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Saturday, September 23rd, 2023

How the budget will morph into an election platform


Globe and Mail Blog

After sifting through Finance Minister Jim Flaherty’s latest keep-the-opposition-from-voting-us-out budget, I’m sorely tempted to adopt the analytical approach of Carl Weinberg, the estimable chief economy watcher for High Frequency Economics in Valhalla, N.Y.

The budget does not merit analysis, because there’s going to be an election anyway, he told clients long before Mr. Flaherty tabled the document on Tuesday. “[W]e see no reason to invest a lot of time worrying about the economic impact of today’s budget. We doubt it will be implemented.”

But that’s precisely why this exceedingly modest and deliberately cautious budget is important.

Mr. Flaherty plainly crafted it with two potential outcomes in mind: Either it would offer just enough to keep the New Democrats onside and prolong the life of the minority government or it would provide the key fiscal plank for the Conservatives’ next election campaign. Given the instant and entirely predictable thumbs down from NDP and the other opposition parties, it’s a safe bet that we’re looking not at the next budget but the economic underpinnings of the Conservatives’ election platform.

And with that in mind, it proffers just enough pork to give candidates in key ridings across Canada something to sell while still displaying Conservative resolve to eliminate stimulus spending, bring down the deficit and keep a tighter rein on program expenditures.

The budget includes $7.6-billion in new spending and tax incentives, while addressing some long-time NDP – and public – concerns at relatively low cost. These include forgiving student loans to get more doctors and nurses to work in rural and remote parts of the country; an income supplement boost for seniors of limited means; the closing of a couple of oil-sands tax loopholes; tax breaks for family caregivers; and a one-year resurrection of a popular program that encourages home renovations to boost energy efficiency.

This is a budget meant to showcase the Conservatives’ steady hand on the economic and fiscal tiller, something that cannot be said for most other industrial countries these days. And it seeks to do just enough in other areas like education and help for the elderly to blunt opposition attacks on Conservative social policies. It’s a no-surprises document. The question now is whether it helps produce a no-surprises election result.

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