Sunday, March 07, 2010

Mr. Flaherty's financial formula

With a two month break to recalibrate (and maybe take in an Olympic event or two) now complete, the Conservatives finally got back to the business of governing the nation in this first week of March.

First with an interesting blue print delivered in the Speech from the throne, a lenghty bit of political theatre which already is getting a rewrite (so, okay, we won't rework the national anthem after all) and then, on Thursday, the real blue print for Stephen Harper's government, the Federal budget as presented by finance Minister Jim Flaherty.

With warnings that the days of spending are soon to come to a close, the Finance Minister, advised that the Conservatives were soon to begin the process of slowly closing the taps of stimulus, which will see only one more year of buffering for the economy before the Conservatives leave it to stand on its own.

Gone is the renovation bonanza for building supply stores, who found that 2009 was a banner year for the home improvement scene spurred on by the government's stimulus package of last year. Crown corporations may soon be sold off and a variety of other initiatives from the environment to alternative energy and foreign aid may be up for a review as well.

With the economy holding its own compared to many other locations in the world, the Conservatives seem rather confident to get back to their original talking points on the economy, that of less government intervention and a dedication to deficit reduction.

Finance Minister Flaherty is hopeful that Canada's lucky streak in all things financial continue on over the next few years, setting a target of 2014 to eliminate the federal deficit, based on the belief that Canada's economic performance is going to improve over the next four years.

To do its part the Conservatives believe that reigning in spending and selling off some Crown corporations will provide the foundation for that debt relief by their 2014-15 deadline.

They also plan on having government "live within its means", by putting a freeze on public servant salaries, administration and overhead costs, they belive that these moves will save them with 6.8 billion over the next five years.

That seems to be the theme that the Conservatives have decided on after one year of stimulus to battle a global recession, the general slowing down of the flow of money this year, with an election strategy to tackle the required deficit from the near two years of financial turmoil that will have ended by the time the next budget comes around.

For the short term, the prospect of that blue print having some shelf life seems solid, the Liberals didn't seem in any rush to send the nation to the polls over the budget and while the NDP and the Bloc stake out the ground against the Flaherty document, the Liberals for now have no desire to force an election over it.

And that's not really a surprise, beyond their own internal problems and the fact that Michael Ignatieff still has not registered high on the radar of Canadians, the simple fact is that with his budget, the Finance Minister has taken on much of the Liberal agenda from the days of Paul Martin as Finance Minister. A dedication towards the goal of a reduction of debt and providing the Conservatives don't get too far off that path, it may prove hard for the Liberals to find some room to move on the issues of Finances.

Time may actually work in their favour, should the  economy not perform as Flaherty anticipates and the need for further and more draconian cuts arise, the Liberals then may be able to offer up a different path, but one that still addresses debt reduction.

As things stand for them at the moment, that's about the best scenario they can work with, while hoping that the Conservatives find more new and exciting ways to give Canadians cause to pause over any potential majority vote total.

Though that is not the advice that one pollster would give to the Liberals, Frank Graves of Ekos polling suggests that the Liberals should force an election this spring, before the Conservatives could benefit from any improving economic trends, though he seems to believe that it's more a case of Mr. Ignatieff not getting any better in the short term more than anything else.

The two month prorogation just passed, did seem to give Canadians time to question the Conservative plan, should the Prime Minister make the same mistakes further on in the year, the Liberals may yet take advantage of an opportunity to bring down the government, providing of course they have something better to offer the Canadian public, which at the moment is still a work in progress it would seem.

National Post-- You call that an austerity budget?
National Post-- Sunny Jim, Deficit Slayer
National Post-- A final spending binge before the hangover hits
National Post-- Relief for those burned by plummeting stock options
National Post-- Frills: Many feelgood measures among the belt tightening
National Post-- Environment: Wind energy loses out
National Post-- Public service: Conservatives set sights on costs
National Post-- Taxes: Relief for those burned by plummeting stock options
National Post-- Defence: Growth in defence spending to slow; foreign aid to be capped
Globe and Mail-- Austere budget spares the middle class
Globe and Mail-- Hope keeps Flaherty's balanced budget afloat
Globe and Mail-- Cautious steps amid fragile recovery
Globe and Mail-- PM gambles that voters care about the deficit, little else
Globe and Mail-- Flaherty's 'tough' budget may still be a year away
Globe and Mail-- No new taxes, but no goodies either
Globe and Mail-- Ottawa extends work-sharing agreement
Globe and Mail-- A budget for election season
Globe and Mail-- Deficit tamer? Six sleights of hand
Globe and Mail-- Spending now, restraint later – after the next election
Toronto Star-- Jim Flaherty calls for 'modest' growth
CBC News-- Crown asset sales coming this year: Flaherty
CBC News-- Steady budget offers few surprises
CBC News-- Staying the course: highlights of a no-surprise budget

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