Budget will expose absurdity of ‘recalibration’
TheGlobeandMail.com – Opinions – What Canadians will see is overwhelmingly more of the same
Published on Tuesday, Mar. 02, 2010. Last updated on Wednesday, Mar. 03, 2010. Jeffrey Simpson
If the argument had not been so cynical, it might have been laughable: that the Harper government had to prorogue Parliament to give itself time for a deep-think “recalibration” of its fiscal policy.
Tomorrow’s budget will finally and fully expose the absurdity of the “recalibration” argument, since what Canadians will see is overwhelmingly more of the same.
Prorogation was all about gaining a political advantage by shutting down the opposition’s principle platform to make a stink. As things turned out, it was one of Prime Minister Stephen Harper’s too-clever-by-half strategies, since it offended Canadians’ sense of fair play and made their political institutions tied to prime ministerial whim.
So, no, prorogation was never about recalibration.
Some programs introduced a year ago for one year, such as the Home Renovation Tax Credit, will, indeed, be ended after one year. Others that were supposed to last two years will last two years.
The stimulus spending package will continue, as will tax reductions. Both will be justified on the grounds of an economy that remains too fragile for the withdrawal of stimulus.
This budget, therefore, will continue a Harper government tradition of never having made a hard fiscal decision since first being elected.
A hard fiscal decision involves raising taxes or reducing spending, or both. All sorts of political pressures lean against tax increases or spending reductions, which is why so few governments do either. So, too, minority governments are notoriously adverse to hard fiscal decisions, since opposition parties never saw a spending program they sought to cut.
So it has been with the Harper government, whose years in office have featured the easy decisions of reducing taxes and raising spending way above the inflation rate. The only spending restraint the government has shown was an examination of departments looking for savings of 5 per cent – not actually to save money but to reallocate it elsewhere.
Rhetoric and ideology aside, the Harperites were big spenders and big tax cutters long before the recession arrived, with the result that the budgetary surplus they inherited disappeared, as did the margins of fiscal prudence that Liberal governments inserted in federal budgets.
Spending a lot of money this year to assist the fragile economy will also help the Conservatives’ political objectives.
Those of you who watched the Olympics could not have missed the multiplicity of TV ads for Canada’s Economic Action Plan, the Harper government’s stimulus package.
Untold millions have already been spent to promote this package in the media. Much more advertising is yet to come. So, too, is another stream of government announcements and photo ops, all featuring Mr. Harper, his ministers and Conservative MPs. Easy fiscal options of lowering taxes and spending money provide political opportunities not to be missed.
In the background, however, will be messages of restraint to come, since the federal government will amass about $100-billion in debt during the two fiscal years of recession and slow growth, a debt to be soon hit with higher borrowing costs as interest rates rise.
So jam today and jam tomorrow in the budget will be accompanied by the message of less jam the day after tomorrow and the day after that, starting perhaps with the 2011 budget.
If possible, however, the Conservatives would prefer to have an election before the 2011 budget, since that budget will actually require them to start making hard decisions at least on the spending side, something they’ve never done.
Obviously, this government’s first target will be its own employees – their numbers and their pensions. Targeting the public service is red meat to core Conservative supporters, and is much easier politically that cancelling or shrinking programs and taking on powerful interest groups.
Don’t be surprised to see re-emerge in this budget or the next the idea that provoked the parliamentary crisis of 2008: the end of public subsidies for political parties.
The Harperites retreated from that policy, but they never abandoned it. They said they would return to it at an opportune moment. What better cover could there be than the context of overall spending restraint?
Every budget contains a few surprises, twists and changes, but for all the talk of “recalibration,” this one looks a lot like more of the same.
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