Tuesday, October 09, 2007

Throne Speech

Greg Weston lays out the fiscal utopia the government currently enjoys. With the bottom line, it provides a powerful counter to the idea of the Liberal Party postponing an election. You can see the prospect of majority in these numbers:
Canadian taxpayers could be in for what one Conservative insider predicts will be "the biggest single tax cut in the country's history."

By rough calculation, that would leave enough leftover cash in the till to cut the personal income taxes of every Canadian by more than 10%, or an average of something like $700 a year.

Alternatively, the same amount would buy a 50% increase in old age pensions; a 75% hike in federal health spending; cutting the GST in half to 3%; or a hefty combination of all of the above.

Well, you get the point. By federal budget time, roughly six months from now, the Harper government will have enough money in its spare-change drawer to buy every swing voter in the country several times over.

The government will move before the next budget:
In past, governments teetering on the brink of a federal election have often turned the fall report card on the country's finances into an early mini-budget.

Conservative insiders tell us with some authority that's exactly what Finance Minister Jim Flaherty is considering, using his update in late October or early November to announce at least some tax goodies.

Last time, Harper attempted to buy votes with big spending and he failed. However, tax cuts, substantial ones, probably come with a different acceptance. If the Conservatives can argue they gave every person another $500 dollars in their pocket, that is pretty powerful to overcome.

I'm on the record for wanting the Liberals to reject the throne speech on principle, but the above scenario also makes the strategic point. Whatever weakness the Liberals have at present is offset by the looming realities, that make an immediate election just as attractive as a postponement. If the Liberals wait until one of Harper's many "confidence" votes, there is the advantage of timing, but there is also the prospect of Flaherty delivering something substantial, with more to come.

Strike immediately, and you don't give the Conservatives anything beyond promises. You also make the government stand on its last budget, which is a big spending, little tax relief approach. The Conservatives can promise, but so too can the Liberals, and the voter has the knowledge that the Conservatives under-estimated the surplus, and didn't find it necessary to compensate Canadians.

I don't see how the landscape improves in the next few months, and I can't stand the prospects of waiting until 2009. The hard reality, whatever problems the Liberal Party has will not be overcome quickly, so delay doesn't necessarily improve the situation, particularly when you add in the government's financial situation.

Weston concludes the reality is a win/win for Harper. His analysis omits one important caveat, the Liberals pull the plug, now, right now. Food for thought.


Susan said...

I'm with you - Dion has his policy ducks in a row already - Harper won't be able to steal his ideas once an election is called, and all the Liberal blah blah artists with time on their hands to natter with the media will have to get to work and help win an election. Quebecers will have to take a serious look at the options as will all Canadians on the issue of Quebec and federal decentralization and I'm willing to bet there will be some rethinking in that arena.

Dion also has the essence of the offensive ready, as he showed today quoting Flanagan's ideas as Harper's ultimate goals. I want the Liberals to go now and I want them to come out swinging. And while they're at it I want them to take on Layton with a frontal assault.

Anonymous said...

The potential Conservative plan and tax cuts sounds like very good news for Canadians and so far the country is in pretty good hands.

If nothing else Harper is a good manager, you have to admit, even though still on a learning curve of less than two years (is it 18 months only)?

So tell us again why and election would be GOOD for CANADA?

Or are you basically saying the Conservatives are providing such good government that the Liberals have to prevent even MORE good Conservative governance?

I don't get it - Harper is good for Canada so BAD for LIBERALS?good for

Anonymous said...

I agree - now is as good a time as any for an election.

burlivespipe said...

So Anonymous, by saying Harpor is a good manager that must mean the Liberals over the previous 8 budgets were great, right? Surpluses galore, but didn't rack up a record spending spree in the meantime. Even during the period after 9/11, Chretien, Martin and co. kept the ship on an even keel. Oh what? Yeh, they did keep us afloat by not getting involved in that Iraqi quagmire, too. Thanks for bringing that up.
And as to Harper's economic management? I guess you've not been touched by that Income Trust bait and switch, nor had your company bought out by foreign investors. Those are two direct hits that the gov't accelerated, if not downright triggered.
Bright guy that Harper. Or so that's what he's telling us...

Steve V said...

"If nothing else Harper is a good manager, you have to admit"

To further Burl's point, that would mean the Liberals were just fantastic, since Harper inherited a great fiscal situation. You can't blame the Liberals for everything, and then not acknowledge the positive legacy.

900ft Jesus said...

I agree - non-confidence vote, have an election. The past 20 months show us what the pattern will be - stalled committees, non-stop attack ads, CPC acting as though they are campaigning. An election gives the Libs a chance to really get their message out, and they tend to pull together in strength during elections.

The in-fighting doesn't worry me. Libs do this from time to time, more a way of re-examining how the party needs to change to adapt to changing environments, but they sort it out and pull together. I prefer that to a party run by a dictator who lets no one speak.

wilson said...

'' I guess you've not been touched by that Income Trust bait and switch''

It appears, with a McGuinty majority on it's way, that Ontarians are very forgiving of broken promises,
when they are conviced it was 'the right thing to do'.

Given that Income Trusts have rebounded to a point where investors are making an average of 10%, and it hit the much hated oil industry investments the hardest, IMO, this too shall pass.
Average and low income Canadians were not hurt by it.

Gayle said...

What I want to know is how are we going to pay for that little war in Afghanistan, the hundreds of billions of dollars it will take to implement the "tough on crime" plan AND get tax relief?

Meanwhile, environment ministries are complaining about funding cuts.

No one likes paying taxes, but I think most people recognize them as a necessary evil.

Part of me says let Harper buy the electorate and stick around to pick up the pieces when it all goes south.