I think it’s an open question, whether or not the Conservatives have erred with this tax cut barrage. Obviously, the measures announced yesterday are good news for Conservative fortunes in one sense, but the timing might undermine the benefit. It would appear the Liberals have no intention of voting down the government, which effectively eliminates the prospects of an election this year. Given the fact that Flaherty has eaten up most of the surplus in the fall update, you have to wonder what the government can offer in the spring budget. Has the government mis-interpreted the terrain, delivering the goodies at the wrong time?
Flaherty didn’t have to commit yesterday, he could have spoken in broad terms, offered a few things and left the rest for the budget. Instead, the government put all its cards on the table, without the immediate return at the polls. I’m not arguing that the government doesn’t benefit from the announcements, more a question of maximization. Fast forward to the spring, Flaherty has left little room for himself, which means if we do have a non-confidence, the tax cuts are part of the equation, but they might not be the centerpiece of a campaign.
The Conservatives might be too clever by half here, over-estimated their chances to goad the Liberals, too anxious to embarrass, without looking at the longer term. I don’t think the government took full advantage here, benefit yes, optimal benefit no.