Budget Bamboozler: Conservatives’ 2009 Puzzling Document

I wish I had the time to dig into the Conservatives’ 2009 Budget released today. Here’s the link, if you’re interested. But, between my family vacation earlier this month, my 3-year-old-son’s tonsilectomy/adenoidectomy last week, and my ongoing efforts to keep my business strong during these bizarre economic times, my blogging has screeched to a virtual halt.

From what I’ve read and heard in the media coverage so far today, this budget is a puzzler, from both an economic and a political perspective. Economically, the infrastructure-heavy spending plans are anything but a “stimulus” (I hate that word). Infrastructure spending is slow-moving, and highly inefficient thanks to local political graft and massive union-controlled labour inefficiency. If the Cons intend to actually proceed with the spending they’ve announced, then I think they’ve gone nuts. If they have made these announcements as a PR exercise, and end up spending a fraction of the funds (which is what I suspect is the case), then I think they’re acting wisely in the face of a media-generated Keynsian hysteria.

If, however, Flaherty & co. wanted a true “stimulus”, they could have cut the GST again; they could have chopped payroll taxes; they could have reduced energy taxes. Instead, the personal tax reductions are miniscule, and the home renovation tax credit is good “bang for the buck”, but will be a significant spending incentive to only a small sliver of the population. Perhaps government tax revenue projections, thanks to the decline in the investment markets, are so poor, that there’s simply no room to significantly drop taxes. Either way, at least there’s no tax increases.

Politically, it’s a little less difficult to understand. This is a survival budget – a document that the Liberals could not possibly defeat. It has backed the Liberals into a corner – with the coalition idiocy now no longer an option, and the Liberals under Iggy with no ideas of their own, this will maintain the status quo.

The questions for 2009 will be: what will the Harper Conservatives offer to small-c conservatives to excite them to keep their grass-roots support? And when will Harper finally put forward a coherent vision of what Canada is and should be, in order to rally the country to give him a majority? It’s a make-or-break year; he can’t float along forever on simple competence and continuity. And, for Iggy and the Liberals, the question is: what can they do, beyond their typical demagoguic bluster, to differentiate themselves from the Conservatives, now that Harper is, essentially, leading as a Liberal minus the corruption and tax increases.

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4 Comments

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4 responses to “Budget Bamboozler: Conservatives’ 2009 Puzzling Document

  1. Bloodred

    Today’s budget will do little to help low income Canadians. Harper’s government has made some attempt to placate the opposition, but his efforts will only help a shrinking fraction of the population. The spending strategy is described as Timely, Temporary, and Targeted. Indeed it is. It’s too little, too late, for too few. While 75 billion dollars are given to the financial sector, there are only scraps left for the poorest in our society.

    In line with the ongoing Harper agenda, the budget emphasizes tax cuts, instead of making real investments in housing, infrastructure and people. He crows about investing in social housing and unemployment insurance. The budget says that it will invest 2 billion into social housing. Sounds great. But the cost of repairs to Ontario’s housing are estimated at about $1.2 billion. And 60,000 people are on the waiting list for social housing in Toronto alone. Given that much of the infrastructural funding is dependent on cost-sharing with the cash-poor provinces and municipalities, the figures are misleading. Harper claims that he’s making things easier for laid off workers by adding 5 weeks to employment insurance. Given that 60% of Canadians aren’t eligible, this will do little for the majority of those suffering in the economic downturn.

    As factories close and businesses go bankrupt, more and more Canadians will need help. Unfortunately the tax cuts, benefits and incentives will do little for them when they’re evicted, unable to obtain employment insurance, or scraping by on welfare and food banks. A budget that would
    really address the needs of the increasing ranks of poor Canadians would raise the welfare rates, expand employment insurance in a serious way,
    build new and quality social housing invest in transit, education and health care. This budget doesn’t even try.

    An economic recession that leads to layoffs, evictions and poverty is not the time for bailing out the corporations and playing political games.
    It’s the time to organize in our communities to support one another, and to fight to ensure that the poorest, the most vulnerable, are not
    abandoned yet again.

  2. Mario

    Bloored said,
    …instead of making real investments in housing, infrastructure and people…

    Sorry to disabuse you of the concept but governments DO NOT invest. They only can spend the money they already took from people before they can actually invest it.
    For the same reason, governments DO NOT create nor protect real jobs.

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