Looking back on The Coalition, one year later

It’s hard to believe that, one year ago, political Ottawa was in a tizzy of coalition madness, and even in the rest of Canada, the political interest alert system rose from “who cares” to “meh, wha?” Looking back one year later, who were the winners and losers and what are the lasting impacts?

In the short-term, certainly, while they may have over-played their hand the coalition was the right move for the opposition parties. With the Conservative economic update that ignored the worsening economic realities and instead tried to destroy their political opponents, the opposition parties had to act.

The coalition succeeded in forcing the Conservatives to introduce a budget in January that, while unfocused and imperfect, did make needed changes in areas such as Employment Insurance as well as spend billions in necessary stimulus to help the economy. It wasn’t the budget we’d have written, but it went much further than the Conservatives wanted to go because their feet were held to the fire by the coalition.

At that point, while I had misgivings at the time as well as quibbles with the strategy, Michael Ignatieff made the right decision in backing-away from the coalition. If they’d tried to take the government, after it has gone a long ways toward meeting their demands, the public would have revolted. No matter how constitutionally legitimate it would have been, in the eyes of much of the public it would have lacked moral legitimacy, and without such legitimacy no government can, or should, govern the people.

So, on the positive side for the opposition, the coalition forced the Conservatives to address the economic reality, dramatically change their policy in our direction, and bring in necessary economic policies to help Canadians deal with the recession. And for the Liberals, however messy the aborted leadership process triggered by the coalition drama may have been, it did get our new leader in place much sooner, saving us many, many dollars that could instead go into party coffers. We emerged with a new leader, a united party, and a healthy war chest.

That said, there were missteps and many negatives.

Did we overplay our hand by proposing a formal coalition, rather than just a Liberal government that would seek to govern with NDP and BQ support on a case-by-case basis? Certainly the NDP saw this as their opportunity at real power and wanted seats at the table. And it was important to demonstrate to the Governor-General and Canadians that the new government would be stable. But it made the separatist-socialist coalition messaging easy, and that resonated with Canadians. And we needed public support for legitimacy. We may well have over-reached.

Having Gilles Duceppe at the table for that press conference/photo-op was a mistake too. It lent credence to Conservative lies about the BQ being in the proposed government when they weren’t, and hurt our chances to sell this to the public.

And as much as it pains me, having Stephane Dion at the head was a deal-breaker for many Canadians. I argued at the time it had to be Stephane, and for us, there was no other viable option at the time. But he had just been pretty soundly rejected by the electorate and I talked to many Canadians who said, they’d support the coalition, but not with Dion. While he was the PM we needed, he wasn't the salesman we needed to sell it. It was another factor that made it harder for us to gain public support.

Looking back now, I’d have to say I total more wins in the Conservative column one year removed from the coalition crisis.

While they were forced into stimulus spending they’ve embraced it, using the opportunity to paint themselves as Conservative Santa Clauses with a multi-billion dollar slush fund. They’re showering money on their own ridings to cement their re-election chances and on key swing ridings they need to get to their elusive majority, all with giant prop-cheques emblazoned with the Conservative logo.

We can point out all we want that the distribution of funds is politically-motivated, that they’re blurring the partisan/government divide, but for most people any outrage is largely of the “a pox on all their houses” variety. Conservative popularity has largely held steady through this downturn. That’s a remarkable feat, and due in no small part to the stimulus spending forced on them by the coalition.

More long-term, the prospect of a future coalition government, which would be perfectly democratically legitimate and could be an antidote to both the perpetual minority governments that Canadians are tiring of as well as a good opportunity to unite the centre-left against the Conservatives, has been poisoned and will likely be a no-go for a generation.

We had to sell Canadians on the concept, and we blew it. We were hobbled by the factors mentioned above and we couldn’t overcome the Conservative campaign of smears, lies and distortions. Now the concept of coalition governments, which are the norm in so much of the rest of the world, is as politically toxic as, well, the green shift. Which is a victory for the Conservatives that greatly increases their chances of continued governance by playing the NDP and Liberals off each other. A divided left helps a united right.

So, overall, while the opposition parties largely played their cards as best they could and did achieve some tactical victories, in the long-game it’s Stephen Harper’s Conservatives that emerged as the winners from the coalition madness of one year ago. They continue to govern, their opposition is divided, they held (and even increased) their popularity through a punishing economic downturn, and are inching closer to majority nirvana.

It has been quite a year.

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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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(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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Almost all economic stimulus cash would keep flowing during election

Stephen Harper says an election would stop stimulus money from flowing. Stephen Harper is wrong. From CP:

More than 90 per cent of the economic stimulus planned for this fiscal year will continue to flow whether or not opposition parties defeat the federal government and force an election on Friday.

And that fact blows a big hole in Prime Minister Stephen Harper's best argument for avoiding a summer vote.

``I think it's largely bogus,'' says Allan Maslove, public policy and administration expert at Carleton University.

``Governments don't shut down (during an election), they continue to spend money. So all of those programs that were approved can go forward.''

Out of $22.7 billion in infrastructure and other stimulus measures announced in the January budget, Treasury Board officials confirm that parliamentary approval has already been received for
$21.1 billion.

Some $1.6 billion in stimulus, to be voted upon as part of the estimates Friday, would be stalled though by a summer election.

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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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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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Managing expectations

I've touched down in Los Angeles for a work trip for briefings with HP, checked into the Beverly Wilshire in Beverly Hills and I have two hours to go and enjoy the sunny, warm weather and look for movie stars before my first meeting. So I'm going to try to keep my comments on last night's budget vote short, so I can get out of my room.


I agree with much of what Steve said on the topic. I'm very annoyed with what happened last night. Let me explain why though. For the Liberal team this was a failure of communications, and of managing expectations.

One thing should be clear from the start: the Liberals were always going to pass the budget, and this associated stimulus funding. First, we believe in this time of economic crisis we need to get the stimulus flowing. Second, voting it down would have triggered an election. There's no getting around that. And even if we wanted an election right now, Canadians don't. Triggering an election no one wants would be stupid right now. So this was always going to pass.

Where we erred was in allowing the expectation to arise that anything else was the case. And it's our own fault. We made the right call in January, that's clear: pass the budget and get out of the way to get the money flowing. Attach accountability measures and quarterly reporting. If we don't like what we see, we vote no-confidence.

When this $3B fund thing came up it seems we wanted to try the same play: let it pass with accountability measures attached. We did well on the latter half of that equation, the accountability measures were reasoned and sensible. Where we erred was on the first half, with the "blank check" rhetoric we allowed the false impression to take hold we were prepared to vote the stimulus down. We never were, but we left that impression, which then makes it seem like we've fallen into the same huff and puff and run away mentality again.

Fact is, the accountability measures we wanted were passed before the main stimulus vote, with BQ and NDP support. So we met our strategic goal, but our failure to manage expectations casts it as a defeat. And we're letting the other parties spin it thay way, we're not getting our message out.

Yes, the Conservatives say they'll ignore the motion: then we can go to Canadians and say Harper is ignoring the will if Parliment and the accountability demanded by a majority of parliamentarians. And they have actually promised more reporting, so we'll know where this money goes.

Yes, they motion is non-binding. We always knew that. It was always going to be non-binding. The enforcement is through the quarterly reports, through voting non-confidence if they're not behaving responsibly.

The lesson I hope the Liberals take here is to manage expectations, and don't bring the rhetoric if you're not going to back it up. We're on the right track here, we're behaving responsibly and Canadians are onside. Let's not fall into the old huff and bluff habits.

What happened to keeping this brief? I'm off to Rodeo Drive.

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GritGirl vid: The Harper Conservative's Massive Deficit

Newest video from the infamous GritGirl is up, entitled The Harper Conservative's Massive Deficit.



BTW, while it's a good ad and I love the ominous music, fact is all parties had agreed a deficit of some sort was needed and unavoidable. Now the size of the deficit, and where its spent, those are other matters.

But really, since when did fairness have a place in political ads? The Conservatives continually and deliberately misled Canadians and perpetuated falsehoods in their TV advertising. So they're in no position to kcetch. I say, you go GritGirl!

*Is the grammatical error in the title the innocent mistake of a basement amateur videographer, or an intentional and deliberate Machavelian-inspired error hatched via focus group to give the appearance of amateurishness? We may never know.

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(Video) Conservatives play political games with EI, Liberals don't read the fine print

Is it any wonder everyone thinks they're all a bunch of idiots up there in Ottawa? Given today's events, I don't think there is. Unfortunately, they're a bunch of idiots that control many billions in spending that can impact our lives for better or for worse, so we can't just ignore them.

In short, the Liberals agreed to bypass Senate hearings and pass the budget today, after before insisting pretty firmly we wanted to give the Senate a few days to do its sober second thought thing, because it turns out the Conservatives buried a provision in the fine-print around the effective date of the extension (by five weeks) to EI eligibility. Everything else in the budget comes into affect April 1st, but the EI changes come into affect retroactively two weeks BEFORE the budget is passed. Therefore, every day the budget isn't passed people fall off the EI roles that would otherwise get benefits.

The Liberals say we didn't notice this before, and that the Conservatives didn't bring it up until Jim Flaherty's Senate testimony this week and they were trying to set us up with political shenanigans. The Conservatives say they were totally talking about this all along, and the Liberals (and every other political party and the national media and the blogsphere and your mom) just never noticed.

First, let me just say this to my Liberal Party: WHY THE HELL DIDN'T YOU READ THE DAMMED BUDGET! I mean, really, what the hell guys? I mean, I know it's a thick document. Lots of fine print. But we know the Conservatives are sneaky-sneaks. Did no one read the dammed thing? I know finances are tight, but let's find a way to get “guy that reads the budget to check for sneaky Conservative shit” back on the payroll, k? Or maybe give everyone in the office a few pages so it goes faster. Order in some schwarma, make it a party. But really, you're killing me here guys.

Ok, done venting. Now, Conservative Party, you guys are so full of shit here it's ridiculous. Of course you buried it, hoping they wouldn't find it, so you could jump up and say “Ah Ha! Those dastardly Liberals are holding back EI from Canadians in need! They totally suck, and so forth!” You weren't clear about when the EI changes were coming into effect at all. If you were, someone would have noticed. Other parliamentarians, the media, anyone. They'd have been all over it. But no one did.

Not even your Senators. The Conservative Senate leadership agreed to a time line for Senate debate of the budget that included hearings this week and passage before the end of the month.

Why, pray tell why, would the Conservative Senate leadership agree to this time line if they knew it would deprive Canadians of five weeks of EI benefits? Did they just not care? Were they setting up the Liberals, hoping they'd take the bait so you could then blame them for obstruction, so you could score political points at the expense those EI benefits? Or did you just not tell your Senators this was in the budget either?

And why set this sort of time frame for bringing the EI changes into effect, which is completely out of precedent with normal procedure, unless you're screwing around? Using the EI eligibility of millions of Canadians during an economic crisis as a political football to try to either tar your political opposition or force them to ram through billions in needed stimulus is disgusting. It is patently obvious that the Harper Conservatives have learned nothing from the fiscal update brouhaha. Clearly, political gamesmanship remains more important to The Harper Government then bringing Canadians the help they need.

When finally clued-in to the Conservative EI trap, the Liberals had little choice but to skip the hearings and pass the thing forthwith. We'd already passed it through the House, and it was going to pass the Senate as well. It's far from a perfect budget -- I'm upset with a lot of the provisions – but this is an economic crisis and this is stimulus that Canadians want and need.

The Liberals decided to support this imperfect budget because, thanks to the pressure of the opposition parties, it is substantially improved from the economic update. Also, Canadians don't want an election right now. They want action on the economy, and they want all the parties to make a good faith effort to work together. The Liberals have been making that good faith effort, and the Conservatives have responded with political games.

Now, though, that this budget has passed and this needed stimulus should be on its way to Canadians, my patience with these Conservatives and their political games is running extremely thin. I think Canadians' patience is wearing thin too.

Read more at Impolitical and Liberal Arts and Minds.

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(Video) Ignatieff won't bend on $3-billion 'slush fund' despite election threat

Michael Ignatieff scrummed with reporters after question period today, making clear Stephen Harper can bluster and threaten an election all he wants, but we'll still be demanding accountability for that $3 billion 'slush fund' they've recently announced. He also laughed-off threats of negative advertising from the Conservatives. Good scrum by Ignatieff. The contrast between his statesmanlike demeanor and the bluster of Harper was quite compelling, and shows at least one political leader is in touch with the mood of Canadians.



Here's the CP coverage, and impolitical has more. So does Steve and Liberal Arts and Minds.

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Poll vindicates Liberal budget position (UPDATED)

Hot off the CP wire:

Ignatieff was spot on with budget compromise: poll (Fedbudget-Poll)
Source: The Canadian Press - Broadcast wire
Feb 3, 2009 15:28

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OTTAWA - A new poll suggests Liberal Leader Michael Ignatieff struck a chord with the public by compromising over the federal budget.

Ignatieff's offer to support the Conservatives' fiscal policies in return for a pledge for regular status reports on the economy won majority support from respondents across the country.

The Canadian Press Harris-Decima survey found that 72 per cent of respondents supported the idea of quarterly updates, with only 20 per cent opposed.

The poll also suggested the Conservatives read people correctly in drafting the budget, with 62 per cent of respondents saying they wanted it passed and only 20 per cent opposed.

Support for Ignatieff's decision cut across all political parties, with 85 per cent of Liberal backers, 75 per cent of Bloc supporters and even 64 per cent of Conservatives saying it was a good idea.

The survey was part of a national omnibus phone survey which interviewed just over 1,000 people between Jan. 30 and Feb. 2, and is considered accurate to within 3.1 percentage points, 19 times in 20.

(The Canadian Press)

UPDATE: Now with analysis:

Jeff Walker, senior vice-president of Harris-Decima, said it looks as if Ignatieff hit one out of the park in this case.

``That's exactly what I saw when I got those numbers,'' he said. ``It seems that he struck the right tone ... he made the right decision.''

Walker also said the data suggest that the idea of an opposition coalition to replace Prime Minister Stephen Harper's government is dead.


``Among Liberals, there was almost universal support for what he did and almost _ arguably absolutely _ no support among Liberals of going for the coalition.''

The survey also suggested that Canadians are more insistent than ever that their politicians put aside partisan bickering.

Walker said that sentiment has grown since Harper's ill-starred fiscal update before Christmas, which brought his minority government to the brink of defeat.

``Canadians were not really very happy with the way in which the Conservatives went about delivering that economic statement,'' he said.

``It seemed to have purposely poked the other guys in the eye for no reason other than politics and it didn't fit with where people feel we are right now in terms of the economy and the importance of getting government right, right now.''

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Misleading and scaring Canadians on pay equity

The misleading headline on this Globe and Mail story about the budget and pay equity is emblematic of the fear mongering campaign being conducted by some for purely political reasons:

Pay-equity changes set to pass with budget

GLORIA GALLOWAY
From Tuesday's Globe and Mail
February 2, 2009 at 11:29 PM EST

OTTAWA - The federal budget revives the same pay-equity changes from the fall fiscal update that spurred mass protests and the potential collapse of the Conservative government now surviving with Liberal support.

This headline is absolutely false, and the Globe should change it immediately. As I pointed-out the other day, while the budget talks about the government’s plans to make changes to pay equity it does not make any actual changes, or provide much detail on what those changes may be. From page 211 of the budget document, this is the only passage where "pay equity" appears in the budget:

The existing complaint-based pay equity regime is a lengthy, costly and adversarial process that does not serve employees or employers well. Legislation to modernize the pay equity regime for federal public sector employees will be introduced. The new regime reflects the Government’s commitment to pay equity. It will ensure that the employer and bargaining agents are jointly responsible and accountable for negotiating salaries that are fair and equitable to all employees.

I’ve bolded the key passage. Legislation…will be introduced. As in, at a future date. No changes to pay equity will be made by this budget. Whatever changes the Conservatives plan for pay equity will be introduced in separate legislation that the opposition parties can debate, amend, take to committee, and either pass or defeat.

Journalists don’t write the headlines and so I don’t fault Ms. Galloway, as her own story gets it right and contradicts the headline put on it:

The budget released this week says the government will introduce a new means to establish pay equity. "The existing complaint-based pay-equity regime is a lengthy, costly and adversarial process that does not serve employees and employers well," the budget documents assert.

I feel pay equity is a serious and important issue, and I’ll be expecting the Liberals to closely examine whatever legislation the Conservatives decide to introduce on this topic. I’m confident that. with the three opposition parties being of similar view on the issue, no legislation will pass unless it’s good legislation. And if Harper decides to dig-in his heels on this down the road, so be it.

But because this is such an important issue, I’m disgusted at those in the political arena that are creating fear around this issue, misleading Canadians into thinking horrible changes will be made on pay equity in this budget, and that by listening to the clear desire and will of Canadians to make this parliament work, by passing this budget the Liberals are somehow gutting pay equity.

It’s a fabrication; a transparent attempt to score political points against the Liberals with falsehoods and by sowing fear. I don’t think it’s worth frightening people on this issue just to score political points against your opponents, and those who claim to support pay equity should give their heads a shake.

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Video: Michael Ignatieff on CTV's Power Play

Liberal interim leader Michael Ignatieff was the first guest today on the debut edition of Power Play, hosted by Tom Clark, the successor to Mike Duffy Live. Topics of discussion included the budget, equalization, the Liberal Newfoundland MPs, himself, his goals, power, and the NY Times piece over the weekend.



Speaking of the budget, the Liberal amendment passed tonight. Here's a partial transcript of Ignatieff's scrum comments after the vote:

THE FEDERATION CALCULATES RESOURCE REVENUES. IT'S A TECHNICAL ISSUE, BUT ON THE 27th OF JANUARY, BOOM, OUT OF THE CLEAR, BLUE SKY, NEWFOUNDLAND WAS INFORMED THAT THERE WERE SUBSTANTIAL CHANGES. INTO THE FEDERAL TRANSFERS THAT THEY WOULD RECEIVE, AND IT LOOKS LIKE, AND THIS WAS CONFIRMED BY THE MINISTER OF FINANCE TODAY THAT THAT'S ABOUT A BILLION DOLLARS OVER THREE YEARS. I SAID TO THE PRIME MINISTER, YOU CAN RUN A FEDERATION THIS WAY. UNILATERAL WITHOUT WARNING, CHANGES. IT MAKES IT IMPOSSIBLE TO BUDGET. IT MAKES IT IMPOSSIBLE TO PLAN AND IT MAKES IT IMPOSSIBLE TO RUN A FEDERATION PROPERLY. I SAID WOULD YOU PUSH THE PAUSE BUTTON ON THOSE CHANGES? AND RETHINK HIS APPROACH TO GET GREATER NATIONAL UNITY IN A TIME OF CRISIS, AND HE SAID NO. SO THAT'S WHERE WE ARE.

Harper said no. Well, colour me surprised. Why would he say yes, exactly? Harper wants to stick it to Danny Williams for obvious and personal reasons, he has calculated we're not prepared to go to the mat over this, and he's not particularly inclined to help out out Newfoundland Liberal MPs. All that's left is to let our Newfoundland MPs vote as they wish, and hold it up as an example of how free and open of differing opinion and regional concerns the Liberal caucus is, vis a vis the Conservatives.

We continue to push for changes on equalization as part of our wider push around making parliament work and giving the Conservatives a chance to succeed or fail. And then if they don't correct this we roll in into out wider messaging when we do pull the plug on Harper, as a time and on issues of our own choosing.

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Reading Harper's masters thesis

Don Martin dug-up a copy of Stephen Harper's masters thesis from when he was an economics student at the University of Calgary. Certainly seems relevant, given how Harper and co. always like to remind us that he's an economist, so he totally knows what he's doing.

Here's a few excerpts:

Excerpts from Stephen Harper's 1991 master's degree thesis

"Minority governments show no particular tendency to fiscally irresponsible behaviour, contrary to some theoretical predictions."

"A general observation would be that, while there is no evidence of a 'chronic deficit' tendency in Canada historically, neither is it clear how such a problem is resolved once it occurs."

"The record indicates that particularly activist Keynesian policy has been rare in the postwar period. The results indicated that it should remain so."

I'd have no problem with him having changed his views over time -- that's perfectly natural and healthy -- except I don't believe he really has changed his views, his actions on the budget were entirely motivated by political survival, with the coalition of opposition parties holding his feet to the fire. I think the fact his heart isn't in it is borne-out by the fact he did such a crappy job of it. I think he still believes what he wrote in his thesis.

No, what I think his thesis and his actions now show is the gulf between the theoretical world of academia and the real world of the actual economy and of government. It's one thing to debate abstract policies in the ivory tower; in the real world, it's not so cut and dry.

Also, the media continue the race to ask anyone who ever met Harper if they're disappointed in him over the budget. As amused as I am, and pleased as a partisan, I can't help but wonder, is it a bit much? Not until they track down his Grade Five music teacher. After that, they should stop.

As an aside, while the reporters reading through everything Michael Ingnatieff ever wrote still have a lot of work ahead of them, I suspect that with Martin getting his masters thesis, those on the Harper beat are now done. At least until he gets that book on hockey written, that is.

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Deficit Watch 2009: What happened to truth in budgeting?

It’s only the first day of Deficit Watch and already its not looking good for the Conservatives, with leading economists and the International Monetary Fund casting doubt on Jim Flaherty’s overly optimistic projections of future economic growth. In short, it will take the Conservatives longer to retire these deficits than they’re admitting.

A day after Finance Minister Jim Flaherty tabled a budget projecting that the global and Canadian economies will rebound moderately next year, the International Monetary Fund has thrown a spanner into the assumptions that underpin the government's numbers.

The latest global outlook is in line with Canadian economic expectations in Flaherty's budget for this year -- a 1.2 per cent gross domestic product retreat -- but the two part company over the expectations for next year.

The IMF says Canada's economy will begin to grow at a tepid 1.6 per cent pace, while Flaherty is counting on a 2.4 per cent advance followed by even stronger momentum, to make good his prediction that the government will balance its books four years from now.

Remember the days of Liberal governments regularly running healthy surpluses, a practice Deficit Jim thought was just horrible, but most saw as sound financial planning (particularly in hindsight)? That wasn’t by mistake.

When the Liberals took office from the Mulroney Conservatives (and inherited a big deficit by the by), it had been common government practice for a much larger than forecast deficit to be revealed when the books were closed at the end of the fiscal year. That was because they'd made a habit of basing their budget projections on the most wildly optimistic projections of future growth and revenue. The best-case scenario. It made the bottom-line look better on budget day but it was artificial, a mirage. They wanted to hide the true situation until less people were watching.

When the Liberals and Paul Martin moved into the finance portfolio he changed this practice, adopting a policy of basing his budget projections on an averaging of the more conservative forecasts of both public and private sector economists, essentially erring on the side of underestimating potential growth rather than overestimating.

This policy, along with the contingency reserve (also abandoned by the Conservatives), allowed for a budget cushion should growth be hampered. As a result, each year the Liberal government was able to do a little better fiscally than anticipated, allowing leftover funds to bring down the inherited deficit faster, and then be targeted to a combination of debt repayment and priority program spending. And when the September 11 attacks put severe fiscal demands on the government overnight, we were able to bear them without deficit.

While this all seemed like sound financial planning to me, the Conservatives disagreed. They thought all this fiscal prudence was a totally bad idea. Overtaxation, they'd cry. (ed: So do they consider a deficit undertaxation then?) They killed the contingency reserve. And ironically, given this Flaherty budget, which uses overly rosy revenue projections to downplay and hide the true size and length of this deficit, they also ran in 2005/06 on Truth in Budgeting, and bringing transparency back to the budget process.

Yet another Harper broken promise, as Deficit Jim fiddles with the numbers to cover-up the true size of his deficit. (He knows what he's doing there) I hope the finance committee will put Flaherty on the hot seat over his attempts to cover-up the true scope of the deficit. Kevin Page would be a good witness too.

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Video: Bob Rae on the budget, coalition, and Liberal response

Bob Rae talks about the budget, the coalition, and the Liberal budget response with Don Newman on CBC's Politics this afternoon.

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