An empty, almost flippant budget

Conservatism is not just dead but, it appears, forgotten

The government delivers an empty, almost flippant budgetLet’s get the good news out of the way first. The unilateral elimination of all remaining tariffs on production inputs in today’s budget is terrific public policy, a shot in the arm for Canada’s manufacturers, and a timely example to the rest of the world. It will lower costs, save on paperwork, and improve productivity. It will make Canada the G20’s first tariff-free zone, and as such is likely to prove an attractive incentive to locate a plant here.

End of good news.

The rest is simply bewildering. It was to be expected the budget would be inadequate; nothing suggested it would be quite so trivial as this. A merely inadequate budget would have made no cuts in spending in the coming year, notwithstanding a deficit projected at $54-billion, but would have pencilled in cuts in succeeding years. If it were really inadequate, it would have left these mostly unspecified, leaving skinflint critics like me to splutter at the vagueness of it all. We’ll believe it when we see it, we’d say, in the pleasant anticipation of the scathing articles we would write about next year’s budget, when the government would once again fail to deliver on cuts — the economy is still just a little too fragile, it would claim, again — pushing off the day of reckoning yet another year into the future.

As I say, that’s what an inadequate budget would have included, together with handsome bar charts showing the deficit declining majestically to zero. But that’s not what’s in this budget. This budget has no spending cuts this year — in fact, it projects an increase of $4.5-billion from what was forecast as recently as last September. But it also has no cuts, or next to none, in future years. The September fiscal update projected spending over the next five years (fiscal 2011 through 2015)  at $1.247 trillion. The budget now puts that figure at $1.245 trillion. Total spending cuts: $2-billion. Over five years. $400-million a year, from a budget of roughly $250-billion.

Of course, that’s the net: the budget claims gross spending cuts, before offsetting spending increases, of $17.5-billion — again, over five years. How do they make those not-so-draconian cuts? They take about $2.5-billion — a billion a year, at the peak — out of Defence. Easy enough: Defence is hardly the opposition’s pet, and the cuts merely slow the projected growth in defence spending, from the torrid to the slightly less torrid.

Another $4.5-billion, or $1.8-billion a year at peak, comes out of foreign aid. Even easier: foreigners don’t vote in Canadian elections.

About $2.5-billion in “expected savings”, or $625-million a year at peak, is accounted for by closing a few corporate tax loopholes. Fair enough: if the loopholes themselves should really be regarded as a form of tax expenditure, then I suppose closing them counts as cutting spending.

The largest single saving, $6.5-billion in all or $2-billion a year at peak, comes from a two-year freeze on departmental operating budgets. That sounds tough, until you realize they’re freezing spending at 2010-11 levels: that is, at the very height of the stimulus-enhanced, shovels-in-the-ground, money-out-the-door frenzy. In 2011, according to the budget’s breakdown of federal expenses (p. 180), “operating expenses subject to freeze” totalled $54.9-billion, fully $10-billion  more than they were just two years before. That’s where they’re freezing it. The peak has become the base.

Oh, but I’ve forgotten program review. You know, where the government asks every department to assess their lowest-priority and lowest-performing programs, with an aim to “reducing costs while improving efficiency.” Must be difficult: the budget pencils in a maximum of just $288-million a year in efficiency savings from the 2009 program review: one-tenth of one per cent of program spending. The federal government is, apparently, 99.9 per cent efficient. Corporate welfare, transfers to money-losing Crown corporations, “regional development” pork: all are sacrosanct. Transfers to provinces must continue to rise at 6 per cent per annum, eternally. Even the wealthiest old folks must continue to receive their federal cheques.

So this is where we’re at. The previous Liberal government having increased spending 47 per cent in its last six years in office; the Conservatives having increased spending another 19 per cent in its first three years (“good times”), and a further 20 per cent over the next two (“bad times”); after doubling spending, in short, in the space of a decade, the government’s notion of restraint is more or less to leave it there. Oh, some spending drops out when they’ve run out of hockey rinks to build and roads to repave. But in 2015, spending will still be higher, as a per cent of GDP, than it was in 2006. Measured in real dollars per capita — the more meaningful gauge — it will be 12 per cent higher.

And after all that, they still leave us in deficit. The budget boasts of a plan to “return to budget balance,” but it doesn’t even deliver what it claims. Though it forecasts five straight years of growth averaging 5 per cent per year — no double-dip recession, no aftershock of the financial crisis, no flareup of inflation or spike in interest rates, just rosy scenarios as far as the eye can see — and though it counts on revenue growth of nearly 7 per cent a year, it still shows a small deficit in 2015, six years after the recession that was the supposed cause of it all.

It wasn’t, of course. Only a fraction of the current deficit was brought on by a recession-induced decline in revenues, and even that would not have been the case had the government not spent us to the edge of deficit during good times. The rest had nothing to do with stimulating the economy — the recovery began months before any shovels hit the ground, on the strength of unprecedented central bank action: monetary stimulus, not fiscal, was the necessary and sufficient remedy for our ills.

The government ran us into deficit for purely internal reasons: in the first place to avoid defeat in Parliament — the deficit that the Finance minister now trumpets as part of his plan all along was nowhere evident, you’ll recall, in his November 2008 statement. And having first taken the plunge, it found it rather enjoyed it. All those projects to announce, all those ribbons to cut, all those lovely oversized novelty cheques to hand out, with a grinning Conservative MP in every picture. It corrupted itself, and hoped desperately to corrupt the country.

And bearing down on us, remorselessly, is that fiscal freight train of which we’re all uneasily aware, but which the budget, incredibly, never mentions: the coming retirement of the baby boom generation. This is the point: if it were just about today’s deficits, that would be one thing. But the deficits we are running now are as nothing compared to what is to come; the discretionary spending we are merrily running up on our credit cards today is a small fraction of the costs that will engulf us as those aging baby-boomers start crowding the hospital wards. We should be running surpluses in these years, not deficits. And yet the government delivers this empty, almost flippant budget.

Even a year ago, it was still possible to be shocked by this. But now? One is surprised, it is true, by how unconcerned the Conservatives are about the state of the country’s finances, how little they are prepared to do about it — surprised, but not shocked. Those Conservative faithfuls who have been hanging on all these years, in the hopes that, eventually, someday, with one of these budgets, this government would start to act like conservatives, must now understand that that is not going to happen. Conservatism is not just dead but, it appears, forgotten.




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An empty, almost flippant budget

  1. And they needed extra time off to even come up with THIS much!

    Sigh.

    • So given your track record, what would you have said if there had been real meaningful cuts to .. oh let's say every liberal prgressive driven NGO that exists in Canada (read most of them) or perhaps ACOA or WED or whatever the Quebec or Ontario equivalents are, depending on where you live. How about cutting cultural spending or OTP . Tell us, it was the opposition that argued for the billions in stimulus spending: "do it or we'll bring down the government! You are amongst the finest examples of a hypocrite that exists in the "tolerant" left in this country.

      • I'm pretty sure he would have supported all those things. What in blazes are you talking about?

      • Don't excuse this mess by attacking ME, dude. I ain't leftwing and never have been. And the G20 brought in the stimulus so don't bother blaming the Libs…again… for that either.

        How about this govt do something useful for a change?

        We needed 3 things: Our infrastructure is falling apart, bridges, roads etc….. and we have hundreds of thousands of unskilled labourers out of work. The solution should be obvious to a gnat.

        Massive retraining for all those young enough and willing enough to embrace it. Because those jobs aren't coming back.

        Massive investment in education, science, R&D….the 'jobs of the future we were told about, that never materialized in Harp's poor excuse for a budget.

        Harp isn't planning for a future because he doesn't believe there will BE one. Take him at his word for once. He's expecting Armageddon….hence the 'an attack on Israel is an attack on Canada' line.

    • So the left leaning talking heads are at it again.

      • Yes, An empty, almost flippant opine!

  2. I was afraid of this. The proof was in the budget pudding, and they've blown it.

    • I'm disappointed as well. There could have been some significant changes made, Andrew had a great start in his piece a while back. he has often said that there needs to be a reconcilation with the conservative in this party. They don't seem to have the courage to act on what they espouse.

    • Couldn't agree more. This doesn't go anywhere near far enough in showing restraint.

    • Yup. A timid, don't-nonconfidence-me-bro budget.

      When oh bloody when will the Conservatives stand up and say, "We're conservatives and Conservatives, and we were voted to deal with this. It should surprise no one that we're slashing the following programs at the following departments because they (a) were a dumb idea at the outset and/or (b) outlived their usefulness at least five years ago and/or (c) never achieved their objectives and never will and/or (d) a fine idea but too expensive to justify spending money when we still owe hundreds of billions. Bellyache all you like, not-a-penny-for-X-Y-Z whiners. We're conservative. It's what we are. You no like — let's have an election and have the people tell us whether we're on track or not."

  3. great article Andrew, there is no conservative in the CPC, just Evangelicals addicted to spending

    • as opposed to Liberals and Socialists who demand it without taking responsibility

      • The Liberals balanced the budget before. You can't just pretend it didn't happen.

        • yah, the Liberals balanced the budget by raiding the EI fund, to the tune of $54 BILLION……..illegally.

          • They also cut spending. This is a fact.

          • Are they proposing serious spending cuts now? Why should I use what they did 15 years as an indicator of what they would do today?

          • IntenseDebate Notification <DIV dir=ltr align=left>You definitely shouldn't. What happened 15 years ago is irrelevant. </DIV> <DIV>

          • is that the reasons the CPC don't seem to be able to cut spending or reign in the deficit?

          • Sigh… Again with this lie wilson?

            There was nothing illegal about using the EI surplus to pay down the deficit.

            The only thing "illegal" about the whole thing was setting the rate in Cabinet rather than in the House. That rate would have been approved by the House anyway, so no one can say things would have happened any differently had Chretien used the correct process.

            By the way, since the SCC gave Harper the option of giving the money back or retroactively setting the same rate, does anyone know which option he chose?

          • Actually, that is not true. You could argue that the EI funding changes added to the surplus in later years – which is only partially true and mostly wrong as well – but the EI funding changes did not come in until after the deficit was slayed.

        • The only way the Liberals 'balanced' the budget was to:
          1. slash programs that left a lot of people unemployed
          2. take EI money that was not the governments to take
          download programs onto provinces who then cut programs that left a lot of people unemployed
          3. raise taxes
          4. pray like they never prayed before that the US economy wouldn't tank (all the while dissing the US)
          The only reason they got away with it was because the eeked out a majority so they could do anything they wanted.

          Canada is not in a position to do the same without dragging Canada into a bigger recession (which we have actually have survived pretty good).

          • If you were unemployed during the period 1995-2005, you were not employable. Don't blame the #LPC. You can make a case for being overtaxed, but bottom line the economy flourished…. THAT IS FACT!!!!

            You want to talk downloading… I give you Mike Harris as Ont Premier. His inner circle is now Harpo's inner circle, reaping a new path of destruction for the CDN economy.

  4. "It is not a dramatic change of course, and in uncertain economic times you want a steady hand. And we are getting a steady hand," said Craig Wright, chief economist with Royal Bank of Canada.

    Read more: http://www.nationalpost.com/news/story.html?id=26
    The National Post is now on Facebook. Join our fan community today.

    Andrew, quit shoveling the ignorance. A good diet takes patience, perseverance and "a steady hand." The Cons are doing the right thing here. Abrupt change is adverse to economical recovery.

    • Right. So between Andrew Coyne, Jim Flaherty and the National Post, who has the reputation for shoveling the ignorance?

      • Yes, between Coyne on the CBC with Chantal Hebert……I'll take the National Post for $500 Alex!

        • You just won't pay for it though, will you?

    • RBC pulled down 1.5 billion in profits this quarter while personal bankruptcies rose 25%

      They stand to make a bucketload more when Flaherty's tax cuts kick into gear.

      You're damn right he's happy with Flaherty.

      • Well the Canadian taxpayer forked out that same amount to run the CBC….a crown corp long past it's best before date

        • Hidden agenda! Hidden agenda!

          Excerpt from:

          http://www.straight.com/article-206164/ian-morris

          There is a pattern in all this—say one thing, do another. Despite the shortcomings of its management and Harper's antipathy, the CBC does have one big asset: public opinion. When Friends asked Nanos Research to find out how Canadians would respond to the question that Harper's “Rasputin” posed in that fundraising letter, Nanos found that 63 percent of Canadians think that spending $1.1 billion a year on CBC is a good use of taxpayers' dollars, while only 25 percent disagree.

          I doubt Harper or the CPC have the fortitude to publicly advocate for the removal of funding for the CBC and Radio Canada from the federal budget; never mind make it part of an election platform. Small wonder Andrew Coyne titles this article, Conservatism is not just dead but, it appears, forgotten. He, at least, speaks publicly and on the record regarding his preferences with respect to this issue.

          • So about 20 million Canadians support the CBC….which is about $50 per year for each of them.

            I would pay that amount per year for a subscription to the CBC in an instant, especially if it meant that we could move on to thinking about issues that are having or are going to have a much larger financial impact over then next few decades.

          • Wonderful! Take away the public teat, and add an optional $50 contribution to CBC/Radio-Canada to everybody's tax return. PhilCP is in!

            Huh? Oh, I see. What you meant to say is you are happy to force EVERY taxpayer (those who would, and those who wouldn't) to chip in the fifty bucks. Except it's not $50 a head. It's nothing at all for many, a few bucks for some, right about $50 for a few, and bucketloads more than that for those in the higher brackets.

            "For all the garbage they are wasting my money on, at least they have the sense to [insert personally favoured garbage here]." And here we are.

          • It seems that I didn't make myself clear.

            I'm definitely not supporting the current method of funding the CBC. I'm suggesting that those who wish to support the CBC (and apparently there are about 20 million supporters) do so, and that they do so the same way that people can support Maclean's or the National Post or The Globe and Mail – through a yearly subscription.

          • Average of 34 bucks a head. Seriously, people. How much do you think you pay for health care, whether or not you need it? Or fire and police services you may never use? What's the psychotic fixation on the CBC?

            I mean, how much do we give to the producers of "Stargate Atlantis" to film in Vancouver? And every other made for tv movie with a C-List American acto shot North of The Border for the huge tax breaks. Go do some homework and see how much that crap costs you…

          • OK, this time I am totally at fault for being confusing. In the just previous post, when I said "I'm definitely not supporting the current method of funding the CBC" I meant not supporting it tooth and nail over any other method (such as a subscription method).

            I actually have no grief with the current method, but since it seems (as you pointed out) to be such a psychotic fixation for some, I would be prepared to move to some other funding system, especially if that would help us to get past talking about the CBC and allow us to start talking about other issues that are actually costing us serious dollars.

          • Works for me. Never thought you were one of the psychotically fixated, either.

          • If you can't get the difference between the CBC and other essential government activity you list (and don't for a moment think I put monopolized health care in there), I am afraid I can't help you with the fixation thing. Hint: It sure ain't just the CBC.

            Better hint through repetition: "For all the garbage they are wasting my money on, at least they have the sense to [insert personally favoured garbage here]." And here we are.

          • Well, if government only paid for "essential" stuff, we'd have a pretty mean and hollow landscape. Are music and drama classes essential to education? Cut them. Funding for the arts? Cut it all, because we know the artists are all at galas complaining about how much money they need, listening to their rich friends play Beatles songs on the piano…

            Sorry, where was I?

            Right, essential. I'm sure there are private broadcasters ready to hop into those areas where only CBC broadcasts to take up their rightful position as the corporate heroes they are. The stories of closing stations in small towns, and cutting local noon and weekend news in the largest media market in the country are surely no indicators of what would happen.

          • Are music and drama classes only in existence because the taxpayer of tomorrow foots the bill? Are the arts so pathetic an industry that they would all shrivel up and die if there was no maple leaf in the upper left hand corner of the sponsoring cheque?

            Local noon and weekend news is dying because we are moving with the times and getting our news updates on our smartphones and from this internet thingy nowadays. Remind me why the CBC which gets clobbered in the ratings (even with those dwindling Canadians who go to TV & radio for their link to the world) is so essential?

          • As with any school class, the answer to your question is yes.

            Local news is not dying. How it's delivered is changing. Whatever the format, it still needs journalists to produce the material that the Diggs and Farks aggregate for your easy enjoyment. The Huffington Post is great, although I wonder when the unpaid staff will have to start paying rent…
            CBC will soon be the last guy standing, and "clobbered in the ratings" means less than most people think it does. There's very little movement of advertisers in Canadian TV, and because the market is small and everyone knows each other, few ad decisions are made as a result of the "book" quarterly numbers.
            Mind you, "Metro Morning" is the top rated morning radio show in the largest media market in Canada. It's on CBC.
            CBC also has the best and busiest news web site in Canada. Go compare it to CTV or really anyone else in Canada.

          • Lotsa words. Anything in there that justifies the coercive confiscation from the productive, or that justifies our taxpayers supporting a media organization competing with real taxpaying companies for advertising dollars? Because "I like CBC's news website better than the others" just doesn't cut it.

          • "Anything in there that justifies the coercive confiscation from the productive,.."

            Got that all out of your system, Ms. Rand?

          • Hey, Tig, welcome back, and nice of you to reveal y'self by not actually offering anything of substance in your reply.

        • So the answer you're suggesting is that RBC should redirect it's profits to supporting the CBC?

          I'm cool with that.

        • What, you don't think other media get subsidized? As Macleans.

      • True enough. Mind you, a GST hike would make me happy too. Let us tax the consumption of big ticket items, which favours everyone who doesn't by a new car or house every year. Which is most of us out here.

        • why are you so eager in paying more, I think a slow down of spending is what is in order. More money in and the will find a way to spend it again.
          Andrew's blog on spending cuts made my hart sing.
          wilson I am with you on the CBC, keep the radio and ditch the rest.

          • You missed the point. A one percent GST raise or cut makes almost no difference to me in a year. Maybe a hundred bucks. That's because I drive a 10 year-old car, have an old tv and don't plan on making any major purchases this year or next other than any emergency home repairs.

            This kind of consumption tax is much more fair than an income tax, and hits those with lots of disposable income harder than the middle-class folks, or the working poor. Also, a one-percent rase in GST would bring in several billion a year, saving the government from having to cut transfer payments to the provinces. You know, the guys that run the hospitals and schools.

          • Would a 1% increase in GST really only cost about $100?

          • If you only spend $10,000 or less on GST-taxable goods and services in the legitimate economy, the 1% increase would set you back no more than an additional $100.

            But if you're in that frame of consumption, there's an outside chance you're cashing GST rebate cheques, which might also get adjusted when the rate goes up (not positive on this — anyone know if the rebate ever got adjusted downward when 7% became 6% became 5%?).

          • It didn't. Which was the saving grace on those tax cuts.

            Consumptive taxes actually tend to be regressive, because people without money generally can't afford to buy quality, so instead end up buying repeatedly. The rebate is what keeps it from being entirely regressive, so reducing the tax without reducing the rebate was a very good thing, IMO.

          • Nope. Make decent money, but food, meds and mortgage take up most of our spending. We also invest a good deal of our savings, so 10 grand a year on clothes, entertainment, electronics and big-ticket items sounds about right. But even if I spent 20 grand a year, the $200 annual payout would be nothing compared to that half-percent tax increase 4 years ago, when the current government undid the previous ones' personal income tax cut.

          • So you own a house (no-GST resale, obviously), but don't pay for utilities? Sweet. But most of us aren't in that position.

            Sure, GST doesn't apply to property taxes, insurance, investments, food, mortgages, and medical. But I find it hard to believe that you make good money yet pay less than $100 in GST.

            My Honda is 12 years old, and has never required irregular repairs. Food ($7,000), medical($8,000) and mortgage($32,000) make up most of my spending too, and I too budget less than $10K for clothes ($900), entertainment ($500), electronics ($200) and big ticket items ($2,000, for non-auto depreciation) .

            But I easily spend $10K on utilities, gasoline and diapers alone. Heck, I spend more than $10K again on maintenance (home, lawn and 2 compact cars).

            Sure, GST doesn't apply to everything, but it still outpaces what I consider to be my luxuries (essentially entertainment and electronics), which are less than $1K out of an income of $140K.

            What cheeses me is I'm worse off in some ways than 15 years ago. 15 years ago, my income was $14K, I paid $3K in taxes and spent more than $2K on fun (e.g. entertainment, alcohol, electronics, cable TV, travel, restaurants). Now our income is $140K, we pay $65K in various taxes, have less than $1K for fun (dancing lessons, babysitter, and some DVDs), and can't afford TV service, cinemas, restaurants, alcohol or travel. Sure, I now own 1/2 a house, 2 old cars and have 3 kids. But a 10-fold increase in income doesn't pay for that because the taxes in every form are staggering.

            Life is less fun. Far and away, the biggest reason is taxes.

            What most people don't grasp is that since our disposable income is so small compared to gross income, even small tax changes make a huge impact.

  5. I doubt even manufacturers are pleased with this budget. The tariffs measure is a pretty small consolation for killing the accelerated capital cost allowance program.

    • The accelerated depreciation front-loaded the tax savings by artificially messing with best-estimate depreciation. It was silly. Killing tariffs is absolutely smart, and might hobble the hurting manufacturing industry less, and has the added benefit of not having the government picking winners and losers among the best of the bribers</strike</i> loudest crybabies most promising companies deserving of investment. EVERY company gets a break, not just GM and Chrysler and Bombardier and…

  6. Great "skinny", Andrew. Thank you. Now all we'd need is an Opposition that can see and talk straight.

  7. Hey Feschuk! Looking for a photo with endless potential for your next caption challenge?
    This one is an absolute beauty!

    • Or 5 seconds later….

      "1, 2, 3, 4, I declare a thumb war……"

      • I was wondering if the saluting guard could clutch his sphincter any tighter?
        Just what the heck is he so afraid of?

    • I'm in for the Danby caption challenge:

      "We upped our thumbs. Now up yours!"

    • Are you requesting the budgets be forecast to be balanced?
      In that case, Flaherty-types just adjust their projections.

      Are you asking for legislation that ties government spending to income on an annual basis?
      In that case, poor fiscal managers (like Flaherty) will blow the years spending too soon and essential government services get screwed.

      The only practical way to run a balanced budget is to plan for a significant surplus, and then have a plan for how to use that surplus on necessary one-time investments that will provide value over the long run. Martin did that and invested in debt reduction, science&tech. infrastructure expansion, etc and your organization roasted him for it.

      I have nothing against people with a single agenda wrt government… but try to be internally consistent.

  8. So I'm guessing Andrew that you would disagree with Don Martin of the Calgary Herald that this is the first time the Conservative government has actually acted Conservative by cutting spending?

      • Yup.

    • What spending cuts? Iggy is smart to leave an election until after their planning conference – Harper doesn't do well in parliament or debates so I expect he will be looking for more opportunities to leave the country – Photo opps in Chile?

  9. Sorry you were disappointed Andrew…. it is tough to kick a football that just ain't there.

  10. Those Conservative faithfuls who have been hanging on all these years, in the hopes that, eventually, someday, one of these budgets, this government would start to act like conservatives, must now understand that that is not going to happen. Conservatism is not just dead but, it appears, forgotten.

    So much for the giddy excitement partisans exhibited when Stockwell Day was shuffled to the Treasury Board because it "signaled the return of fiscal restraint."

    They won't understand that it won't happen, I bet. As long as the party forms a minority government, people will believe all will be set right (no pun intended) again with a majority. Even though there's no better test of principles than what a party is willing to do to maintain power.

    • Former Progressive Conservatives decided that power was more important than the government they believe in, and voted in this sorry posse of empty suited Reformists. I keep thinking one day, they'll admit it quietly to themselves and move to demand more — but the apologists here for really any and all creepy, irresponsible, or downright offensive moves by the government are really disheartening. The longer we go, the longer and harder we have to clean up the fiscal mess. Not only are they not nice, they're not smart.

    • They need the majority so they can re-instate the 2c of GST that they thoughtlessly removed, in spite of warnings by top econonmists:

      quote:
      Andrew Dunn of Deloitte and Touche said the best way to plug the deficit hole would have been to raise the GST back to 7%, but he concedes that was not really an option for the Tories.

      “They really put themselves in a box by cutting the GST and then celebrating it,” he said. :unquote
      http://www.torontosun.com/money/2010/03/04/131148

      • I wonder if at least partly, Harper and Prentice has become man-made global warming believers because cap-and-tax will bring in more tax revenues from the higher base prices for energy and all the goods and services that use it.

    • Conservative voters are the most niave hopeful bunch of voters. History shows that the history of Conservative/Republicain Government is debt, uncontrolled debt, recession even two depressions if not war. The real reason for this is that they promise to deliver the impossible and the sucker voters believe it every time. This budget is a masterpiece of obfustication all the usual headlines. Reduced taxes for business, underfunded of course by raising taxes on payroll ie workers. Reegan Thatcher Berlosconi Bush Bush again, they all cut taxes and failed to cut spending. It goes back centuries will the niave ever learn. You know these same people allow business leaders unregulated corrupt pocket lining, yet they constantly rubbish their Liberal/Democrat opponents morality

  11. Great perspective Andrew. One good thing and the rest is bewildering! It's about time this Government did one good thing, instead of all those that they have been bewildering us with. I can think of very little that they have done that has been progressive.

    I continue to think that this government is in way over it's head. I am convinced that their lights are on, but sadly there is no one home!

    • And the Coalition of Losers would be oh so much better, eh.

      • You should get a holster for that remote control, Tex. Fastest channel changer in the west.

    • I can think of very little that they have done that has been progressive

      When the parties of the right merged a few years ago the Progressive label was intentionally left out of the new party's name.

      • Actually, I believe that removal of the word progressive was actually a condition of the merger from the Reform side.

        Just goes to show.

        • Indeed.

          The occasional reminder of that history occurs when folks here (or elsewhere for that matter) post a comment mentioning that they used to support the old PC party in the days of Joe Clark (or even Robert Stanfield) – and that comment is followed with a reply or two telling us that Clark and Stanfield were far from true conservatives.

  12. Why is the police officer saluting in the picture?

    • They are at the entrance of the House of Commons. It's the security guard that keeps the non-MPs out of there.

  13. I don,t see why the Opposition Parties don,t Team Up as A Coalition ,This Form of Government works in other Countries in Europe,That way It would bring some Balance for All, TO: Have a Leader ,Run the Country with the same Idea,s as the GW Bush, & We can do Better than hav'n Harper as A Figurehead & A Puppet ,To Fool canadains Again…. & pull the wool over their Eyes,we would Be Better Off TO: Bring his Government Down. Pull Together as A Coalition Parties, & Truly Show Harper ,their is A Higher Power on the Top of The Hill & the King.

    • Oh for sure, lead by a rookie visiting MP that has the confidence of 15% of Canadians,
      a coalition with it's existence dependent on 'what's good for Quebec' and Dippers with their hands all over the nation's cheque book….not gonna happen.

      • Might give you that elusive majority…

    • Harper is a kind of Conservative M. King. The CPC will stay in power for a long time. (Hope I'm wrong!) Let's just hope the combined opposition can prevent him from doing too much damage.

  14. Andy has overlooked two things. One is that the people are not demanding cuts. The people always demand bigger and better 'services'. So the Harpist plays the notes the plebes want to hear.

    Second, there may actually be some cuts, here. Real rather than nominal. How's that? Well, if the velocity of money increases, we could see some big-time price inflation. Keeping a budget at even keel then becomes a drastic cut.

    Keep in mind, our brilliant leaders a while back sold off much of Canada's gold. If you think Yankee dollars are overpriced, have a look at our own back yard. Our dollars, on a gold standard, are like the German marks of 1923.

  15. Long gone are fiscal conservatives. Brian Mulrooney did the socially deadly but *prudent* thing of creating the GST.

    To me, that defines fiscal conservatism. It's a bad idea to do that in order to win elections, but from a prudent P.O.V. if you need to spend more money to maintain your lifestyle, you need to earn more money. Raising taxes or introducing a tax definitely increases revenue.

    Restraint in fiscal growth used to define the big "C" conservative movement but has now been absorbed by those who believe in moral and social restraint. On this front, the CPC has done nothing to prove me wrong: as they have done nothing but increase spending over the "previous Liberal Government" (they so like to mention) and yet they've cut their revenues. In terms I, a minimum-wage earner, would use: They quit their job and started to drink to cope. Now, alcoholic, they say they need to keep drinking this much so that five years down the road the credit-cards will be fully paid-off (because they really need this, they really do!).

    I do not now, nor have I ever, as a 25-year old person a fiscally-conservative party to choose from federally.

  16. I honestly think I did vote PC once, but I can't recall if it was provincial or federal.

  17. Fiscally, this is useless and irresponsible.

    Immediate suggestions to getting more stable finances:
    - Increase corporate taxes from their current level of 18% to 25%, the rate it was at in 2002. A country with a higher tax rate but more fiscal stability is likely to be regarded as a net plus by at least some businesses.
    - Introduce a new top tax bracket of $500,000, with a rate of 40%. This will only affect a few percent of Canada's population, and those whose income has been growing fastest (while the income of the median Canadian has more or less stagnated), so it's perfectly affordable.

    Cuts are more difficult. To illustrate, here's the main components of spending in 2006-2007, as per the government:
    - Old Age Security, GIS, Employment Insurance, Child Tax Benefit: 23.5%
    - Transfers to provinces (health transfer, social transfer, equalization): 19.5%
    - Interest on debt: 14.5%

    That's nearly 60% of the budget right there, and none of those are likely to be touched. Personally, I'd start by ending any subsidies for farms with an annual income of more than, say, $200,000, along with all other corporate welfare.

    • Exactly – most of the big programs are entitlements that are almost impossible to cut – even holding OAS at today's rate would be seen as a huge political risk. Furthermore, all the money from all the taxes at every level of government could go to health care and it still would not be enough. Unless Canadians are willing to literally give up stuff from the government, the best any government can so is to hold back increases.

      Taxes are not the answer – I am self-employed and close to half of my income goes to taxes. I have cut back on my work, because I'm done with seeing half of my income go to taxes. At times I think I should give all my income to government and they can refund me what they don't use – but I doubt that they would have any money left. Colleagues who are in salaried positions are no longer taking promotions and are looking to work 4 day weeks with reduced salary and they will come out with the same overall income by working less – one person's last raise put him into a higher tax bracket and he ended up with a lower take home. That is nonsense and does not make Canada an attractive place to work.

      • I disagree. The tax increases I'm proposing wouldn't affect many people, would only affect people thoroughly able to pay more, and would only restore the state of things as of about 10 years ago, when both the Canadian economy and the budget situation were doing well.

        And it's extraordinarily rare for making additional money with a higher top marginal rate to decrease take-home pay, as a person is still paying the same tax they did before on the money they made before, and is making additional money. It would have to be a case of losing eligibility to tax exemptions, which my proposals do nothing to affect.

        Close to half of my family's income goes to taxes, too, so I know that people with that high of taxes still have enough money to buy, within reason, almost anything a person can want. You and I are nowhere near to being the average Canadian.

        • Katherine, it IS possible to earn additional income and net less. When clawbacks are included, some middle-class people are in 70% marginal tax brackets. Plus some taxes are stair-step, like the McGuinty health tax. When you breach a step while at a high marginal rate, you make less money for the next $300 – $1K. So yes, sometimes you can lose money when you get a raise.

          In December 2001, self-employed, I found myself in a 92% marginal tax situation. I largely stopped working that month, there was no point.

          What I find galling is your assertion that people paying half their income in taxes have enough money to buy almost anything they could want. The upper classes in this country pay most of the taxes, but the middle class pays almost half its income in taxes in Canada, a higher burden than many other places (particularly our most important competitor, the US).

          My household income now is nearly twice the national median, I pay nearly half my income in various taxes, and I have 4 dependents. I am better off than most Canadians, and I'm barely scraping by. I hardly ever buy clothes for myself, don't have TV service, never buy alcohol or go to restaurants, or travel for pleasure.

          So I know that people with taxes that high can have almost no disposable income, and can afford little of what they want.

  18. Katherine, calm down. Am I yelling into the dark? Is anybody home? IN A COUNTRY WITH A 1.3 TRILLION DOLLAR GDP A 20 OR 30 BILLION DOLLAR DEFICIT DOES NOT MATTER!

    • It's not the GDP that matters for paying it off, it's the annual government revenue, unless people across the country decide to spontaneously pitch in and pay off the debt out of the goodness of their hearts.

      According to Statistics Canada, our revenue in 2009 was 237 billion. The deficit is over 20% of current revenues, which is, in my opinion, not cause for panic but a significant enough disparity that we should try to correct it.

      Another way of looking at things is that in 2005 the national debt was $500 billion. Increasing it by 10% in one year without a plan for balancing it in future is pretty significant.

      • But in 2008 the national debt was significantly lower than $500 billion. And it IS the GDP that matters for paying it off: GDP is a measure of our ability to pay. Just like someone making $50,000 with $50,000 in consumer debt would be someone in dire financial straits, someone who makes $100,000 with $50,000 in consumer debt would be comparatively a lot better off.

        This is a nagging issue, but not a major one. We could run $30 billion deficits until 2020 if we wanted to and our debt-to-gdp ratio would probably be lower in that year than it is now.

        • Sort of like how a lost limb is worse than a flesh wound?

        • You do know there's a whole whack of people retiring soon right?

          Care to bet what your GDP is going to do then?

        • Here's an example on why your theory is so screwed. My wife and I are waiting to buy a house — we have over $125000 for a downpayment and two children under 5. We live in the lower mainland. As house prices continue to rise, or even float — aka debt to gdp — our money is getting smaller and the size of the mortgage is getting bigger day by day. Add the fact that I'm almost 50, wife 40, and you have a smaller window inwhich to pay off that mortgage.
          One could borrow $300000 – which wouldn't buy much house within a 45 minute drive from work – but that would take both a huge risk (values continue to rise endlessly, no major correction that would leave us holding more debt than house) and a long untenable payoff (a bank would probably agree to a 20 or 25 year mortgage, but that would be foolish). The Canadian economy, as managed by these bozos, is just one hiccup away from $!^+ville. The aging demographics, as Andrew noted, really only leaves the Rapture as the most likely means that Flaherty's fairytale comes true.

          • Well said. And I like your point about this being a socially conservative budget. "And I beheld another beast coming up out of the earth; and he had two horns like a lamb, and he spake as a dragon" (Rev 13.11) — if that's not a clear-cut reference to devaluation, I don't know what is.

          • and how exactly is it the government's fault that you live in an area where housing is so dear? Would you like them to take steps to deflate real estate prices in Vancouver?

        • Here's an example on why your theory is so screwed. My wife and I are waiting to buy a house — we have over $125000 for a downpayment and two children under 5. We live in the lower mainland. As house prices continue to rise, or even float — aka debt to gdp — our money is getting smaller and the size of the mortgage is getting bigger day by day. Add the fact that I'm almost 50, wife 40, and you have a smaller window inwhich to pay off that mortgage.
          One could borrow $300000 – which wouldn't buy much house within a 45 minute drive from work – but that would take both a huge risk (values continue to rise endlessly, no major correction that would leave us holding more debt than house) and a long untenable payoff (a bank would probably agree to a 20 or 25 year mortgage, but that would be foolish). The Canadian economy, as managed by these bozos, is just one hiccup away from $!^+ville. The aging demographics, as Andrew noted, really only leaves the Rapture as the most likely means that Flaherty's fairytale comes true.

    • So you're advocating our government not bother planning to deal with it at all?

      Well.. it seems you're getting your wish.

      • It sucks when you're right. And here, you're bang on.

  19. It's the equivalant of making $100,000 next year and having a debt of $31,000 on your mortgage. And the following year making $103,000, and having $32,500 on your mortgage. Are you worse off? Is this worth hyperventilating about?

    • Holy crap, do YOU have a forty-year old mortgage!?

    • OH MY GOD. NO ONE HAS ETERNAL DEBT; GOVERNMENT POTENTIALLY COULD.

      SHOULD WE PANIC NOW!?

    • It is a bit different because the government never has to pay off its debts. It can, in perpetuity, issue more bonds. If the government borrows too much it will probably impact interest rates, but at small deficits the difference is fairly small.

    • Your example is flawed.

    • Ok… just to follow along with your metaphor… You continue along for 5 years… By year 4, you are earning $125,000 and you've used your line of credit so that your mortgage balance is now 45,000. But in year 5, the company you work for goes bankrupt, taking your severance and pension plan with it. As it was the major employer in town, real estate values crash. Your house is now worth a fraction of what it was only a few months earlier. The bank calls you in to demand you reduce your mortgage balance NOW.

      Then what? Maybe you should've started to save something instead of continuing to build your debt…

  20. Also: anybody who seriously argues for taking $20 or $30 billion out of the economy during a very shaky recovery is just asking for trouble. I thought Canadians were so into President Obama: did no one listen to his arguments for fiscal stimulus last spring?

    • There is a profound difference (if you might like to grasp it) between "taking $20-30 billion out of the economy" and electing not to steal it from future economies (plus interest) to feed it to us now.

      Got any friends in Greece? Ask them about the joys of feeding an economy with non-existent wealth year after year after year.

  21. James, have you ever heard of compounding interest? I don't mean 0.5% a year, I mean 20% as occurred in living memory.

    • This is why I seriously suggest putting an age-cap on people who can vote in elections; no one above 40.

      You end up being the general fighting the last war.

      That 20% interest rate happened to an economy that looks way different than what ours looks like now – the complex maze of free trade deals pumping ever-cheap textiles into our country almost guarantees that we will never have core inflation ever go that high again.

      Here's a recap: in the late 80's we had a budget deficit that was always several points higher than growth. That got us into trouble. Projected growth is conservatively guessed at 2-2.5% over the next 5 years, meaning we could run $30 billion deficits utnil 2015 and be in the exact same debt-to-GDP shape we are in now, even taking into account compound interest and possibly higher interest rates.

      Nothing makes people in Ottawa like Andrew Coyne, James Travers, Jeffrey Simpson et al feel more important than fighting a heroic, noble battle like urging the federal government to mount a fiscal war against a problem that is more or less benign. That doesn't mean you should feed their fantasies.

      • Uh. You do realize that the deficits are projected to be twice that for this year and next, at least, right?

        And that beyond that, economists are looking at Flaherty's assumptions and going, "Well.. I suppose it could work out that way.. if we're very lucky, and nothing else happens in the US… or anywhere else in the world."

      • James, whatever it is you're smokin', I'd like some. When a govt. expands the money supply, that leads to price inflation, unless the velocity of money decreases. In the past year or so, the velocity has declined dramatically. When it returns to normal, we'll see big-time price inflation. Bank on it.

    • Have you always liked John Manley? I would be comfortable with him as PM. You too?

      • Yes, I have always liked him. I actually liked Martin the man, too.
        No to voting for him, at least not if he was leading this current pack of LibDippers.
        Manley would NEVER have entertained forming a Coaliition of Losers.

        • If Manley had entered the Liberal leadership race when Martin resigned, he probably stood a good chance of winning (never any guarantees though). I assume he didn't enter the race because he assumed that the Liberals were destined to at least a few years of opposition status, and he wasn't interested in that.

          Looking back at it now, had he entered that race and had he won that race it is difficult for me to envision the Liberals ending up in the situation where the coalition would have ever become an option. Obviously very speculative on my part.

          Also, I'd say that Manley himself would actually be quite comfortable leading a 'conservative' party, not so much the current iteration of the CPC, but the old Joe Clark or Robert Stanfield PC party.

          I also did not mind Martin at all…never really understood or agreed with the ditherer label…personally I'm a big fan of thinking and weighing alternatives and consulting in place of hasty action.

  22. I am a conservative because I believe the government that governs best governs least. I look at this budget and basically see they aren't doing much: good. I don't want my governments rocking the boat, I want them standing quietly in the corner while I live my life.

    Andrew Coyne seems to not understand this.

    • No, what you don't understand is that Coyne is saying these guys are interfering a hell of a lot more than they need to. That's what his comment about the peak is now the base is about. You want a government that does nothing. Coyne wants a government that is fiscally conservative.

      The two are different.

      • James told you what HE wants………..you reply with what Coyne is infering and wants. Do you have your OWN opinion or are you just a mouthpiece of our lame leftwing media????

  23. The Only Time I,ve ever seen A Police Officer saluting to the PM /President is in Russia Or TO: Hitler. THE PM ,Photo up makes him look like A Idiot. I wonder what other Tunes his look'n to change tmrow,or who or which Citazens will Be Attacked Tmrow, His Radar Seems t o Sway in All Directions.

    • A) That's not a police officer.

      B) You haven't been paying attention, they always salute the PM, and did so pre-Harper as well.

      • I'm confident that you thought long and hard before replying.;-)

      • Did it start with Chretien or Mulroney? I am reasonably sure it didn't start before Mulroney.

        But it's dumb. He is Her Majesty's First Minister. He is not a military commander to our armed forces. He is not top cop to the RCMP. And that gendarme, presumably, answers to the Speaker of the House, not the PM.

        I wish this nonsense would stop.. I can't imagine the power-tripping types Yertle-the-Turtling their way to the top would ever lower themselves to righting this silliness, however.

  24. Mr. Coyne, are you a conservative?
    I honestly thought you were a Liberal!

  25. Hey James, you cannot compare Obama's financial predictament to the solid situation Harper inherited from the Liberals. Harper should never have cut the GST. The economists of every stripe agree on this point. Instead, he decided to pander to empty-headed conservative voters who would rather have larger deficits than pay for entitlements with slight tax increases. The Conservatives pretend to be prudent guardians of the state purse, but it was the Liberals who brought the debt down from 80% of GDP to 30% of GDP. Where is Paul martin when you need him?

    • Instead of cutting the GST the Liberals would have just spent more on healthcare, Kelowna and their new childcare program. Do you honestly believe that Paul Martin would have run surpluses 15 billion dollars in excesses of the Conservative surpluses in 2006-2008, because he predicted there would be a financial crisis, and wanted to make sure Canada only went 40 billion into deficit by 2010?

      • . . . the Liberals would have . . .

        If you're just going to make things up, how does that serve to advance any form of debate?

  26. That myth lives on, eh?

    There's no such thing as an EI fund. Accounting fiction.

    EI is a tax like any other.
    EI payments are a government program like any other.

    The sooner some of you get that through your heads, the better off we'll all be.

    Maybe the government should just formalize it by dropping the EI payroll taxes and rolling that up into regular income taxes.

  27. Excellent rant!

    But in real terms, the budget has not doubled.

    Secondly, in real terms, at least revenues are at their lowest in a long, long, time. Eventually that spending will have to fall to come back in line. What they decided today is that when it does come back in line, rather than it being nice, slow, and gradual, it will have to be swift and messy. Shame.

    Still, I am happy they are trying to starve the beast.

  28. Andrew Coyne, Jeffrey Simpson, James Travers and half of the people on this board seriously need to calm down.

    A $20 billion deficit is about 1.5% of our GDP. The federal government could run $30 billion deficits for the next 10 years and odds are have a much lower debt-to-gdp ratio than it does now.

    We could swallow $30 billion deficits with 0 (0! I MEAN 0! NONE! ZILCH! NADA!) forever into time and it will have zero impact on any Canadian's standard of living, ever.

    Seriously. Relax.

    • I disagree. But leaving aside the fact that I disagree with your math, I also disagree with your call to relax.

      I voted for these fools because I wanted a fiscally responsible, focused, mature, frugal government that would open doors, promote parliamentary government, respect institutions and take the fact that we're at war in Afghanistan seriously.

      What we have instead is a highly partisan, cynical, secretive, centralized, arrogant and often juvenile government that has made a mockery of democratic institutions, treats Afghanistan as a wedge issue – and, now, the lot of them are entirely comfortable with Trudeau / Mulroney levels of deficit spending.

      I don't just want to vote against them; I want to see them completely destroyed as a political organization. I want every last one of them starving in a food bank. I'd rather see the Liberals in power for another 20 years than give another Conservative MP or staffer a chance to betray anyone's trust again.

      So no, I won't relax. Sorry.

      • Trudeau and Mulroney levels of deficit spending? What the hell? Please tell me you aren't stupid enough to look at nominal dollars to base that on?

        We would have to be running a deficit at almost $98 billion dollars this year to reach the average percentage of GDP deficit run by Trudeau and Mulroney. Almost double. And remember the deficit is going to be going down to probably about 20-30 billion in two years or so. I doubt that the economy is going to grow at 5% a year for the next five years like the government does to get it's balanced budget forecast, but even so, I'm ok with that.

        As for the rest: seriously, lighten up. I would rather have a highly partisan government who played childish games in government doing small-bore things like changing the words to the anthem or building victimes of communism memorials than some highly repugnant charlantan like Stephane Dion who believes people could safely live in a place like Kenora, Ont driving around Toyota Yaris' just to make his ideological ends meet.

        • Firstly those are not "Trudeau-level" deficits. Running a deficit that is nominally the same as the deficit in the early 80's (actually it is smaller) is not the same because of A. inflation and B. economic growth.

          Secondly, it seems that Canadians have this vague sense that deficits = slow economic growth, without really understanding the mechanisms behind it. Government deficits do cause problems, specifically, they crowd out private borrowers and raise interest rates for consumers and businesses. You can think of credit as a big pond in some Savannah. When governments run deficits, they are a big elephant drinking from the pond, and leaving less for us smaller animals. That said, 1.5% of GDP is a pretty small elephant. Moreover, the pond actually grows over time – as our economy gets larger so too do available funds. Economists are pretty agnostic about the effects of deficits on economic growth, particularly small ones.

          In other words, the key question isn't "do we run a deficit or not". It is whether we run a small (or no deficit) vs. whether we run big deficits.

          • To be honest, the key question for me isn't deficit at all.. it's debt. The sooner we get out of debt, the sooner that gov't can implement more services to help people, or reduce taxes to help people rather than paying interest. Interest is a completely non-productive payment for our government. However, we don't get out of debt by running any deficits whatsoever.

            I have no understanding of these conservative hawks who scream whenever the government has a surplus. To me, gov't building up a surplus is a good thing, as it not only means we can run deficits when we need to without going into debt, but that instead of paying interest, we can actually earn it — and thus reduce taxes over the long run.

            Wouldn't that be a gift to leave to our children? Encouraging our gov't to tax us when times are good, so that our children can have gov't services without high levels of taxation.

            Too bad we're so damned selfish.

          • Aye, almost. Screaming about a nine billion dollar surplus is indeed dumb when we have been left with a six hundred billion dollar debt. But the screaming has gone both ways in recent history. "See? We're overtaxed!" & "You don't pay down your mortgage when [pick any one of dozens of NDP domestic calamity metaphors]."

            Where we part, as we have previously, is on your assumption that "having government services" of whatever pretty stripe we can cook up at the time is a net benefit for society. Even IF we could afford them.

        • You have to know it's time to put all Tories still blind enough to carry a party card (or a torch) into special camps when they start arguing that $50b year-over-year deficits are ok because, hey, you're not adjusting for inflation.

  29. This budget is not pitched to Andrew Coyne conservatives – it is pitched to Canadians. Harper knows that what Canadians want is Liberal-style government without the corruption. This is what is being delivered.

    It is the Government's job to exude confidence in the economy – this helps in terms of investment, growth and employment and consumer spending. Trash-talking or doom-and-glooming the economy hurts the economy – nobody can predict the future but it is important for Government to be both optimistic and reasonable.

    As a member of the "base" I for one am quite happy with the way it's going – long-gun registry going extinct; pension income splitting; TFSA's, a proud strong military that can fight ; lowering GST; one-year home reno tax credit; no hysterical action on so-called AGW- these are the sort of things that resonate with me. I understand the need for stimulus, but believe the Government when it assures us that temporary means temporary.

    The Liberals and the NDP have lost their most effective weapon, the whole Harper=Bush attack. Also, the Government is very lucky about what has happened on the climate-change file. This I thought was a critical weakness, but the post-Copenhagen events have shown that the global-warming fad was just that, a fad. Maxime Bernier's musings were a trial balloon of expressing a view widely held among Conservative supporters that man-made climate-change is mostly leftist politics and not settled science. The muted media response to Bernier shows this issue has lost its political salience and therefore its risk to the Harper Government.

    In sum, Harper Government is doing a good job and I am satisfied with it. Ignatieff obviously agrees as he says no way will he bring the Government down and force an election – he knows that Canadians are satisfied with waht we have now and that he would lose.

  30. Great article.

  31. Andrew Coyne is getting too predictable. Every budget he says, this is not a Conservative budget! Or maybe it’s not Andrew Coyne who’s getting predictable.

    I guess as long as people are running around assuming this government is going to conform to some idea of conservatism, somebody has keep repeating the truth . . .

  32. Nothing in Politics happens by accident. Think about this and more from Garth Turner.ca

    On a more serious note, if that's possible, is what this little federal exercise means. The budget is political, not economic. It sets the scene for an election this year (I told you 2010 would be a tipping point), in which F&H plan to get a majority. That will pave the way for the real budget, which is 12 months away – the one that could declare a debt emergency, ‘temporarily' hike the GST, impose an income surtax and slash spending.

    for what it is worth Mr. Turner has been bang on for well over and year and Harper and Co feel every million in taxpayer money ( 10%ers) spent to see he lost last election was worth it.

  33. You sound like a Liberal hack!

  34. I just don't know what to think.

    On the one hand, the Tories are proposing freezing spending at it's highest point ever. Andrew Coyne calls the budget "empty, almost flippant", and says that "one is surprised… by how unconcerned the Conservatives are about the state of the country's finances, how little they are prepared to do about it". Meanwhile, John Ibbitson, over in the Globe suggests that the PM is making a gamble that all Canadians care about is slaying the deficit, hence the government has brought down "the most austere, deficit-fighting document since Paul Martin set out to balance his budget in the nineties".

    So, does this budget reflect the Tories total lack of concern over the state of the economy, and a flippant disregard of excessive spending and the deficit, or does it represent a laser like focus on the state of the economy, with a concern for the deficit at the expense of all else? Of course, perhaps the more pressing question is, does it matter? I only really believe half of the promises and commitments laid out in any Tory budget, and that half most emphatically does not include their predictions of the level of the deficit, given that the Tories have proven just about the worst predictors of deficit numbers in the history of predictions. Even if the budget were as austere as the Globe paints it, I still wouldn't believe that they'll hit their lofty (sarcasm) deficit reduction targets of eliminating the deficit they created in less than 4 years, in just 6 more years.

    Of course, I also tend to think the folks at the Globe and Mail have just lost it. A budget that caps spending at it's highest point in the history of Confederation is "austere"? Give your heads a shake G&Mers.

    • Spending freezes are quite rare in Canadian history – one article noted that this was the smallest spending increase since 1997, but I think that understates the overall historical context. From 1947-1994 (the Queen's historical macroeconomic data stops in '94) spending was decreased in exactly 1 year, 1994. Presumably Paul Martin's efforts would count as well, but it seems like most Canadians suffer from a profound lack of historical context.

  35. Unprorogey.. which clown will be the ringmaster of the Coalition circus you propose?

  36. There is nothing conservative about Mr. Coyne. That is why he is a regular on the CBC.

  37. An empty and flippant response from an empty and flippant Liberal who has nothing much to say about his empty and flippant Liberal Leader. Iggy's performance on this is deplorable to say the least. What about this weak kneed leader of yours! Liberalism is dead!

  38. Does the open door to foreign investment in communications mean the CBC is for sale? Could ABC buy CTV? etc.

    • Hopefully, it would mean there's more competition for Bell, Telus and Rogers so we don't have to pay such outrageously high cell phone bills.

      Of interest: CTV is currently owned by Bell, ABC is currently owned by Disney.

  39. An empty, almost flippant government

  40. SpenBC, save the ad hominens. Those illogical arguments might fly in Conservative circles, but not in the better read pragmatic liberal circles. Iggy could not have attained his accomplishments and lofty positions with weak knees. Harper could not have secured the janitor job at the Kennedy School. How about brains? The brain power on the Conservative front bench, let alone the back bench, is laughable. The mental midget, Stockwell Day, could only rise to such prominence in a party of evangelicals schooled on discredited neo-con philosophy.

    • Truth hurts eh!

  41. Every timeI see those two with their thumbs in the air – I think they are saying – Sit on it and rotate – Harper – Not a leader!

  42. What surprises me at this point is not how inept the Harper government is at budgetary and economic matters, but that so many Harper supporters state the Harper government's supposed competence in these matters as their reason for voting Conservative. The Harper government squandered a $13-billion surplus inherited from the Liberals into a record deficit of $54 billion. And the reason we weathered the recession storm better than other countries is because Paul Martin refused to deregulate the banks when other countries were doing it. When Harper came to power, he tried to deregulate the banks, and thankfully he was unsuccessful, or our financial industry would have collapsed along with those in the nations that did deregulate. Say what you will about Paul Martin, but there was a man who knew how to balance the books and protect the economy–unlike his Conservative successors.

    And we really should stop calling it "fiscal conservatism." It's a misnomer at this point. Since 1960, Conservative governments have run up the debt far more than Liberal governments. (With the Chrétien and Martin government being the only ones to post surpluses and pay it down.)

    Very detailed and informative column, thank you, Mr. Coyne.

  43. I remember sitting in that excuse for a departure lounge that Air Canada has at LGA and Donald Trump ( a republican) was being interviewed on tv. He commented – "The economy always does best under the democrats" . Hopefully Canada will wake up to this fact before Harper bankrupts this country entirely – as Bush has done in the US.

  44. The budget is proof that the CPC knows little about managing the economy. It's all based on wishful thinking that the economy will recover, despite all the evidence that the UK and the USA will be in recession for a long time to come. Our economy doesn't stop at our borders.

    They should have had the guts to raise the GST back up 1 per cent. And the wit to realize they've created a structural deficit.

    What we really need is to recognize that taxes aren't pure evil. I hate paying them, but they are the foundation of a true democracy.

  45. I was correcting James. I didn't think my personal opinion was relevant. Just as I don't think yours is.

  46. Interesting comments. I have never considered Andrew Coyne a Liberal nor a liberal, but I believe he does not care for such right/left categories. I think he is a reasonable commentator on our political times and has a variety of stances on events.
    I agree with his assessment of the budget. I also agree with those participants who view this document as a political rather than an economic document. A government who began their term with a surplus of (approx.? I feel confident that I will be corrected) $13 billion has a LOT of accounting to do for their $56 billion deficit. What more do we need to know about this government? As for their future plans, how relevant are they? Have these people ever done what they said they would do?
    I am distressed that so few people have expressed concern about the sneaky way the government has used the budget to loosen the already far too slack reins on the tar sands.

  47. You fail to mention the reduction of the GST by 2 points and the effect of that on our deficit picture. The GST should be raised back to the level it was when M. Harper became PM. I don't like it any more than any one else reading this post — but it is the responsible thing to do.

  48. The trouble with guys like Andrew Coyne is that they need to earn a living writing articles. And that means having a sharp, strong view, even if it is wrong.

    To write readable articles you need a STORY. And you become stuck with the story, even if it is wrong.

    So Andrew decides to be fiscally conservative. That gives him a position, a story. It enables him to write articles.

    In reality, there is nothing so bad about running deficits, within reason, to prevent demand falling out of the economy in a recession. Any economist knows that. Keep the economy humming, create jobs, create demand, make the economy grow, and pay off the deficit.

    It's like a firm borrowing to expand production.

    Deficits are not a sin at all. Just an tool appropriate at certain times. Like today.

    If Andrew said that he would be right, but that would deprive him of HIS chosen story, which is to be anti-defict.

    So there is no way Andrew will agree.

  49. By the way, I sympathise with Andrew's anguish at there being no true conservatives any more.

    I have long favoured feudalism, and worry there are no real feudalists left. Sigh.

    Why doesn't Andrew form a Real Conservative Party and sweep the polls? I'd prefer him as PM to dreary chaps like Harper and Mr Yawn Ignatieff.

  50. Never take seriously those who need to earn their living by having views, my friends. They are not advocating. They are paying their rent.

  51. It makes sense when you remember that these Reformers hate government in any form — basically they're libertarians. They obviously believe if they dig us into a big enough hole we'll come to agree with them.

  52. Fiscal conservatism is neither dead nor forgotten. It’s just practiced by Liberals (and, in the USA, by Democrats). Paul Martin (as Finance Minister) and Bill Clinton were pretty good at it; Harper, Bush, Mulroney … not so much.

  53. It looks like Canada is doing just as bad as the US now

  54. Canada doesn't set its fiscal policy; the G20, IMF, and World Bank do, and Harper has been fairly open in acknowledging this, coining the term "enlightened sovereignty" to describe the situation. Why, I ask tongue in cheek, are you giving Harper grief for something out of his jurisdiction? You wanted "ransnational progressivism"and that is what you are getting – good and hard.

  55. I'm not reading all 150+ comments and I didn't finish the lengthy article, but did anyone tell Andrew that right wing measures won't be bringing manufacturing plants to Canada?

    • Its worth reading the article, though the comment can be safely skipped (though the people accusing Coyne of being a Liberal are amusing).

      I honestly can't see anywhere Mr. Coyne is suggesting "right-wing" measures or concerns about bringing manufacturing to Canada, though. The main point is that making stimulus-time spending levels the new normal is irresponsible considering the coming demographic crunch.

      • OK you can quibble about eliminating tariffs as right wing or not (although raising them could reasonably be considered left wing or nationalistic). But plants went overseas because of the paltry amounts you can pay workers and the safeguards you don't have to put in place, and won't come back for some easier paperwork and less regulation.

        • Agreed that eliminating that particular tariff is unlikley to bring plants back, but in the short term it should be helpful to plants that are still here, particularly those that are on the bubble.

          In the longer term it does help to set a tone, assuming it is a part of a larger effort to attract manufacturers.

  56. This happened last week as well with a post from Wells.

    Does anyone know why Coyne's budget post is suddenly, randomly, appearing at the top of Blog Central, above much more recent posts?

    • If I had to guess I would surmise it's like a sticky, where stuff they want to highlight is kept in a more prominent place. Not a bug, a ffeature?

      Is that it?

      • I considered that, but then why let it drop down as it got older, and then pop back up, completely randomly and with no context whatsoever? Also, I've only ever seen it happen with two posts. If it's a feature, it'd be nice to at least see a post saying "It's a feature, not a bug", 'cause it seems pretty bug-like to me in it's complete randomness and lack of context.

    • Could be a mistake somewhere. I'm going to report your post so the Macleans web guy will spot it. That seemed to work with the last one.

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