Budget '09: Tories take a final leap into the void - Macleans.ca
 

Budget ’09: Tories take a final leap into the void

There will be no going back from this, for the party or for the country


 

Tories take a final leap into the void

Say what you like about the Tories: they don’t do things by halves. When they spend, they spend. When they go into debt, they do it $100-billion at a time. And when they decide to put an end to conservatism in Canada — as a philosophy, as a movement—they go out with a bang.

We can safely say that the strategy of incrementalism, at least, has been put to bed. With this historic budget, the Conservatives’ already headlong retreat from principle has become a rout: a great final leap into the void. For there will be no going back from this, for the party or for the country. Whatever the budget’s soothing talk of “temporary” this and “extraordinary” that, and for all its well-mannered charts showing spending obediently returning to its pen, deficits meekly subsiding, “investments” repaid in full, we are in fact headed somewhere we have never been before. We are on course towards a massive and permanent increase in the size and scope of government: record spending, sky-high borrowing, and — ultimately, inevitably — higher taxes. And all this before the first of the Baby Boomers have had a chance to retire, and cough up a lung.

Also at Macleans.ca
Budget ‘09: The Overview
Budget ‘09: Bailout
Budget ‘09: Stimulus
Budget ‘09: Economic Outlook
Budget ‘09: Personal Finance


 

Budget ’09: Tories take a final leap into the void

  1. You sound disappointed.

    • Really, Turn that frown upside down.

      Besides, when the Libs get in, we’ll fix the deficit just like we did last time, and Conservatives can do what they do best–sit on the sidelines and complain.

      • The Liberals want to enlist NDP cabinet ministers and had Gilles”I was a Maoist well into the 1980’s” Duceppe as a head consultant for The Coalition to save Canada’s ailing economy.

        Wow BCL, that’s a winning combination that inspires confidence!

        • Hey Sisyphus…we’ ve got “Maoist” over here!

          • That’s more like it …. I feel better already …. we can always rely on Jarrid to carry his share of the nonsense.

          • Good evening Sisyphus, GillesDuceppe was a maoist in the 1980’s. Fact.

        • yes, and they call Obama a Marxist Commie Muslim too!
          The left is in, and even this temp government of Harper has moved Left.

      • Yup I look forward to the tax increases that the Liberals will put in place. If they surviv that then they might fix it.

        Keep dreaming BCL. The deficits “were fixed” because the Liberals broke a promise to get rid of the GST when they realized it spewed money like a firehose.

        Not to be partisan but look at the schizophrenic comments form the Liberal party so far….it isnt enough AND the deficit is too big. Its a floor wax and desert topping, tastes great and look at those clean floors.

        The Liberals want to raise taxes (maybe that is as it should be) but good luck with that.

        I would prefer to run a deficit becuase I have undertaxed rather thn because I have overspent. You can always raise taxes. Look to the UK for the end point of Tax and Spend….it is ugly. For all of the fauls inherent in the US fiscal position it has one saving grace, they have room to increase taxes, the UK is at the end of the branch. You will see erly 90’s Ontario or mid 90’s federal government review and the associated pain and issues in the UK.

        I dont like the deficit, but hey, the Liberals fought every single spending cut recently proposed, you know the ones, cuts to the arts or cuts to the party subsidy. So the the Liberals are left with only one answer, raise taxes….tax and spend the way it has always been.

      • Deficit budgeting, massive overspending, and the entitlement culture that pervades this country and the root of the troubles we face now are the legacy of one-party political system with the Liberals and such misdirected leaders such as Pierre Trudeau and the meg-corrupt little guy from Shawingan. God save Canada from any more Liberal governments and now Conliberal ones. This country is now embarked on a dangerous.course of more of what has not served it well since Laurier.JA

        • JARA it seems that we are unshakeably convinced that there really is such a thing as a free lunch. This is really depressing. We know that massive deficits don’t work. We had massive deficict spending from the early 1970s to the late 1990s and what did it get us besides huge govt debt, high interest rates, high unemployment, de-industrialization, two rotten recessions. All bad stuff. So now here we go again. Plus central banks that know (because we’ve just been there) that too low interest rates lead to wild speculative excesses, asset bubbles, real estate crashes, bank failures. So what to the bloody fools go and do? Lower the central bank rates to almost zero and inject even more liquidity into the economy. Like pouring gas onto a raging fire. God save us from our politicians, from our bankers and from ourselves.

  2. Well, it’s not like all this money gets spend tomorrow. Sure, fine, pass the budget, and once Iggy is confirmed as leader in May, we throw these incompetents out (reduction to 2 seats, PLEASE!), cancel the funding (cruise ships? really?) and return sanity and fiscal responsibility to government.

    • That makes no sense. Iggy and his coalition of big government are the primary reasons for this in the first place.

      • Hmmm… ok. Traditionally the Finance Minister is thought to be responsible for the budget, but go with whatever helps you sleep at night.

        “This is a Conservative budget,” Flaherty told reporters. “Conservatives understand that the government must respond.”

      • The primary reason for this is our crashing economy.

  3. ‘We are on course towards a massive and permanent increase in the size and scope of government: ”

    Too right we are. That’s what angers me the most about this budget, and there many things to be pissed about, is that the Cons have just expanded the power of the State and there is no going back. I hope Harper et al at least felt a second or two of shame before they decided to put aside principals in their pursuit of power.

    • Please explain how the power of the State has been expanded?

      Secondarily, surely you meant the word “principles” when you typed the word “principals?” That’s a nasty dose of malapropism you have there.

      Thirdly, Harper has reversed himself on so many issues he has campaigned on I’m surprised the cognitive dissonance caused by trying to keep up permits any of his remaining supporters to function at any level above lap-dog?

  4. Needless to say, if the Tories “did things by halves” in terms of stimulus spending, the coalition would take over and the next budget would make even a Keynesian blush. Not to mention all the pork headed to Quebec to secure Duceppe’s support.

    • Yeah, because when we look at history, clearly the party of big deficits and fiscal irresponsibility has been the Liberals since about oh, 1980 or so… it’s interesting… since those dastardly liberals got into power in ’06 the financial health of our country as well as the state of the federal government’s books has declined to such a precipitous degree that we are now forced to accept the massive deficits and unfocused spending in a faith-based hope that some of it will stick and get us out of the mess we’re in.

      Personally, I think the worst thing the right wing (and esp. the right wing elements of our national media; the Globe and Mail, CTV, etc) did for the country was to chase Paul Martin out of politics for having the outright temerity to be willing to expose and punish corruption within his own party instead of sweeping it under the carpet as has been the case in this country since time immemorial. Internalizing that particular snow job has been the dumbest thing that we the electorate have done in a long long time.

  5. Too true Andrew. We, and our children, will all have to pay the piper for this some day down the road, at a time when the ‘boomers’ will be putting unprecedented pressure on our social services and health care. And its even more scary that the NDP and Bloc think this budget doesn’t go far enough. I’m glad we don’t have to experience a budget of their creation. Imagine, $87.5 billion not enough in their eyes… They really show their true colours. A chance at a coalition government, no matter how little the chance, is the closest these two parties will ever have at a small ‘shot’ at glory.

  6. Andrew,
    I know you have stated this at least once over your career (maybe twice), but why is this a bad thing? Is it bad for Canadians to pay more taxes for more government? Does it harm productivity? Why exactly is this not good? I am not saying it is good, but then i am not saying it is bad. There are plenty of examples of high(er) tax/High spending productive countries where people seem happy wit life (think of the nordics, for a start).

    Merely saying that this is “the end of conservatism” does not convey why that should be viewed as a bad thing – sometimes movements deserve to die. Nobody in Albania seeks a return to Hoxha-ism. Not that I am comparing conservatives to mad Albanian despots. Just pointing out that there is no justification in your Lament for the Nation (to borrow a phrase from a good conservative)

    • Paying higher taxes to service a debt which was unwisely incurred is not a good use of anyone’s money. Not only is this budget enormous, it is also completely unfocussed. Sure extra money to sod you lawn is nice, but how much is that going to impact our future economy. Chantal Hebert nailed this budget – it is Harper and Flaherty pushing all the buttons and hoping something works. We need more thoughtful spending.

      Having said all that, being no fan of the coalition and getting sick of so many elections, not to mention, that we need a functioning government and not politicians out campaigning — I can’t see any solution but to hope that Harper pushed at least a couple useful buttons.

      • I don’t think this answers Chris unless everyone agrees that the budget spending is “unwise”, to which I think Chris makes the point that Andrew doesn’t argue how it’s unwise.

    • This much money blown by the government is not just bad: it’s enormously bad. Think of it this way: for every “job” created by this scheme, it will suck up government money and not generate any private wealth. It will have to be paid by either borrowing, raising taxes or by printing more money, which devalues the dollar through inflation. And idiotic “infrastructure” projects usually turn out to be many bridges to nowhere, or municipal projects that aren’t needed, or a slew of innumerable pork projects that won’t add anything to productivity.

      And contrary to what you might be led to believe, productivity should not include government spending in the calculation, as – again – productivity measures what’s generated by private income, or business. Say the feds build that bridge to nowhere; it must be paid for somehow: taxes, borrowing, etc. The jobs it creates are only TEMPORARY: once the bridge is built, what of the workers? You simply have to build more bridges to keep people “employed”. But every dollar spent by the government is a dollar that won’t be spent by the private sector (or every job “created” by the govt means no new jobs created by the private sector), and we have not only lost the opportunity at a creating new wealth but now we have to pay for the non-value added work done. And remember, every new “job” created by working in the government will be typically higher paying than its private sector equivalent, and mostly unionized, which means it is vastly more difficult to get rid of the job when it is no longer required (usually from Day 1).

      You. Cannot. Spend. Your. Way. Out. Of. A. Recession. repeat ad infinitum until this nightmare ends. This killed Bob Rae in Ontario. It prolongued the Great Depression. Do you binge spend if you lose your job, or hunker down, reduce spending and weather the storm? We are idiots for thinking this will work.

      Contrast this to tax cuts: the government revenues doubled in the 80s after Reagan cut taxes; ditto after Bush 43 cut taxes. With lower business taxes, more people get hired in the private sector, and real wealth is generated when companies sell new goods/services. The more people get hired, the more taxes the government takes in. And if you reduce capital gains taxes, more people will invest in companies, or form new ones.

      Basic Rule of Economics: governments cannot create wealth; they just move piles of it around to their favorite pet causes or groups.

      God help our economy.

      mhb23re
      at gmail d0t calm

      • “Contrast this to tax cuts: the government revenues doubled in the 80s after Reagan cut taxes; ditto after Bush 43 cut taxes. ”

        Government revenue did not double from 2000-08. In 2000, government revenue was 2 trillion, and reached 2.5 trillion in 2008. When adjusted for inflation, there is negligible increase. Over the same period, spending increased by a trillion dollars, and the debt grew from 58% of GDP to 73% of GDP.

        Tell me again what great fiscal managers conservatives tend to be.

        • These are the great economists who believe that if you cut the revenue you take in, you end up with more revenue.

          Or if you increase the wealth at the top, the bottom will be better off.

          A child of six would see how illogical it is.

          • But a child of seven might inquire about a strategy that seeks to punish success and reward failure. Jimmy, you did all your homework and delivered all your newspapers? Good boy! Please put half your tips in the jar. Johnny, you smeared feces all over your brother’s science project? That’s a shame — here’s twenty bucks allowance for this week.

          • Since when is “success” defined by income? You must cringe at your own failure when you contemplate the Bay St. millionaires, MYL.

          • Jack, if I wanted to be a Bay St millionaire, I should probably start by moving to Bay St — Pass. I’m still cringing over the YouTube’d fellatio performed on President Obama by that Hollywood crowd (ht: Wells), and the CBC Radio 2 49-tunes cringefest.

            I am merely pointing out positive and negative reinforcement. Jenn wants to subsidize poverty better. Fine. Just don’t expect less of what you subsidize.

          • Well, fair enough, but the fact is that there will always be poor people. Just as one doesn’t want to encourage dependence, one doesn’t want to make the lives of the poor depressing just so as to encourage upward mobility for a few of them. I think we have a reasonable balance right now, certainly as vs. the States. “Punishing” success and “rewarding” failure don’t enter into it, that’s just whining.

          • Those poor people who will “always be there” gonna have any kids, Jack? I thought all proper-minded progressive folk keep declaring an “end to child poverty” by 20xx. This they plan to achieve by continuing to give free money to poor people, figuring that’s a smart way to reduce the number of people presenting themselves as poor. How’s that plan going, everyone?

            And, please forgive me for a day or two. I am very much in a whiny mood.

      • The only fault to this arguement is that business does benefit from a new bridge/roads etc (except when they are planned to go nowhere).

        Infrastructure that is lacking in Canada cost business and productivity every day. So, well planned investments in making sure goods and services get delivered is not a bad thing to business.

        It would be nice if more had been done to stimulate “greening” for infrastructure because that is the future. Teaching/learning those skills would help when we want to build more green “bridges”, and export those technologies abroad.

      • mhb- give your head a shake.

        Government enters the equation through infrastructure. Productivity (labour) is output (GDP) divided by the number of hours worked – transportation networks increase it by getting things to market. Government spending increases GDP as it is the third component of GDP, if it goes up GDP goes up (it’s a mathematical identity- I refer you to Statistics Canada’s system of national accounts, expenditure bade GDP).

        The argument against government expenditures is that less investment money is available for private investment at full-employment (Mankiw’s crowding-out theory). We are not going to be at full-employment over the next 2 years so the argument does not apply. You can make the argument that it increases future debt – agreed. But that does not mean that it is ineffective now.

        LI

  7. Wealth re-distribution, the bad way: Instead of transferring money from the very rich to the poor, it’s transferring money from future generations to the current one. I’m sure my kids will thank the Tories for that.

  8. In the spirit of Scott’s photo caption contest: “They like me! They really, really, like me!”

  9. Come hell or high water: not sure which disaster this budget qualifies as, but it is certainly the high-water mark for fiscal irresponsibiliy. But I guess we’ll just leave it to the next generation to clean up this mess.

    If the Coalition of Independent Parties votes down this budget, what more do they want?

  10. I think next election Im going to have to stay home unless some sort of alternative arises.

  11. But don’t we really need this stuff, not right left, but we need these highways, waste plants, water etc. The Gardiner is falling down! Gridlock. Smog. Potholes. We needed this stuff anyway.

    • We need SOME of this stuff. Look at the budget. It is all over the map. Lasting infrastructure is just one piece of the budget.

  12. Andrew, these guys were NEVER conservatives. You and your fellow travellers WISHED they were. They are opportunists. Thats’ why, when money was rolling in, they gave businesses a tax break they didn’t need (after 10 years of record profit increases), and when money became tight, they provide those same businesses with taxpayer-funded grants and bailouts.

    Anyone notice that, according to Jim, we were ALREADY in deficit before the new stimulus spending? Anyone want to query where he got his last batch of economic forecasts … you know, the ones he based his election and fiscal update planning on? Narnia?

    I guess you can’t slash government revenues three years in a row (GST1, GST2 + Corporate Tax Break + Income Tax Reduction) while pushing up gov’t spending to record levels three years in a row without their being some negativity to the numbers. This budget plans to boost federal spending by another 9% — in the interest of dodgy drywallers and inter-bank lending managers – while reducing the revenue the government takes in. They’ve learned nothing!

    Add this to their deceptive numbers on federal asset sales (they count as “in the bank” properties that have not been named, let alone sold) and defense spending that is somewhere between $60B more than normal over the next decade or $600B more …

    Better to have a disruptive election at $300 million than another month of these guys running the national piggy bank.

    • Then why do all the ‘other’ political parties say that the gov’t didn’t go far enough ? You wanna let them run the piggy bank???

      • All? The NDP and Bloc said they wouldn’t support it no matter what it contained, so I’m not sure what their criticisms mean.

        I suspect the Liberals will think some of the spending and tax cuts for incomes over $100K are not effective and will cause unnecessary debt. Whether this kind of waste is too large a fraction of the budget for the Liberals, we will learn tomorrow. This budget looks marginal to me, but I just can’t see having another election so soon when we are heading into such economically difficult times.

        You have to weigh the damage this budget will do over the next 6 or 9 months, compared to having another election. Probably, it is somewhat better on the economy than having another election. I think the Liberals should pull the plug later and then try to clean up the mess if they get elected.

    • That’s well put.

      I would merely add that the previous Harper budget was also, please correct me if I’m mistaken, the largest spending spree in Canadian history? And what is to show for that? Another couple of seats for Harper?

      The only other point I would add; there is also going to be an expensive moment when the chicken$ come home to roost regarding harmonizing Harper’s non-existent Green Policy with Obama’s ambitions.

      • Anthropogenic global warming does not exist.

        Obama will bs his way out of doing anything while he spends his way out the recession or rather I should say, attempts to spend his way out of a recession.

        • Some bser that guy Obama. Already overturned half of W’s non-enviromental policies. Wonder what’s next?

        • “anthropogenic global warming does not exist”

          wouldn’t it be great if we could simply write blantant lies like this, so perfectly summed up in one sentence, in everyday life?

          • Jarrid does not exist.

            See how easy it is?

        • Jarrid, do you live in a ditch or something ?!?!?

          Already on my 2009 dumbest comments list.

  13. The picture of steve is enough to make any woman miscarry. steve is doing nothing more than implementing the policies & regulations that the Liberals would have with this budget. I would like Andrew Coyne to actually look into who the financial advisors are and the conflict of interest in ethics and morals of those citizens. Take into consideration they are the very ones who are on the various Security & Prosperity Partnership committees that are taxpayer funded,how much monies have those individuals made with this insider knowledge, I sent a citizens petition to the SEC on this. Perhaps Andrew with his pull could do an in depth investigation into this and get farther ahead than I did. This has nothing to do with left or right and everything to do with the morals and ethics of the Government of Canada.

    • That particular picture of demented Stephen Harper should be on the wall forever in the HoC, even after Stephen Harper takes his fave pics down from the Wall O’ Harper and goes home, wherever his home is in Canada or elsewhere.

      Put that pic on a Christmas card and mail it around. Hannukah cards even. Just put it on cards left blank for people to write in themselves. Canada Post needs a money boost: Harper can pay good money to get that particular face of his on a stamp. Or not. This picture is worth at least 1,000 words.

      Whoever or whichever media outlet snapped that pic has a piece of gold. You can’t script that. Though it is freaky, not sure if miscarriages can be blamed.

      Good luck, Terri, in getting emessem to follow up on dastardly deeds done dirt cheap by Dirty Steve. Bread. Butter. You know the routine. Plus, some are still plugging for the Senate, eh ;)

      Landslide Steve and a slippery slope to non-stop perks to 75 and a whack of give-away to the offspring is a pretty big plum to not pick…

  14. Any penny of increased Child Tax money we get will go directly into savings, my chidren will need the money later in life rather than right now.
    This is budget is a massive dissapointment to this small ‘c’ conservative.

  15. If I read it right, you can save up to 1,350 on a 10,000 home renovation.

    Not sure that a 13.5% savings is going to ‘stimulate’ a lot of people into renovating their home that weren’t going to do it anyway.

    • But it might push you over the line. For example, I am hemming and hawing about putting some insulation in the walls. Gettng 15% of the money back is enough extra impetus to do it.

      Besides I think the point is to have people do it this year (hence the term stimulus). In three yars, hopefully, everything will be moving along nicely. But we need to get thingsgoing now. So, if you know you need to, say, rdo your driveway in the nex two years, surely you will do it this summer when it is 15% off. I think it is a reasonably good way to get people spending money in a manner that will not leak out ofthe country too too much.

      • Why are people assuming that contractors won’t simply increase their prices? When the Cons introduced the $100/child Universal Child Care Benefit, I know that child cares in Calgary simply increased their prices by $100/month per child.

  16. This is budget is a massive dissapointment to this small ‘c’ conservative.

    That statement, while true, does not even begin to do justice.

    If this is what “pragmatism” means, Mr. Harper, you know where you can shove it.

  17. And when they decide to put an end to conservatism in Canada — as a philosophy, as a movement—they go out with a bang.

    Well, thank God that’s over with. The next time a poorly-socialised, under-educated demographic is looking for a movement, I suggest it take up marathon running.

    • Amen

      • Actually, I’ve never understood why Coyne ever believed this collection of radicals, rubes, liars, know-it-alls and know-nothings were ever conservative to begin with. He’s never really explained that, and he’s “the smart one.”

        • After passively reading the nonsense plastered all over the comment section of this article, I was finally compelled to reply when “Ti-Guy” began spouting his rederick about the Conservatives being a “Collection of radicals” who were never conservative (and I say that in the small ‘c’ sense).

          Not only does said commenter (“Ti-Guy”) seem completely oblivious to Stephen Harper’s record as a Reformer, he also is ignoring the dire political and economical environment in which this budget was brought forth. Economically, Canada is in a tough spot, however this is due mainly to the ailing economies of our largest trading partners. Internally we have a solid economy, yet when nobody is buying our exports it affects us at home. The biggest problem with “spending our way out” is that it has time and time again proven to have no positive effect, Governments simply hope to outlast the problem and come out the heros. Harper (who has a Masters Degree in Economics) is well aware of this reality, but unfortunately the political climate is not condusive to slimming down the budget at present day.

          Hence the Political problems. Harper is caught in between a rock and a hard place right now. That’s not to say his hands are clean, I think all Canadians realize that the Throne Speech after the election was not a good time to unveil his partisan funding cuts (although the majority of Canadians are in agreement with them according the polls), nevertheless the opposition took their rebuttal to the extreme. Dion made a last ditch power grab which will potentially hurt the Liberals in the next election forcing Harper to take action. There is evidence to suggest that Harper’s meeting with the Governor General put conditions on the prorogation. That is to say it was supposed to be a 20 minute meeting, yet it lasted 2 full hours. Commentators have speculated that the Prorogation was granted with the duty to pass a budget, or suffer the wrath of the coalition. In this case, Harper would have been forced to consult the Liberals seriously (which no doubt he did), go against his ideology and put forth a deficit budget.

          As for Andrew Coyne, I’m sure he too is well aware of Harper’s background, but I disagree with his condemnation of the budget. Harper was backed into a corner and came out on top with a best-case-scenario budget. So here we stand and the only radicals, rubes and know-nothings, are the ones barking about Harper’s “downfall” and the apparent “end of Conservatism as we know it”.

          • no you don’t get it… you’re not allowed to always blame the liberals for everything that happens in government!

            “Dion made a last ditch power grab”… and so did Harper… by proroguing.

            If anything Dion’s actions helped the liberal party because it allowed them time to get a new leader.

          • First of all, I didn’t blame the Liberals for anything, I noted that the reason Harper had to put out a sizable deficit was because of the Governor General. If she had given him provision through prorogation with no strings attached, surely Harper would have kept the Partisan cuts, the budget would have been defeated, and either Canadians would be voting for a Coalition, or the Coalition would be dead and we would be back to October.

            Secondly one should be cautious about their use of the phrase “power grab”. Patrick I believe it is only a grab for power, if you are not currently IN power. Unfortunately for you Harper is our Prime Minister, and “clinging” to power is much different that grabbing at it.

            Lastly if I wanted to blame the Liberal Party for everything, there is no one stopping me because well… this is an internet forum. Yet unlike yourself I am quite a levelheaded person, and am not so opposed to the Liberals as you might think. I believe that Ignatief is doing a fabulous job as interim leader, and that Paul Martin was the best fiscal politician Canada has had in a long time. However I am fiercely opposed to the coalition (NDP Cabinet Ministers? Elizabeth May in the Senate?), and at heart I am a social conservative, and therefore more in support of Harper than Ignatief (although they are both decent men).

            P.S. Just an afterthought, but Dion couldn’t have been good for the Liberal Party, sure he allowed them, “time to get a new leader”, but only after one of their worst electoral standings in history. Epic fail Mr. Dion… Epic fail.

        • Well Ti-bore, at it again as usual. I can go away for a week , have a life unlike you, it appears, and you are still here, name calling, ranting like a lunatic, frothing at the mouth. Must kill you the “Evil Harper” is still in power and with the help of your patron saint “Iggie”. Get a life. Hope your head doesn’t expode before the Liberals take their rightful place as masters of the universe, well at least Canada, once again. Careful what you wish for however. Iggie may disappoint you , as I don’t see much difference between the two. I really don’t care which one is running the show as long as Dion and his goofy green shift are gone. Holy smokestacks, I gather Iggie is now a fan of the tarsands. Talk about a conversion on the road to Ft. Mcmurry. He’s smart enough to know what has kept Canada’s standard of living where it is: energy exports. I don’t see that reality changing anytime soon no matter who is in power in Ottawa. Cheers.

  18. A little bit of everything , not enough of anything. Well, except a few years down the road we’re set up for a whole lot of woofing about spending cuts to ( social ) programs programs … because that’s where the money is. Mr. Coyne will be more in his element … and happier … then.

    http://www.progressive-economics.ca/2009/01/25/getting-out-of-the-deficit-hole/

  19. The Conservatives had the gun to their heads due to the Liberals embracing the NDP and the socialistic Bloc as Coalition partners. Nothing short of spending lots and lots of the people’s money were going to keep this crowd happy. The Liberals have embraced the looney left. Economic stimulus, I doubt this stuff will do much good but the socialistic opposition wanted this “government cure-all”. I hope the Libs are happy.

    If people want to know what the alternative is, it’s 6 NDP Cabinet ministers in a Liberal-led government beholden to the Bloc. We’d be building big bronze statues of Rene Levesque and building bridges to nowhere in Sperationville, Quebec.

    • “The Liberals made us do it”??? Really???

      Isn’t that getting a bit tired. The Tories are philosophically bankrupt. And further, they ought to OWN IT. I really don’t think it’d hurt them at the polls.

      It hasn’t so far.

    • ” If people want to know what the alternative is,…” absolute cop-out bs. There was an alternative. SH could have stuck to his guns and dared the coalition to pull him down and said i’ll see you a the polls in 6 months. That would have been principled. it’s called leadership! As Sissyphus says above he hopes to have a built in excuse down the road to gut programmes to pay for all of this.

      • Nope. The Coalition were going to vote against the government in December on the government’s economic statement. They wanted the government to spend lots and lots of money.

        The NDP and the Bloc aren’t voting for this budget because they want to spend EVEN MORE OF THE PEOPLE’S MONEY.

        The Liberals, the Bloc and the NDP have a majority and have indicated they will bring the government down.

    • Then the Conservatives should’ve damn well had the balls to stick to their guns instead of collapsing.

      C’mon dude, at least use your half of a brain!

    • Sorry, Jarrid. We part here. Either your principles mean something or they don’t.

      The opposition is threatening Harper with a lost job as PM unless he steals from all our children. Harper then steals from all our children, to save his job. Pathetic.

      • Fair enough, but to quote from part of the title of one of Iggy’s books, I’ll choose The Lesser Evil.

        The Liberals have moved further left in the last couple of years and are apparently ready to jump in bed with the NDP and actually have NDP Cabinet ministers. Even Trudeau the socialist sympathiser never went that far in 1972. The Liberals are prepared to go to bed with the NDP and the socialistic Bloc. The NDP and the Bloc are already voting against the budget. What does that tell you?

        • Jarrid, my only point is this: if you are willing to violate your basic principles and commit theft to protect your job, you don’t deserve your job, or your sense of self-worth. This is nothing short of an abdication. If you suggest that this is a Liberal-NDP-Bloc budget, then bloody hell let the Lib-NDP-Bloc coalition propose it, pass it, and wear it.

          When the Tories choose to display Politburo street cred to satisfy their opposition, this country is in trouble.

          • Have to agree with MYL Jarrid. These guys are Conservatives in name only.

            If I wanted this kind of budget I’d vote Liberal. It’s not good enough to say the Liberals forced this. I voted for Harper because I once thought he had enough leadership in his body to stand up and say no way to this kind of nonsense, and to risk the fallout on it…because he’d be right. Clearly I was mistaken.

            Coyne is right. Conservatism at the federal level is for all intents and purposes dead in Canada. The Conservatives have become just another party who thinks that government is the answer to everything, and as a conservative that kind of thinking is what I abhor.

  20. “Ignatieff told reporters Tuesday the budget shows that Harper responded to the pressure of the opposition parties.” CBC news.

    That’s right, spend, spend, spend.

    “The NDP and Bloc Québécois immediately came out to say they would not support the budget,…”

    That’s right, spend more, more more. These guys remind me of my 9 year old son when I tell him that I don’t have the money to buy something. He says “Just pull out your (credit) card dad.”

    • So then in that analogy, Jarrid, is responsible fatherhood to actually PULL out your credit card? Because to me then, the Tories sound like a party who listens to a 9 year old wrt finance.

      you cannot have it both ways. You say that in urging the Tories t ospend like this, the NDP/BQ/Libs are iresponsible, but it is okay that the Tories ACTUALLY did do the spending because they were forced to? Doesn’t sound like much of a governmnt to me. If the coalition told them to jump off a bridge, would they (oh please, would they?)?

      • Don’t even bother, Chris.

        2006-2008 it was: The Liberals did it first!
        2008-2010 it’ll be: The Liberals made us do it!

        At this rate, why bother voting for Conservatives at all? Since apparantly they just let the Liberals dictate how they govern anyway, we might as well just vote Liberal and be done with it — at least then they’ll properly wear what they cause.

        • This is a minority government, this Budget reflects that, this budget is the product of a Parliament which is controlled by three parties who beleive that all that is required in getting out of a recession is to get the two government mints in Ottawa in Winnipeg to print more money.

        • I am trying to think of an argument – hmmmm.

        • Wear what? Cause what? Has everyone forgotten that except for Trudeau, the Liberals have consistently been the party of fiscal discipline, and the Cons the party of deficits? The myth of Cons fiscal responsibility is amazingly persistent, given that it has no basis in empirical fact. Listen up: If you keep cutting taxes, driven by some kind of childish ideology that cutting taxes is always good (no matter what their level at any point in time), at the same time as increasing spending (or even just holding it steady), you’ll go into deficit. Is this difficult to understand?

          But maybe that’s the point: Deficit spending eventually forces cutbacks in programme spending, as governments are forced to devote more and more of its tax income to paying interest on the accumulated debt, and less and less tax income goes to actually doing useful things (roads, schools, hospitals). This represents a net transfer of wealth from average taxpayers to investors wealthy enough to loan money to the government. Maybe that’s the idea. “Conservatives” have usually been aligned with the rich against the poor.

          Forget Party labels and ideological talking points. Face facts. The Canadian federal party of fiscal responsibility has a name that starts with the letter L, not the letter C. That’s just empirical fact.

  21. It’s almost twilight zone time. I left the Liberal Party became Conservative and now find out I’m actually a Liberal again … my heads exploding … but wait I can’t rejoin the Liberal Party because they stopped being Liberal a long time ago and if anything pretty soon will be competing to see who is the most Conservative (well sort of) …hmmm … what do the NDP have to offer = never mind what was I thinking – then again we had no choice all the nations are gearing up for a situation that is only to get worse before it gets better you think the outlook is bad now and we are certainly not alone in this .. time to gird the loins out there because the bad news is going to be getting considerably worse from the ol US of A. – the rumble happening now will make a recession look like a positive experience. Oh well at least we have Stevie and Iggy who at the very least of their abilities know how to make the tough calls and keep the ship of state navigating anything but still waters (stole this from Obama) – near as I can tell we have gone from 35% of GDP total debt to 38% and the americans will be soaring into the late 50’s 56 – 59% of every dollar on debt interest only – jeesh!!!!!!!!!!! not even 10 years of double digit growth would take care of that thank god children can’t vote.

    • Oh Wayne. I wish I could give you a hug.

      I remember back, was it only four months ago? when the one thing that could be counted on was your eager support of anything and everything that Good ol’ Stevie Boy did.

      And now you are a man without a party. Oh, the pain of disillusion!

      My heart breaks for you.

      • I remember those times. ‘The good old days,’ I like to call them.

      • I appreciate the hug I needed one but … I will have to return it it. It was a momentary breakdown due to severe sticker shock. Sorry still CPC and going strong. I seem to remember around 26 years ago going through some hard times because of my misspent youth and wastrel ways going way way and more way into debt to pay for assorted gambling, drinking drugging well you know the old 60’s thing better living through chemistry. I bottomed out in life and had to re-boot as it were. It took 10 years but I clawed my way back out of debt (stayed that way still no debt) so I am sensitive to this issue. I no longer believe in debt! Period case closed! I want to buy somthing I save up and buy it. I also invest 35% of my gross income and keep my life simple and healthy. It does take a toll though – The weird part is I have turned into the family bank and at present more money is owed to me than I used to owe? very weird. I strongly recomend living debt free as it is not easy in today’s world – it can be done though folks honest!

  22. It’s too bad Conservatives rant and rage all the time. Their quite legitimate beefs about this budget are barely registering.

    Are they angry or are they livid? Who can tell…

    • It’s too bad Canada has such an irresponsible opposition. It’s treally quite disappointing.

      • Try as you might you cannot blame a budget on the opposition. You see, the government writes the budget.

        • The opposition is supposed to vote on them unlike the last time if you remembr where they wanted a coalition … no way … the main player in this is indeed the irresponsibiltiy of Layton and for never negotiating at all and Dion who promptly dumped this mess in Iggy’s lap. This whole mess could have gone much smoother if they the LPC would have supported the fall economic update and offered up amendments to the parts they didn’t like but no no no like the spolied little children they are they went all let’s form a coalition days after an election (like that was going to fly talk about stupid is as stupid does… the only people that are benefiting right now are Iggy and crew – so you have to give them a few credits and that’s for sure and actually no matter how or who you look at the resultset would be the same – deficit plain and simple the only thin in question is the amount which was already promised at the last g8 – 20 – sorry you can’t fob this off on Conservatives only it’s the way it has to be.

          • Wayne
            Kady has shown that the libs did not get a chance to attack the Fu as genius Harper set things up so tthat it was a for or against choice. How’s that old saying go: you play with the bull, you get the horn.

      • Look, if that stupid Harpy had bothered to govern throughout most of last year and hadn’t broken his own law to call a useless election (which he screwed up, no ifs ands or buts about it now), you’d be looking at a different situation.

        Stop blaming this on everyone else.

        • No, it’s the coalitionists’ fault.

          And the NDP and the Bloc want to spend even MORE. If Iggy backs his two coalition buds and brings the government down, the people will vote the Conservatives in again. Iggy knows this so he’ll back the budget. This budget is Parliament’s budget, it will need the Liberal’s support to pass.

          • I blame Gerard Kennedy, 06.

          • Jarrid,

            Crazy = you.
            I can not believe that, after reading ten or twenty million references to Harper as some sort of master strategist and all that nonsense, that he or anyone who thinks he’s so freakin’ great would suddenly be willing or able to settle for an excuse as crybaby as yours.
            But, if you won’t take anybody else’s word for it, take it from the Man Himself. Stop being such a fanboy for a minute or two and go back to that interview with the Sun that Wherry linked to awaaaay back last week sometime. Find the part where Harper took ownership of this budget. Take it to heart. I don’t give him credit for much, but for that, I do.

          • cwe – Harper’s budget is an exercise of realpolitic. He’s in a minority with 3 left-wing parties with their arms intertwined like they were dancing a polka.

            Let me repeat: it’s The Coalition’s fault.

        • No, it’s the coalitionists’ fault.

          N’uh uh.

          Win!

          • Can it at least be his fault that he didn’t win a majority?

  23. Andrew, of course you are right. Even granting that stimulative spending was appropriate, they screwed it up with a scatter shot, thinly spread, something-for-everyone, please-all-regions approach. Let’s none of us forget, that stimulus or not, they were going to run a substantial deficit in the coming fiscal year. So at least some of this is an attempt to obscure the – forgive the term – ‘natural’ deficit they in part created by overspending (and cutting the wrong taxes) during their time in government. Finally, allow me to suggest that much of the ‘discretionary’ (e.g., infrastructure, etc.) spend they have promised will never be dispensed as it requires matching or participation from the provinces and cities. Ain’t gonna happen. Neither tier has the money and two and three-way deals will push activity all out beyond the two year horizon. So, if I’m Harper, I see some pretty substantial cushion in these forecasts. Useful to beat his forecasts (smaller deficits) or absorb significant further deterioration in the the economy. Either way, Harper claims he’s a brilliant manager. Funny how doing the wrong thing and/or the failing to execute your plan makes you a winner in politics, eh.

  24. Looking at the budget, the thing that leaps out at me – and apparently is missed by Coyne – is the very low estimates for tax revenues.

    Much of the (projected) deficit is from reduced inflows rather than additional spending. And what spending there is is one time stuff – not the creation of new programs or expansions of dept operating budgets (to the contrary, they have been capped).

    Should the economy do better than they predict (and oil returning to north of 65$ by the fall, as I am hearing from my sources in the patch, will go a long way to causing just that) the deficit will be much smaller in the later years.

    Having stated that, i have to say that i am somewhat disappointed by it, although i realize the political conditions that probably made this budget less than it could have been. Most of the spending measures were very modest, piece-meal things as were the tax-cuts and changes to EI. (contrary to Coyne’s view, incrementalism not only lives it is a systemic contagion, apparently)

    What would have been a boost to the base and put the wind in the sails of canadians (and put Liberals and their separatist coaltion on their heels) would have been bold things like income-splitting, capital gains deferral on investments that are reinvested, allowing income trusts for the resource sector, and not piecemeal infrastructure, but mega-project stuff – stuff that has huge long-term economic impact and makes a federal mark on the country such as:

    Twinning the TCH from coast to coast and
    building a transportation/energy corridor from northern Quebec and Labrador across the strait to Newfoundland (and thus drastically reducing the hugely expensive North sydney to Port aux Basques ferry service).

    They would be memorable initiatives as would income-splitting that would be part of a memorable and well-regarded conservative legacy.

    Maybe next time…

    • Finally, someone who actually read and understood the budget, its implications and provided some critisism with positive ideas to make it better … Too bad politics gets in the way of rational thinking ….

    • I don’t know about twinning the TCH from coast-to-coast… that would be wasteful in many areas (like Newfoundland), but improving it through the mountains and maritimes would be good…

      High-speed rail would have also been a memorable legacy. Remember though, the timeframe for any of these projects would be much beyond the next two years, so in not proposing them the Conservatives may have been better addressing the immediate needs.

      That said, I want high-speed rail. Please?

      • Has anyone done the business case, other than Bombardier’s, for High speed rail? I like the concept but what would the tickets cost, without a subsidy, what are the expected rates of adoption? Is it for people or freight or both?

        What would the reaction of the shorthaul airlines be? Would they go bankrupt?

        The only way you get high speed is ensuring there isnt a single level crossing. Either a big ditch from here to Montreal or bridges over every single road crossing or altenatively stoppping the road.

        What are the objectives of high speed rail anyway, do we really have the population density to justify. remeber there are probably 30-50 million people in the Boston to Washinton corridor.

        Tell Canadians what an unsibsidized ticket would cost then see what the reaction is.

        I think the money is better spent on more track locally in the two metopolis’ spidering out, like the UK…but once again you need triple track to relieve congestion and fewer level crossings. It needs to be a generational committment and plan rather than a single megaproject agreed to for “job creation”

      • “I don’t know about twinning the TCH from coast-to-coast… that would be wasteful in many areas (like Newfoundland), but improving it through the mountains and maritimes would be good…”

        You must be from Toronto….

  25. Gord Tulk, Flaherty said the budget is based on an estimated -0.8% this year and a +2.3% next year in economic growth. These don’t sound like underestimates to me.

    • And there lies the major problem with stimulus. The stimulators would have us believe that with enough stimulus, the economy will indeed start growing again, and we can safely project a balanced budget a few years down the road. Flaherty seems to have bought into this myth (more out of political expedience than personal conviction). However, NODBODY knows how long this recession will last. Given the levels of consumer and corporate debt out there, brought on by years of easy credit, it could last 5 or 10 years.

      No amount of stimulus can make debt magically disappear. The only way debt levels can be lowered is by belt-tightening, at the consumer, government, and corporate levels. Consumption must go down, and savings must go up. This is a recession, by very definition. And severe debt levels require a severe recession to correct them. As always, politicians, policy makers and the general public are loathe to suffer a recession. They look to the quick fix. When the quick fix inevitably fails (as it did in Japan in the 1990s, and in Canada & the US in the 1970s & 80s, and the UK in the 1970s) we end up with chronic deficits. Unless we’re very lucky, and the US manages to turn things around in the next few years and restores some level of growth, we are doomed to chronic deficits.

      • Chronic deficits? Only because we keep turning to debt financing to pay for public projects, rather than introducing an element of fiat money. Why does our government borrow money from private banks or bond-buyers, when it could spend money into existence instead? As long as the money is spent on wealth-generating infrastructure or other real-economy uses, it will actually create no more inflation (maybe less, actually) then the alternative, which is expansion of the money supply via debt (and artificially low interest rates). The current system only serves to indebt everyone to the banks and to the already wealthy. Government debt is not even necessary. We just don’t understand the system well enough to realize this.

        • You are suggesting the monetization of debt. In other words, direct printing of money. NOBODY outside Zimbabwe does that anymore. And it isn’t working very well for them. (Though the Federal Reserve is also ready to start directly purchasing government debt to finance Obama’s $1.5 trillion deficit. Out of desperation, not because it’s a good idea.)

          Obviously you just don’t understand the system well enough to realize this.

  26. This is interesting and I haven’t seen it mentioned elsewhere:

    “Hidden, but still included in this budget are the cuts to transfers, controls on program spending, weakening pay equity for federal employees and the privatization plans announced in Harper’s disastrous November Economic and Fiscal Update. ”

    (from Toby at “progressive-economics.ca/relentless”)

    • Ian, you have pointed out the one, thin silver lining. Though I’m sure you never meant it that way. Thanks. You’ve cheered my up slightly. (Ever so slightly.) I should also point out that Harper has given the public service unions a giant FU in his bid to legislate pay increases they’ve basically already agreed to. We must satisfy ourselves with small victories I suppose.

  27. Catherine:

    adjusted for inflation and how much the expected to intake in the budget a year ago they are …

  28. Serious question, looking back, who is more fiscally conservative:
    1. Jean Chretien, or
    2. Stephen Harper

    My money is on good JC himself. I really don’t understand why I used to loathe him so, he was great. I was wrong.

    Personally, I’m through with Stephen Harper and his NDP Party. They just called me 20 minutes before the budget for a donation, too. Hilarious guys, simply hilarious.

    • You must be joking…

      Chretien “solved” his budgetary problem by stealing (this is the unanimous opinion of the Supreme court) from the EI surplus and reducing transfers to the provinces whilst increasing federal progam spending. Harper has done almost no new program spending while increasing or restoring transfers to the provinces and individuals and cutting taxes including the GST which JC promised to scrap but did jack squat.

      • No. I am not kidding. The math is real simple. Chretien brought spending from 22% of GDP to 16%. Harper maintained the 16%, until now, so during Chretien’s tenure, spending as a percent of GDP dropped, during Harper’s (if we include this budget) it sharply went up. I repeat, who’s the Conservative here?
        Don’t complicate things by looking at the revenue side of the picture (EI). It’s actually REAL simple, forget the party labels and look at the data:
        Chretien spending: 22% to 16%.
        Harper spending: 16% to 18-19%.

        Who’s the ‘c’onservative? Who’s the ‘l’iberal?

    • Meany & Gord, let’s not forget the manufactured faux-prosperity created by the Chretien Liberals riding the devaluation wave down to the 60s cents.

      But, Gord, at least JC recognized the harm to the country’s future prosperity that would have occurred had he actually scrapped da tax. Today, I don’t know which is worse: Does Harper understand the harm he’s doing (and doing it anyways) or does he not even understand the harm he’s doing? Neither is terribly flattering.

      • let’s all remember that whatever JC did budgetarily it wasn’t his idea – the bond market told him to tunr things around or the next issue of cdn gov’t bonds weren’t going to fly.

        As for the %ages quoted above – JC got all of his reductions through the elimination of transfers to the provinces – he did not cut any federal programs but rather made the provinces cut theirs. Harper has restored those transfers and is moving to transfer tax points to the provinces so that they can raise funds for areas that are their juristiction. And be thus be directly accountable. When he has moved to cut federal programs he has been heavily criticised – rather he has frozen many and spent much more on things like defense. The liberals – JC included -are opposed because they think that it’s a good thing that the feds meddle in provincial affairs by pulling at the purse strings.

        The GST cuts need to be viewed in conjunction with provincial taxes. The HST in places like NL was at 18%. This drove a significant part of the economy underground – bartering is rampant everywhere there and cash is king. Reducing VATs and sales taxes to a level that encourages more of the economy is reported is a good thing for many reasons.

  29. A team of 46 doctors and nurses just delivered octuplets in California. A team of fiscally-minded conservatives just delivered a 30 plus billion dollar deficit that ndp and most commentors on this site should be proud off. Strange times we live in.
    For Andrew and the few here who think this is a sad day, I`ll try and find something good to look at.
    WE do need to do some work on those bridges.
    Less new subdivisions—more renos and housing for poor.
    5 more weeks on the pogey is worth a party or two.
    There is some tax cuts if you know anybody making money.
    Maybe the next budget will see that the best time to get rid of the waste in gov`t bureacracy is when we have to.

    Foe the majority here of fiscally imprudents—-well I don`t know what you can say—maybe you wanted an even bigger deficit or maybe you just like to complain.

  30. Harper is an ultra-right wind conservative. The problem is that he can’t be an ultra right-wing conservative if he wants to get elected. Conservatives can’t help themselves, and they don’t exactly have a history of surpluses. I think they ought to start a new reform party, or rebel and retake the reformist part of the conservative party. Then they won’t get elected again anyway. This government will collapse over this recession, especially when Canadians realize we have entered another decade of deficits. Say good-bye to all the debt repayments the LIBERAL party has made.

    PMO meet Ignatieff….Ignatieff meet PMO.

    • Stephen Harper an ultra-right wing Conservative – you must be a Marxist-Leninist or are joking! Harper may lean to the right but you wouldn’t think so from the way he has governed and with this ridiculous budget. Left wing religion of re-distributing wealth forgets that you need an egine to create that wealth in the first place and it sure doesn’t come from socialist policies as most of those who have tried them have found out!

  31. Let’s not forget the influence of the G20 meeting (all leaders agreed to a 2 % of GDP stimulus to their economies) on this budget. And of course, there is the very real threat of the Coalition taking power.

    Andrew, let things play out. Harper will have red meat for his base via justice and democratic reform legislation. First, enough time has to pass for the GG to be 100 % guaranteed to grant SH an election, should the Opps vote non-confidence in this gov’t.

    • good point – too bad the cons have nothing about this

  32. Why are they freezing EI premiums? They’ve been going down for years.

  33. “Let me repeat: it’s The Coalition’s fault.”

    Jarrid, really man, give it a rest. Mr. Harper is a big boy; he can’t blame others for his messes.

    Even if we were to grant you that it was the coalition’s fault, you would have to concede that Mr. Harper (Dr. Frankenstein?) created the coalition in the first place. Mr. Harper does not know the difference between politicing and governing. His bizarre actions with the fiscal update that no-one supported led him directly to the situation he finds himself in today.

    This is all his doing, no-one elses.

  34. This budget can be explained by dipping into the book “Crisis and Leviathan” by Robert Higgs. It is in times of crisis that government lurches forward and grows in size, stealing more wealth and power from its citizens. In times of calm government may retreat somewhat in size and grasp, but until destroyed by revolution or defeat on the battlefield, it never shrinks in any really significant way.

    If a suitable crisis does not occur then governments will create a crisis out of thin air. If a crisis does not frighten the public sufficiently to permit them to be cowed by government, then the crisis will be torqued up and exaggerated as much as required.

    In the last 100 years the major crises which allowed governments to expand were: WWI, Great Depression, WWII, Cold War and 9-11. The crises “du jour” are Global Warming (now losing its shiny promise, but still a pretty good moneymaker for some) and the Great Credit Crunch.

    Most members of the media and academia are only too happy to participate in the manufacturing and exaggeration of crises. Academics do it because they are part of Big Government and directly benefit from its growth, and media do it presumably because strife and ruin sell more newspapers and get more eyes on their newscasts.

    And for those of you who are surprised that a “conservative” party is expanding government … get real. They make their living from government. They’re part of government. They live in the belly of Leviathan. When they are no longer running the government they will not go to work in factories, mines, retail sales or insurance. They will live off their fat government pensions and double-dip and triple-dip working for various government agencies and government-funded agencies and do lots of, ah, “consulting”, for companies which seek government contracts and government subsidies. The “fiscal responsibility” song and dance was just a patter to get the rubes into the tent where their pockets could be picked more easily (after shouting BOO! in their faces to frighten them).

  35. Devil’s Advocate Mode: While it would be tempting for small-c conservative folk to tell the Conservatives, “submit a balanced budget with all the pain that would entain, watch the opposition vote it down, and let the ‘coalition’ deal with the mess. You’ll be back in six months, tops.” I really think that line is just wishful thinking for several reasons. 1) For a ‘coalition’ government to fall in six months would require that the majority partner (the Liberals) to display the same level of selflessness and ideological purity that y’all are now demanding from the Conservatives. I highly doubt that would happen. I think it’s more likely the the Big Red Machine would accept nearly any demand to keep its coalition partners happy. 2) I think it’s unlikely that a ‘coalition’ government would be content to simply submit a short-term ‘stimulus package’, no matter how large the dollar figure. I think it’s more likely that they would institute the sort of deep structural entitlement programs that are VERY hard to reverse later down the road. If there’s one good thing to be said about this budget, it’s that the only permanent structural changes are the tax cuts. The spending, while massive and sometimes silly, is made up of one-time grants. In other words, the mistakes this budget contains are mistakes that can be reversed. Cruise ships may be silly things to spend money on, but it’s easier to cut that sort of funding later on than to eliminate a “guaranteed universal child care” entitlement, or a “Canadian Broadcasting Corporation”, or a “Green Shift/Carbon Tax”, etc. etc. Bad spending decisions hurt, but eventually pass. In contrast, bad institutions are almost impossible to get rid of once they’ve been founded, and the cost of keeping them going creeps ever higher the longer they’re allowed to operate. I mean, we still have the gun registry, and it isn’t even that old of an institution!

    • I appreciate the effort, anonymous.

      But here’s the thing about principles: You don’t abandon them. The Tories have accepted, validated, gone whole-hog into, drunken-sailor mode. The idiotic notion (that you piss away tomorrow’s wealth at the first sign of a downturn in a cyclical economy) has now gained credibility in the political world, and by extension the electorate. “Hey, even those evil right-wing neocons are spending like crazy, I guess it’s a given that that’s what you gotta do.”

      So I do not accept that “Bad spending decisions hurt, but eventually pass.” Bad spending decisions are used in future to justify further bad spending decisions. “Don’t worry, these measures for 2009-10 FY are one-time,” … “These are targeted temporary measures for just 2012-13,” … “OK, these tough circumstances call for a one-off binge for FY 2018-9, but this is the last time, promise!” … “We really mean it this time (2024-5)!” …

  36. Of a long series of seriously creepy photos of Harper, that is one creepy-assed photo of Harper

  37. When times are tough more me, I find ways to decrease costs. When times are tough for government, it finds ways to spend more. I thought, maybe, that would change with Conservatives in power. Nope.

    • Individual != Government.

      Here’s the thing, individuals aren’t all rational like economists would like them to be. We get together and groupthink begins to happen. Witness the Cabbage Patch Kid, pet rock, the Wii, and housing prices in Vancouver.

      Unfortunately, groupthink can’t outlast reality forever. Which means that we as a people are doomed to cycles of extreme prosperity followed by extreme poverty. Economic cycles are well known. Government, if it’s intelligent, works counter-cyclically in order to smooth that out.. so it means our prosperity isn’t as high as it could be, but then hopefully our poverty isn’t as low as it would be.

      This is why when times are good, the government should work on hoarding money.. cut spending and raise some taxes where it can do so safely, and basically run a significant surplus. That way when the bad times come, they have a healthy cushion to spend and ease the pain that people would otherwise feel.

      Or in short, when times are tough for you, government finds ways to spend more so that they’re hopefully not as tough for you as they would be otherwise.

  38. I have to say i’m more than a little impressed by all those Conservatives here who are rejecting the blame the coalition line. Not enough for me to convert mind but i’ve alway been an admirer of those who hold true to their principles. I guess as an irresponsible liberal financial reponsibility isn’t my reason d’etre. Although i would hope many libs are concerned by these numbers. Let’s hope we learn something of value as Canadians over the life of this Parliament.

  39. One thing in particular in this budget that impact me directly is this item “Protecting the severance pay for employees when companies go bankrupt.” I have worked for this unnamed company for over a decade now, a friend of mine for almost 2 decades . We have seen a lot of good people get laid off for a number of years now. They got their severance pay and all much needed support to get them back on their feet. All in all the company treated its employees very generously after being told they have been affected by company “right sizing” efforts. Recently the company declared Chapter 11 Bancruptcy protection and all employees have been told that there will be no merit increases for the next few years, what’s worse previous and future severance pay agreements are now in limbo and will be treated just like any other creditor that will need to get in line.

    So for all of you squirming in protest, groaning with angst about how this budget is not Conservative at all, think about us ordinary hard working canadians in need of a lifeline like this. Will you deny our families this much needed assistance until we can find another job and get back on our feet ? This is not about ideology but survival for some . Did this thought ever occur in that empty vessel you call your heads ?

  40. And Sisyphus helpfully provides us with a link to a site that tells us that the Liberals did not have to balance the budget nearly so quickly in the 1990s, and that running more deficits for longer would actually have been good for Canada. Because of course we need to be reminded that today’s deficit is not nearly big enough.

    That’s almost as amusing as the knee-slapper the Canadian Centre for Policy Alternatives came up with last week. They said that Canada must act fast with much greater stimulus than planned or we’ll end up like Japan. Apparently increasing the national debt from 15% of GDP to 85% (where Japan sits today) wasn’t stimulating enough for the progressive stimulators. Well, that explains why Japan’s economy has never recovered! Always wondered why that was.

    Sis, we already know you’re economically illiterate. You’ve shown that repeatedly with your own opinions. There is no need to provide links.

    • There are different kinds of illiteracy. The worst kind , to me , is the kind where people who can read won’t.

      I’m not sure if my anonymous name is appropriate or not. But your’s surely is.

      • Actually Sisyphus, far from refusing to read, I’ve spent a good 20 years reading about economics. And I’m still learning. And no, I don’t just read stuff written by right-wingers either. (I find right-wing economists to be just as enamoured with their own dogma as the progressives, and often even more so.) I’ve even read a couple of Paul Krugman’s books. (His criticisms of Bush’s voodoo math regarding social security and budgeting are bang on. Where I disagree with him is on his own policy prescriptions, which seem just as deluded as Bush & Co.’s. )

        It is the total lack of the predictive ability of economics (something that will never change because it is inherent in the economy itself) along with its reliance on overly-complex mathematical models which cannot possibly reflect the real economy, which makes me extremely leery of deficits and stimulus. Running a temporary deficit, or a short-term stimulus, are both predicated on the belief that the government can accurately predict the effects of these policies, and that those positive effects are strong enough cover the opportunity costs. The empirical evidence for such beliefs simply isn’t there.

        When it comes to economics, the only bias one should have is extreme skepticism. (And it’s taken me most of the past 20 years to learn this lesson.) Read and learn as much as you can, but don’t buy to deeply into anything, because if you keep learning, by this time next year, you’ll have likely changed your mind on a lot of things. Try Nassim Nicolas Taleb at the link below.

        http://www.fooledbyrandomness.com/

        Better yet, read his books, The Black Swan and Fooled by Randomness. (I don’t much bother with videos of him actually speaking – he’s a mostly unimpressive speaker who can’t control his temper.) Taleb is neither right wing nor left wing, and pokes fun at both leftists and free market gurus. More interestingly, he’s an admirer of both Keynes and Hayek, a combination one doesn’t come across often. But he takes a view of economics that I’ve personally never seen before, and he’s well worth reading.

          • Nevermind. I’ve figured it out. I’ll read lots of everything and respect that which appeals to my innate personal bias. That way I’ll be exactly the same as everybody else. There.

          • Yes, and Potter provides no evidence to back up that assertion. Not even an explanation. And the links he provides barely mention Taleb, let alone show him to be insane. Taleb has angered whole professions of people (economists most of all, but also Harvard School of Business luminaries and various financial “gurus”) by pointing out the simple fact that the “science” they practice is voodoo. And makes a pretty good case in his books (in his own rambling way). Taleb might well have a screw loose – he is an eccentric after all, (for a purported genius, he spends an inordinate amount of time engaged in petty personal vendettas against anyone who criticizes him), but insane he most certainly isn’t.

            And interesting that you should mention your “innate personal bias”. That very human bias takes up a good portion of Taleb’s book Fooled by Randomness.

  41. Jubi, the long term health of this country does not depend on whether or not you get your severance pay, much as you’d like to think otherwise. The fact that the government would even think to put such a mindless and meaningless detail into a budget document shows just how far off the sane track they’ve strayed. And what if all this debt costs you another job someday? Will you still be grateful for the assistance to get back on your feet? Look at what just a few years of progressively larger deficits have done to the US. You want more of that?

  42. I too blame the opposition.

    Harper’s in a minority situation, where the other three are threatening to take control, lest he opens the taps.

    So he “listens” and opens the taps, and now he’s a pariah.

    Shame, shame on the opposition for bringing this on.

    What Canada needs is a Harper majority.

    I think that’s something we all can agree on.

    • In other words, “Shame, shame on the opposition for putting Harper’s principles to the test!”

    • “I think that’s something we all can agree on”

      pfffffff!

      And yes indeed, shame on the opposition for fighting for what they believe is the best for the country… maybe Stephen Harper needs a lesson in this particular subject.

      I could just imagine if the tables were turned and it was the Liberals in government… and the conservatives were in opposition… hmm what would Kody be saying… oh hell, we all know he’s way too partisan, why bother.

  43. A $40-billion deficit out of the blue, eh? Does anybody, apart from Jarrid, think the Coalition would have dared to table anything so reckless? Only Nixon could go to China; only Harper can go to Cloud-coo-coo-land.

    In principle, I support government action to help an ailing economy, if a case can be made that such action would be effective, even to the point of deficit. But $40-billion? Good lord!

    • The NDP and the Bloc still think it’s not enough.

      They want to go further, they want more government spending, they want more debt for our children and our children’s children and our children’s children’s children.

      That’s the Libs’ Coalition partners J@ck.

      • Citation needed.

  44. Perhaps the most disturbing thing I’ve read tonight is in the Ottawa Citizen. The growth in the public service will accelerate over the next two years, despite retirements. There is simply no way the government can get the cheques out the door – and the programs off the ground – as fast as they say they will without hiring MORE public servants. (That wouldn’t be a huge issue if the PS weren’t already larger than it was before Paul Martin starting cut 50,000 positions in the mid-1990s.) That fact, more than any other, puts the lie to the talk of this being a “temporary deficit”. More employees means more office space to rent, more computers to lease, more networks to install, more benefits to pay out, more pension contributions to make, and more otherwise productive young workers in cubicles pushing paper. We’ll see how “stimulative” that is five years out.

  45. I hope that the Liberals are happy now.

    They wanted stimulus and deficit spending, they got stimulus and deficit spending.

  46. Kody, Jarrid, please, just stop.

    But Your Honour, I HAD to murder my neighbour’s three kids, because my other neighbour really wanted to kill them, and was calling me names because I wouldn’t do it for him. So you see, it’s important to have principles, but, sometimes, you’ve just got to be pragmatic. Really, it’s my neighbour’s fault — don’t blame me for my own behaviour!

    • I’m glad to see you’re not on-side in this, MYL. You’re a man of principle, whatever slurs should be cast at that principle.

      I’m quite appalled by this budget, I must say. Now Canadians have no choice in the next election, as between a party (or parties) who want to keep the budget balanced and a party (or parties) who want to go into the red big-time. Forget fiscal principle: democratic principle should dictate that, when push comes to shove, parties want more than mere power. That way voters can choose. As it is, Harper has deprived his (erstwhile) supporters of the chance to vote for him and his opponents of the chance to vote against him.

      Just when you think Canadian democracy could not get more corrupt, the ante is severely upped.

      • Good pt Jack. I never considered it from this pov before. Where will all those true cons go? Don’t care, do i hear my fellow libs But consider, this is not good for anyone. When people feel unrepresented they either stay home [ not good at all] or they form other, possibily more extreme, disafected regional groups [reform, bloq] A healthy body politic is a necessity in a democracy. This requires political parties to be at least an approximate of what they say they stand for. For the libs it’s not such a big issue since their core ideology is not so tied to dogma. The cons and the ndp don’t have as much wiggle room. SH is a chameleon, he thinks he can just change colour again when necessary, maybe; but not as a plausible conservative he wont. I’d say he’s set conservatisim back a decade or so.

        • kc, it is the country that has been set back by at least a decade. I don’t give a rat’s gluteus about the Conservative Party. They were tolerable when they were the least damaging to the country. Their race to be as or more damaging than the other guys just threw that all out.

          I remember “Canada is in an enviable position, our banks are ok, and our federal balance sheet isn’t as bad as any other country’s.” I remember “Now is not the time to do anything rash or stupid.” I remember the polls showing Canadians expected Harper’s gang could be trusted to manage any economic storm, more than any other party. And now, this.

          We now have nobody who can be trusted with the common purse.

  47. Who the hell is going to pay for this orgy of spending ? How ? When ?

    And where exactly is the influence of the brilliant team of economic advisors that your colleague Wells was touting ?

    Why can’t Conservatives act like conservatives ?

    • As I recall Wells wasn’t exactly touting it so much as having a head-scratching episode.

      But I wouldn’t call it a team of economic advisors , brilliant or otherwise. It’s a team of business boffins.

      And business boffins , despite the public impression , love nothing so much as spending public money.

      Preferably on themselves.

  48. From Curiosity Cat;

    Today Harper unveils his budget, and tomorrow Michael Ignatieff will most probably lead the Liberals in approving the budget, while the NDP and Bloc will oppose it. Harper will remain in power.

    To date, it seems that the Liberals have been rubbing out one line drawn in the sand after another (Harper deceived the public back in the summer because he knew then that his budget would go into deficit in 2009? That’s OK, we still have confidence in him to run the country. Harper is tabling a stimulus package which is less than the amount the Canadian government agreed with the G20 to spend, and less than the amount the Liberal Party agreed with the NDP and Bloc to spend? That’s OK, we still have confidence in him to run the country. Harper is saying that white is black and black is white, so that we don’t really know what to believe? That’s OK, we still have confidence in him to run the country).

    And what is the last line in the sand the Liberals drew, which Harper is about to cross over?

    We need, said Ignatieff, to avoid permanent tax cuts for the middle class because that will reduce the ability of Canada to move from budget deficits to budget surpluses.

    Yesterday, on CTV (apparently the unofficial Tory television show), Harper said very carefully and very precisely that his budget would contain permanent tax cuts for middle class Canadians (all those who earned $80,000 or less).

    So it appears that Harper has thrown down the gauntlet for Ignatieff, by deliberately stepping over the last remaining Liberal line in the sand.

    Why is he doing that?

    What is really going on in Ottawa today?

    The Cat believes that Harper is acting on his assessment of Ignatieff as an opponent, made during his recent meetings with Ignatieff. Harper has measured Ignatieff, and perhaps sensed that there just might be a trend in the man for kowtowing to those in authority (We Americans; the Imperial Presidency), and is now about to teach Ignatieff that there is only one alpha male in Ottawa, and his name is Harper.

    Harper is trying to achieve three things (and according to news reports about Ignatieff’s and other senior Liberals’ intention to vote for the Tory budget, he stands a good chance of achieving all three):

    1. He is proceeding with his firm objective of gutting the power of the federal government by reducing its revenue stream (tax income) and so reducing its power.

    The permanent reduction in income tax for the middle class is part of this design. In his budget, Harper will outline how the budget will get back to surplus in 5 years; these forecasts will include rosy revenue forecasts, and mention cuts in expenses.

    The rosy revenue forecasts will most likely not be met, but Harper will then rely on the Act of God defence his Tories are already using to explain how they got it so wrong with their rosy November forecast (no human could have foreseen the worsening of the economy; it was outside our control; we are therefore blameless and competent), to explain that the shortfalls in revenue are outside his control.

    But then he will also use the same shortfalls in revenue (exacerbated by the middle class tax cuts) to justify a vicious round of cuts to government services and to transfers to the provinces.

    2. He is showing Ignatieff that there is only one alpha male in Ottawa, by deliberately including these tax cuts for the middle class in the budget.

    Having sensed that Ignatieff is afraid to bring his government down by voting down the budget, Harper, being Harper, is setting out to punish Ignatieff for the scare given him by the coalition Accord, and by Ignatieff’s tough talk. He is daring Ignatieff to do what he said he would do (vote no if there are middle class tax cuts), because Harper has concluded that Ignatieff will back off from his public tough statements, and come to heel.

    Making Ignatieff support a Tory budget which deliberately includes the middle class tax cut is Harper’s way of publicly humiliating Ignatieff, and showing the world who is the stronger man.

    3. Harper is also forcing Ignatieff and the Liberals to be a party to his overall objective of reducing the power of the federal government, by cutting its revenue through these middle class tax cuts.

    And he will have made the Liberals party to the inevitable future cuts to federal government services and to transfers to provinces, because they bought into his budget forecasts by voting for the budget tomorrow. So the Liberals will not be able to point a finger at the Tories when they start their cuts.

    Ignatieff is preparing to adopt the Liberal fighting tactics devised by Stephane Dion, which involves furiously attacking by frantically walking backwards while Harper repeatedly socks you in the snoot.

    The most interesting thing tomorrow will be seeing how Ignatieff tries to explain to Canadians how he can approve the Tory budget despite it clearly crossing all the remaining Liberal lines drawn in the sand. The public wants us to do this, will be his rather lame defence.

    It will be amusing, somewhat sordid, and rather sad to see Ignatieff on his knees, administering a public bootlicking to the top dog in Ottawa.

    • Bow wow! Dream on buddy that distant roaring in yr ears isn’t howls of liberal outrage, but the sound of vengefull conservatives, true cons out for Harper’s blood. Alpha dog indeed!!

    • interesting analysis. Iggy will have to fish – bring down the government with an 85% chance this means an election – or cut bait which means he will vote as you theorize above and have to listen to the howling if the ND and Bloc and see his bump in support in que vanish – iow dion redux.

      going to the polls with no money against a budget that is 95% of what he wanted and is supported by a majority of cdns in the middle of a recession will put him back lecturing in harvard by christmas.

  49. Tax cuts should have been even higher. In a country that violates people’s basic human rights, by forcing them to spend more of their income (45%) on taxes than the bare necessities of life (food, clothing, shelter), tax cuts are long overdue (and the current ones still don’t go far enough).

    What we need is a flat tax at the federal level — 15% up to $80,000, 25% above $80,000, with the personal exemption at $20,000 – $25,000.

    Anyone who doesn’t complain about taxes is either a bum living off taxpayers or so filthy rich that it doesn’t matter.

    Most of the spending stimulus will evaporate upon impact; it’s useless and completely moronic. Deficit spending doesn’t stimulate the economy (at least not in the way it is expected). Only a reasonable tax system that leaves enough money in consumers’ pockets will do that.

  50. Word from Tim’s this morning even from some Harper moderates ………… The Harper/Flaherty Budget is a waste of paper …. not one person could name one thing that would benefit them ….. Tax cuts … hello the Provinces will tax them back, like they did last time ….. no person on pension is making 85K, no where near it ….. home improvements will not pay for heat, food or higher gas prices plus the contractors will raise their prices 15% plus! …. nothing on EI for family and friends and their children ….. no word on pension guarantee’s …. hello no word on strict conditions on the $75 Billion put on table for the banks …( look south to what happened there) …. and the list goes on ….

    NO ACCOUNTABILITY OR TRANSPARENCY ….. which leads to the same ode underhandedness en route!

    PASS THIS ON …… we the taxpayers and our children and grandchildren deserve more! Do not every try and tell the working class people you never knew ….. if y’all do not hold Harper & Co’s feet to fire!

    PS…. For what it is worth most thought those so called professional people who championed the Budget were running for the Senate . Sorry Andrew your name was first on the list ….. good luck worked of Duffy …..

  51. Is there any BS conservative idea Jarrid doesn’t believe in? I hope his lot are in charge of the Conservative’s next election campaign. Mike would get his 2 seats wish. If not, I’m sure Palin will be looking for campaign staff.

  52. I’ve thought about this some more.

    Are we sure this isn’t an idealogical budget?

    The only way to claw our way out of this defecit will be to raise back the taxes or cut spending.

    Presumably, the conservatives (or even likely the Liberals) will resort to spending cuts rathern than raising taxes.

    • Yup.

      • Sure would be nice to think that. Comforting, in a warm-brandy-after-being-out-in-the-cold kind of way.

  53. So Andrew Coyne says he likes this budget as he will save 1300$ by spending 10,000$ renovating his home!?!
    Yes, and the unemployed will get crumbs. Aren’t they the real victims in this economic crisis. Rich people like Andrew the publisher of a news magazine will get more money than the single mother struggling to survive and feed her children or that unemployed neighbor who is going to get a five week extension in EI, while the EI fund sits on a huge surplus, but now Andrew can top up his new registered tax free savings account.
    Yes, this budget is good for Canada; the richest of the rich in Canada.
    I suggest Mr. Coyne pay his renovator Cash, and he’ll save a lot more than 1300$, perhaps then he might think differently about whether this is a good budget.

    • You might want to develop the habit of reading posts before commenting on them. It may help avoid embarrassments like this in the future.

  54. Harper looks like a turtle in that picture. I can’t decide whether it’s Franklin or Yertle.

  55. The bad news, as suggested above by Andrew: spending our way out of a global recession will not work (will actually fuel inflation).

    The good news: “stimulus” is what the uneducated masses demand, so better have conservatives managing the spending (hopefully much less than announced and temporary, if they are smart) ,
    than liberals buying votes across the country for “green shaft” initiatives.

  56. “1. He is proceeding with his firm objective of gutting the power of the federal government by reducing its revenue stream (tax income) and so reducing its power.”

    I think there’s something in that. But let me put your point in another way. “He decided to govern as badly and as self-interestedly as possible, securing his grip on power by giving people billions of dollars in freebies and telling them fairy tales about how it can easily be paid for in the future, knowing full well that it will eventually cripple the economy and bring the government crashing down, sometime in the future when he won’t be holding the bag. Then, during his retirement, he can assure them that accelerating the collapse of their welfare state by making it bigger and more powerful was his selfless plan all along.”

    “2. He is showing Ignatieff that there is only one alpha male in Ottawa, by deliberately including these tax cuts for the middle class in the budget.”

    Good call. They definitely remind me of a bunch of chimpanzees squabbling over who gets the biggest bananas and who gets to, um, service the taxpayers the most frequently. The alpha chimp’s strategy is this: grab the fattest bananas while assuring the other chimps that the banana leaves he is giving them are just as good as the real thing, casting doubts on the competing male chimp’s ability to trade banana leaves for bananas with enough wisdom and foresight.

    “3. Harper is also forcing Ignatieff and the Liberals to be a party to his overall objective of reducing the power of the federal government, by cutting its revenue through these middle class tax cuts.”

    Indeed. He’s offering enough bananas to the other would-be alpha chimps to make them participate in his banana-leaf ponzi scheme, consoling themselves with the hope that when the collapse comes and the job of alpha male is once again up for grabs, there will still be enough bananas left in the forest to make dominating the other chimps and confiscating their bananas worth the effort.

  57. Rona had just announced she’s ready to legislate the Ottawa bus drivers back to work. Ignatieff COULD have championed this issue, as I have been stating for weeks. He COULD have earned himself a half-dozen seats in the NCR if he’d have been associated with ending this strike. Ottawans are suffering in a BIG way, and they would not have forgotten him if he’d have pressured the government to act on this. Presumably he was too afraid to offend his coalition partners as long as he though there was a chance he still needed them. Shows you what kind of political instincts Ignatieff has. He’s right up there with Dion.

  58. The opposition controls the house,

    if they want to.

    It’s up to Iggy. If he wants this we’ll have it.

    And Jarrid is right. The parties the rest of you support either a) will agree with it, or

    b) think its not enough.

    Shame, shame on the opposition from bringing this all on.

  59. What a drama queen.

  60. Andrew, in those two paragraphs you’ve said it all. Our economy is going down the crapper and on top of that, there is no real and clear exit strategy which is quite alarming.