Jim Flaherty muses about increasing taxes

As part of the Conservative government's plan to try to convince Canadians that we should spend money we don't have to give big corporations tax breaks, instead of investing in ordinary Canadians, finance minister Jim Flaherty had a press conference this morning.

Postmedia journalist Andrew Mayeda was there, and he shares this excerpt from Flaherty's response to a question if the Conservative government would ever consider a tax increase down the road. I've boldedthe relevant portion.

"Our plan actually is to continue to reduce taxes over time in Canada. We've reduced business taxes significantly, and our plan continues in that regard. We've reduced the federal consumption tax, the GST, as we promised we would ... We've done some tax reductions on personal income taxes. Quite frankly, we'd like to do more over time, so that's the direction we want to go. What we're seeing in the economy is moderate growth. It's not dramatic, but it is steady. And we expect that to continue over the medium term. You know, given what we've all been through around the world in the last few years, I would never presume to say 'never' in terms of a very substantial economic shock where we'd have to have one. And there are risks in the world, with respect to Europe, with respect to relative weakness in the U.S. economy, with respect to some global imbalances that I'm sure we'll be talking about at the world economic forum (in Davos, Switzerland) the next few days. That's not the expectation. The expectation is that we'll have continued moderate economic growth and continued tax reductions over time."

Now, let me say first that, as a realistic and reasonable person, I think this is a perfectly acceptable and realistic answer. We don't know what the future may hold. Making definitive statements on hypotheticals is a fool's game. You can tell someone what you know they want to hear, but it wouldn't be honest. It's entirely possible that a scenario could arise where, to maintain programs, a tax increase may need to be considered.

So I think Flaherty's answer, which I'd sum up as "we're not planning to and we don't want to, but I won't say never ever," is the correct one.

But here's the thing. A few years ago Liberal leader Michael Ignatieff was asked a similar sort of hypothetical. In short, the question was if the sky is falling and you had a massive deficit, would you maybe consider a tax increase? His answer, like Flaherty's, was that that wouldn't be his first choice, it's not his plan, but he wouldn't rule anything out.

And the Conservatives have been dining out on that answer ever since. In their most recent round of attack ads, once focused entirely on taxes, centred around a quote form Ignatieff that he won't take a tax increase "off the table."

So would it now be fair to see ads on how Jim Flaherty is going to raise your taxes, or is the sauce not as good for the goose as it is for the gander?

I look forward to the creative and entertaining rationalizations on how the Ignatieff and Flaherty situations are completely different. Don't disappoint me, friends.

UPDATE: In the interest of fairness, I should say that Mayeda reports Flaherty's office is crying, surprise surprise, that he was "misinterpeted." Reports Mayeda:

In an email, a spokesman for Flaherty said the minister meant that he would never rule out another big economic shock. I suppose it depends on how you interpret the word "one," which I took to stand for "tax hike." But fair enough.

Mark me down as unconvinced. The question was about ruling out a tax increase. Flaherty posited the hypothetical of another economic shock, and said he wouldn't rule it out. Look at the main line here again:

You know, given what we've all been through around the world in the last few years, I would never presume to say 'never' in terms of a very substantial economic shock where we'd have to have one.

Now, it seems pretty clear to me that by "have one" Flaherty means a tax increase. But he now wants us to believe one means economic shock.

Tell me, which sentence makes more sense?

A) I would never presume to say 'never' in terms of a very substantial economic shock where we'd have to have an economic shock.

B) I would never presume to say 'never' in terms of a very substantial economic shock where we'd have to have a tax increase.

Yeah, I'm not buying Jim. You had a moment of honesty. Own it. Don't piss on my trouser and tell me it's raising.

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Argh! The Liberals be here to steal y'er women and drink y'er rum!

Aye, we''e tried t' keep it secret but alas, that scallywag Jim Flaherty has found out our secret plans, gar!

Aye, this an an excerpt o'er a speech that Flaherty actually ga'e today, in the Chateau Laurier, at a Canadian Club e'ent. And yes, he is the finance minister o' a G8 country. Aye, me parrot concurs.

In the global recession, the ship of state has had a difficult voyage.

But we can see the harbour lights.

And that’s just when a would-be captain and his ragtag crew are trying to storm the bridge.

If they seize the wheel, ladies and gentlemen, they’ll have us on the rocks.

And that’s not how this voyage should end.

Aye, yes, it be true. We Liberals be pirates and you landlubbers best be scared, shiver me timbers! We're takin' o'er this ship o'state and y'all can either join our crew or be permanent guests o' Da'ey Jones, shiver me timbers!

Ahoy, if you want t' be sparred from our pirate path, hand o'er your women and your rum while we plunder your booty, shiver me timbers! Or join our crew for an ad'enturous life o' piratin', plunderin' and drinkin', shiver me timbers! We're an equal opportunity employer, and offer full medical, dental and a comprehensi'e retirement sa'in's plan.

Arrr, resistance is futile, argh!



Choose your Canada, scallywags!

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Budget 2010: Bland, unimaginative, and largely inoffensive

As I perused the budget speech tonight, read the highlights and skimmed the 400+ pages, it occurred to me this certainly wasn’t the budget the Conservatives hoped to be bringing in. The plan was prorogue Parliament, starve the opposition of oxygen, position Stephen Harper as Canada fan #1 in Vancouver, come back high in the polls to a rousing throne speech and populist budget with a few carefully chosen poison pills, defeat themselves and to the polls and majority nirvana.

Of course, it didn’t work out that way. Prorogation backfired. The parties are neck-in-neck (sorry, Ipsos). The Olympic bounce is non-existent. So no one wants an election. Not the Conservatives. Not the Liberals. Not even the NDP, who are now safely back to their reflex opposition now that the Liberals have shifted tactics. This isn’t a budget to run an election on, or against. This baseball season is saved, even if not for the Blue Jays.

With an election off the table, its somewhat unfortunate how bland and inoffensive the Conservatives choose to be. They had some room to play with here. With no one wanting an election, themselves included, they had some political cover to get creative, with opposition silence, if not support. Perhaps a real idea of where they’ll trim to get the deficit balanced. Or some real action to begin addressing some of the major issues facing the country: the ballooning costs in health care, the need for a lifelong learning strategy, beginning a conversation of how to deal with the coming demographic glut.

I talked the other day about how we need as a country to think big. This budget utterly failed to do that. There’s no vision. No purpose. Its housekeeping and stay the course, but it also seems to be wandering blindly as so many swords hang above our necks by a thin, thin thread. Conservatives have never been big on the vision thing, so perhaps I’m wrong to expect much there, but I’m still disappointed.

Largely, this budget was a re-hashing of previously announced spending and initiatives. One more year of stimulus, but only one more year. There were some limited new programs. A few million here, a few million there. A few promises to study things. Hard to get excited about committees. Forming one to look at cutting red tape seems a contradiction in terms.

They promise deficit reduction, and they give a pretty chart on how to get there in 4 to 5 years. But just how still seems to be determined, as even their promises of program restraint only make a bare dent. Once they end the stimulus, they still have a ways to go, pointing to an underlying structural deficit that needs to be addressed. I’m fine with running a deficit for a time, slash and burn isn’t the way to go. But we do need a plan, and all I see are unanswered questions.

There were a few positives I’ll point to. I was happy to see the government acknowledge, even if belatedly, that the untold crisis of this downturn is youth unemployment. They’ve been disproportionately hit by the downturn. There’s $60 million in funding this year to help youth, and for a few other programs. I’m not clear on how that will work, but at least it’s getting some attention. There’s also funding for improving elementary and post-secondary education for aboriginal youth, something very much needed.

There was a fair bit around university research, infrastructure, and support for the granting councils. It sounded almost reminiscent of some of the late Chretien/Martin budgets I read back when I was a tech reporter in Ottawa, locked-up at the Congress Centre. And like I did then, I’d prefer to see more attention to working the provinces to restructure core post-secondary funding and improving student assistance.

It’s definitely not the budget I’d have written. Nothing on a lifelong learning strategy. Health care. Social housing. Poverty. It’s a budget that fails to seize the opportunities of today, or set the stage for the future prosperity this government claims to covet.

It’s certainly not an offensive ultra-conservative document though either. Harper’s base will be annoyed at the continued stimulus spending, the refusal to get serious about deficit reduction.

It’s an unimaginative document from a government that seems to lack vision and purpose. It’s a going through the motions document. They don’t want an election, but they don’t seem to have much they want to do in government either. That’s what strikes me the most. What is motivating Harper these days, what are they seeking to accomplish? Is he bored?

Whatever it is, it won’t be done through this budget. We’ll see what they get up to on the legislative front as Parliament gets back to work.

P.S. I reserve the right to revise my view once people much smarter than me pore through the ways and means fine print for possible trickery, tomfoolery and what have you.

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Stephen Harper's Top Ten Cabinet Duds

So, apparently Stephen Harper is going to shuffle his cabinet tomorrow. And hopefully apologize to New Zealand on Greg Thompson's behalf, before they cut off our sheep supply.

And by the by, I'm willing to fly business/first class to New Zealand and can be at Rideau Hall for the morning, if anyone at the PMO is reading this. If you fly me Air Canada, you can even book it in economy and I'll use a certificate to upgrade. See, I'm saving the taxpayers money already!

And if the PMO is reading, hopefully the reports that tomorrow’s minor cabinet shuffle will reward incompetence by retaining ministers who have failed miserably in their portfolios are untrue. But alas, Stephen Harper seems content to keep a tight rein on the Conservative agenda and stick to a course that lacks any vision for Canada’s future.

If Harper was willing to start clearing out the deadwood however, here are ten ministers he'd be well advised to shuffle off into the sunset:

1. Lisa Raitt

Her greatest hits: Botching Canada’s medical isotope supply; her insensitive “cancer is sexy” comment caught on tape; leaving a top secret briefing binder at a TV station and then forcing her young ministerial aide to take the fall for it; signing off on thousands of dollars of questionable expenses as President and CEO of the Toronto Port Authority (TPA) and then, once in federal cabinet, organizing a partisan fundraiser out of the TPA offices. She now faces no less than three investigations – by the Ethics, Privacy and Lobbying Commissioners.

2. Peter Mackay

Ever since becoming a reality TV star, Mr. Mackay’s ratings have plummeted – first for attacking sympathetic civil servants who speak the truth, and then for using the Canadian Forces as a shield for all political criticism.

3-5. Jim Flaherty
Tony Clement
and John Baird

In a move that should terrify investors, Mr. Harper is leaving his Harris-era cohort of front-bench ministers intact.

John Baird has little more to show for his infrastructure spending spree than delayed projects and underwhelming job creation.

Jim Flaherty is responsible for a record $56 billion deficit.

And Tony Clement shrunk his side of the balance sheet after giving away Nortel’s made-in-Canada technology.

Mike Harris would no doubt be proud of what his children hath wrought.

6. Jim Prentice

The onetime cabinet superstar has lost all independent willpower. Charged with the impossible task of trying to communicate the government’s excuses for inaction on the environment, he became the laughing stock of the world in Copenhagen.

7. Gerry Ritz

Combining his cavalier attitude with a dangerous mismanagement style, Minister Ritz felt it was funny to make jokes while Canadians were dying of listeriosis.

8. Jay Hill

Conservative MPs use Mr. Hill’s Parliamentary "disruption" manual as a guide on how to dismantle important committee work. Mr. Hill’s Afghanistan committee no-show technique wasn’t even good enough for Mr. Harper, who took it a step further and canceled Parliament altogether.

9. Helena Guergis

After nearly two years of promising an ‘Action Plan’ to advance women’s equality, we wish that Minister Guergis had achieved nothing. Instead, she has stood silently in the background while her cabinet colleagues chipped away at women’s equality rights – whether through cuts at Status of Women, the cancellation of the Court Challenges Program or attacks on pay equity – leading to a growing gender gap under her government.

10. Stephen Harper

Our Prime Minister has shuttered our dearest democratic institution for the second time in a year so he can stage daily Potemkin village photo ops. He followed up his tirades against delayed government legislation by killing 36 of his own bills, and blew up his Senate reform agenda by appointing more cronies in one year than any Prime Minister in history.

But if Stephen is shuffling deckchairs on the Titanic, perhaps it would be best if the captain went down with the ship...

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Day vs. Flaherty: Who ya gonna believe on the economy?

Now is the time when we compare and contrast at Small De..., er BCer in Toronto:

Jim Flaherty:

Finance Minister Jim Flaherty says it might be premature to declare an end to Canada's recession.

The minister made the remarks Tuesday on his way into a Conservative caucus meeting.

"No, I think we will have to look back as we always do, and look at this quarter," Flaherty said when asked whether he agreed with the Bank of Canada's most recent assessment of the economy.

Stockwell Day:

I'm not kidding. The recession is over. Now I realize some of you may be saying, "hey, who gave Stockwell Day the right to say the recession is over?'

Strictly speaking, nobody gave me the right to say a recession had started, let alone declare it was finished. There is actually a technical definition which says if a certain number of measurable economic indicators are not met over a certain period of time, then, presto!, we're in a recession.

However, if those same economic goal posts are reached over a certain period of time then somebody can declare just as categorically that the recession has ended. In Canada's case that 'somebody' happens to be the Governor of the Bank of Canada.

Now, I know Flaherty is the finance minister and everything, whereas Day is good with a jet ski. Still, I feel like Stock has just a little more credibility on economic matters than Jimbo these days.

So I don't know who to believe...

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Where's the plan, Steve?

In the midst of a disastrous week for the Conservatives, Stephen Harper finally admitted what has been obvious to everyone with half a brain for months: the Flaherty budget projections of emerging from deficit within five years are fantasy and will not be met:

Prime Minister Stephen Harper has scrapped his government's controversial promise to stop running annual budget deficits in five years.

For the first time, Harper said today that keeping the government's pledge to balance Ottawa's books by 2013-14 will depend on how quickly Canada's economy recovers.

"We will allow the deficit to persist if necessary," Harper said.

At least he's not lying to us anymore on the deficit time line. But while, once again, he is tacitly admitting that he and his finance minister were very wrong (see $50B deficit) and Parliamentary Budget Officer Kevin Page was very right, he still wants us to know Page is dumb:

But yesterday, Mr. Harper disputed the suggestion that the government would need to slash spending or boost taxes to balance its budget when the economy recovers.

"We will not start raising taxes and cutting programs. That's a very dumb policy and, to the extent, frankly, that the parliamentary budget officer suggested it, it's a dumb position," he said.

Well, Harper is an economist, after all. I'm just a writer, but I have to say I find Harper's plan to balance the budget, which seems to boil down to "do nothing and hope for the best" to be irresponsible and doomed to failure. Maybe Harper just doesn't plan to be around when the bills come due?

But it has become increasingly clear that we won't be able to grow our way out of this hole. Through endemic Conservative economic mismanagement, we're now in a structural deficit, as Page has reported. Harper seems to dismiss this finding, but let's consider his and Page's track-records here: who you gonna believe?

There are only two ways to deal with a structural deficit: spending cuts or tax increases. Or some combination thereof. There is going to need to be sacrifices, and Canadians deserve the truth from their government, not the willful ignorance of Harper and Flaherty.

According to Ipsos Reid, Canadians are increasingly skeptical of the veracity of anything the Conservatives have to say on matters budgetary. Indeed, just 35 per cent of Canadians believed the Harper Conservatives would be able to meet their budget commitments. And that was before Friday's credibility-busting admission.

The poll also found 88 per cent of Canadians favoured spending cuts over tax increases, which is hardly surprising. Asked in isolation, that's always going to be the case. But ask someone to choose between actual services, such as health care, and taxes you're going to get a different answer.

Ipsos doesn't seem to do that, but they do ask which spending people would like to see cut first:

But if the Canadian government and others were to cut spending, the top three programs that should be on the chopping block are, according to survey respondents, foreign aid, salaries and benefits of government workers and military spending. Environmental protection, public transportation, education spending and health care were at the bottom of the list.

Fact is, you're not going to find substantial savings in government spending without getting into those areas favoured for protection by survey respondents. There's little savings to be found in foreign aid and government salaries, and military cuts would be difficult. Much of the recent spending there has been capital acquisitions anyways. But the point is, to have any meaning, a spending cuts-alone policy will hurt those areas Canadians don't want hurt.

Of course, it's a discussion Stephen Harper is unwilling to have with Canadians. Just cross our fingers, he says, close your eyes, keep spending, and never mind the perpetual deficits. It will all be fine. Trust him.

You're supposed to be an economist, Stephen. And you're supposed to be a leader. So level with us: where's the plan? Or are you just making it up as you go along?

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Structural deficit, or how Harper and Flaherty squandered the sacrifices of the 1990s

Jim Flaherty: Worst finance minister, ever?

OK, a harsh statement to be sure. But I’m really starting to wonder about Jim Flaherty and Stephen “I’m an economist” Harper, and the evidence is adding-up.

Here’s just a few of the headlines the latest report from Parliamentary Budget Officer Kevin Page is generating:

Harper got it all wrong, budget watchdog says
Deficit still looming in 2014, financial watchdog says
Federal deficits to total $156 billion, job losses to mount: budget officer
Raise taxes or cut spending to end deficit: Report

It’s a report that, once again, showcases the utter incompetence of Flaherty and of this government when it comes to budgeting, fiscal forecasting and economic management, and drops one major bombshell: we are now in a structural deficit.

Why is that significant? Everyone (well, nearly) agrees that, in this downturn, a deficit is necessary to help the economy through one-time stimulus spending. This temporary spending will end with the recession, so that, along with economic growth as the economy recovers, we’ll return to surplus in short order without substantial cuts to core services.

A structural deficit, however, is one that is deeper than just short-term stimulus funding. A structural deficit cannot be overcome by the end of stimulus programs and economic growth alone. A structural deficit cannot only be tamed by either program cuts, tax increases, or some combination thereof. And that’s where we now are, thanks to the economic mismanagement of Harper and Flaherty:

In his latest fiscal projections, to be officially released Wednesday but parts of which were obtained by Canwest News Service, budget officer Kevin Page says the deficit will be nearly $156 billion over the next five years, much deeper than the $103.2 billion cumulative deficit that Finance Minister Jim Flaherty's department has predicted.

According to Liberal finance critic John McCallum, Page is forecasting a structural deficit of $17 billion, which means that even with economic growth, even with the end of stimulus, we’ll still be $17 billion in the hole.

It’s not just on the deficit that Page is calling-out Flaherty’s incompetence. It’s also on jobs:

According to sources, the budget officer predicts between 190,000 and 270,000 fewer Canadian jobs this year than estimated in the budget.

For next year, the discrepancy rises to between 200,000 and 500,000 fewer jobs, and even in the years 2011-2014 _ when the recession is expected to be a painful memory _ there are expected to be between 100,000 and 380,000 fewer Canadian jobs each year than the government assumes.

I really have to question if anyone, even Jim Flaherty and Stephen “Want to see my economics degree” Harper can really be this incompetent in their forecasting, of if they really do know better and have just been misleading Canadians. I think it’s some combination of the two.

Look at the track-record. During the last election campaign, the Conservatives repeatedly said if there was going to be a downturn, it’d have happened already. The only way we’ll go into deficit, they said, is if you elect the Liberals. They released a fiscal update in November that ignored the fiscal reality to instead play politics, and laughably insisted there’d be no deficit. When they released their budget in January their overly rosy revenue projections were panned by the experts, until months later Flaherty finally admitted his $50 billion mistake. And as Page’s new report makes clear, that was only the tip of the iceberg that is this government’s incompetence.

One has to wonder though if structural deficits aren’t really part of this government’s plan. What better way to shrink the size of government no matter who is in power (their supposed ideological goal) than sharply choking-off its revenue? That’s what their GST cut was really about: choking off revenue to tie the hands of future governments around program spending.

Whether it was by design or by incompetence though, the structural deficit is now reality. So it’s time for the Harper Conservatives to start being honest with Canadians and tell us how they plan to get us out of this deficit.

Will they raise taxes? If so, which ones, and by how much? Or if, as they insist, they’d never raise taxes ever ever, what program spending will they cut? Where are they going to find at least $17 billion in savings? Which programs, exactly, do you plan to dump over the side?

Or, once again, do they plan to just skulk off into the night and leave the Liberals to clean-up their mess? Whether it’s the federal Conservatives of the early 1990s or the Mike Harris/Jim Flaherty Ontario Conservatives of the early 00s, that does seem to be their pattern.

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Jim Flaherty and the homosexual agenda

Gee, you know, if Jim Flaherty keeps telling Conservatives to f*** off and keeps making enemies of nutters like the folks at LifeSiteNews, than I may actually start to like him (h/t).

Ok, that's unlikely, but I may start to dislike him slightly less. Because it seems Flaherty is under attack from the nutty right for "supporting the homosexual agenda", whatever that means and whatever that agenda may be.

Maclean's magazine reported on June 18 that Canadian Finance Minister Jim Flaherty, previously supported by pro-family advocates, has indicated support for the homosexual movement in a congratulatory letter to Conservative strategist Jaime Watt. Watt, who has been Flaherty's campaign chairman, is currently on the election team of Flaherty's wife Christine Elliot and was one of the whiz kids in Ontario Premier Mike Harris's inner circle, was awarded Egale's inaugural Leadership award for homosexual rights at Egale's gala last week.

LifeSiteNews.com reported in 2002 that Flaherty was supported by Campaign Life Coalition (CLC) in his campaign for the leadership of the Ontario PC Party. CLC National President Jim Hughes sent a recorded message to 50,000 Ontario homes urging them to join the PC Party so as to vote, and indicating that Flaherty was the only candidate who was pro-life without hesitations.

When, in the wake of CLC's announcement, he was questioned by media about his views, Flaherty defended them, stating, "You're asking me what do I believe in? I'm pro-life. I always have been. I don't anticipate ever changing that view."

It seems that Flaherty is at the tip of a secret thrust to gay-up the formerly saintly Conservative Party:

This, and other developments in the Conservative Party in recent years, seem to indicate that Watt and his many influential associates within the party are succeeding in making the federal Conservatives as gay friendly as they did with the Mike Harris Progressive Conservative regime. Under the Ontario Harris and later Ernie Eves PCs, the homosexual movement made dramatic, major advances with the PCs betraying their large social conservative base.

According to Maclean's, Flaherty stated, in reference to the Harris government's decision to give same-sex couples the same rights as opposite-sex couples, a decision which Watt was influential in bringing about: "Some were surprised our government took this decision ... but conservatives fundamentally believe in equality and fairness. It does, however, sometimes take leaders such as Jaime to help us live up to our ideals."

The piece goes on to chastise Flaherty for having an openly-gay chief of staff, and attack the finance minister for saying he's anti-abortion and, yet, friendly to gay people and what not. I'm not entirely clear why someone can't be gay friendly and anti-abortion though, they don't seem like mutually exclusive positions.

Meanwhile, on the other end of the spectrum the folks at Rabble and some members of the gay community are upset with Egale and Watt (and Flaherty) because, I guess, you can't be gay and conservative at the same time:

But queer activists say Watt's work for Mike Harris's Conservative government in Ontario and for the Canadian Alliance — the successor to the Reform Party, which eventually merged with the Conservative Party — should make such an award unthinkable.

"I'm sorry, that's just wrong," says Peter Bochove, a Toronto bathhouse owner who has campaigned for changes to Canadian sex laws. "I find it personally offensive. I don't understand how you can be gay and belong to these parties. Leave aside the gay community, let's talk about Walkerton, let's talk about Ipperwash, let's talk about the amalgamation of Toronto, let's talk about the 'common-sense revolution'. It's the antithesis of everything in the gay community."

That's a lot of demands for ideological purity flying from all sides. If only we were all perfect, no?

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Program for the disabled a Conservative slush fund?

Hopefully the auditor general will look into this because these are troubling accusations, and to use a program intended to assist the disabled for partisan political ends is doubly sad:

The auditor general has been asked to investigate why Conservative ridings -- particularly Finance Minister Jim Flaherty's constituency -- have disproportionately benefited from a federal fund to improve access to buildings for the disabled.

Liberal MP Mike Savage has requested Auditor General Sheila Fraser examine what he called a Tory "slush fund."

He made the request after calculating that 94 per cent of the funding approved so far from the $45-million Enabling Accessibility Fund has gone to Conservative-held ridings.

In particular, only two of 89 applications for major project funding have been approved, both for $15 million and both in Conservative ridings -- Calgary Northeast and Flaherty's Whitby-Oshawa in Ontario.

(more)

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(Video) Tony Clement on deck to defend the government

It seems the Conservatives have designed Tony Clement as their go-to talking head to take the bulk of the media interviews yesterday and today about the election speculation and the four questions Michael Ignatieff wants answered by Stephen Harper ahead of Friday's confidence vote/s.

This video is Clement's interview yesterday evening on CTV's PowerPlay program. I thought Tom Clark gave him a pretty through grilling on why the government can't just cough-up the numbers that Canadians have a right to know anyways, and questioning the validity of Clement and the government's claims they can still get the country out of deficit in five years.

Clement looked like a dear in the headlights at times, although all in all I thought he did reasonably well with a bad script, managed to keep his composure, and offered what may at a brief glance seem like a reasonable explanation. On a closer look though, not so much.

The deficit has ballooned since the January budget to over $50 billion, yet the government is still sticking to its five-year out of deficit plan. With a much bigger than forecast deficit it doesn't make sense, right? Clement says it does, because revenues are going to be EVEN HIGHER than forecast in the budget, therefore increased revenues cancel out the increased deficit and the five-year plan is maintained.

Except I find that very hard to believe. Clement says private sector economists are now revising their revenue projections upward. Which ones? Because I recall private sector economists saying Jim Flaherty's budget revenue projections were grossly optimistic. Now we're to believe they've actually vastly underestimated revenues, despite massively underestimating the deficit?

The economists at TD Bank, for one, still say the government's numbers are way off. On next year's deficit, for example, TD says Flaherty is underestimating the deficit by $15 billion. That's a $15 billion hole in the Conservative 5-year plan they haven't explained away yet. Over the next five years, TD projects a deficit DOUBLE what Flaherty forecast in the budget. And Tony Clement wants us to seriously believe revenues are going to increase so much they'll easily cover off that? It doesn't pass the smell test, Tony.

And then there's the Parliamentary Budget Officer, Kevin Page, who has a far better record so far that Flaherty on these matters. Page says the only way to get there in five years is to cut spending, raise taxes, or both. Flaherty says pishaw.

Clement does, at least, say sure, we'll release our numbers. I'm sure they'll make for creative reading.

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Why do Conservatives hate Ontario?

Conservative finance minister Jim Flaherty famously called Ontario the worst place in Canada to invest. Helpful to remember on a day when we get more bad news for the province's beleaguered manufacturing sector. And now its transport minister John Baird talking down Toronto:

In an unguarded moment, Baird told aides Toronto stood alone in not meeting the technical criteria for federal cash, yet was complaining about Ottawa dragging its feet.

"Twenty-seven hundred people got it right. They didn't. That is not a partnership and they're bitching at us," he said.

"They should f - off."

Stay classy, John Baird. And once again, we see the Conservatives showing an impressive aversion to accountability for their own words and actions. Much like the Raitt tapes, the Conservatives are saying Baird's words were private and not meant for public consumption. Never mind the fact he was at a major conference with hundreads of representatives of Canada's municipalities, and made the comments as he (accidentally, he says) walked into the media room, where he was overheard by a reporter.

Whether Baird meant the comment to me heard or not, it doesn't change the fact that he was. It doesn't change the face that he said it. And it doesn't change the face that the feeling is mutual, John. So instead of whining that it was a private comment, man-up John and either own it or apologize.

Oh, and by the way my Conservative friends who will dismiss this little story, I ask you to consider what your reaction would be if take this story but change it to a Liberal minister speaking about Alberta. Would it be a non-story then?

John should just apologize, and move on. Work with Toronto to address whatever issues there were with their application so Canada's largest city can get the stimulus and transit assistance it needs. His comments do, however, speak to a pattern of disdain for Toronto and Ontario within the CPC party that won't be easily forgotten.

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Video: You don't fool me, Stephen Harper

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363,000 Canadians have lost their jobs since Harper's re-election

Some sobering numbers today fromStatistics Canada:

* The Canadian job market lost 42,000 jobs in May
* The unemployment rate jumped 0.4% to 8.4%, its highest level in 11 years
* In Ontario, the unemployment rate jumped to 9.4%, its highest level in 15 years

And since October, since the last election, where Stephen "lassiez faire I don't care" Harper promised if there was going to be a recession it would have happened already and said we should trust him because he's an economist, the Canadian economy has retracted by 2.1 per cent and 363,000 jobs have been lost.

And the government isn't helping. Municipalities are complaining they have "shovel-ready" projects ready to go, but the Harper Conservatives are stalling on the cash:

But so far, cities have not received the cash they need to break ground, Carl Zehr, mayor of Kitchener, Ont., said on Thursday at the annual Federation of Canadian Municipalities conference in Whistler, B.C. “Our shovels are ready, and we're simply waiting for the money,” he said.

Three months have come and gone without any cash flowing, a delay long enough that it likely precludes any project starting this summer, other mayors said. “This construction season is virtually lost,” Toronto Mayor David Miller said.

Harper and Jim "$50 billion deficit" Flaherty warned stimulus funds had to be out the door within 120 days to be effective. That deadline passed last week, and with only 6% out the door, their effort can only be termed a massive failure.

UPDATE: The headlines tell the tale:

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Video: It's a serious matter

A look back at the day in Ottawa yesterday in just over two minutes. And for the record, not one "seriously" was repeated in the making of this video. Each clip is a new and independent use of the talking-point. And for those Conservative commenters trying to dismiss the atomic docu-scandal as no big deal, clearly the government at least considers it a serious matter...



This is bigger, however, than the scape-goating of some poor staffer. It's bigger, even, than the embattled Lisa Raitt. As Michael Ignatieff said in QP yesterday, it's about the competence of this government. And increasingly, the Stephen Harper government is proving itself incapable of governing responsibly.

Despite knowing there were serious safety concerns at Chalk River for at least 18 months, and really much longer, the government has done nothing but develop talking-points to blame the Liberals while failing to develop a back-up plan for isotope production. It refused to see the economic downturn coming, then promised no deficit, then used a fical update to attack its political opponents instead of addressing the economy, then dramatically underestimated the size of the deficit to the point of absurdity by delivering the biggest deficit in Canadian history. It ignores a growing chorus of provincial leaders and a majority of MPs that want to fix EI. And now TD economists say its plan to get out of deficit is a joke, and we're in for years more of pain than Harper and Jim Flaherty are willing to admit.

It is a serious matter. When will we have competent government indeed?

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(Video) The biggest deficit in Canadian history? Priceless

Spent a little time with my video editing software over the weekend, and with apologies to the folks at MasterCard, I bring you these two videos on the "priceless" Conservative deficit.

I'm envisioning a series with two new facts at the top of each spot, so if you have any ideas for future spots please let me know.

And enjoy.

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Jim Flaherty is sinking man, but does he know how to swim?

If things were functioning correctly back at the homestead I may get some video up later tonight, but for now the transcript will have to suffice. But Bob Rae made Jim "biggest deficit in Canadian history" Flaherty look rather foolish in question period today.

Bob asked a rather simple question: 37 days ago Flaherty was saying the fiscal situation was on track, but this week he announced a record-setting deficit of $50 billion, minimum. So what the heck happened in those 37 days?

Jim’s comebacks amounted to mocking Bob’s record as Ontario premier and asking if he hates auto workers or not. Oh, and pleading it’s not his fault there’s a deficit so leave him alone.

If this is the best Jimbo can do he must really be at the end of his rope.

Bob Rae: Thank you, Mr. Speaker. Mr. Speaker, 37 days ago, the Minister of Finance knew that the forest industry was in trouble. He knew that E.I. was up. He knew that the auto industry was in the tank. 37 days ago, Mr. Speaker, the minister said at that time, “I'm staying with our budget projection. We're on track.” I'd like to ask the minister a very simple question which he has still not answered. How could he have made such a terrible statement a mere 37 days ago with respect to the financial situation in Canada?

Jim Flaherty: Well, I pay attention to the questions from one of the leading Canadian experts in deficits. And having brought Ontario through that period from 1990 to 1995, so that by 1995, the people of Ontario were paying $1 million an hour in interest only on the debt accumulated during that time. Creating a permanent structural deficit in the second largest government in this country. Here's what the member for Toronto Centre says -- again another hypocritical position. He says if we had a deficit now at the federal level, is that going to be the personal fault of the government. I don't think so. And I don't think that's an intelligent position. And no reasonable person should –

The speaker: The Honourable member for Toronto-Centre.

Bob Rae: Thank you Mr. Speaker. Mr. Speaker, I'm an amateur in this regard. The minister -- ( interjections ) the ministers got the phd -- ( interjections )

The speaker: Order. Order. We can't -- you have to have some order. I have to be able to hear the honourable member for Toronto-Centre. He has the floor. Order.

Bob Rae: -- Minister has become the expert. The minister's become the expert. He's going to win the Nobel Prize with respect to the financial situation. I simply want to ask the minister -- ( interjections )

The speaker: Order. ( Interjections ) Order. ( Interjections ) Order. Yes, there will be more. But we have to have some order so we can hear it. The honourable member for Toronto-Centre has the floor. We'll have some order. Even if it's addressing a Nobel Prize winner. ( Laughter ) ( interjections )

Bob Rae: Thank you, Mr. Speaker. If the Conservative Party takes pride in receiving the Nobel Prize on deficits and debts, that's fine. Mr. Speaker, we know that the Prime Minister spent the last 37 days holed up in his basement watching tapes. I simply want to ask the minister -- I simply want to ask the minister, what has happened in the last 37 days to so drastically change the numbers which he's coming to this house with, Mr. Speaker? That's a simple question.

Jim Flaherty: You know, as much -- humor. This is a serious time. Unemployment is worse than anticipated. The recession is deeper and broader than was anticipated by anyone -- this is a serious time and a serious subject. We have the auto negotiations with respect to Chrysler and general motors, and I'd be interested to know the member's position on that. Is he against supporting the auto industry in Ontario?

UPDATE: Make that a $57 billion deficit.

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Some people saw this coming...

I can think of about 50 billion reasons why this Liberal campaign ad from 2004 seems oddly prescient, in light of recent events.

And no, we're not allowed to make this up...

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(Video) GritGirl returns: Harper's Conservatives Runaway Deficit

GritGirl is back, and it only took a $50 billion deficit:

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Video: The government got it so wrong

Quite the day in Ottawa yesterday. Stephen Harper declares "we need to raise taxes" during question period, and to distract from the PM's verbal slip (which I'll continue to blast out of context because the Conservatives deserve a taste of their own medicine for a change) Jim Flaherty announces this year's deficit will be some $50 billion, the biggest budget deficit in the history of Canada.

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Will Harper be honest with Canadians?

Apparently Michael Ignatieff is making news because, in response to a question today from a citizen about how we can deal with this escalating deficit, he admitted we may need to raise taxes to get the books balanced again.

A political faux pas, to be sure, in the sense that it's bad politics to give honest answers to Canadians when they ask tough questions of politicians. It's better to just lie, and tell them the Gum Drop Princess will just plant more candy canes. Which seems to be the Conservative economic policy, as far as I can tell.

Of course, the Conservative war room is all over this. They're going to need to re-cut their first negative ads. That doesn't change the fact though that Ignatieff is right. And it doesn't change the fact that the Harper Conservatives aren't being honest with Canadians about the deficit, and how we're going to get out of it.

But then, what else is new? Harper denied there would be a recession, right up until we were already hemorrhaging jobs. Instead, he talked about buying opportunities. He said me, run a deficit? Never! And then when the election was over, he abruptly changed his mind. Instead of bringing in stimulus in the fall, he played political chicken -- and nearly lost. And he continues to mislead Canadians about the true size and scope of this downturn.

So is it any wonder the Conservatives aren't being honest with us about the deficit?

We were heading for a structural deficit before the budget, and its getting worse. Once the economic tsunami has passed we won't be able to grow our way out of this hole. Private sector forecasters and the parliamentary budget officer agree Jim Flaherty's go-forward revenue projections are grossly optimistic. Harper isn't being honest with us about the challenges ahead. They're trying to hide the problem. But we will have to deal with it.

If we're going to get back into the black after this economic storm passes, then there will either need to be tax increases, program cuts, or some combination of the two. I give Ignatieff credit for saying the politically unpopular: we'll need more revenue, ie. taxes.

Harper owes Canadians some honesty here too. Where's his real, realistic plan for dealing with this deficit. If he says tax cuts are a no-go, what specific programs does he plan to cut to balance the books? How is he going to deal with the deficit? What's his magic plan?

The Conservatives can play the tax bogeyman all they want. They'll even scare the more gullible among us. The rest of us, though, want some answers. Taxes? Program slashing? What's the plan, Steve?

Actually, the answer is b) gutting program spending. It's long been their game plan: choke off government revenue, forcing a radical reduction in the size of government. The only way to undo it? Politically unpopular tax increases to preserve program spending. Of course, they won't tell you this now.

Why? People like program cuts in the abstract. But in the real world, they like those services and programs, and would punish Harper for planning to gut them. So he'll promise abortions for some, minature American flags for other, and hope we can't put two and two together.

But I'm betting Harper is planning on not being around when the bill comes due leaving it up to, once again, the Liberals do the heavy lifting, make the tough choices, and clean-up his mess. Just like we did with the last Conservative deficit.

FOR MORE: Far and Wide, Liberal Arts and Minds and Impolitical.

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