Tag: jim flaherty

Budget notes

From conversation with some friends in the PPG,
– while detained in budget lockup, someone yelled out regarding CBC Newsworld being shown on the tv: “what’s this s**t? Turn it to TSN!”. The budget document/executive summary was easily consumed in 20 minutes and there was an NHL trade deadline looming.

– budget lockup means no communication with the outside world, so reporters complained of not having Google to check facts, do background, and put together the finer details on a story. One wonders how reporting was done before 1993. But seriously, something could be done about this. Wikipedia, for example, can be downloaded to an iPod (or laptop). Not perfect, but it could help fill in some blanks in background understanding.

– One reporter said to me “I’ve never seen the Liberal government so willing to publicly commit suicide so frequently and willingly”

from conversation with conservatives,
– conservatives are generally happy that the Conservatives have passed their first “conservative budget”. Debt reduction and the new tax-exempt savings account are the headlining items for the movement.

– conservatives are unhappy about the spending increase projected for 3.4% this year. That totals 14.8% government growth under Flaherty (source: CTF). Why can’t we rein-in government growth?

– Guaranteed Income Supplement raised to $3500 should help patch things up with seniors whom have been upset about income trusts, according to Bob Fife and Craig Oliver of CTV. This budget item sounds like creeping socialism. (UPDATE: Oops, that was poorly interpreted. The GIS tax exemption has been raised, encouraging seniors to stay in the workforce.)

– taming the EI beast is a welcome change. Capping EI surpluses and moving towards better fiscal management (and proper allocation) of the fund is long overdue.

– effective communications line of the day was from Stephane Dion’s team which described the budget as “a mile wide and an inch deep”. The line was often repeated on newscasts and in print. It’s a perfect descriptor for Dion to achieve his objective: diminish the significance of the budget and and his subsequent approval of it. It’s also important to note that the Liberals have claimed this to be a “watered down Liberal budget”. Is Harper as Tom Flanagan would put it “triangulating” the Liberals out of relevance? This was first done with the Afghanistan mission, now the budget. Liberals essentially support the Conservatives in coalition without any leverage.

– the NDP is using the Liberal support of the budget to make the argument of Liberal bankruptcy from the left; they argue voters who don’t agree with Harper’s government can oppose it with the NDP. But this isn’t exactly news. What changes will the NDP have to make in order to more effectively challenge the Liberals from the left?

– the only thing sustaining the Liberals is their brand.

Predicting the future
– In the absence of Liberal opposition, will segmented conservative interests in the party and in the movement start leveraging for their own agenda? With slim majorities we see maverick government MPs potentially holding the balance of power subject to their agendas (PM Chretien government with MP Paul Martin). With large majorities we can see whole factions form and break off (as with Reform and the Bloc from the Mulroney government). Harper has the power of majority with the psychology of a minority; the PM can govern on the agenda he chooses because the the prize of a majority is still in sight and this will generally keep maverick MPs and the movement tightly following Harper’s lead so that their agendas can be realized in the future.

Harper’s now in the sweet spot of governance; he sits opposite a neutered opposition but holds the incentive of untapped potential for his government and its MPs. I’m certain that the Prime Minister would be very satisfied continuing his government under this balance until the fixed election date in fall 2009.

February/March election? Think again

As we break for the Christmas/New Years holidays, Ottawa has been talking about a real possibility of an election in February and March.

I believe that the current conventional wisdom on the timing of an election is wrong.

First, no party is really in a good position for an election.

Consider the Conservatives; statistically tied with the Liberals in the latest Harris/Decima poll, the Tories aren’t riding their traditional high numbers. Some have attributed this decline to Canada’s bad press at Bali, some blame the attention that Mulroney has received. But a budget will be a bonanza of tax cuts in February, you may think, and this surely will be enough to buoy Conservative numbers. It may, but the Conservatives need the decision of at least one party to survive and three to defeat it.

That brings us to the main opposition party: the Liberals. Stephane Dion has been routinely embarrassed in the House of Commons by being forced to abstain from votes of confidence such as the throne speech and subsequent crime legislation (named a matter confidence by the PM). A staffer in Dion’s office recently told me that this pattern cannot continue at length. He’s right. The Liberals will stand in February to defeat the budget. In fact, they’ve already indicated that they intend to try force an election. This is a necessary move by Dion, as he cannot remain neutered indefinitely lest his caucus revolts. The smart play here is that he’s been first out of the gate in declaring his intentions meaning that he will not have to race Jack Layton and Gilles Duceppe to the waiting cameras outside of the House doors (besides Layton and Duceppe are closer to the doors anyway). So Dion is forcing the NDP and Bloc to react to Dion whereas earlier Dion reacted to the declared intentions of those two parties instead. Dion is well ahead on this vote. This will help relieve some of the negative attention received from his chronic abstentions in this latest session in 2007. The move, however, is somewhat disingenuous as Dion knows that at least one other party will save Harper’s government (and Dion) to fight another day.

While the NDP has had better fundraising fortunes than the Liberals, this opposition party still needs to continue its strides in becoming a viable opposition in the minds of Canadians. While they will no doubt vote against the budget (and the Conservative government won’t change its legislation to accommodate them), they are unlikely thrilled about a March election. Further, the NDP standing with the Conservatives on a conservative budget would destroy much of the NDP’s credibility.

That leaves us with the Bloc, who shares a particularly important electoral interest with Stephen Harper: Quebec. The Bloc will vote for the budget because there will undoubtedly be some good items for their province. In fact, we can be quite confident in this prediction as Harper/Flaherty would be unlikely to pen a budget without extended consideration for Quebec. If they did, they would guarantee that their government would fall and that their hard-fought gains in that province would be tenuous at best and their planned gains would evaporate overnight. Expect good things for Quebec in 2008 and expect the Bloc to pass the budget; the Bloc is the only party Harper needs onside to survive.

This scenario generally satisfies all parties to some extent. The Conservatives will continue to govern while entrenching their image as tax fighters in the minds of Canadians. They will also continue to build in Quebec. The Liberals (and especially Dion) will relieve a lot of pressure internally in caucus and externally in their image as the hapless leader breaks his abstention streak. The NDP will still get to stand up to the Conservatives (the NDP gains from this scenario are the least of the four parties). Finally, the Bloc will have voted for a better budget for the people of Quebec, even if it is delivered by Conservatives. The Bloc has been concerned by the Conservative encroachment upon their nationalist strategy as it has been reconfigured by Harper as decentralization and respect for provincial jurisdiction. Duceppe would only be handing Harper voters if he defeats this government as the Prime Minister will be seen to be a better defender of Quebec’s interests.

If the Prime Minister really wants an election in March, the budget will contain a poisoned pill that is inert to Quebeckers but unacceptable for the Bloc.

Ontario by-elections

Two by-elections are upcoming this fall in Ontario and I’ve got a bit of info on these individuals and the timing of the contest to be called by the Prime Minister.

Maureen Harquail will be taking on Martha Hall Finley from the Liberals in Willowdale and Mark Warner will be appealing for votes in Toronto-Centre as he battles against former Liberal leadership contender and NDP Premier of Ontario Bob Rae.

Harquail has completed reserve duty with the Canadian armed forces and was an environmental prosecutor. She also happens to be the cousin of federal finance minister Jim Flaherty. The cousin connection has already come in handy as the Tories are said to be packing their war-chest for the riding pre-writ by bringing in some highly visible cabinet minsters for fundraisers. Peter MacKay has already been seen in the riding pitching for Harquail, and besides cousin Jim, environmental minister John Baird is also expected to raise some funds for the Tories in Willowdale. Willowdale consists of significant jewish, korean, persian and japanese communities among others. Retiring Liberal MP Jim Peterson won the riding last time for the Grits by 14,000 votes, however, a significant portion of that support rested in Peterson’s popular personality rather than the Liberal Party. Yet, Willowdale should be a challenging riding for the Tories to pick up. At this point, the NDP have yet to forward a candidate and Harquail would only benefit from a strong NDP effort in that riding against the Grits.

Mark Warner will be challenging for Toronto Centre. Warner is a lawyer will some impressive credentials that include lecturing in law and practicing for the OECD internationally. In the riding, Warner will have a bit of work to do as the Tories only secured 18% of the vote in the last election. We may, however, see some split with the “progressive” side of the spectrum with NDP voters showing up to vote against Rae, and a relatively stronger Green presence there. Plus as Warner is running for the incumbent government, this may produce a small boost. Warner was acclaimed February 9th and has already hosted a couple of successful fundraisers including one with justice minister Rob Nicholson and popular Ontario candidate Tim Hudak. Despite the good fundraising start, Warner is still a bit of a long shot in this realist’s opinion.

I’ve heard from a couple of senior Tories that the by-elections will be called after the provincial election. Former Toronto city councillor David Shiner, the provincial challenger in Willowdale is likely to be a bellwether for Harquail’s success in that same riding federally. The Tories may be angling to hold the federal contests after the provincial election in order not to be seen as interfering in provincial politics and to tap into the mood of the electorate after the provincial contest (whether to balance a McGuinty win, or buttress a breakthrough by John Tory)