Sunday, August 29, 2010

Beware The "Spring" Strategy

A pretty good read on the Liberals summer, and where they go from here by Joan Bryden. This particular passage was interesting:
Ideally, Liberal strategists would prefer to wait until spring, giving the Harper government more time to accumulate baggage, wrestle with a weakening economy and produce a promised restraint budget packed with painful spending cuts.

One word comes to mind here- NIMBLE. I would argue that the Liberals abandon these long term plans, or more correctly, adapt to events and be pragmatic. The above premise probably sounded wise at one point, but it's now full of risk and uncertainty.

Conventional wisdom holds that the next budget is where the government must make the tough choices, unpopular choices. The last budget, mostly a free pass, the 2011 budget will be where the deep cuts come and with that dissent and dissatisfaction. I believed this theory, but I have serious doubts now as events change.

Most economic forecasts for this year NOW project better growth than Flaherty budgeted for in the spring. As well, we just had the first quarter deficit numbers released, figures which every Liberal should pay attention consider:
Ottawa's budgetary shortfall narrowed in the first quarter of the fiscal year, the federal deficit dropping to $7.2 billion from the $12.5 billion it reached a year earlier.

That puts the government on track to meet its prediction of a $49.2 billion deficit for 2010-11, though there's still plenty of reason to keep an wary eye on the global economy, the Finance department said Friday.

Flaherty is wise to be cautious, politically and philosophically. Three months does not a year make, but it does start to confirm what economists are projecting. Extrapolate the quarter out to the year, and you see a deficit of around 29 billion. Even if growth slows, there is still AMPLE room for Flaherty to come in well below what the government projected. Fast forward to the spring, are Liberals really that keen on a budget which allows a much rosier picture? There is also evidence that the government is already reigning in spending- can Flaherty argue that our position is so much improved, the huge cuts assumed aren't required?

I think the situation NOW allows for the possibility that the 2011 budget won't be the "meet your maker" budget everybody assumes. Instead, it could well be a relatively positive presentation, that puts the government in a favourable light, able managers. Canadians are expecting huge deficits. While Flaherty would be foolish to predict anything, I'm sure the government is pleased and sees upside. Something like "because of our sound management and prudent policy, I am pleased to tell Canadians that our fiscal house is much improved since the 2010 budget..."

The key thing for the Liberals is not to get tunnel vision with this spring strategy, but keep a fluid perspective. As the picture unfolds, nobody should be surprised if, in fact, the spring budget is the preferred election scenario for the Conservatives, not the Liberals.


CathiefromCanada said...

And they absolutely must not forget that the election has to be about something important -- not just that the Liberals think the timing is good. Canadians will punish that kind of ego.

Steve V said...

Canadians will punish that kind of ego.

They didn't punish Harper, when he had no reason and broke his own law? I understand the point, but we are in the 2 year window now, don't see much of a "your time is up" redux, as long as the Libs play it cool. There are many issues this fall that could be reasonable triggers.

Gayle said...

I doubt the NDP will be willing to go for an election right now. The whole gun registry thing will be fresh in everyone's minds, and they are the ones with the most to lose there.

CK said...

CAthieFromCanada: I have a feeling Steve is going to launch some of his infamous poison pills this Fall to test the Liberals' new found confidence post-liberal bus tour.

I think Iggy is still gun shy from the reaction last year though, hence why I don't believe he will do the same thing he did last year.

All that said, Fall election problematic for Liberals; I have a friend who is running for nomination in Jeanne Le Ber, that vote is not scheduled until sometime in October. He informs me that to his knowledge, the Liberals have approx 20 seats open for nominations; I imagine those are slated to be filled around the same time Jeanne Le Ber's will be. Question is, can they move up 20 or so nominations? I certainly hope so.

I'm with Steve on this one, while I disagree with him and no matter how rosy an economic picture King Steve and Flaherty paint, their next budget will be an austere one chock full of draconian measures. They've been setting the stage for it; Stevie spiteful does have a propensity to bounce back no matter how hideous he becomes. The time is now for the Liberals, or else we're stuck with the Harpercon regime for the unforeseeable future

CK said...

Gayle, you just provided another good reason why the Liberals' timing is now.

CathiefromCanada said...

CK, you could be right.
Actually, Steve, I think Canadians DID "punish" Harper for calling the last election by not giving him the majority he craved and thought he was going to get, particularly against a Liberal leader that way too many people didn't know or didn't like.
I would love to see Ignatieff go for an election this fall, but not if the media can portray it as a stunt, a "grab for power". But if Harper does indeed overreach -- and I can just see him doing something like trying to fire Fraser or gut the Information Act, for example -- then I hope Iggy will seize the day.

RuralSandi said...

Well, I think the Liberals should stay mum on this. When they let it be known their plan - Layton takes advantage and cowers when necessary.

Keep it a surprise if possible. Layton has the bravado when the onus isn't on him and when the tables are turned Layton suddenly wants to make parliament work.

RuralSandi said...

Pollster Nik Nanos said the upcoming vote on the registry definitely puts Mr. Layton in a tough spot, and if it goes as planned it could bolster Mr. Ignatieff's claim to be the only credible alternative to Prime Minister Stephen Harper (Calgary Southwest, Alta.).

"It's going to be difficult from the point of view that Jack Layton for the last number of years has been able to talk much tougher against the Conservative government knowing that the Liberals would be buckling. This is the first time where he will have to bend a bit," Mr. Nanos said. "Michael Ignatieff could come out ahead on this."

Mr. Nanos said for individual New Democrat MPs the political impact of the vote will come down to the urban-rural divide. In the 2008 federal election the Liberals lost a suite of rural Northern Ontario seats to the NDP, and Mr. Nanos said while those MPs could benefit from voting to scrap the registry, their colleagues in urban ridings might not fare so well.

"For the NDP it's just going to make it difficult for them come election time when the Liberal candidate says your party allowed the Conservatives to scrap the gun registry. It's going to be difficult for the NDP in high density urban areas such as Toronto and Vancouver. That's what the NDP basically have to manage at this point in time, what are the repercussions for urban candidates?"

Tof KW said...

Sandi, it's not just the NDP candidates; urban CPofC MP's will also feel the heat. Steve Woodworth (Kitchener Centre) and Peter Braid (Kitchener-Waterloo) each won their respective seats by slender margins in 2008.

This issue will hurt the NDP candidates just enough that the Libs should re-take both these ridings the next time around.

All it would take is a few disillusioned dippers to switch their ballot choice (Baird won by just 50 votes, Woodworth by just over 300), let alone the soft Con vote being swaying by this.

If the Reformatories were not whipping this vote (make no mistake, they are) I'm fairly certain Braid and Woodworth would both be voting to keep the long gun registry. The Kitchener Record published an editorial on the merits of keeping the registry just the other week. This is a serious issue in this city.