Opportunity Knocks

The only knock I've had against Dalton McGuinty in the past is that he's been very risk-averse and has never really seemed to take full advantage of his time in power to bring about real change. He's run the province well, but if Dalton were a font...well, I have no clue what font he'd be, but he wouldn't be bold.

Tomorrow's budget will probably be the best opportunity he ever gets to put his stamp on the province and to leave a legacy. The word of the year is "stimulus", which means governments have been given a green light to spend to their hearts content, without worrying about balanced deficits or balanced budgets. So the money is there to do whatever he wants.

On top of that, with the PCs in leadership mode, there's no opposition leader to take him to task or to critique him. So there's likely to be little political fall-out.

He has the resources and political cover to be bold. I'll be very curious to see what he does with this opportunity.

Budget 2009 Reaction: Do You Think It Is Easy To Make Priorities?

(updated at bottom)

We'll need to wait until Ignatieff speaks tomorrow to answer most of the questions I posed this morning, but the initial reaction seems to be one of reluctant acceptance. The economists on Don Newman's show both gave it a "B-", and all the provincial governments I've seen reaction from like it (more so than they liked Flaherty's 2007 budget, which ended the era of provincial bickering, anyways) . Hell, even Dwight Duncan was saying nice things about Jim Flaherty.

Personally, I'd give it a C. It's satisfactory. There's nothing in here that Liberals should have huge ideological problems with and I have a hard time seeing how a Michael Ignatieff budget would have been significantly different. But, despite that, it feels like a lot of recent Alberta budgets - a missed opportunity.

The electorate gave the political green light for wild deficit spending. This budget could therefore have launched a bold national project, modernized our economy, made our post-secondary institutions and research centres world class, or forged ahead with green initiatives. Instead, Jim Flaherty drove around town throwing twenties out his window to every group or industry that wanted them. As a stimulus budget, that's not an awful strategy, as bold projects often take time, but this budget could have been so much more.

I'm sympathetic to the political realities of the situation. But I can't help but think that the lack of focus stems from this government's refusal to recognize the problems we were facing until a month ago, and their refusal to accept that government can actually be a force of good in shaping the future of a country.


A few other random thoughts:

1. Ottawa will be moving ahead and creating a national securities regulator, which is long overdue.


2. On the flip side, Flaherty standing by his FU plan to scrap pay equity rules was completely unnecessary, and gives anyone who wants to oppose this budget an obvious target. [note: I'm trying to find online confirmation of this somewhere, although I'm seen it mentioned on a few pundit shows]


3. Also stupid, but more far more politically sell-able are 20 billion dollars in permanent tax cuts over 6 years. Tax cuts are great...when you can afford them. And you can't afford them, when you're staring down a 34 billion dollar deficit.

It will take time for the tax cuts to impact consumer behaviour and, when they do, most of it will just go into savings. So it won't do a thing to stimulate the economy. It's even a tough one to figure out politically, since it will receive scant attention amidst billions in spending promises.


4. I do like that the budget is short term in scope. 18B in stimulus spending this year, 15.5B next, then under 5B by 2011-2012. The key is obviously making sure the money gets spent quickly - given many of the projects involve three levels of government, and municipal governments are short on cash, that's going to be a challenge.

The plan is to balance the books by 2012, but knowing this government's track record on predicting surpluses, I wouldn't bet the house on it.


5. I can, however, renovate the house on it. Not a bad stimulus plan, but I would have liked to see it tied to environmentally-friendly renovations.


6. Andrew Coyne has his annual "this budget means the death of conservatism" post up and it's a doozy!

And when they decide to put an end to conservatism in Canada — as a philosophy, as a movement—they go out with a bang.

7. Man, all the hard right fiscal Conservatives are going to need some state-paid heart medication after reading this budget. Joining Andrew in the depths of despair is Gerry Nicholls:

The Conservative Party is conservative in name only. Makes me yearn for the days when we had relatively fiscally conservative leaders, like Jean Chretien.

UPDATE: The Liberals will reportedly move forward amendments to the budget. I really like this approach. It's a bit ballsier than just letting the budget through, and it lets Ignatieff claim victory for an issue like extending EI benefits in that same annoying way Jack Layton always took credit for every penny he shook Paul Martin down for in the 2005 budget.

And it's not like Harper can say no ("sorry we don't have the money for it. ha ha ha!"), without looking completely ridiculous in the process.


UPDATE2: Here are Iggy's demands, as per CTV. Fairly tame stuff.

1. The Tories make amendments that include improvements in employment insurance and infrastructure but without adding more to the deficit.

2. The Tories issue an update three times a year on the types of progress being made in terms of the deficit, infrastructure, creating jobs, and regional fairness.


UPDATE3: The Liberals who have allowed every Conservative confidence vote during the past two years to pass are now putting the Tories on "probation". This time we mean it!

Truth be told, the tactic isn't that bad, if only because it sets up convenient election triggers when these accountability reports come in. Of course, that's assuming this ammendment gets passed, and that's not guaranteed given that the jilted coalition brides will likely vote against it.

Budget Day

Leave comments here, as the fun happens. Updates will follow

Yeah, yeah, most of the juicy details have already been leaked. And, sure, the Liberals will probably let it pass. But, there are still a few things worth tuning in for:

1. Tax cuts? This appears to be the only issue that could cause the Liberals to vote it down - despite the leaks, we still don't know how big the tax cuts will be.

2. The coalition response. Not their response to the Tories - we know what to expect there. But their response to the Liberals if they decide to support the budget. I'm curious as to just how strongly Layton and Duceppe will lash out at Ignatieff if he supports the budget.

3. The coalition dies? Will the coalition parties keep the threat alive, or will they finally just admit that the idea is as dead as the days of balanced budgets.

4. The budget. Not as a political document, but as a policy one. In all the hoopla, it's easy to forget that this is the most important budget in 14 years. Just how effective will it be at stimulating the economy?

5. Ignatieff takes the stage. The question is not so much what he'll do - the question is how he'll do it, and how he'll look and sound in the process. This is his first big test as leader, and it's not easy to look good while rolling over with the whole country watching.


UPDATE: I'll more thorough analysis later but, until then, here are the Globe, CBC, ITQ, CTV, and Canwest recaps.

Mid-Week Musings

Can you feel that warm front of hope drifting up from Washington DC? No? Not yet? Well, regardless, here are a few random news stories that caught my eye today:


1) For anyone preparing for their SATs, here's a handy word association to keep in mind: Sheila Fraser is to Paul Martin as Kevin Page is to Stephen Harper.

Today, Page answers the question on everyone's mind - how long will it take Stephen Harper to undo all the economic gains the Liberals made during their time in power? You can read all the gloomy projections here.


2) The League of Below Average Prime Ministers Strikes Back! Fresh from their annual Christmas pilgrimage to the grave of Arthur Meighen, the League of Below Average Prime Ministers has decided to re-iterate their call for green infrastructure spending.


3) The Liberals are drafting their own budget up - it's unclear as to whether this will be made public or if it's a "just in case" document, but I like the optics of it. It shows you're ready to govern and that you have a plan.


4) Not that they'll need to implement it.


5) When I first heard that Iggy was spending his holidays finishing his book, I kind of had a "huh? remind me again why he was in such a hurry to take over?" reaction. But now that we know some details about the book, it's clear it could be a very useful political document. One of the biggest knocks on Ignatieff remains his time outside of the country. And I think it's a fair critique, since you want a leader who truly understands what it means to be Canadian running the show. Well, if Ignatieff can show he understands Canada in this book, it might go a long way towards easing some of the doubts that voters may have of him. At the very least, it will help him win the votes of the dozens of poli-sci students who will be forced to read it.


6) To drift off-topic for a minute, I must say that both BSG and 24 have been top notch since their January returns (although I could do with the constant monologuing about the pros and cons of torture use on 24...if I wanted that, I'd read a Michael Ignatieff essay. I kid, I kid.). Tonight, Lost is back with a vengeance. Woo!

Alberta's NDP Budget

Those outside of Alberta may have missed it, but something truly remarkable happened in our province yesterday (no, not the snow storm or the Flames win - both small miracles in their own right).

Remember the complaints by some on the right about Flaherty's 6-8% increase in spending? Well, yesterday, Lyle Oberg brought in the first Stelmach budget which calls for an unprecedented 17% increase in spending. This may very well make Alberta's Progressive Conservatives the authors of one of the most free spending budgets in Canadian history. After years of gargantuan surpluses, it is projected to shrink to $2.2 billion this year, $1.4 billion in 2008 and $925 million in 2009...that's assuming no out of budget spending and oil prices which match the forecasts. Most alarmingly, instead of banking the surpluses to the Heritage Fund, 2/3 of all surpluses will be spent onto miscellaneous new projects while only 1/3 will actually be saved.

Despite the massive spending, there's no real focus. No plan to make Alberta's Universities world class. Not a penny for the environment. No plan to diversify the economy. No tax cuts. No end to the health care premiums. Not since the Alexei Yashin contract has so much been spent for so little return.

But enough from me, I'll let Rick Bell do the talking:

This is a mess. The Tories cannot say it is a mess because they created it.

Many Albertans, and many Calgarians, cannot say it is a mess because they supported the making of the mess, where loyalty to the Tories trumped common sense.

But make no mistake about it. The numbers aren't lying. In the richest province in the land, we have a mess.

So naturally, there's all kinds of spending on catch-up construction, though off the top there is a big caution.

A good chunk of change is for projects already approved and announced. Lyle Oberg, the finance minister, admits there isn't a "huge amount" for new projects.

And well over a billion bucks covers the costs going through the roofs not yet built because the Tories, in their wisdom, wait to bang nails big-time until the economy is good and hot.

The most interesting thing about this budget is that it opens up a ton of space for the Liberals to pass the Tories on the right (appropriate since as Transport Minister, Ed Stelmach proposed moving the "fast lane" on highways to the right). A focus on long term planning, the Heritage Fund or tax cuts right now from the ALP could very well force a few on the right to hold their nose and vote Liberal...at the very least it would make it very hard for them to justify their continued support of the PCs.

Random News

1) Andrew Coyne is waging one heck of a crusade against the Tory budget and I must say - give me a sword! When this guys picks an issue to feel passionate about, you do not want him against you.

-Tuesday's Column

-Wednesday's Column

-And a link to Jack Mintz's critique of the ever expanding tax code. Next year: tax rebates on dental floss!


2. Stockwell Day is in trouble again...


3. More reports on the new era of peace between provinces and the federal government.


4. The opposition parties pass Paul Martin's private members bill on the Kelowna Accord which the Tories plan to ignore. Of note, Brian Mulroney has spoken out in favour of the bill.


5. John Ivison has a good article on the potential of the Tories converting to Kyoto. He opens with a brilliant line: "The suggestion from this week’s budget is, if there was a sizeable voting population of Vikings in the country, he'd offer up a few villages in Newfoundland to plunder."


6. On the flip side, the Liberals are now not only backing Harper's crime bill, but trying to fast track it.


7. I'll leave the comments to those in Ontario, but Dalton McGuinty has brought in a pre-election budget of his own.

The Official Budget Response

Scott Feschuk is a friggin' genius

(hat tip OOL)

Bloggers Hotstove

I was on a special post-budget edition of the Bloggers Hotstove this week with Tasha Kheirriddin and Antonio DiDomizio. If you don't want to listen to the whole thing, it can be broken into three parts:

1. Tasha makes some very smart comments on the budget.

2. Antonio and I bicker about the fiscal imbalance (which I can't for the life of me seem to pronounce properly no matter how hard I try).

3. Antonio goes on an absolutely amazing rant against Mario Dumont.


Anyways, check is out here.

Budget 2007

I know most of my fellow Libloggers will classify today's budget as everything from "a disaster" to "the end of Canada". Personally, I'd say it's not bad. I mean, with the Canadian economy in the shape it's in, it's hard to deliver a bad budget. Harper resisted the urge to go down the typical conservative route of massive upper class tax cuts, massive middle class tax cuts, massive corporate tax cuts, and military spending. It reminds me a lot of the kind of budgets Ralph Goodale delivered during the Martin months; lots of scattershot spending with no real theme and enough pre-election goodies to satisfy everyone and cut off the opposition. With that in mind, a few general comments:


1. There's some good analysis of the budget here and here.


2. Via Wells comes this gem from Mario Dumont:

The premier called Dumont "an empty shell" last week. Now Dumont says, approximately: "Well, I say he's a hermit crab. You know what a hermit crab is. It's those little creatures that have no shell of their own and need somebody else's shell to live in. Mr. Charest has no record to run on, so he has to run on Stephen Harper's."

The BQ supporting the budget certainly is good news for Charest who I still think can salvage a minority win.


3. Andrew Coyne was, predictably, in a bad mood calling this the most free spending budget in the history of confederation.


4. Not that Phil Fontaine is ever happy, but he certainly wasn't happy with the budget.


5. Danny Williams waging war with Ottawa has become somewhat comical outside of Newfoundland, but I suspect there may be some repercussions for the flip-flop on equalization on the Rock. There are also some votes to be lost in Saskatchewan. That said, there are a lot more votes in Quebec and Ontario than Newfoundland and Saskatchewan, so I doubt Steve will lose much sleep over this.


6. The Liberals and NDP have both been rather ineffective at communicating why this is a bad budget. I've watched the coverage and read the press releases and it's hard to get a clear message or theme as to what's wrong with the budget from either of them. Obviously Flaherty has done a good job of not giving them anything to latch onto.


7. If Harper was going to "fix" the "fiscal imbalance" by spending in provincial jurisdictions, he should have directed more to education. The post-secondary component of this budget is a joke. More for the RESP program won't improve access or quality to higher education for any Canadians.


8. Like I said bellow, anyone who thinks this will mean the end of the provinces asking for more from Ottawa needs to lay off the ganja.



So, when all is said and done, a very political savvy budget which won't do much harm but won't do anything to drastically improve the lives of Canadians either.

Monday News Roundup

Daveberta has the run down on the new legislative session in Edmonton and the performance of Mr. Ed thus far. Speaking of which, Stelmach says he's not ready to pick a fight with Ottawa over the new equalization scheme but I'm guessing Danny Williams won't be quite so nice.


There weren't many leaks for the first Harper budget but it looks like secrecy may not prevail this year. The Globe has some speculation here:

The finance minister's “fix” [for the fiscal imbalance] is expected to include at least $3.5-billion extra for the provinces: about $1-billion more in annual equalization payments, $1-billion in annual transfers for post-secondary education, an already announced $1.5-billion fund to tackle climate change, and possibly more for other infrastructure projects.

Even though I tend to agree with Dion that the fiscal imbalance is the creation of provincial finance ministers with over active imaginations, it's hard to argue against money for education, the environment, and infrastructure. All the more reason I can't see the government falling on this budget. Still...I did find this cartoon pretty funny:





In Quebec, Mario Dumont is upset over the "witch hunt" being waged against ADQ candidates. I know! You find one or two candidates who worry that "the ethnics will swamp us" and complain that we "let them wear turbans" and suddenly everyone is on trial...


Out West, it appears the federal Tories are having problems of their own with a BC candidate who exaggerated his resume. As someone whose current resume has "2006 Time Person of the Year" under his accomplishments, I can sympathize with Mr. Pandher.