Judy: Judy, and when I hear the beep stopping, I’m going to start the meeting.
Judy: Hang on everybody, you don’t even need to give your name yet, I’m going to do a check in a second.
Judy: Hi there, it’s okay, it’s Judy, we’re all set.
Jack: Hi Judy, we’re all, we got a bunch of caucus members here, we’ll just wait for your instructions, we’ll leave it on mute in the meantime.
Judy: Okay. Alright, I think I’ll start, uhm, it’s Judy, we’ve got exactly one hour and no more. We’re going to run this meeting very tight. I want everyone to put your phones on mute, also please do not anytime during this call, put your line on hold, because that causes a noise for everybody. We’re going to give an update, an over view from Jack, a report on what’s happening procedurally from the House, generally from Libby, and then thirdly a overview on the issue of platform and policy, from Kathleen, and then a chance for each caucus member to give a very succinct and brief point to indicate their concerns or issues that they would like to see raised by our team as we prepare any further documents. So, as you all know, we have our next meeting as our regular meeting Monday at ten o’clock, in Ottawa, we will have a chance there to have a more extensive roundtable that in through the week, so please don’t feel you have all the time for questions and concerns, but we will deal with that on Monday, so without further ado, let me call on Jack who must be very tired and going non-stop for the last three days, we appreciate what you’re doing Jack, and I think we’re all excited to get an update. Thanks, Jack.
Jack: Thank you very much, uh, keep the myth alive that I’m exhausted and working incredibly hard (laughter) I appreciate you relaying that, I was asleep by ten o’clock last night, and had a very good night, a very good sleep, and that was my Friday night. So, an update on where we are, the, uh, we’re in the middle of a very historic time, and we’re playing a key role in it, in some ways a catalytic role actually, because as we think back, we’ll realize that nobody really imagined that it would be possible for the Bloc Quebecois, the Liberal party of Canada ever to enter into any kind of a discussion around the future of the country and it turned out that we were the glue, and spotted and prepared for the opportunity, and had taken the steps that were required so that when that opportunity arose, which was when Mr. Harper made his disastrous strategic error, by not providing stimulus to the economy, and instead playing political games, we were able to move, and things began to move very quickly, however, many obstacles remain in our way, and so we’re in a real battle now. The negotiating process, I am, by the way in very very regular touch with the leader of the Liberal party, and the leader of the Bloc, frequently every day. At the same time, negotiation processes are underway, and in fact as we speak, our negotiating team that I’ve named to meet with the Liberal negotiating team are discussing the mechanics of a coalition government, and the form that it would take, the structure of cabinet, the way in which the logistics of a coalition government with the Liberals and the New Democrats would work, the key roles, and dispute resolution mechanisms, timelines, et cetera.
All of the logistics issues that you would expect would be a part of such a discussion are being negotiated now we hope that that part of the negotiations would be completed today. Our negotiating team consists of Brian Topp, who negotiated as a senior member of the Romano team in Saskatchewan, negotiating a similar coalition with the Liberal party there, and of course you know Brian is our campaign co-chair director. Ann McGrath, in her chief of staff role, she’s also wearing the president of the party hat still, and so she’s got several hats on at the moment. Ed Broadbent, Alan Blakely, Dawn Black, as a member of caucus I’ve selected to participate in this process, someone that I happen to know is also respected and trusted by key Liberals, Tom Mulcair, as our Quebec lieutenant, and Carl Belanger. Tom and Carl are the negotiating team with the Bloc team, and Brian and Dawn Black are negotiating with the Liberal team. We’re starting with two party talks, this will resolve itself into a tripartite conversation before the weekend is up, and the goal is to produce by the end of the weekend, an agreement on the machinery of the coalition, which would be signed off, particularly by the NDP and Liberals, but endorsed by the Bloc, and an agreement on policy program for the coalition, that would have three party agreement. I can’t go into the details on all of this stuff, particularly the machinery, but it’s in the process of negotiation, and we could consume an awful lot of time speculating about it, so I don’t propose that we spend that time today on this particular matter of question. But instead, there’s a golden opportunity today, for you to provide input on the policy matters, you can be assured that we have looked at our program, we’ve looked at our platform, we’ve looked at what I’ve been saying about economic stimulus, we’ve been in close consultations with the leadership of the labour movement around some of their key ideas and they’ve been providing terrific support, including at a high-level early morning meeting this morning, so much of what you would have want to see, it’s probably already there, you’ll hear a bit more about it later, but there’s an opportunity to touch base with all of you, because in the end, you’re going to be intimately a part of the delivery of all of this, and so that’s why we’re having this meeting at this point in time.
Jack: I made a list Judy, so I’ll take a whack and you’ll say if I’ve missed any…
Judy: Ya. Meetings, confidentiality, what can be said. Go ahead.
Jack: First, do MP’s have to be in Ottawa until we have a better sense of the potential confidence motion stakes. You have to remain agile. And with Ottawa being the base. Uh, and so when you’re organising your community meetings make sure there’s a speaker phone facility, or a webcam. Secondly, I believe that we should get immediately into the driver’s seats on organizing these community meetings, you have people who worked on your campaign who are exactly the kind of people, whether in labour movements, labour councils, uh, childcare groups, environmental groups, these are people that need to be pulled together. You get them together, and then they’ll take it from there, it doesn’t have to be your meeting, it shouldn’t be your meeting, but of course you’ll be there as the MP, and you’re part of the coalition, and you’re consulting with the community to make sure they’re open, so if anyone wants to come and protest and say it’s a bad idea, be there to make a real news event out of it, the youth comes with the emotion in favour of the coalition and an action plan coming from Thursday night, particularly focused on the weekend, with petitioning, and phone in shows, and god knows what else, a letter writing, one of the goals here is to of course, recruit as many names, addresses, emails, phone numbers as possibly can, because this coalition will need the support of these people, and then we will need their support when we get an election. Now, will there be an independent NDP caucus, yes. BQ stability issues, worry about BQ potentially being off-side, we’re taking that very much into account. We have numerous strategies designed to deal with it, I actually believe they’re the least of our problems, but in case I’m wrong, let’s just say we have strategies, this whole thing would not have happened if the moves hadn’t have been made with the Bloc to lock them in early, because you couldn’t put three people together in one, in three hours. The first part was done a long time ago, I won’t go into details, and the managing expectations, lists from groups, actually, the wisest people in the groups are already coming to the conclusion, some of them are in direct contact, saying probably wouldn’t be too helpful if we had long lists of stuff, right? What we really want is just to get Harper out and get the new group in because it’s going to be a hell of a lot better for everything we believe in, correct? Correct. So let’s stay on that track, and not start debating whether or not it’s twenty five percent change or fifteen percent change over here, let’s get them out, on the basis of unity not the basis of division. Somebody asked about Bill Casey, absolutely, in the game, uh, on confidentiality, we now have to get out and defend the idea of the coalition. This is not a secret that it’s been discussed, the various elements that are in it, you can say it’s all about getting the economy going, and transforming the economy for the twenty first century, use everything that you’ve seen in my speeches up until now, that you’ve all been using so well particularly when I’ve seen you on panels, and by the way, our team on panels, everybody, staff and MPs, rocking, absolutely rocking doing us proud, so yes, there is a coalition, we’re fighting for it, we’re trying to make it happen, we think it’s a good idea for Canada, the majority of Canadians voted to go in a different direction than Harper’s taking us, you can’t trust him, no matter anything, throw him out. What about the legitimacy of the democratic process, yeah, what about it? He was given a minority, and he refused to work with the other parties, he had 38% of the vote and he’s trying to govern like he had 100% of the power, he’s the one who’s got democracy wrong, not us. So do not be defensive, to work among what we are doing is to give effect to the wishes of the majority of Canadians, have no doubt about that. The coalition for Canada, I love the idea, it could be a deal-breaker for the Bloc (laughter) so if we don’t go, we call it “The Coalition for Canada and Quebec,” (lots of laughter). Well, welcome to the real world of….that’s not funny
Jack: And let me come to, I know it’s complicated, so let’s just be wise about how we put this thing together. I think that there were many good comments that were developed from this, right from Aboriginal, which was on our mind, right through to many of these other suggestions and we will do our very best to put this together. And I’ll just say one other thing about the issue of the Bloc: nothing could be better for our country, than to have the fifty members who’ve been elected to separate Quebec to actually helping to make Canada a better place. I think we just approach it on that basis, and say we’re willing to make Canada happen, here’s other things that we’re going to be investing in and transforming together, they’re willing to work with us, we’ll accept that offer. What will be important to point out is that this will be an NDP-Liberal coalition, which is supported by the Bloc, with policy ideas that the coalition is bringing forward. Okay? And that’s going to be helpful to you in your dealing with those that have concerns, because they, you can see where Harper’s going here, he’s going to say it’s the socialists and the separatists and the opportunists getting together. You know? Those are their talking points, and so we just need to push back. I want to thank everybody for the input, I would get going this weekend on getting groups together, start talking about organizing those Thursday meetings, act as the catalyst to make it happen, and then just let it go, it’ll roar, and it’ll be very exciting. If you’re in a larger city, and there’s several of you, or if you’re in the largest city and you’re on your own, act as the catalyst anyway, chances are there’s a bunch of Liberals in the other ridings on whom we want pressure placed, as I mentioned at the outset of the conversation. I guess we’re at the end.
Judy: I just want to add one thing, and that is so the major thing is here that the message we’re focused on the message, so that’s not confidential, what’s confidential is strategy, the discussion, details, the speculation about the other parties and their motivation and what they will or they won’t do, we should not talk at all about war rooms, or campaigns in that sense. We’re building, trying to create a coalition government that will be a Liberal-NDP coalition that will be supported by the Bloc and that’s the message that we want to get out, nothing about the discussions in the background, and when in doubt, call, probably Brad, and Brad on that issue and on the whole issue of the campaign, and organizing meetings, people will want to reach you quickly, what’s the best way?
Jack Harris: Judy, Jack Harris here, I know it’s a structure question, but I’m at a loss at this point to know whether we’re talking about a short-term, quick economic stimulus coalition, or are we talking about something that could last two or three years, this is kind of important in our own minds, as well because aside from economic stimulus of course, this coalition will have to govern on every part of the government, of the legislative of the –
Judy: Okay, let me ask Jack to answer that and then Brad, you give the best contact information.
Jack Layton: Longer term. Not short term.
Judy: Now, Brad, you’re going to be in demand, what’s the best way to get to you quickly?
Brad: For folks that are going to be holding panels that we’re setting up, we’re going to be briefing you and your media office, for your press secretaries, the press secretaries have been divided into thirds, so every member of caucus has been assigned, so those folks are going to be available to you, and working very closely with me, and I discourage anyone from phoning me, the smartest move would be to give me as much heads-up as possible, I’m on a panel in two minutes, is highly unhelpful, and I will fail you miserably, and I know some times that situation has to happen and it’s understandable, but obviously calling me on my cell is the fastest way or by sending me an email, at email@example.com
Judy: Alright, and is it you, not just on panels, organizing meetings, events, here at the grassroots level, who’s the best person?
Brad: It will not be me, I will not be able to assist with your meetings on the Thursday night, we will assign a member of the team to that.
I’m at the Parliamentary Press Gallery dinner right now and a quiet rumour among a small number of the gathered people here is that Prime Minister Stephen Harper may prorogue Parliament until the new year.
This would provide some breathing room for the government and let Canadians consider a Bloc-supported NDP-Liberal coalition while they eat their Christmas dinners and/or get together for their holiday parties.
The opposition will cry foul, but it’s within the Prime Minister’s power. The effect on Ottawa would be to pour some cold water on the heated political atmosphere on the Hill.
However, I should say, the optics of it wouldn’t be ideal to say the least. What do you think the risk/reward potential of this move would be?
UPDATE: 45 minutes later, the rumour has made it to the podium and was just announced to a surprised room. Should be an interesting evening. I also hear that the PM may make a surprise appearance.
Fact: “The Liberal Opposition plans to introduce a non-confidence motion in the House of Commons on Monday” (source)
But: Notice of motions are introduced regularly by the opposition. Motions are always introduced in advance. Generally five motions are introduced. The Liberals having a confidence motion on the table are simply having the confidence motion on the table as an option. Potential motions must prested in advance and today (Friday) is the earliest opportunity for the opposition to have that option on the table for Monday. They may not actually move on voting on the motion.
Speculation: Anybody wonder why Stephane Dion didn’t immediately step down after the election? His people have been quiet on his prospects as leader of a coalition government. In the Liberal constitution, if I remember correctly, the only way Dion can be replaced in a pinch is if he either dies or resigns. If Dion doesn’t resign, the Liberals may govern under Dion if a coalition is formed.
Fiction: A new Bloc-Liberal-NDP coalition government would be viable beyond their agreement on the $1.95-per-vote subsidy.
Speculation: If the Liberals-NDP believe they can form a coalition with tangential Bloc support, the GG may have no other option to call an election as 77+37=114 LPC/NDP vs. CPC’s 143. The GG may see this as the only stable option.
Fact: The Conservatives (in the broader picture) want to move forward on the economy. The opposition wanted to hold the government back on the campaign welfare package.
Fact: The Throne Speech passed in the House yesterday after the economic statement was read. The opposition approved the government’s mandate knowing full well that they’d be bringing it to the brink this weekend.
Fact: On mandates, if the Liberals were to form government, they would do so after receiving the lowest proportion of votes in their party’s history. Further, if Dion does resign and if Ignatieff does become Prime Minister, he would do so without having been presented to Canadians during the democratic process that we call elections. Talk about an affront to democracy!
Fact: The opposition accused the government of not having a plan for the economy during an election and now they accuse the government of the same now. What has changed? The Conservatives now want to end campaign welfare.
Fact: Cooler heads recognize that the American elephant will move on the economy in new year and that any action with respect to our integrated economies would be better done in coordination rather than prematurely.
Speculation: Canadians will not accept a surprise Liberal-NDP coalition backed by a party that wants to destroy the country that would stand to be dismantled under the proposed funding changes of the Conservative government. By opposing campaign welfare reform, the Liberals are sustaining the existence of the Bloc for their own ambition. Canadians will not accept a surprise Prime Minister unvetted by the electorate.
Speculation: What are the terms of a NDP-backed Liberal coalition government? Cancellation of the $50 Billion corporate tax cut? What are the Bloc’s terms?
- CTV cuts 105 jobs amid advertising slowdown
- CTV opts out of Press Gallery dinner in Ottawa due to costs (no link)
and now this:
(would someone pay the bandwidth bill at CTV!)
Last time I checked, funding for the CBC went up to $1.2 Billion under the Conservatives. While we’re talking about propping up and subsidizing organizations like the Liberal Party and Bloc Quebecois, perhaps we should instead be talking about letting organizations that inspire and provide a competitive product compete on a level playing field with those that don’t and unfairly receive welfare from the Canadian taxpayer.
The latest news is that the potential of Bloc-Liberal-NDP coalition government in waiting is shrinking a bit now that the Conservatives have promised to remove required confidence from the party welfare issue.
This is bait of course.
If the BLN coalition backs down now, Canadians will understand that their opposition to the economic statement really wasn’t about the “lack of stimulus”, the rescue of Canadian jobs, or the “protection of rights of women and workers”. The opposition and brinkmanship that was threatening a fresh election or constitutional crisis would have been about parties that are so fresh out of ideas, so unable to inspire, that they were ready to go to political war over their $1.95-per-vote handout from the Canadian taxpayer.
So, have we seen crisis averted? Better yet, has the PM been successful in floating a very useful trial balloon over the heads of the opposition? If we don’t see the government fall, or a new one form, will this have instead put the issue of campaign welfare to the fore and have raised the cynical ire of Canadians to know that in an economic crisis, the ones ready to burn the house down were the Liberals, the NDP and the Bloc?
Over their entitlements?
UPDATE: Have we seen a crisis averted? No, not yet. The PM has pushed confidence votes back to December 8th and parties will have a chance then to bring down the government.
4:09pm: Persuant to a standing order I do not recall, the Minister of Finance tables his economic statement.
4:10pm: Time of unprecedented economic deterioration. Uh oh, this sounds bad.
4:11pm: IMF projects global growth weakest since ’93. Good thing the IMF puts Canada in the best fiscal position of the G7.
4:13pm: CTV reports that the Liberals will not support the economic statement. This statement is a matter of confidence and if defeated would precipitate an election.
4:14pm: Reformation of global finance will be done with global partners.
4:15pm: Trade will be expanded.
4:15pm: Opposition mocks Flaherty for saying the government planned for the downturn last year.
4:15pm: Taxes have been reduced by $200B. Investments have been made in infrastructure, S&T and training.
4:16pm: Funding for infrastructure projects. Taxes down by equivalent of 2% GDP. Sustainable and permanent tax relief.
4:19pm: Canada will come out of the crisis in a strong position because it went in a strong position.
4:21pm: Will not engineer a surplus just to say we have one.
4:21pm: Budget is balanced for now, but future injection of government stimulus may move Canada into deficit.
4:22pm: Days of chronic structural deficits are behind us.
4:23pm: Tax dollars for political parties and tax credits for donations brought up. Flaherty talking about the $1.75 per vote subsidy. Political parties should pay their own bills without excessive tax dollars.
4:25pm: $1.75 subsidy gone as of April 2009.
4:26pm: Spending growth will follow sustainable track.
4:27pm: Spending review will also look into crown corporations. Government will save $15B over the next five years because of expenditure management system.
4:28pm: re: public sector… New legislation will put in place “annual wage increases for the federal public administration, including senior members of the public service, as well as Members of Parliament, Cabinet Ministers, and Senators, of 2.3 per cent in 2007–08 and 1.5 per cent for the following three years, for groups in the process of bargaining for new agreements.”For groups with collective agreements already covering 2008–09, the 1.5 per cent would apply for the remainder of the three-year period starting at the anniversary date of the collective agreement. In addition, the legislation would suspend the right to strike on wages through 2010–11.” Some honourable socialist members: “oh, oh”.
4:32pm: Largest increase in infrastructure spending. $6B in spending. Aim is to provide new jobs.
4:33pm: Flaherty wants more power to help sustain the banking industry. These powers would include:
– Funding in the unlikely event that there is a draw on the Canadian Lenders Assurance Facility.
– The Canada Deposit Insurance Corporation (CDIC) to establish a bridge bank as a further resolution tool to help preserve banking functions.
– An increase in the borrowing limit of CDIC to $15 billion to reflect the growth of insured deposits since the last increase in 1992.
– The Minister of Finance to provide the CDIC Board of Directors broader scope of action when systemic risk concerns may result from the potential failure of a member institution.
– The power to direct CDIC to undertake resolution measures when necessary to prevent adverse effects on financial stability.
– The provision to CDIC of greater flexibility in the timing of preparatory examinations.
– The Government to inject capital into federal financial institutions to support financial stability, with appropriate provisions to protect taxpayers.
4:37pm: taking action to allow RRIF holders to keep more money in their RRIFs.
4:40pm: increase available credit to the exporting sector. $350 million injection of credit for these businesses.
4:41pm: Inject an additional $350 million of capital to the BDC to help SMEs.
4:44pm: “The greatest histories are written in the toughest times”
4:45pm: Scott Brison to respond for the opposition. Demands a “real action plan”. Brison accuses Conservatives of symbolism over substance. Conservatives have provided gimmicks instead of a game plan. “Nothing for manufacturing, autos”.
4:46pm: Brison: PM wants to change the channel from economy to politics. Canadians are hurting. They want talk on economics rather than politics.
4:48pm: Brison bringing out the personal anecdotes describing real Canadians and real concerns. Liberal are making this statement out to be about that $1.75 vote subsidy cut.
4:50pm: Brison accusing the Conservatives of huge spending and huge cuts at the same time.
4:51pm: Brison: government is selling the house to pay for the groceries.
4:51pm: Brison calls Flaherty “Deficit Daddy”.
4:52pm: NDP will not support economic statement.
4:53pm: CTV reports that the government is digging in their heels on the $1.75 subsidy.
4:55pm: Brison brings up Obama and speaks about his economic team and accuses the Conservatives of schemes.
5:00pm: Brison calls for “a new deal”. Brison’s seat mate earlier called out “FDR”
5:01pm: Gilles Duceppe responds for the Bloc. Duceppe: hat was presented was not an economic statement but an ideological statement.
5:02pm: Duceppe: government blind to urgent need to stimulate the economy. Government is attacking democracy, women’s rights and worker’s rights. Government has attacked Quebec.
5:03pm: Duceppe: government has sparked a democratic crisis.
5:03pm: Duceppe: economic statement runs against Quebec’s interests.
5:04pm: Duceppe: Bloc will not cave in on its principles.
5:06pm: Duceppe: Bloc ready to support the reduction of the size of the state.
5:12pm: Bloc Quebecois will oppose the economic statement.
5:13pm: Layton responds for the NDP. He’s got his wounded face on.
5:14pm: Layton: government has failed to act on the economic crisis. Layton is speaking quietly and slowly to show concern and disappointment.
5:15pm: Here comes the anger. Now Layton is doing some finger pointing.
5:19pm: Layton applauds Duceppe and Brison for “standing up to ideology”.
5:21pm: Layton reiterates NDP’s position that they will vote against the economic statement.
On November 7th, I argued that we should end government-subsidized campaign welfare in this country and follow the example set by President-elect Barack Obama and amend our electoral system to eliminate our $1.95-per-vote subsidy received by political parties each year. During the US Presidential campaign, Obama did not take a single dollar of public financing and went on to win the election. On a panel for the Public Policy Forum yesterday, I suggested to my Obama-obsessed co-panelist Judy Rebick that Mr. Hope and Change had set the wheels in motion for the elimination of public money for political campaigns.
In my post earlier this month, I suggested that such a system implemented in Canada would cause parties to actually appeal to the electorate and work for donations rather than put their hand out for a per-vote subsidy for being the least offensive option. The theory goes that if our politics inspires (Yes We Can) rather than demonizes (No They Can’t), people will show additional financial support that parties should depend on rather than be the public cash-receptacle of successful fear mongering campaigns that they are. How many Quebeckers these days actually support the Bloc Quebecois on its principles (they’ve all but abandoned sovereignty these days) rather than voting for that party to “block” the Conservatives or the Liberals?
I argued that we should end party welfare to motivate parties to appeal on their own issues.
In the past couple of hours, we’ve learned that in Jim Flaherty’s economic update tomorrow, the Conservative government will move to do just that in the name of showing that even politicians can tighten their own belts.
I may have been a bit of a tongue-in-cheek cynic by using the Obama magic to suggest removing critical funding from two parties of the left. The Bloc Quebecois, as mentioned, has depended on their status as those that could block Liberal corruption in 2006 and the Conservative Party’s… er conservatism in 2008. The Liberal Party on the other hand has depended upon what they are not. Specifically, they have warned Canadians of the Harper hidden agenda and what the Conservatives would do if they had a majority. In this spot and in relative comfort, the Liberals have relied on their per-vote subsidy. Under the new proposed financing cuts, the strength of the Liberal brand won’t matter as it is veritably without substance as conservatism is represented by the CPC and progressive politics is claimed by a resurgent NDP.
CTV reports that under Flaherty’s cuts, the parties could stand to lose up to:
* Conservatives: $10 million
* Liberals: $7.7 million
* NDP: $4.9 million
* Bloc Quebecois: $2.6 million
* Green Party: $1.8 million
Late this evening, I’ve learned that the per-vote subsidy stands to be reduced in full.
In this, the Conservatives aim to level a strategic blow to the Liberals as Conservative fundraising efforts — rooted in the Reform tradition of passing the hat in legion halls and church basements — has remained strong. Buoyed by detailed supporter databases, the party is set to compete on an advantageous — despite it’s now mutually diminished — footing with other parties. The Liberal Party still has not mastered grassroots fundraising and with an expensive year ahead with another leadership convention, Liberals will need to determine how to appeal (and fast) if they are to survive as a viable organization.
Last night, supporters of the Fraser Institute gathered in the Adam hall of the Chateau Laurier to listen to federal finance minister Jim Flaherty deliver an assessment of the Canadian and global economies. On Thursday, the minister will be delivering a sobering fall economic update in the House of Commons and last night, we got a hint of what might be to come.
Flaherty was introduced by former Ontario PC Premier Mike Harris, the finance minister’s former boss and mentor. Harris disappointed the crowd saying that he was not about to return to politics but that a deep-rooted fixation on Canada’s future prosperity is one that both he and Preston Manning hold. Manning and Harris are the authors of Canada: Strong & Free, a six-volume set of books describing Canada’s ideal path along internationalism, economic freedom, federalism, and education among other topics. Last night’s dinner was held to mark the release of their sixth summary volume called Vision.
In minister Flaherty’s speech, he described Canada’s position in a rapid yet sustained decline of the global economy and while trumpeting Canada’s economic leadership among G7 nations, we are simply the country that is sinking the slowest. Indeed, at a recent meeting of the G20 finance ministers, Mr. Flaherty revealed that not one minister was optimistic about their economies domestic or international. Flaherty will project a surplus through the end of this fiscal year ending April 2009, however, as he conceded the next fiscal year will present “a challenge”. The minister sketched a fiscal portrait in broad strokes declaring that the crisis will not end tomorrow, next week or in the next few months and warned that we have not yet seen the worst of the situation.
Yet despite its faltering position, Canada is an economic leader among its economic peers. Flaherty described the economic measures implemented by the federal government to prepare for such an eventuality saying that they’d never apologize or regret cutting the taxes of Canadians or bringing in more stringent regulatory frameworks to maintain Canada’s economic structure. Indeed, the IMF, as Flaherty noted declared Canada to be the best economic shape going into the global economic downturn.
In the United States, President-elect Barack Obama has conceded that he will delay the rollback of the Bush tax-cuts and in Canada, Flaherty suggests that this Conservative government will maintain Canadian tax-cuts to retain this increased spending power among Canadian consumers.
Perhaps the worst-kept secret in Ottawa is that this government will project a deficit in the near future. Flaherty has declared that he will sing from the same songsheet as other national government and use the federal treasury to stimulate growth, or rather stem the “negative growth”. For this, infrastructure minister John Baird will become a hero of sorts in Ontario as federal dollars are channeled through on road, rail and other contruction projects sustaining jobs. Prime Minister Harper days earlier declared that some deficits provide opportunity and are necessary. Flaherty promised that the stimulus would be underway by March 2009. The pairing of the temporary and artificial sustenance of Canadian jobs via government spending with the consumer spending power of a less-tax-burdened population may help the good ship Canada weather the global economic storm until it subsides. Or at least the theory goes.
Deficit spending will be accomplished in order to sustain the “real” economy. Flaherty promised no ‘structural’ deficit.
For my part I asked the minister during the dinner about conservative opportunity describing this as a time when Conservatives in power could be allowed to make cuts to government spending and suggested that a reduction in the size of government rather than its growth would help balance the books in a real rather than artificial way. The finance minister unfortunately balked at the question suggesting that some areas of growth are necessary such as the rescue of the state of the armed forces. If given a follow-up, I would have suggested that some cuts are necessary too. Even in a recession, the government is a growth industry. The minister described a treasury board review of all programs to measure value for money and promised to extend this review through both core and non-core assets.
As for the public sector, wages will not increase faster than the private sector. This has caused some concern among public sector employees and the minister reached a deal with PSAC, it’s largest union late yesterday. The two parties have settled on a wage increase of 6.8% over the next four years.
On interprovincial trade barriers, the minister promised to break these down and suggested that the current economic climate behooves governments to allow uninhibited trade within Canada. The minister welcomed a cooperative spirit among provincial and territorial ministers on addresses the economic downturn domestically.
The minister declared that the government would not artificially engineer a surplus. Perhaps this is a reflection by the minister on Paul Martin’s method of balancing budgets by slashing transfers to the provinces and “fixing” healthcare for a generation. Ontario has warned Ottawa not to balance its books on the back of the province and what is needed is economic stimulus in the province through reduction of its corporate tax rate. For the part of the Conservative federal government, Flaherty described a $37B debt reduction, a reduction of the tax burden by $200B and a 2012 projected corporate tax rate of 15%.
On securities regulations, the minister promised the creation of a single national securities regulator. The federal government will seek to regulate leverage and large pools of capital. A more transparent market infrastructure is needed according to Mr. Flaherty.
The sum of Flaherty’s speech was to say that this government is acting to sustain economic activity for the foreseeable future as economies around the world reconfigure to recover. Taxes will remain low, spending is temporary and a deficit would be a temporary and an short aberration from Canada’s economic plan.