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The Breakdown

by Archives January 27, 2009

Finance Minister Jim Flaherty presented his government’s 2009 budget on Tuesday. After the barrage of pre-budget announcements, there was little new to look forward to on budget day.

The budget, which has been described by pundits as the end of small-c conservatism in Canada, contained everything from massive spending measures to permanent broad-based tax cuts. The measures will be financed by significant deficits scheduled to run at least five years before the government is able to balance its books.

The move represents a complete policy u-turn for the Conservatives. After turning their backs on everything they once stood for, all that now differentiates them from the Liberal Party is their social agenda. It will now be hard for them to deny they would do anything, and this means absolutely anything, to hold onto power.

This is not a criticism of their decision to listen to the opposition and seek advice, a considerate measured approach would have been a breath of fresh air. Flaherty proudly described this budget as a reaction to the heartfelt concerns of Canadians facing tough economic times. People always want the government to spend money on them and cut their taxes, just because there’s a recession doesn’t mean the government should grant all of their wishes – but they have. The Conservatives have abandoned their principles and should be looking at themselves in the mirror asking what happened.

The budget is not a response to the economic crisis, but rather the political crisis. It gives the opposition very little room to manoeuvre. Spending and stimulus are spread butter thin across the country.

What is lacking in this budget is the lack of any sort of vision. The government had a chance to use all of its resources (and more) to chart a course through this mess, instead they’ve used the money to please as many people as possible.

Many of the budget’s initiatives are not automatic, but must be activated by spending on the part of consumers, provinces and municipalities. Such programs are slated to last from one to two years, in the hopes of getting people to spend quickly. In this regard, few of the numbers contained in the budget are realistic projections – depending on how easy it is to unlock the stimulus money, the deficit could be much smaller than projected, we’ll just have to wait and see.

Liberal leader Michael Ignatieff has announced that his party will support the budget pending one crucial amendment. They are looking to include in the budget a mechanism that will make it possible to track the stimulus money, effectively putting the government on probation. With this comes the death of the coalition, a fact that the other opposition leaders have already acknowledged.

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