Dion was an unexpected gift, but Ignatieff was an original Tory prospect

During the Liberal convention in December of 2006, Bob Rae was seen by Conservative strategists as the most fearful prospect that the Liberals had on offer to their delegates. Most messaging that came from the Conservative camp during this time was against Rae and the party did its best to suggest to Liberal delegates that he would deliver economic disaster to Canada like he did for Ontario. The Tories did their best political maneuvering to spike Rae’s bid because focus testing showed that enough time had passed between the sour days of Bob Rae the NDP Premier and the “give-him-a-chance” Bob Rae Liberal leadership candidate. Dedicated Ontario political watchers would remember tough economic times under Rae but apparently the modern dynamic had changed for the typical voter. “He has the chance to be a Canadian Bill Clinton” was how I heard the smooth talking and charming candidate described by a particularly concerned senior Conservative.

Yet, times have changed again and the economic recession is now centre-stage and it doesn’t take a surplus of political sense to acknowledge that a Rae leadership win would have been trouble for the Liberals in the 2006 leadership race, and that in 2009 — if it had occurred. During the 2006 race, as the front-runner, the Conservatives had already constructed a thorough game plan against Ignatieff and believe they had a workable strategy against the American-tenured academic should he become leader of Canada’s natural ruling party. “Ignatieff is awkward and tends to put his foot in his mouth a lot” was the consensus among senior Tory partisans. My sense was that during the 2006 leadership race, while Conservatives were concerned about Rae, they were less so about Ignatieff. And then Dion happened and he became a surprise, a wonderful gift and an unexpected best case scenario for the Conservatives and their Prime Minister.

Today, Michael Ignatieff is the leader of the Liberal Party of Canada and he’s starting to show strong gaffe potential, a lack of clear policy direction and a generally aloof attitude towards the Canadian electorate. In fairness, I’d say that Ignatieff is much more calm and calculated that his hapless predecessor and instead, we find him focused on the long game. This should help Liberal prospects. Yet, Ignatieff is failing along the predicted lines of the original Conservative assessment. Yesterday, in Cambridge, the good professor mused that “we will have to raise taxes”. As a front-runner-turned-crowned-leader of the Liberal Party, Ignatieff never needed to wedge and never needed to segment in order to differentiate his campaign. It is unclear as to why in a trajectory largely devoid of policy pronouncements that of the rare policy musings he is making, he is offering ideas that are generally seen as unpopular. For example, in an interview with CityTV’s Richard Madan last December, the Liberal leader mused that he’s open to reversing the Conservative’s 2% GST cut.

Few election campaigns have seen bold policy stands by leaders fail so spectacularly. Despite this, we recently saw how the idea of funding non-Catholic faith-based religious schools sunk the PC Party’s prospects during the last Ontario election and for the Liberal Party of Canada, the carbon tax was a federal electoral disaster in 2008. Though Mr. Dion will be scapegoated with the carbon tax and conveniently shelved away, the Liberals will be considering the policy again at their next convention. Though in truth, Mr. Ignatieff was the original proponent of the tax.

Now it seems that Mr. Ignatieff is against such a tax but how can we be so sure given his reversal on this policy that his membership is now proposing? For Mr. Ignatieff, whether we’re taxed on carbon, income, or our purchases, what he’s made clear is that under his leadership our taxes would go up. Though cliché, this paraphrased statement holds:

“A carbon tax if necessary, but not necessarily a carbon tax.”

or rather, “a tax is necessary, but not necessarily a carbon tax.”

Mr. Rae would have been a wonderful leader for the Conservatives to oppose, unelectable as he would have been though disastrous for Canadians should have assumed residency at 24 Sussex Drive. Mr. Dion would have raised our taxes with a carbon tax. With Mr. Ignatieff, we know that while times are tough, he’d heap on increased government burden. At least with Mr. Dion, we would have known where it was coming from and how to brace ourselves. Terrible Liberal fiscal policy makes for good Conservative electoral prospects. Terrible and ambiguous Liberal fiscal policy makes for great Conservative electoral prospects.

Conservatives are looking forward to a Liberal party led by the professor on loan from Massachusetts. They’re anticipating the Canadian reaction of watching Mr. Ignatieff debate himself on how to best raise our taxes.

Bombshell: PM Ignatieff may hike the GST in the future

In a one-on-one interview today with Citynews’ Richard Madan, Liberal leader Michael Ignatieff said that he won’t take a GST hike off the table in dealing with the economic crisis.

Madan: “On the tax side, is it time to boost up the GST to its former levels of 6%? Do we need to that? Do you support raising the GST?”

Ignatieff: “I won’t be drawn at the moment where Canadian taxpayers and consumers are struggling with their bills, jacking up GST doesn’t sound to me like the greatest idea. But, let me be clear here: If we are in a deep deficit in year 3 or 4 you can’t exclude tax increases to get us out. Canadians understand how bad deficits are. So I’m not going to take a GST hike off the table… later, I just think it would be a bad idea now, in the recession.”

Richard Madan has the video.

Coalition cracks?

Asked about the first thing he’d do as Prime Minister, Jack Layton in the English leader’s debate said that he’d roll back the $50 Billion corporate tax cut. That would have been his #1 priority. Now we learn that the Liberals won’t support this. Since Layton has supported this coalition, has he sold out his socialist roots? Or is it more likely that the proposed coalition wouldn’t be stable or agree upon much after mere weeks in power?

Fact, fiction and speculation

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?

Liveblogging Flaherty’s economic statement

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.

Jim Flaherty at the Fraser Institute

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.

Good luck in the debate, Mr. Dion

On a question at the University of Western Ontario today regarding instituting a tax on windfall profits for oil companies, Liberal leader Stephane Dion had this to say:

Maybe Elizabeth May will step in and answer all of Stephane Dion’s questions for him on October 2nd when the federal leaders debate.

Also, when politicians deflect in answering a question they don’t care to answer or don’t understand, they don’t tell people they are doing so. So, my respect to Mr. Dion for telling us he doesn’t know about the issues.

Stephen Harper channeling US Presidents?

Stephen Harper on the economy today in the Northwest Territories:

“Somebody said a recession is when people start losing their jobs, and when your neighbour loses his job. There are job losses, but overall employment is pretty stable”

That somebody the Prime Minister refers to was former US President Ronald Reagan during the 1980 Presidential campaign:

“A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his.”

And remember the Conservative line?:

“The Conservative Party supports Canadians that work hard, pay their taxes and play by the rules”

Thank Bill Clinton:

“My tax cut plan will give families a $500 per child tax credit. The congressional plan denies the child credit to up to 4.8 million families who make less than $30,000 a year. But these families work hard, pay their taxes, and play by the rules.”

How might this government fall?

Stephane Dion won’t return Stephen Harper’s phone calls. The Prime Minister wants to get Dion on the line so the perception can be built that the PM is doing everything he can to make the fall session of Parliament work. Mr. Dion is avoiding the PM’s calls in order to appear to be in the position of power regarding this latest showdown, but of course, Dion risks playing in the narrative that he’s not allowing Parliament to work.

It seems that the Prime Minister wants to go to an election this fall. He doesn’t need to worry about the fixed election date legislation if he wants to do so.

A simple confidence motion by the Conservatives would do the trick:

“This House resolves that a carbon tax would destroy this country and that Canadians do not trust politicians when it comes schemes of tax shifting. This House has confidence in this government to [lower the income tax/introduce tax splitting/decrease the GST to 3%/cut corporate tax] (pick one or two) because such conservative measure(s) are the best way forward for Canadians”

NDP and Bloc would vote against. If Dion abstains, his Green Shift loses any authority and months of campaigning is gone. It would be argued further that Dion would want to go to an election on the issue of his carbon tax so abstaining from this vote would be the end of him as leader of the Liberal Party. If Mr. Dion votes against, we go to an election with Dion defending a carbon tax and the Conservatives proposing tax cuts. The election is then defined on tax policy rather than the environment.

From the Dept. of Irony

Jack LaytonI believe that my political views are enriched by discussions with other Conservatives. I find that when we talk policy, we can argue the best approach that we should take concerning the issues of the day. However, I also engage in discussions with others who identify themselves as Liberal or as a supporters of the NDP. One of my best friends is, in fact, a staunch supporter of Mr. Jack Layton and the Orange Squad. I find that through discussion with him, I can at least understand, while rarely support, his point of view and that of other lefty Canadians.

My friend recently shared a letter that he had received from Mr. Layton and wanted to point out something he found quite ironic and baffling at the same time. I’ve scanned in the letter and you can access it below.

jackletter.jpg
Click to enlarge

Jack Layton, in his letter, greases the wheels for his wide-eyed supporters:

“There are new political financing rules as of January 1. There’s a 75% rebate of your first $400! That’s right. You can now give $400 to our exciting and energetic New Democratic Party and get $300 back in a tax credit. So your donation of $400 only costs you $100. The other $300 is a loan! I’m hoping you’ll stretch to that limit right now, if you can. Because we need your help as never before to tackle the corporate drift of Paul Martin’s Liberals.”

You may be wondering… “Did I just read that right? Did Jack Layton actually bribe his members with a tax cut”. Don’t worry… Jack says it’s just “a loan!”

Let’s follow some Layton logic shall we?
1) Jack Layton is promising his members a tax cut
2) so he can take out ‘a loan’ from his members and then, ultimately, from the rest of us.
3) so that he can form the next government
4) to raise all of our taxes!

It’s difficult to understand Jack Layton’s logic, yet it’s entertaining to read his letter. From his fatherly pride over his passionate spunky team of die-hard workers “Tommy would be proud of our little team here”, to his Xeroxed ‘handwritten’ underlining of all the important parts of his letter, to the leftist rhetoric peppered throughout his piece of creative writing.