Ridiculous? Conservative partisans will say so. But consider the text of Finance Minister Jim Flaherty’s fiscal update speech, delivered to the Fredericton Chamber of Commerce Tuesday. “As I have said on many occasions,” said Minister Martin, sorry Flaherty, “balanced budgets are not an end in themselves. They are a means to an end and that end is a better, more prosperous future for all Canadians.”
The result is a deficit this year of $26-billion, $5-billion higher than projected seven months ago. As for next year’s shortfall, that’s anybody’s guess: Ask the Americans about their fiscal cliff, and the Europeans about Greece. Everything they do affects everything we do. All this government can do, based on Flaherty’s speech, is shrug, pay lip service to balanced budgets — as Mulroney finance ministers Don Mazankowski and Michael Wilson once did — and hope for the best.
Every political speech is an exercise in subliminal advertising. This one was designed to convey a single overarching idea: Despite what you may have heard about $5-billion in cuts to federal departmental spending this year, added to $8-billion in 2011, this government is reasonable, moderate, non-ideological and compassionate. “Unlike governments past,” Flaherty said in a reference to the callous Jean Chretien Liberals, “we have not and will not reduce transfers to persons — including seniors and children — or transfers to other levels of government in support of services that Canadian families rely on like health care and social services.”
Just in case anyone were fuzzy on the breadth of Ottawa’s generosity, Flaherty rhymed off a list of “investments” in New Brunswick’s economy; $300-million for highways, $26.6-million for Saint John Harbour; $50-million for colleges and universities across the province.
There’s more, but you get the drift. It’s 2009 all over again, and the federal cheque book is wide open. Indeed, that was the second message of the day: The global recession still looms. “Canada is still growing, and is among the strongest G7 economies, but we are not immune to the economic uncertainty beyond our borders,” said Flaherty. “Canada has clearly been affected by volatile and falling world commodity prices since the budget in late March.”
Because of the commodity price dip, projected Gross Domestic Product between 2012 and 2016 is now $25 billion lower than stated in the last budget in March, with an attendant expected dip in government revenue, Flaherty said.
As political cover, this is beautiful. It means that, should the new-new target date for a balanced budget — now 2016-17 — also get blown out of the water, for whatever reason, the government can cite uncertainty abroad as the cause. As an added bonus, there’s a deft little stab at Tom Mulcair: Booming commodity prices are the central pillar in the opposition leader’s theory that an “artificially” high Canadian dollar, driven by resource profits, is hurting the eastern manufacturing economy. If commodity prices slump, the wind goes out of that sail and the government, in theory, looks like the grownup in the room.
To call the deficit retrenchment a betrayal of the governing party’s fiscal-conservative wing would be an exaggeration — but only just. Last spring, amid budget consultations, hawks in the caucus argued for deeper and faster reductions, so as to allow the party to campaign on a balanced budget in 2015. They were overruled. Cuts that had originally been billed as totaling about $8 billion, were reduced to $5 billion. Now, it appears, the goal of reducing the size of government is shelved. If cuts to departmental spending beyond the ones already announced are out, and transfers to the provinces and to individuals are off limits, then de facto the era of austerity is history.
The Conservatives can do this with impunity — for them it’s all political gain, no political pain — for two reasons: First, the rest of the G7 is a fiscal shambles, making Flaherty look like a bean-counting hero by comparison. Second, there’s no one on the government’s right flank to siphon away grumpy fiscal hawks. There is no appetite in Alberta — at least not yet — for a federal wing of Wildrose. Most Conservatives I know are happy to have their team in power and winning the game.
What they can no longer credibly argue though, is that their party is the philosophical heir to Preston Manning’s Reform movement. Social conservatism is off the table. Accountability? Gone. And now fiscal conservatism is also on the way out. What’s left, increasingly, is the colour blue. This is Liberalism, with different people in charge.
Original Article
Source: national post
Author: Michael Den Tandt
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