Tue, Jan
27
2009

Hmm....

Tue, Jan 27, 2009

Federal Budget 2009

I didn’t listen to Flaherty’s budget speech, but the CBC does appear to have good, detailed coverage of what’s in the document.

On first glance I would have to say that, if I were the Liberals, I’d have a bit of a hard time voting against it. In terms of all of the things the opposition said was wrong about the November fiscal statement, the government has stepped forward to address just about every criticism. Money for infrastructure? It’s there and there doesn’t appear to be strings attached (I now await McGuinty requesting a cheque for MoveOntario 2020 and getting shovels in the ground on key projects). Stimulus for the flagging construction and lumber industries? There too, in the form of a rather ingenious tax credit for home renovations valued between $1000 and $10,000 undertaken over the next year. That may be something Erin and I could take advantage of. And those suffering layoffs receive extended periods of EI and a half billion set aside for retraining — although here details are disturbingly scant.

And as for tax cuts, these appear to be the right tax cuts: an increase in the personal exemption rate from $9600 to over $10,000, and a shifting up of the tax brackets for lower income Canadians (although the actual savings amount to less than a dollar per day for most). Unless new or expedited corporate tax cuts are in the fine print, I don’t see them. (Further information can be found here, but the cuts don’t seem too serious)

Michael Ignatieff

In total, it’s a good budget, and in the current climate, Harper and Flaherty have even given Ignatieff and Layton the option of congratulating themselves for holding the government to account and forcing these changes on a chastened cabinet.

But for Layton and Duceppe, their reasoning for voting down this budget has little to do with its contents, and everything to do with the Conservatives pattern of behaviour over the past three years, which call into question the Conservatives’ credibility when they say that they’re now a listening government and the partisan games are over. Layton doesn’t care one whit about what’s in this budget; rather, he has lost confidence in Stephen Harper. And, back in December, so did I.

And even if this money for municipal infrastructure materializes (Harper has a disturbing tendency to announce funding and then quietly hold off on actually paying it out), there is the question of what else the Conservatives have on their radar, and how else they might try to poison the well. As good as the budget is, I’m reluctant to give the Conservatives a second chance. If this budget is as Liberal as the Conservatives’ right-leaning critics say, it’s a budget the Liberals themselves can put forward and pass.

But the challenge is on for Iggy. It’s going to be tough for him to stand up and explain why he voted against this particular budget, given that it seems to have almost everything the Liberals asked for. And unless he is willing to roll the dice — something which opens him up for criticism of being reckless — I can see the temptation is strong to set aside the coalition and go it alone, hoping to fight another day.

We shall see what we shall see.


Further Budget Notes

  • According to projections, the Conservatives will end the 2008-9 fiscal year with a $1.1 billion deficit. Note that number — the bulk of which was achieved when the Conservatives did not move on this economic stimulus (and the bulk of the economic stimulus spending won’t occur until after this fiscal year closes). To those who said that there was no deficit and never would be? Time for your plate of crow.
  • I wouldn’t be particularly upset if Ignatieff decides to stand up and vote in favour of the Conservative budget, any more than I’d be upset if he decided to stand up and vote against. Really, it’s his prerogative. However, I hope that he and his party stand up and do something, rather than sit back and abstain. That’s the coward’s way out, and I’m thoroughly sick of that approach. So, Ignatieff, If the budget is worth supporting, support it and fight another day. If you lack confidence in the Conservatives’ commitment to this budget, defeat it and go for an election or a coalition. Either way, take action now. There is no middle ground.
  • Ouch. Accidental Deliberations puts this together:

    $85 billion: Deficit Jim’s red ink estimated over 5 years.
    $87 billion: The total cost over 5 years of Deficit Jim’s previously-implemented GST cuts (estimated at $7 billion per point per year), plus the income tax tinkering in the 2009 budget prorated from a 6-year estimate.

    I told you that the GST cut was bad policy.


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