Tag: deficit

Liberals: election now, before the economy gets better

In politics, one is usually driven to action to prevent a problem from developing, or to act to make something better when it is going in the wrong direction.

On the website of Michael Ignatieff’s war room chief Warren Kinsella, we learn why the Liberals are itching for an election now:

[In] politics, as in war, you attack when your opponent is weak, not strong. … Right now – due to the recession, due to a stumblebum Tory team, due to their leader who nobody likes – we know the other side is really, really weak. In a few months – due to a economy rebounding, mainly – they could be strong. Go with what you know is the reality, not what you hope may be the reality.

Of course, this logic is sound; if your enemy is weak, attack your enemy. This is strategy 101 and Iggy’s guy is among the best in the professional political class. However, it is difficult for Michael Ignatieff to say that he wants parliament to work when Liberal strategy reveals itself as ambition at the expense of jobs and the economy. If the economy is on track to rebound, why endanger this by throwing the helmsman overboard with an election? Prime Minister Stephen Harper released his second report on the Economic Action Plan to see Canada through this difficult economic period. Conservatives have revealed that 80% of planned stimulus is already out of the gate and those shovels are in the ground. It was also revealed that increased EI payments accounted for a large chunk of the deficit.

It will be difficult for the Liberals to go to an election on the economy for the following reasons.

  1. their chief election strategist explains that the economy will get better under the Conservatives and that the reason why Canadians should go to an election is because the Liberals don’t want the Tories to get the credit.
  2. they’ve complained that the stimulus money isn’t flowing when in fact it is.
  3. they’ve complained about the size of deficit when their only major plan for the economy is to increase EI eligibility (ballooning the deficit)
  4. Michael Ignatieff has written 17 books but at most a few scant paragraphs on economic theory while Stephen Harper has a graduate degree in economics.
  5. Ignatieff’s friends in the White House are racking up substantially larger deficits per capita and are doing nothing to stop an allied congress from destroying the Canadian economy with its “Buy American” protectionism.
  6. The Liberals have not produced any substantial pushback outside of Parliament save a boring two minute Youtube lecture on the politics of nice from Dr. Ignatieff. And on the economy? Grit girl Youtube ads? Torytube it ain’t, Warren.
  7. The Liberals don’t have a strong record themselves of balancing their own books. In substantial debt themselves under Dion and still posting underwhelming fundraising numbers under Ignatieff, how can the Liberals manage our pocketbooks when they cannot manage theirs?
  8. Conservative scandals highlighted by the opposition have not been on the economy. Raitt-gate will not turn the average voter. The scandal regarding Raitt’s unfortunate private remarks about cancer may indeed represent a “sexy” opportunity for career advancement for Dr. Ignatieff, however, he’ll find that the average Canadian voter doesn’t find this inside the Queensway stuff all too sexy or even relevant to them. Isotope supply is relevant, but a tape recording is not.
  9. If Michael Ignatieff wants to run an election on EI, he should wait a few years in order to pay as much into the system as the average Canadian voter. Forgive the talking point, but the man was outside of Canada for 34 years.
  10. During an election, Liberals will without fail propose social spending to fix the economy. This puts them on the ugly side of the wedge that is the $50 billion deficit.

July election on EI? Possible but quite improbable

Is there election fever in Ottawa? This seems to be the question on Parliament Hill whenever we move through the months of May and June in a minority parliament. Of course, the most fevered example was during the late months of spring in 2005 when Stephen Harper’s newly minted Conservative Party tried an assortment of creative parliamentary procedures to take down the Paul Martin government only to be upset by former Conservative leadership candidate Belinda Stronach when she crossed the floor to sit in cabinet.

But in June of 2009, months after an attempt by opposition parties to form a coalition government without vetting of the idea before the Canadian electorate and just months and a few weeks after that electorate returned Stephen Harper to power to deal with the global economic crisis, will we have yet another election?

From the MPs that I’ve spoken to, many believe that it is a real possibility with Michael Ignatieff tabling a confidence motion on Employment Insurance which will paint the NDP into a corner forcing them to support a vote of non-confidence in the government. For Jack Layton, leader of that fourth party in the House, his votes are critical to this government’s survival. Though Mr. Layton’s party is not poised to make any serious gains in an election held in the short-term any failure to deliver – in the context of an embarrassing collapse of the coalition game – will have the party grassroots looking to replace its leader. The next election will be Mr. Layton’s last if he does not perform. Mr. Layton needs more time to explain why he’s still fighting and build a real election plan. NDP executive director Brad Lavigne was in Washington last week meeting with senior Democrats to get a fix on both strategy and tactics. As for NDP confidence, they could easily save face if a number of their MPs had the flu on the day of Ignatieff’s confidence motion.

As for the leader of the Liberal Party, Mr. Ignatieff has an important objective; the man who ran second place to Stephane Dion in a leadership race doesn’t want to go into the summer looking like his leadership predecessor. You’ll recall that when Mr. Dion was leader of the party, his MPs were shamed and embarrassed as Stephen Harper rammed his legislation through while the Liberals feably sat on their hands. While Mr. Ignatieff doesn’t face a caucus revolt over inaction, he does want to appear as though he’s given the Conservatives a rough ride and his party will claim it as a victory as they go into the summer with their heads held relatively high. Strategically, going to an election in July wouldn’t be ideal for Mr. Ignatieff as a $5-6 million Conservative pre-writ ad buy defining the Liberal leader would be much more effective if the Conservative messaging is fresh in the minds of Canadians. On the other hand, despite a $50 Billion projected deficit posted by the Conservatives recently, the Canadian economy is starting to show signs of recovery. If Michael Ignatieff wants to defeat Stephen Harper in an election which which will certainly be defined upon the Conservatives’ traditionally perceived strength (taxes/economy), his advisers are likely telling him that this may be his best chance. Yet Michael Ignatieff’s only visible policy proposal on this has been EI reform.

As for the Prime Minister, he will only precipitate an election if he believes that he can orchestrate a majority win. Many observers now agree that the dissolution of parliament previous to the last election was a defensive measure by the Prime Minister as he read the global economic indicators and found himself staring into an abyss about to rattle Canadians. If we are to have an election, it will be because the Prime Minister would have allowed it; either allowed himself to fall on a Liberal confidence motion, confident on the framing on an election on EI, or because he will orchestrate a political crisis which will upend the polls. For example, polling is moot if the Prime Minister were to frame an election on cutting public subsidy for political parties with the $50 billion deficit to back him up as to why. “If an election were to be held today” is a pointless question when elections are framed, campaigns are waged and events occur to shape electoral intent during a 36 day writ campaign.

An election based upon EI is a ruse. It’s a ruse because it splits voters into two politically inequitable camps: the employed and the unemployed – the latter won’t deliver a win for Ignatieff. It’s a ruse because most Canadian voters have paid more into EI than Michael Ignatieff as the Liberal leader filed his tax returns to British exchequers and American secretaries of the treasury for thirty four years. It’s a ruse, because the man who came second to Stephane Dion is only trying to appear that he has already bested him now after just a couple months as Liberal leader. An Liberal triggered election on EI is a ruse because the Conservatives occupy an entire side of the debate, the other parties will be fighting each other to stake out their position on the issue. Finally, the Liberals need to rebuild their party. They are still only raising money at par with the NDP and of their nominations, I’ve heard that they still have about 200 spots to fill.

An election in July? A dreadful prospect for any opposition party and not ideal for the PM unless the man best positioned to set the stage can line up a major win.

Liveblogging Flaherty’s economic statement

4:09pm: Persuant to a standing order I do not recall, the Minister of Finance tables his economic statement.

4:10pm: Time of unprecedented economic deterioration. Uh oh, this sounds bad.

4:11pm: IMF projects global growth weakest since ’93. Good thing the IMF puts Canada in the best fiscal position of the G7.

4:13pm: CTV reports that the Liberals will not support the economic statement. This statement is a matter of confidence and if defeated would precipitate an election.

4:14pm: Reformation of global finance will be done with global partners.

4:15pm: Trade will be expanded.

4:15pm: Opposition mocks Flaherty for saying the government planned for the downturn last year.

4:15pm: Taxes have been reduced by $200B. Investments have been made in infrastructure, S&T and training.

4:16pm: Funding for infrastructure projects. Taxes down by equivalent of 2% GDP. Sustainable and permanent tax relief.

4:19pm: Canada will come out of the crisis in a strong position because it went in a strong position.

4:21pm: Will not engineer a surplus just to say we have one.

4:21pm: Budget is balanced for now, but future injection of government stimulus may move Canada into deficit.

4:22pm: Days of chronic structural deficits are behind us.

4:23pm: Tax dollars for political parties and tax credits for donations brought up. Flaherty talking about the $1.75 per vote subsidy. Political parties should pay their own bills without excessive tax dollars.

4:25pm: $1.75 subsidy gone as of April 2009.

4:26pm: Spending growth will follow sustainable track.

4:27pm: Spending review will also look into crown corporations. Government will save $15B over the next five years because of expenditure management system.

4:28pm: re: public sector… New legislation will put in place “annual wage increases for the federal public administration, including senior members of the public service, as well as Members of Parliament, Cabinet Ministers, and Senators, of 2.3 per cent in 2007–08 and 1.5 per cent for the following three years, for groups in the process of bargaining for new agreements.”For groups with collective agreements already covering 2008–09, the 1.5 per cent would apply for the remainder of the three-year period starting at the anniversary date of the collective agreement. In addition, the legislation would suspend the right to strike on wages through 2010–11.” Some honourable socialist members: “oh, oh”.

4:32pm: Largest increase in infrastructure spending. $6B in spending. Aim is to provide new jobs.

4:33pm: Flaherty wants more power to help sustain the banking industry. These powers would include:
– Funding in the unlikely event that there is a draw on the Canadian Lenders Assurance Facility.
– The Canada Deposit Insurance Corporation (CDIC) to establish a bridge bank as a further resolution tool to help preserve banking functions.
– An increase in the borrowing limit of CDIC to $15 billion to reflect the growth of insured deposits since the last increase in 1992.
– The Minister of Finance to provide the CDIC Board of Directors broader scope of action when systemic risk concerns may result from the potential failure of a member institution.
– The power to direct CDIC to undertake resolution measures when necessary to prevent adverse effects on financial stability.
– The provision to CDIC of greater flexibility in the timing of preparatory examinations.
– The Government to inject capital into federal financial institutions to support financial stability, with appropriate provisions to protect taxpayers.

4:37pm: taking action to allow RRIF holders to keep more money in their RRIFs.

4:40pm: increase available credit to the exporting sector. $350 million injection of credit for these businesses.

4:41pm: Inject an additional $350 million of capital to the BDC to help SMEs.

4:44pm: “The greatest histories are written in the toughest times”

4:45pm: Scott Brison to respond for the opposition. Demands a “real action plan”. Brison accuses Conservatives of symbolism over substance. Conservatives have provided gimmicks instead of a game plan. “Nothing for manufacturing, autos”.

4:46pm: Brison: PM wants to change the channel from economy to politics. Canadians are hurting. They want talk on economics rather than politics.

4:48pm: Brison bringing out the personal anecdotes describing real Canadians and real concerns. Liberal are making this statement out to be about that $1.75 vote subsidy cut.

4:50pm: Brison accusing the Conservatives of huge spending and huge cuts at the same time.

4:51pm: Brison: government is selling the house to pay for the groceries.

4:51pm: Brison calls Flaherty “Deficit Daddy”.

4:52pm: NDP will not support economic statement.

4:53pm: CTV reports that the government is digging in their heels on the $1.75 subsidy.

4:55pm: Brison brings up Obama and speaks about his economic team and accuses the Conservatives of schemes.

5:00pm: Brison calls for “a new deal”. Brison’s seat mate earlier called out “FDR”

5:01pm: Gilles Duceppe responds for the Bloc. Duceppe: hat was presented was not an economic statement but an ideological statement.

5:02pm: Duceppe: government blind to urgent need to stimulate the economy. Government is attacking democracy, women’s rights and worker’s rights. Government has attacked Quebec.

5:03pm: Duceppe: government has sparked a democratic crisis.

5:03pm: Duceppe: economic statement runs against Quebec’s interests.

5:04pm: Duceppe: Bloc will not cave in on its principles.

5:06pm: Duceppe: Bloc ready to support the reduction of the size of the state.

5:12pm: Bloc Quebecois will oppose the economic statement.

5:13pm: Layton responds for the NDP. He’s got his wounded face on.

5:14pm: Layton: government has failed to act on the economic crisis. Layton is speaking quietly and slowly to show concern and disappointment.

5:15pm: Here comes the anger. Now Layton is doing some finger pointing.

5:19pm: Layton applauds Duceppe and Brison for “standing up to ideology”.

5:21pm: Layton reiterates NDP’s position that they will vote against the economic statement.