Budget ’09: Fearful asymmetries

This budget is clearly designed to form the basis for a Conservative-Liberal coalition de facto


Andrew Coyne will be leading our budget coverage in the next edition. He felt more strongly about the budget than I did, as you will already have noticed. My own column will be kind of wistful. I do want to make a few points, not necessarily connected, in the meantime.

• Last spring I wrote a column arguing, tongue in cheek, that Liberals and Conservatives were already running a coalition government. Andrew wrote a column more recently, suggesting more seriously that they give such a thing a try. This budget is clearly designed to form the basis for a Conservative-Liberal coalition de facto. It’s surprising, though I suppose it shouldn’t be, how little attempt the Conservatives make to placate the Bloc or the NDP. In the latter case especially, that’s obviously a big change. The cozy little arrangement by which Jack Layton and Stephen Harper paid to Martin Liberalism, and which lasted well after the 2006 election, is over. This is the price Layton pays, perhaps gladly, for turning the NDP caucus into a machine for voting No to the Conservatives. But it points up an interesting feature of the political landscape since the last election and, at least, until the next: the Liberals are going to govern in coalition with somebody. It can be the Conservatives or it can be the NDP with Bloc support. But the Conservatives can’t govern alone and they can’t govern durably with the other opposition parties. And the NDP-Bloc can’t govern alone or with the Conservatives. That leaves the Liberals, and only them, with the freedom and the obligation to choose.

• The merits or otherwise of the Liberal-NDP-(Bloc) thing have already been debated endlessly, and only this is new: at the end of November one could argue (and Stéphane Dion did) that Harper was dragging his heels on fiscal stimulus and a serious government had to hurry in to provide some. Precisely the same argument, if it is valid, works against an opposition coalition now. Today there is a budget in hand, ready to implement. A new budget may or may not be better, but it would certainly be slower.

• This is aggressively not a green budget. We had a chance to elect environmentalists in October, apparently, and we decided not to. So the budget allocates $1 billion over five years for green infrastructure; $10 million for improved environmental reporting; and $351 million for nuclear energy, which is fine by me but which will strike many voters as not particularly environmentally friendly. This is penny-ante stuff compared to the scale of spending in lots of other chapters in the budget. And to speed up infrastructure spending, the government actually wants to weaken environmental-impact assessment, which confirms that nagging suspicion that these guys see a clean environment as a hassle. Incidentally, I would not want to take this budget to Washington to show the Obama administration I aim to be a serious partner on environment and energy issues, which means that for the next little while I wouldn’t want to be Jim Prentice.

• The Globe‘s Elizabeth Church and Daniel Leblanc have noticed a weird and disappointing mismatch in funding for the knowledge economy that also vexes the national association of research hospitals. There’s a lot of new money for university infrastructure and new labs. There is no new money for the granting councils that pay for university research. (In fact the granting councils’ budgets are cut, though the government argues this is because of administrative efficiencies that won’t affect the amount of program money they have available.) This mismatch isn’t new; it’s five years old. But this budget makes the problem markedly worse. It’s asinine to open labs if you will not pay for the work that goes on in labs. It suggests you like to cut ribbons but do not care what happens when the photo op is done.


Budget ’09: Fearful asymmetries

  1. Funny (not in a ha-ha way) how your Tory-Grit coalition churns out an NDP budget, that Layton and his minions won’t even vote for.

  2. Yeah, so what about your prized experts from the economic advisory committee, Wells ? What was their influence, exactly ? Huh.

    • I love it when people come storming in here looking for a chest-butting contest. Golly gee, Mr. Mulletaur, I guess I was wrong to sing the praises of my prized experts… whenever I did that. You’re so tough… where can I get some tickets to that gun show?

      • Semi-confidential note to Paul (feel free to “hold for moderation” or delete after reading): Maybe I’m wrong, but as I read Mulletaur, I found he was mocking the Tories for not paying attention to any economic common sense. We all tend to try to adopt some legendary Wellsian wit here. We don’t always make it clear enough. Just like “your” Tory-Grit coalition in my comment in no way blames you for this mess.

      • It’s times like these where I’m glad Paul allows comments on his blog so we can watch him absolutely bitch slap the trolls.

        • That’s very unfair, Johnny. I’ve always thought of myself more as a troglodyte.

      • I have to admit, Paul, if I were writing a book I might come on your blog and provoke you just so I can use your insults as blurbs on the cover.

        You’re so tough…. where can I get tickets to that gun show? – Paul Wells, macleans.ca

        I haven’t even got a book and I can already feel the royalties pouring in.

  3. So. Can I dust off that old Liberal ! Tory ! Same old story ! chant that I have around here somewhere. I always had the feeling I should have kept it handy.

    I promise I’ll keep the Hey ! Hey ! Ho ! Ho ! buried in the closet. That would be overkill for some of the boys on these blogs. Especially the Ottawa brigade these days.

  4. Seems to me that both Harper & Iggy are playing chess.

    I don’t play chess, so I can’t really comment, but seemingly the Libs now have the Tories over the same barrel on which Dion’s backside was repeatedly whupped last year, i.e. the “placate us or fall” barrel. The minority parliament momentum has just swung 180 degrees. Doesn’t chess work like that? A pawn stumbles, and the board changes. Still, it’ll only work for a short time, since the Liberals surely don’t want another election right now.

    I can’t help thinking Harper has made a big mistake by going into coalition, albeit of the heavily armed Cretan type, with the Liberals. His party will be taunted with flip-flopping unto the 7th generation. They’re looking more and more like a bunch of unpredictable amateurs, and I can’t recall when Canadians ever handed the reins to . . . unpredictable amateurs.

    • Not sure about chess Jack? More like poker [don’t play so what do i know] and i would say harpr just got major bluffed. Who could have guessed what the table stakes would be?

      • The late-night media rumour mill is that the Liberals may – repeat, may – come back with one or more amendments to the budget as requirement for their agreement. Probably something making EI more accessible. A Who Blinks First strategy. I’d be ready for that, but i”m not sure the country would be.

        • If it comes to that my money’s on UI [ refuse to be pc on this one] it is after all a Canadian tradition. And you better not mess around with traditions, particularly when you most need em!

          • If the liberal stategy is to humiliate Harper, i’m all for it. Let’s see now three yrs of being publically tronced requires some recompense, don’t you think?

      • Yes, poker, totally. Harper’s all in, though he’s also bet his wife’s jewelry. And Iggy’s holding a winning pair of 3’s.

        • What i’m afraid of is that Iggy’s gonna be the one to fold despite potentially holding the winning hand.

  5. A lib/con alliance eh Paul? Wonder who’ll eat who up in that un-holy union? I’d say that SH is rueing the day he ever opted to play political charades -” who am i now? Remember now i’m only pretending to be a liberal!” Well Steve you should have spent more time reading philosophy and less time Hayak. That cracy German guy for instance [ wont attempt his handle] said: ” if you gaze for too long into the abyss, it will look back into you”. Well Stephen the count is staring right back into you. Hello Steve is there anyone left in there anymore?

  6. Cutting ribbons is always more popular than actually operating the things. See also, hospitals (check out those soaring atriums!), transit).

  7. Paul

    One could conceivably take issue with your second point, that “A new budget may or may not be better, but it would certainly be slower.”

    There has been much made this afternoon and tonight, that much of the actual expenditure directed at infrastructure is highly conditioned (e.g., municipal matching) and as such may not flow before late this year or early next.

    Conceivably, a new budget, could actually get the money out the door faster, seemingly a more significant marker for a stimulus than the delivery of the budget paper.

    • oh and please not chest-butting, thanks.

    • And I do not buy your speed argument either, Paul!

      1) You have to trust that they will spend the bulk of the $$ (unlikely)

      2) It doesn’t boost the EI payments or the GST rebate – the very quickest way to help the neediest AND put spending money directly into the economy.)

    • Nope – afraid you are bucking the entire history of our system the only result is slower … you have 2 options slow or even slower.. nice try though … incidentally having dealings with municipalities when it comes to this issue they are very happy with the budget and the Conssevervatives also have this 50 50 arrangement with the Provinces when the municiaplity can’t chip in a third so when you get right down to it it’s a Provincial and Regional District thing so that’s a non starter and more than likely why most of the Premiers are quite happy.

      • first of all not accurate Wayne re speed.

        second of all nothing you said makes it clear that the SH budget is not slower than what could have come after.

  8. Paul Wells Wrote:

    “…these guys see a clean environment as a hassle.”

    I’m surprised this hasn’t gotten more play in the media or in the various interviews I’ve seen with Liberals, or more specifically, John McCallum (I’m almost positive he has cloned himself to attain maximum media coverage). I understand the Liberals wanting to back away from being seen as environmental crusaders, but the failure of this budget to recognize the short-term and long-term economic importance of “green” infrastructure and technology is appalling, especially in contrast to what we are hearing south of the border. I’m hoping that if Ignatieff does require amendments, this will at least be partially addressed.

    • The NDP press release of January 22 pointing out the dangers of dropping environmental regulations to speed capital expenditures seems to have gotten very little attention in the press, if Google News can be used to judge.

      As for Paul’s remark about not electing environmentalists in October, at least one constituency did. Linda Duncan, winner in Edmonton Strathcona, has more environmentalist credentials than any Green Party candidate of which I am aware.

      From my environmentalist perspective, we need to use federal, provincial, municipal, and personal funds to reduce our environmental footprint. Since part of that reduction is spending and consuming less, it’s a conundrum. Possibilities, some of which are reflected in the budget, include investments in energy efficiency (including replacing individual transit with mass transit), investments in sustainable energy sources, investments in recycling, taxes on excess consumption especially of high-resource use products (carbon taxes, for example), incentives to reduce urban sprawl, incentives for organic farming, individual spending on low-impact services – music (live or recorded) for example. I’m sure we can think of more ways to keep the economy moving without using up the planet.

  9. This is a consensus budget, the Conservatives are presenting a budget that will attract the support of Parliament. The NDP are voting against it because Jack wants to be a cabinet minister taking part in the crafting of a LIberal budget. The Bloc are voting against it because they want to be actively consulted in the makiing of the budget.

  10. Well, forgive me but I’m reading Gwynne Dyer’s CLIMATE WARS so I’m genuinely upset. Granted, Harper is at least consistent (though where the hell’s that 2 cent reduction in diesel?!??!), but were I the Glibs I’d vote it down and go solidly Green with Layton and Duceppe, both of whom would have turned in something, anything, to encourage a toe or two toward saving the planet. You see, this could all have been handled far simpler, cheaper, more effectively with a simple inclusion of the Carbon Tax. Say your reduce income taxes across the board 15% and add $50 a ton on carbon. The Free Enterprise System will figure out the rest. Not fancy shmanzy Bureaucratic Shell Games ($10 bil of this windfall is what the provinces are expected to kick in, and while they might it isn’t fed money now and still won’t be). (And none of this money has been spent, and much likely never will be; the dance of 7 veils is only up to about 4, maybe 5). Even if this cost thirty billion dollars it would have an enormous effect on energy generation and transmission, the direction car engineering would go in this country (what the hell, we can’t import from California?!) And that’s why the Cons have no clue what they’re doing, assembled a mishmash of purported spending hoping most will never be spent. Oh . . . wait, a new bureaucracy for vote rich S. Ontario. Yeah, we don’t have enough pork down here apparently.

    • Sorry. You have violated Rule 13 (b), sub-section (c) . You’re not allowed to read Gwynne Dyer in Canada anymore.

  11. Don’t you love Layton’s usual response! I call him ‘knee jerk Jack’. He was absolutely salivating back in November when he thought he was going to be a Cabinet Minister in the Government. He wouldn’t support the budget if it matched the U.S.A. one hundred billion.

  12. I think you are on to something Paul and I have this nagging little feeling that both Stevie and Iggy are much like negotiating with a lady of the evening. The exact nature of the relationship is defined quickly, personally, out of earshot by witnesses and early on … all that’s remaining is the price for the service rendered. Now that I am over the sticker shock and all things considered what options to people really have here? as the only question appears to be = HOW MUCH DEBT! in this all parties seem to be in agreement when you can get them to admit it and when you get right down to the crux that is what the voter appears to want as well – you can’t say gimme gimme without dealing with how much!

  13. Paul wells wrote,

    ” I would not want to take this budget to Washington to show the Obama administration I aim to be a serious partner on environment and energy issues, which means that for the next little while I wouldn’t want to be Jim Prentice.”

    Ulm, when did we start including US administrations in our budget approval process? And when did they actually care?

    Its not like Canda is going to be three eyed fish in Lake Michigan to wave at Obama from the chicago river when he goes home.

    No big complaint, but imagine writing that and replacing it with thewords Bush or McCain administration and see how little sense that makes.

    Your comment on the research grants….well it never is enough is it? Probably an appropriate thing for the federal government to do, taking care of equiment and capital issues. Shouldnt this free up money somewher else at those institutions? doesnt it make it easier to attract good researchers when you have state of the art labs and the researchers tend to bring the dolalrs with them?

    Research is a complicated process, and money gets raised from anyone of a number of a sources. When I get called for $$ from the university it can go to research grants, capital projects, bursaries or just general operating funds. Universities still need to do a better job tapping their alumni base as well as shaking down taxpayers for money. My bigger complain is there really isnt a strategy for this, how else can you judge the plan, any plan from anyone…..but that just raises the question of whether or not the Federal government can really play at deep level in this.

    This raises issues like induistrial policy, ties to commercialization, military research, big science vs small. I am happy you have thingslike the Perimeter institute, a private creation but maybe thats where it comes from.

    Can you imagine the federal government on its own creating that, first off there would have been a debate about its location, the Bloc would have complained that it wasnt in Chicoutami and the NDP would have had to answer to CUPE about the inclusion of Israeli researchers. I admire your committment to this topic but I would focus more on getting a strategy in place and agreement on goals and objectives of science and research policy before i complained about lack of dollars in a specific area….we still dont know what we do the money even if we had it.

  14. William Blake, who undoubtedly inspired Paul’s “fearful asymmetries” heading, also said, “Without contraries, there is no progression.” We’ve got the contraries. Where’s the progression?

  15. As a university researcher, I am very disappointed with the games that the Conservatives have been playing with the financing of basic research. There certainly was a time (10 years ago) when a lack of infrastructure and equipment was preventing research. However, after many years of sustained investments, especially via the Canadian Foundation for Innovation program, this is much less true. Since the Conservatives have been in power they have cut back funds for actually DOING the research with each budget and this continues with the present one. The granting agencies (NSERC for me) are the ones actually evaluating the quality of proposals through peer review and granting money to the best proposals. These funds are what actually pay for research supplies, scientific equipment and salaries to graduate students and technicians. The result has been shiny new labs that are empty because the funds are not available to run them. It’s like a company investing lots of money to build lots of empty offices because they can’t hire people to occupy them.

    • Too true. Moreover, providing funds and operating expenses for the trainees in the research labs has two major benefits.

      Firstly, its an efficient means to create jobs (graduate students earn $20-25,000 before their 4-5,000 tuition payments). These are relatively cheap jobs that build expertise in many areas and in 5 years time, the economy will be thirsting for these yong and qualified people.

      Secondly, the work they do has all sorts of impact, both long and short term. They are essentially pre-vetted to be working on the best 15-20% of ideas since the funds are highly competitive. The impacts include new knowledge, new applications of that knowledge, new technologies, etc. Plus, they are highly educated in the process.

      However, the current budget erodes this capacity, sends a direct and long term message to these people that this isn’t a good place to be and leaves the previous infrastructure investments under-utilised. Truly we are building bridges to nowhere.