On Friday, I sent out an email to the tens of thousands on the Rally for Canada email list asking them to participate in a small survey concerning the upcoming federal budget. I asked people four questions concerning the government spending and their public policy priorities. Over three thousand people responded on Friday and over the weekend. I will be passing on the results to the office of the Minister of Finance as promised.
Q: On the question of Canada’s upcoming federal budget to get us through the economic crisis, which balance within the following options do you think is best for the government to implement? (n=3003)
Q: Which issues are most important to you from a government policy point of view? (n=3051)
Here is the same graph sorted in descending order (n=3051):
Q: What should be done with the Senate? (n=3007)
Q: What should be done with funding for the CBC? (n=2998)
Some notes: “n” is the number of respondents to each question. Data was gathered from 8am Friday through midnight Sunday night. Sample data is gathered from a population set that registered on the anti-coalition website RallyforCanada.ca between December 4th 2008 and January 9th 2009. Answers were not randomly cycled.
That said, this data gives us insight into the priorities of Canadians who are against the concept of a Bloc-supported NDP-Liberal coalition government. The first question was a careful balance on both sides of the spending vs. taxes debate. On one hand, the answer set does not include an option to decrease spending and on the other, four out of five answers prompt at least some tax relief. Most analysts believe that the federal budget will include some tax relief and stimulus in the form of government spending. The largest group believed a balance spending/tax relief approach would be best while the second largest group favours substantial tax relief and no new spending (given the options presented).
The second question had 24 options. Each option was a yes/no checkbox to pick public policy priorities. There was little surprise on the distribution of public policy interests as the generally right-of-centre respondents selected jobs, economy, crime, tax cuts, healthcare choice, and military spending as priorities while passing on foreign aid, culture and arts, and native affairs. Wheat board reform is generally a conservative priority yet this question is likely too regional for a national survey.
On the specific questions, it is of particular interest that 90% of respondents believe that the Senate in it’s current form must change. Only 10% of respondents thought that the Senate ought to be left as it is. On the question of spending for a particular budget item, respondents indicated that funding for the CBC should be decreased (61%) while only 6% thought it should be increased.
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.
Last night, supporters of the Fraser Institute gathered in the Adam hall of the Chateau Laurier to listen to federal finance minister Jim Flaherty deliver an assessment of the Canadian and global economies. On Thursday, the minister will be delivering a sobering fall economic update in the House of Commons and last night, we got a hint of what might be to come.
Flaherty was introduced by former Ontario PC Premier Mike Harris, the finance minister’s former boss and mentor. Harris disappointed the crowd saying that he was not about to return to politics but that a deep-rooted fixation on Canada’s future prosperity is one that both he and Preston Manning hold. Manning and Harris are the authors of Canada: Strong & Free, a six-volume set of books describing Canada’s ideal path along internationalism, economic freedom, federalism, and education among other topics. Last night’s dinner was held to mark the release of their sixth summary volume called Vision.
In minister Flaherty’s speech, he described Canada’s position in a rapid yet sustained decline of the global economy and while trumpeting Canada’s economic leadership among G7 nations, we are simply the country that is sinking the slowest. Indeed, at a recent meeting of the G20 finance ministers, Mr. Flaherty revealed that not one minister was optimistic about their economies domestic or international. Flaherty will project a surplus through the end of this fiscal year ending April 2009, however, as he conceded the next fiscal year will present “a challenge”. The minister sketched a fiscal portrait in broad strokes declaring that the crisis will not end tomorrow, next week or in the next few months and warned that we have not yet seen the worst of the situation.
Yet despite its faltering position, Canada is an economic leader among its economic peers. Flaherty described the economic measures implemented by the federal government to prepare for such an eventuality saying that they’d never apologize or regret cutting the taxes of Canadians or bringing in more stringent regulatory frameworks to maintain Canada’s economic structure. Indeed, the IMF, as Flaherty noted declared Canada to be the best economic shape going into the global economic downturn.
In the United States, President-elect Barack Obama has conceded that he will delay the rollback of the Bush tax-cuts and in Canada, Flaherty suggests that this Conservative government will maintain Canadian tax-cuts to retain this increased spending power among Canadian consumers.
Perhaps the worst-kept secret in Ottawa is that this government will project a deficit in the near future. Flaherty has declared that he will sing from the same songsheet as other national government and use the federal treasury to stimulate growth, or rather stem the “negative growth”. For this, infrastructure minister John Baird will become a hero of sorts in Ontario as federal dollars are channeled through on road, rail and other contruction projects sustaining jobs. Prime Minister Harper days earlier declared that some deficits provide opportunity and are necessary. Flaherty promised that the stimulus would be underway by March 2009. The pairing of the temporary and artificial sustenance of Canadian jobs via government spending with the consumer spending power of a less-tax-burdened population may help the good ship Canada weather the global economic storm until it subsides. Or at least the theory goes.
Deficit spending will be accomplished in order to sustain the “real” economy. Flaherty promised no ‘structural’ deficit.
For my part I asked the minister during the dinner about conservative opportunity describing this as a time when Conservatives in power could be allowed to make cuts to government spending and suggested that a reduction in the size of government rather than its growth would help balance the books in a real rather than artificial way. The finance minister unfortunately balked at the question suggesting that some areas of growth are necessary such as the rescue of the state of the armed forces. If given a follow-up, I would have suggested that some cuts are necessary too. Even in a recession, the government is a growth industry. The minister described a treasury board review of all programs to measure value for money and promised to extend this review through both core and non-core assets.
As for the public sector, wages will not increase faster than the private sector. This has caused some concern among public sector employees and the minister reached a deal with PSAC, it’s largest union late yesterday. The two parties have settled on a wage increase of 6.8% over the next four years.
On interprovincial trade barriers, the minister promised to break these down and suggested that the current economic climate behooves governments to allow uninhibited trade within Canada. The minister welcomed a cooperative spirit among provincial and territorial ministers on addresses the economic downturn domestically.
The minister declared that the government would not artificially engineer a surplus. Perhaps this is a reflection by the minister on Paul Martin’s method of balancing budgets by slashing transfers to the provinces and “fixing” healthcare for a generation. Ontario has warned Ottawa not to balance its books on the back of the province and what is needed is economic stimulus in the province through reduction of its corporate tax rate. For the part of the Conservative federal government, Flaherty described a $37B debt reduction, a reduction of the tax burden by $200B and a 2012 projected corporate tax rate of 15%.
On securities regulations, the minister promised the creation of a single national securities regulator. The federal government will seek to regulate leverage and large pools of capital. A more transparent market infrastructure is needed according to Mr. Flaherty.
The sum of Flaherty’s speech was to say that this government is acting to sustain economic activity for the foreseeable future as economies around the world reconfigure to recover. Taxes will remain low, spending is temporary and a deficit would be a temporary and an short aberration from Canada’s economic plan.
