Keith Beardsley, a former deputy chief of staff to Prime Minister Harper (Calgary Southwest, Alta.) who worked in the PMO from 2006-2008, told The Hill Times that it appears the Conservatives were making strategy “on the fly” when Employment Minister Jason Kenney’s (Calgary Southeast, Alta.) comments about how the government intends to handle the budget shortfall last week were later contradicted by an anonymous “federal official” in an interview with The Canadian Press.
“That’s a perfect sign of a disconnect when they don’t get everything coordinated,” said Mr. Beardsley.
Mr. Kenney, chair of the Cabinet Committee on Operations, told other media in the Sunday political shows that the government may undertake some further spending cuts to balance the budget and added that the $3-billion contingency reserve will not be touched. But later a senior official directly contradicted Mr. Kenney and told The Canadian Press that no budget cuts are in the works and the contingency reserve indeed is in play.
Mr. Beardsley said it remains to be seen how the opposition parties will capitalize on the current political situation, but said it’s an obvious opening for them.
“For the opposition, it’s a godsend. They don’t really have much to go on [anything other than economy], so, for the opposition to have an issue like this come up where they can just get up day after day, day after day, day after day, and talk doom and gloom. It’s manna for the opposition and the government is automatically on the defence,” said Mr. Beardsley.
Mr. Beardsley predicted that the opposition parties in their messaging will call the government “out of touch” and ask the Canadians for a “fresh start” both before and after the next budget is tabled in April.
But, he said, the daily 45-minute Question Period questions from the opposition parties will be an opportunity for the Conservatives to “test drive” their message on the economy for the next election campaign and for the Prime Minister to further bolster his reputation as a competent economic manager. At the same time, however, he said it’s an opening for the opposition parties to create doubts about the Prime Minister’s ability to handle the current economic situation.
“They can start to lay out their agenda and can almost test drive their messaging. You test-drive your message that you want to use in an election. How is it playing with various interest groups? How is it playing with focus groups? It gives you a good opportunity to test on an issue on which at the moment, the government has problems with,” said Mr. Beardsley.
In these situations, Mr. Beardsley said usually senior advisers in the PMO and Finance Minister’s Office will hold regular meetings to come up with a Question Period and media strategy.
But with the anticipated drop in revenue due to the sharp decline in oil prices, Mr. Beardsley said he was also surprised that the government has not readjusted its messaging as Finance Minister Joe Oliver (Elginton-Lawrence, Ont.) and Mr. Harper both are still insisting that the next budget will be balanced but have not explained how that will happen.
In response to the tumbling oil prices, and to blunt its negative effects on the economy, the Bank of Canada, in a surprising announcement, cut its benchmark overnight interest rate by one-quarter from one per cent to .75 per cent.
“The drop in oil prices is unambiguously negative for the Canadian economy,” Bank of Canada Governor Stephen Poloz said last week in Ottawa. “Canada’s income from oil exports will be reduced, and investment and employment in the energy sector are already being cut.”
Since June, the oil prices have tumbled by more than 55 per cent from $105 to less than $50 a barrel last week.
“The large decline in oil prices will weigh significantly on the Canadian economy,” stated the Bank of Canada’s quarterly monetary policy report that also came out last week.
“Given the speed and magnitude of the oil-price decline, there is substantial uncertainty around the likely level for oil prices and their impact on the economic outlook for Canada.”
While answering questions last week from reporters in St. Catharines, Ont., Mr. Harper said the collapse in oil prices will not cause any significant damage to the Canadian economy in the long-term.
“These things are creating some shocks that will impact us, but they’re not going to throw us off our fundamental growth path or undermine the very strong fundamentals of the Canadian economy,” said Mr. Harper.
A Conference Board of Canada report, meanwhile, suggested last week that Canada will lose $4.3-billion in revenue because of the slide in oil prices.
And according to a private sector analysis, Ottawa is unlikely to balance the budget next year. An analysis from TD Economics predicted two weeks ago that the tailspin of oil prices would likely convert next year’s budget projected surplus of $1.6-billion into a $2.3-billion deficit. The analysis also predicted that the Harper government’s $4.3-billion surplus projection for 2016-2017 would turn to a $600-million shortfall unless the government finds new ways to generate revenue or to cut spending.
For the upcoming election, the Harper government announced several family tax cuts worth billions of dollars late last year tailored to target their voter base, the most important of which is income splitting.
This new development of a drop in the revenue will force the government to make major adjustments to keep its promises of tax cuts. The opposition parties will also have to readjust their campaign platforms, as they will also be limited in offering big-ticket items to Canadians because of the drop in revenue.
Mr. Oliver, meanwhile, who was in Davos, Switzerland, last week to attend the World Economic Forum, vowed that the next federal budget would be balanced. Usually, budgets are unveiled in February or March, but as a result of recent drop in oil prices, Mr. Oliver announced that he won’t table one at least until April to get a better read on how it’s effecting the Canadian economy.
Bruce Carson, a former senior PMO adviser to Mr. Harper, said both the Prime Minister and Mr. Oliver will have to choose their words and economic figures very carefully in Question Period as the opposition parties are going to parse each and every word and figure from every possible angle and will attempt to find any error or contradictions. Also the opposition parties will use these figures provided by the government in their own election platforms, he said.
The next federal budget is especially significant for Mr. Oliver as it’s the pre-election budget and it could be his first and last, depending on the outcome of the next federal election.
Mark Cameron, former director of policy to the Prime Minister who played a key role putting together four federal budgets between 2006 and 2009, said pre-election budget making is always a stressful exercise. He added that because of the expected reduction in the government’s revenue, the Conservatives may have to drop some initiatives or at least may have to scale back some spending ideas.
“It’s an added stress, for sure, because I’m sure they had ideas for the election platform and so on, that will cost money and now they may have to drop some of those ideas or scale some of those ideas back. It reduces the flexibility,” Mr. Cameron, who now works for Hill and Knowlton, told The Hill Times.
“There’s been several years of deficit and spending restraints and people had finally thought that this will be the year when the government can open the taps a bit and there’re a lot of demands that people who had been told in 2012-2013, ‘No we can’t afford this now and in 2015 we’ll have a balanced budget, come back then,’ and now all of a sudden the surplus is not as big as people were thinking.”
Some of the senior staffers from the PMO and Finance Minister’s Office who are assisting Mr. Oliver and Mr. Harper in putting together the budget include: Ray Novak, chief of staff to Mr. Harper; Rachel Curran, director of policy to the Prime Minister; Phil Harwood, policy adviser to Mr. Harper; Daniel Nowlan, chief of staff to Mr. Oliver; and Michael White, policy adviser to Mr. Oliver.
Opposition MPs told The Hill Times that the economy is going to be the most important issue when Parliament returns this week after the six-week Christmas break.
NDP MP Nathan Cullen (Skeena-Bulkley Valley, B.C.), his party’s finance critic, said he and his party will be holding the Conservatives to account for failing to properly handle the economy. He said the way Conservatives are handling the economy currently brings into question the Prime Minister’s competence as a good economic manager.
“We’ll do more than ask question in the Question Period,” said Mr. Cullen. “His entire brand that he has tried to build is around competence and economic mismanagement. He’s shown himself to be incompetent.”
Liberal MP Scott Brison (Kings-Hants, N.S.), his party’s finance critic, told The Hill Times that his party will bring the Conservatives to task during the daily Question Period for “mismanaging” the economy and for offering “economically ludicrous and fiscally irresponsible” plans to fix the economy.
“There’s no plan for jobs and growth from the Harper government and they continue to whistle past the graveyard as if there’s no problem. Their entire focus is manufacturing a notional surplus on the eve of an election to fund a tax scheme that will do nothing for jobs and growth and is only designed to buy votes fro the Conservatives. That’s economically ludicrous and fiscally irresponsible,” Mr. Brison said.
At the same time, both Mr. Beardsley and Mr. cameron said that Mr. Haper and Mr. Oliver are handling the issue skillfully but they will have to be careful in their messaging as even a miscontrued comment could cause a negative swing in the stock markets.
Original Article
Source: hilltimes.com/
Author: ABBAS RANA
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