When he stood up to address the Commons at 4.08 yesterday afternoon, Jim Flaherty let it be known – five years of deficits according to his forecast. When he later spoke about the figure, he said he was being more conservative than private economists – though not all of them agreed, if you listened to the talking head ones that were all being consulted on the TV.
Most of the spending measures can be found elsewhere, but suffice to say, they’re not only increasing spending, but they’re also cutting income taxes. And this might be one of the things that might yet be the death of this government. After all, the Liberals have long signalled that they weren’t interested in broad-based permanent tax cuts to the middle class. After all, they can’t be considered adequate stimulus, as the middle class is more likely to save that money or pay down debt, which doesn’t mean they’re spending it and helping the economy.
That was one of the Bloc’s complaints – that the tax cuts aren’t targeted enough. And they won’t be supporting it.
There are a few other poison pills in this budget, some of them leftover from the fall economic update. One of them is the provision to remove pay equity provisions. The Conservatives claim this will actually make pay equity work better by taking it away from tribunals and putting it into collective bargaining. However, they’ve been saying this since November, and yet we have yet to see them actually produce legislation that would address the issue.
It also still counts yet untold asset sales in its calculations. The Liberals have been beating this drum for a while, and they apparently still haven’t received an answer as to what they plan on selling in a buyer’s market.
Add to that, there are complications with the infrastructure funding. Much of it is tied to federal-provincial-municipal partnerships, meaning that the federal money will flow when the funding from the other two levels does. Only some cities are saying they don’t have that kind of money to pay for what would be their share of the costs. So much for immediate, “shovel-ready” stimulus spending.
The NDP is also not going to vote for it – as if that were a surprise. Finance critic Thomas Mulcair says that if you actually crunch the numbers, it only amounts to 0.7% of GDP, not the 1.9% that they’re claiming (which would put them in line with their international obligations). Jack Layton says that help the vulnerable, but those measures he likes he could put into a coalition budget immediately.
And the Liberals? They have the government’s fate in the palms of their hands, and no real answer yet. The caucus met last night, and Ignatieff will announce his decision around 11 this morning. Many pundits believe he’ll support it for now. After all, it only helps him to let Harper wear this recession for a couple of years, at which time he can handily be defeated. But if those poison pills are too much? Will they try to amend in committee and hope the government doesn’t define amendments as a vote of non-confidence?
Stay tuned.
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