Caucus Splitting

Posted on by CalgaryGrit in Budgets, Federal Politics | 2 Comments

flaherty igloo

By design, Tuesday’s budget was a non-event. The public’s eyes are on Sochi, and the pundits’ eyes are on next year’s budget. So, it should not be surprising that it was the post-budget fallout that grabbed the most headlines, when Finance Minister Jim Flaherty mused that the Tories central 2011 campaign promise of income splitting might not actually be in next year’s budget.

We can debate the merits of income splitting (and this ensures we will), but what I find most shocking about this is that we appear to have the first public rift between Stephen Harper and the only Finance Minister he has ever known. This comes on the heels Cabinet feuds, leadership jockeying, resignation speculation, and backbench revolts. On Monday, the Toronto Star was reporting hourly leaks about Conservative re-election strategy.

By themselves, none of these stories are especially noteworthy. Leadership aspirants are always jockeying for position in Ottawa, and disgruntled party members will flip anything remotely interesting to the media. Despite his candid musings, Stephen Harper’s Finance Minister has caused him a lot fewer headaches than Jean Chretien’s.

But the one thing everyone could agree on about the Harper government is that they were always united and on message. Critics would say this is because of a dictatorial style of leadership, but even they would concede it’s been effective. Now, after 8 years in power, this government is starting to look very much like a government which has been in power for 8 years. And that has got to be worrisome for Stephen Harper.

You Be The Finance Minister

Posted on by CalgaryGrit in Alberta Politics, Budgets | 19 Comments
If Doug Horner can't get Alberta's finances under control, he can always look forward to a long career as a Ricky Gervais impersonator.

If Doug Horner can’t get Alberta’s finances under control, he can always look forward to a long career as a Ricky Gervais impersonator.

Alberta is facing a bit of a budget crisis, with a deficit which, on a per capita basis, could be as big as Ontario’s. This has forced Alison Redford into making some tough choices…or, in the more likely event, building up debt.

To help with these decisions, Redford has launched a Your Choice website, letting average Albertans consider the same trade-offs government is facing. It’s actually a really neat form of citizen engagement, and is the ultimate “let’s see you do better” response to critics.

Since I expect to be one of the many critics on budget day, I figured I’d give the tool a shot, and spent 20 minutes painstakingly deciding where to make cuts – is $60 million on Carbon Capture a wise investment, or are a few more potholes a price worth paying to take $10 million out of the provincial highway fund? By the time I’d cut my way through 18 departments, I still found myself in debt. Maybe I could afford to go a bit easier on the Redford government.

Then I got to the revenue side of the ledger. A 1% increase in the corporate tax rate would bring in half a billion. A tax on anyone making over $250,000 a year would bring in another half a billion. A measly 2% income tax would nearly erase the entire deficit.

Alberta finds itself in a situation where they could fix their fiscal framework and still have, far and away, the lowest taxes in the entire country. I don’t expect Redford to go down that route, but after looking at the numbers being released by her own government, that appears to be the easiest way out of this hole.

Why Can’t We All Just Get Along?

Posted on by CalgaryGrit in Budgets, Ontario Politics | 6 Comments

Ontario careens towards an election nobody wants…

Ontario Liberals threaten election after NDP ‘breaks its word’ on budget

Ontario Premier Dalton McGuinty threatened to take Ontario to a general election Thursday if the opposition parties couldn’t agree on a deal to pass the budget.

“This is about Ontario’s economic livelihood and our ability to continue steering the province in the right direction in these challenging times,” McGuinty said in a statement.

“It’s absolutely imperative that we pass this budget. And if we cannot pass this budget, we will take it to the people in a general election.”

The NDP had appeared ready to support the minority Liberal budget in exchange for a new tax on incomes over $500,000, and to get more hearings into the fiscal plan before next week’s vote.

But on Thursday, McGuinty accused NDP leader Andrea Horwath of reneging on the deal.

“Earlier today, the NDP turned their backs — yet again — on an agreement to pass our budget,” McGuinty said. “They joined forces with the PCs to gut the government’s budget bill.

“The consequences of the NDP’s latest backtrack would hurt our economy when what it needs most is stability and certainty. Andrea Horwath and her party have, for the second time, broken their word about passing this budget.”

My 5 cents on the federal budget

Posted on by CalgaryGrit in Budgets, Federal Politics | Leave a comment

For years the Liberals warned you of Stephen Harper’s hidden agenda. Just wait until he gets a majority, and you won’t recognize Canada.

For years, Conservatives quietly whispered to their base that they couldn’t go as far as they wanted because of that damn minority government. The Liberals won’t let us, the Senate won’t let us!

So after waiting for nearly a decade, we finally got to see the long anticipated Harper majority budget. And what was the flagship change he needed a majority to bring in?

The elimination of the penny.

OK, so it wasn’t exactly the “transformational” budget we’d long feared or hoped for, depending on our allegiances. But it does provide a good look at what kind of Prime Minister Stephen Harper truly wants to be.

This budget should tell us once and for all, that he’s not a guy who wants to fundamentally change Canada. Sure, he’s tossed a few symbolic gestures to the base, in the form of CBC budget cuts, the death of Katimavik, and a warning to environmental activists. But Harper remains the head of the biggest spending government in Canadian history, even after accounting for population growth and inflation.

The budget also shows us he’s not hunting for a legacy, quite yet. There are some “big picture” reforms in this budget, but they’re mostly fine tuning – a speedier immigration process, changes to the innovation agenda, pension reform. These are all worthy initiatives if they work, but they likely won’t ever find their way into history textbooks. They’re also the sort of things a Liberal government would do.

So, there you have the real Stephen Harper. A largely low key and pragmatic Prime Minister willing to toss symbolic gestures to his conservative base. A man whose greatest legacy at this point is the elimination of the penny.

Rest in Peace: Penny (1858-2012)

Posted on by CalgaryGrit in Budgets | Leave a comment

Ontario Budget 2012: McGuinty avoids war with Hudak and Horwath, by starting one with unions

Posted on by CalgaryGrit in Budgets, Ontario Politics | Leave a comment

During the minority government era in federal politics, we all grew accustomed to the annual spring budget dance – a popular budget full of election treats, and never ending speculation over whether or not it would trigger an election.

Yet Dalton McGuinty’s first minority government budget felt different. Sure, Tim Hudak pushed out his chest and boldly declared he’d vote against it (despite not giving any kind of coherent explanation on how he’d balance the books). And yes, Andrea Horwath was not pleased and will now “consult” with Ontarians over what to do. But the reality is the NDP will support the budget, if only because none of the parties want – or can afford – an election.

The budget itself was decidedly “treat-free” – there’s not a single ounce of sugar in it. Not even a Harper-esque tax credit for buying sunscreen. Rather, the Liberal story of the budget was about what the government didn’t do – they didn’t scrap all day kindergarten, they didn’t cut Health Care, they didn’t increase class sizes.

Of course, if the benchmark is the Drummond Report, then what the government didn’t do, might be enough to help the public swallow this tough medicine budget. I feel like most Ontarians recognize tough decisions are needed, and the cutbacks and wage freezes McGuinty has proposed will be far less painful than Rae Days, tax hikes, or health care cuts.

Unless you’re in a union, that is. A public sector wage freeze is easier said than done, so Ontario is in for a year of labour unrest.

While McGuinty’s budget will ensure campaign signs stay locked up, it’s time to pull out the strike signs.

Budget Day

Posted on by CalgaryGrit in Budgets | Leave a comment

Back in January, the NDP laid out 5 demands in exchange for their support on the federal budget:

In a new memo prepared by the NDP, the party costs its main requests. The NDP wants the budget to include $700-million to raise the Guaranteed Income Supplement for low-income seniors; a doubling of the Canada Pension Plan benefit through higher premiums; a $700-million proposal to cut the GST on home heating fuels; $200-million to revive the home energy retrofit incentive, and longer-term pledges to improve health care.

Budget leaks have confirmed the final two of those demands will be met. There will likely be something for seniors (there always is), but Jack is unlikely to see his demands for an expanded CPP or a cut to the GST on home heating fuels met. So, all in all, about a 50% grade – depending on the curve, that could either be a pass or a fail.

In effect, Harper’s overtures give Layton a way out if he wants one. It may just be table scraps, but it’s enough to claim “results for people” and put off an election if Layton wants to put off an election.

It’s very similar to what Harper tossed Duceppe on the weekend, when it was leaked there was a “draft deal” between Flaherty and Bachand on the HST. It’s not in the budget, so there’s no reason for Duceppe to support the budget…but he could probably justify propping up the government to help finalize the deal.

Without making any real concessions, Harper has given two of the opposition parties a way out if they want one. We’ll soon find out if they want one.

Opportunity Knocks

Posted on by CalgaryGrit in Budgets, Ontario Politics | Leave a comment

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?

Posted on by CalgaryGrit in Budgets | Leave a comment

(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

Posted on by CalgaryGrit in Budgets | Leave a comment

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.

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