscal path.

    So i'm guessing you're talking about Chretien/Martin.

    If you call pushing down costs to the provinces/municipalities and illegally raiding the EI fund to the tune of $50 billion sound fiscal management that's your perogative.

    Then relying upon new revenue sources created by the previous PC gov't (GST and prosperity from free trade).

    Then getting lucky with a high tech boom followed by an oil and gas boom.

    Ok, ok you get the picture. The Liberals didn't tackle anything. They restrained their impulses to blow a bunch of money on social programs like daycare which they promised in '93 but never delivered and the economy grew.

    A monkey could have done that.

    Restraining spending and waiting for growth isn't rocket science.

    The Liberals could probably do it too provided they're still liars.

    If Ignatieff actually went ahead with any of his big spending proposals it would be a problem.

    I don't want to gamble on Iggy being a liar. He may or may not be.

    Rather stick with the guys who aren't making crazy promises.

  68. Peter I forgot to mention gutting the military for a "dark decade" while our men and women died in SeaKing helicopter crashes.

  69. I'll give Martin and Chretien credit. Sure they caught some economic breaks but they did what had to be done and the provinces and muni's had to cut as well. That's what happens when you fail to exercise fiscal restraint as both Trudeau and latterly Brian Mulroney did. Then you get an idiot like John Crow, governor of the BOC, jacking up interest rates far beyond what they needed to be. Had Mulroney or Trudeau shown the courage that Joe Clark showed in his defeated budget of 1979, we would never have faced the debt apocalypse that forced Chretien/Martin to act.

  70. Earl,

    It's nice to see that at least you can give Chretien/Martin just a little bit of credit for something.

  71. 49 Steps,

    Yes Earls honesty is refreshing, and he doesn't even compare ex-Liberal PMs to Kim Jong-il.

    Lets see you give it a try.

    Say something nice about a PC, or CPC member(give Mulroney a try).

    A compliment for being reasonable means more, if it's given by someone who actually practices it.


    I'm all for giving credit where it's due, and it is due to Martin especially for making tough choices, but some of what Shadow is pointing out is true also.

    The Liberals would never have been able to balance the books without the GST, and the FTA played a large role in our impressive growth.

    The budget also was balanced on the backs of provincial transfer payment cuts, military cuts, and illegal EI premium hikes.

    I give them a good dose of the credit, but I hardly think they deserve all of the accolades they lay claim to.

  72. AJR79 I have noted Shadow's points. I was the first to point out the who the Father of the Deficit was. I give Mulroney full credit for the FTA. I also give Mulroney full credit/discredit for the GST, (I'm opposed to sales taxes and believe there were better alternatives to the GST). The fact is that the national debt doubled under Mulroney. However the annual deficit as a percentage of GDP shrank under Mulroney. Remember though Mulroney raised taxes in order to essentially keep the deficit even at a absolute level of about $35 billion a year. Mulroney eschewed the hard choices on spending after his infamous encounter with the old lady on Parliament Hill after his government's first budget. It was a shame really because the eighties were also a period of falling interest rates and great economic growth. Had the Federal government shown some expenditure control they could have prevented the debt apocalypse that forced the Liberals to act in 1995. If you remember New Zealand was that period's Greece and it was only through severe austerity that New Zealand managed to clean things up. People in Canada were properly scared by what had happened to NZ, which at one point couldn't find any takers for its debt. Most of us were more than willing to accept the harsh measures Martin took to avoid the same fate.

    Lastly John Crow then the governor of the BOC tightened monetary policy far more than needed and created a severe, made in Canada, recession to prevent the GST from becoming an inflationary problem. Again had the government acted on the fiscal side of things monetary policy would never have needed to be so tight, although I'm not sure that would have dissuaded Mr. Crow. By tightening monetary policy so much Crow forced the government to pay billions a year in extra interest costs. When he was replaced and the Liberals put in place severe fiscal restraint they got the added benefits of significantly lower interest rates which made the fight against the deficit so much easier. Still it took guts, something Mulroney lacked on the deficit, yet strangely had lots for the free trade and GST battles, to put Canada back on the straight and narrow economically. Incidently I read several accounts that say it was Chretien who pushed Martin to go after the deficit and not the other way around.

  73. "If you call pushing down costs to the provinces/municipalities and illegally raiding the EI fund to the tune of $50 billion sound fiscal management that's your perogative.

    Then relying upon new revenue sources created by the previous PC gov't (GST and prosperity from free trade)."

    And with this paean of barf you have finally betrayed the fact you are a pure CRAP troll!!

    Nice use of "talking points" which as usual are inaccurate when they aren't downright lies !!

    Pre Chretien/Martin all Canadian Govt's of whatever political stripe were profligate. The bill finally came due and had to be paid. Something the CRAP doesn't believe in. Blowing a $13 billion surplus and then creating a $54 billion debt hardly rates as responsible Govt by anybodies standards!!

  74. Peter we have rules of conduct here. Please honour them. It would have been better from an economic standpoint to have raised the money the Liberals raised from higher income taxes especially on the well off, rather than from UI as it was known then. UI or EI premiums certainly don't encourage employers to add jobs.

    As for our current situation no matter who was in power at the time the financial crisis hit, the government would be running a huge deficit today. Surely you know that. The surplus would have shrunk to 5 or 6 billion and so we'd be running a deficit in the high $48 billion range. Would Iggy or Layton have turned down the auto companies and risked losing all of the jobs generated by not only GM and Chrysler but all of their suppliers as well? Not likely. Both opposition leaders were also calling for more stimulus than provided by Harper. Finally, like it or not there is a stimulative effect from lowering the GST 2 points.

    What would have been much better in the long term management of the nations finances would have been a much greater emphasis by both Liberals and Conservatives on debt repayment with the surpluses. Had we done that, the amount of money and it would have been huge, freed up by paying less interest on the national debt would have enabled us to better weather the financial storm. Some spending increases were necessary in health care for example, as were tax decreases to stimulate the economy.

    Finally the deficit though huge is a much smaller amount when compared to the economy (GDP) than it was in either 1984 or 1993. The deficit can be easily managed as well.

  75. Earl there's no need to be so even handed.

    Harper paid down the national debt by nearly 40 billion in his first couple years in office.

    This action was greeted by howls of outrage from the opposition who wanted to spend the money on national daycare, the Kelowna accords, and social housing.

    On the revenue side its true that GST cuts were pricey. However, the opposition wanted income cuts that would have cost just as much.

    When you compare Harper's fiscal record to the stated intentions of any of the opposition parties its clear he's a far, far superior choice for anyone worried about the debt.

  76. Why the HST is a bad tax:


    That is unless you're in the upper income group.

  77. Do you honestly find that article compelling, Earl?

    I'm not a big defender of the HST, but the only argument put forward by Christina Blizzard there was that the economy was "too fragile to be tinkering with taxes". What does that even mean? And why would we think the fragility of teh economy even matters?

    That was a terrible article.

  78. Ira the parts of the article that was compelling for me were:

    The lack of transparency about what will be subject to the new tax and,

    The example of how much extra it will cost the average family for heat and electricity. That hammered home again how regressive the tax is.

    I don't normally read Blizzard because she is a hack and a very partisan one at that. I did think the article, although typically badly written by Blizzard, made those two points well.

    Hope you are well Ira.

  79. HST this summer, Sheila Fraiser's report on the stimulus, and the detainee scandal will probably mean the government is in for a bumpy ride this year.

    I wonder if Harper might want to get an election out of the way this spring as originally planned?

    Nobody would blame him if he fell on this budget because there are no poison pills.

    As Eric said the NDP/BQ/Liberals will probably want to make some changes as a condition of their support. Harper could refuse them and treat this as a take it or leave it confidence motion.

    Cue up oppo complaints about Harper not working with others in a minority, Harper deploys "they want to tax and spend" as a comeback and we're off to the races !

  80. Harper would be able to make a stronger argument for fiscal restraint if he's actually shown any as Prime Minister so far.

    I very much wish the 2009 budget had been nothing but austerity and tax cuts. Canada is in dire need of some Chile-style Shock Therapy.

  81. Ira writes;

    Canada is in dire need of some Chile-style Shock Therapy.


    Things were running along smoothly until the cons took over the government and turned a 13 billion surplus into a 50+ billion deficit.

    Sounds to me the only think Canada needs is another Liberal PM to balance the books, again.

  82. Ira why do we need Chile like shock therapy? Seriously.

    Josh you are smart enough to know that no matter who was in government the deficit would have necessarily been in the $50 billion, range given the depth of the economic down turn. We barely dodged a depression. We may still have a depression, if the US doesn't get straightened around. Iggy wanted more spending for goodness sakes and then turned around and condemned the deficit. Corporate tax revenues have collapsed to less than 50% of those of one fiscal year ago. A big reason the deficit increased was the decision of the Feds to help out GM and Chrysler. Are you telling me that you'd be willing to just kiss those jobs good-bye? No Liberal government would do that. So you don't like the GST tax cuts. Get over it. I didn't like the liberals spending half of every surplus when they were in power with only a a quarter going to tax reduction and debt repayment receptively. The GST cuts are very stimulative.

  83. Josh please read the above comments.

    The Liberal record on fiscal management is not that great. If you took them at their words and applied all their wacky spending ideas since 2006 we'd be in far, far worse fiscal shape.

    And throwing around one year surplus and deficit figures isn't an arguement for anything, its just numbers out of context.

    Things were running along smoothly until a synchornized global recession caused revenue to plumet and the opposition called for a massive stimulus package.

    The structural deficit is only something like 5 billion and will dissapear on its own in a few years.

  84. Josh rereading your post I'm wondering if you want to discuss or just condemn the CPC. If you want to discuss the deficit, how we got here and how to solve it fine. If you're just here to tell us how badly we need the LPC back in power, well I won't bother answering your posts further.

  85. Things were running smoothly, but they weren't running well. We had (and still do) a massive government retarding economic growth. We have the government meddling in all manner of industries for no collective benefit. And now the Liberals want to expand social engineering by offering public daycare?

    We need smaller government. Much smaller. I cling to the hope that Stephen Harper, had he a majority, would immediately give that to us.

  86. Ira are you a libertarian or just a smaller government guy like me? I think this column is good start to downsizing government:


  87. Ira I think a precondition to smaller government is a change in Canadian society.

    If Harper moves too quickly people will recoil and go with a big gov't party.

    Pragmatism is required at all times. Harper should only take on 1 or 2 BIG projects at a time and make sure he's not alienating the people when he does so.

    My dream for Harper's first majority would be the reorganization of the CBC.

    End the 1 billion a year subsidy, have it declare bankrupcy and renegotiate wages/benefits so they are equal to private sector broadcasters.

    Scrap services that don't make money.

    Then sell the thing off to the highest bidder.

  88. Here's a topic dear to my heart - Equalization. I think it should be phased out and here's why:


  89. Interesting article Earl.

    I wish they had explained why even though they have the same fiscal capacities the have provinces offer worse services.

    On the face of it you'd think with similiar relative capacity they'd have similiar quality services.

    If I had to guess i'd say its because during normal times somewhere like Alberta has a very over heated economy.

    Prices and wages are higher due to a relative labour shortage where as the same measures would be depressed in have not areas.

    Migrant workers and the need to facilitate economic activity requires large sums to be diverted to infrastructure projects.

    Prosperity has its price, yet it doesn't seem to be taken into account by equlization programs.

  90. The last few days I've been calling for the PS to pay 50% of the cost of their pensions. I still think that needs to happen. However we keep reading about the huge funding gap in PS service pensions, by some measures $58 billion. Now I read that the Chretien government stole a $30 billion surplus in the fund to pay down the deficit back in 2000. Had that money earned just 7% it would have more than covered any deficit. Just goes to show that the answers are never black and white.


  91. Link in last post didn't post:


  92. Such a shame that "Harper" and "majority" must always go together with "dream", isn't it Shadow? Just as "649", "Jackpot", and "dream" must always go together...

  93. Hi Doctor Cynic!

    You misunderstood me. My "dream" was for a specific policy i'd like to see them pursue if given a majority.

    As to whether or not I think a majority is possible I certainly do think so.

    The Conservatives have a daunting fundraising advantage, a strong organization, and a good crop of candidates selected.

    A well run election campaign this spring could easily result in the Conservatives picking up the handful of seats needed to form a majority.

  94. I have a lot of big unrealistic dreams as well.

    The only trouble is none of them are ever going to come true.

    Harper,and Shadow can keep on dreaming.

    It's never going to happen.

  95. Hi Left Winger!

    I don't know if my dream of the CBC ever getting privatized will come true.

    I suspect with a majority it would though. The gov't needs money and that 1 billion a year would be a pretty juicy target.

    Other large public companies have been privatized in the past from a variety of sectors.

    No reason at all to call it an "unrealistic" proposition.

  96. I know all the right wing spiel.

    Keep on talking it up buddy.

    Looks good on you

    You actually left quite a bit out.

    Fascinate me some more with it.

    I can't wait

  97. Earl said...

    Josh you are smart enough to know that no matter who was in government the deficit would have necessarily been in the $50 billion

    I disagree. You're assuming the Liberals would have wiped out their own $13 billion surplus in the first place. What are you basing that on? It could have been a reasonable (reasonable under the circumstances only) $35 billion deficit (+/-) instead.

    The GST break that no one seems to benefit from or even notice what-so-ever has costs us billions and billions and billions in lost revenue since it was implemented.

    Hence the government's fiscal position would have been much, much better with a Liberal government than the cons who destroyed the budget.

  98. Josh have you been following the Liberal proposals since '06?

    They wanted to reduce the bottom income tax bracket by a substantial amount. That effects the amount of tax everyone pays and would have cost about as much as the GST points.

    Then the daycare and Kelowna accords would have been an additional 20 billion or so.

    Finally it was the Liberals who said the gov't stimulus package wasn't BIG ENOUGH.

    When the Liberals plan was to spend more and more how can you say the deficit would be smaller if they had remained in power ??

  99. Josh the GST cuts, cost about $8 Billion a year. That was before the recession. Now they cost less. In any event 56 -13 equals 43. Each year the Liberals divided up the surplus into three parts, debt repayment 25%, tax cuts 25% and new spending 50%. So what ever the surplus we know that there would have been about $4 billion a year devoted to tax cuts, now we are up to $47 billion. Of the 50% devoted to spending some would no doubt have been recurring just as the tax cuts were recurring. Would we have a smaller deficit under a Liberal government? Maybe. But don't for get the plans to spend $4 billion on the Kelowna Accord and the promises of a national pharmacare plan and national daycare plan. How many more billions would they have cost? The fact is we simply don't know what the deficit would be if Paul Martin were still our PM. We don't know if we'd be locked into programs we couldn't pay for like pharma care and daycare. We don't know how much further taxes would have been cut. The only thing we can be pretty sure of is the GST would be 7% instead of 5%. If you can convince me that Iggy would have taken a tougher line in this deep recession and spent less on helping the auto companies and on infrastructure spending and on EI improvements then I'd like to hear what you have to say.

  100. Josh wears rose-coloured glasses.

    Earl, that was an excellent reply, and way to much for me to unpack right now.

    I would have one question..

    What do you have against consumption taxes?

    I know why they may be "regressive" in a way, but they also do not destort they economy as much, and with rebates (and income tax reform) can be part of a good package.

  101. Hey AJR79 i'll just add one more benefit of consumption taxes which is that they provide a more stable revenue base then any sort of income/profits tax.

    During a recession income and bussiness profits especially fall quite dramatically thus reducing revenue from taxes levied against those sources.

    Consumption falls too but at a relatively lower pace because spending habits/lifestyle changes don't happen overnight and people can draw upon savings or go into debt.

    Jurisdictions that rely on corporate taxes at the expense of consumption taxes are seeing revenues cut in half this year requiring massive cuts to services or going into debt and paying the interest that goes along with it.

    During boom times the spike in revenue form these sources can fool politicians into creating programs that are unaffordable in down years.

    On the other hand consumption taxes don't spike as much during booms as people pay down debt and save money.

    Clearly this is a major plus for consumption taxes.

  102. Earl said:
    "rather than from UI as it was known then. UI or EI premiums certainly don't encourage employers to add jobs. "

    Then want to try and explain why the CRAP has mandated a significant increase in EI premiums?

    Tax the Rich?? Yeah, right and they just leave the country. Unless you can tax at source as is done for Income Tax there is no way the "Rich" can be made to pay their fair share. Tax havens abound just so these people don't have to pay tax !!

  103. Peter the independent panel that makes sure EI payments are sufficient to maintain the solvency of the fund has decided to raise rates because its their job to make sure there is enough money in the fund.

    As to why funding comes from workers and not general revenue its because you need to pay into the program to benefit from it.

  104. 49 remember this??


    Guess what. They just imposed new taxes on airport services.

    Domestic Flight = $2.50
    Cross Border = $4.30
    International Flight = $8.90

    Enjoy !

  105. Peter words have a definition for a reason.

    A tax generally applies to everyone, a fee applies to the users of a service.

    Since nobody is forcing anyone to fly this is a fee.

    Security costs are on the rise as terrorists target our planes. Canadian tax payers shouldn't be on the hook for subsidizing air travel, it should be up to the people who use it to pay a fee.

    Frankly i'm glad Harper did NOT raise taxes and instead brought in this fee.

    As someone who doesn't travel by air I would be quite annoyed paying a tax for the benefit of people who do.


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