Canada Throws Its Own Economic Hail Mary Pass

I like to think I found religion a very long time ago.Â I don’t talk about it much, and I’m not going to start now.Â However, as an analogy I like to use it for our Canadian politicians.Â Take for instance what’s going on as I write this.Â Stephen Harper has found the “deficit religion.”Â For a guy who cut his teeth in the reform minded, deficit cutting Reform party, this new federal budget he is about to release definitely says he’s “found religion.”Â That’s deficit religion Jed!Â No, it’s no time to move to Beverley.

I’ve been away for a couple of week so I’ve had to watch from afar.Â With the global economy contracting, and with our western leaders calling for a stimulus, you could see this coming from a world away.Â Stephen Harper who once openly mused about building a firewall around Alberta now will be running federal deficits, which would rival anything Brian Mulroney or Pierre Trudeau could ever imagine.

From my vantage point as of this writing I’m at a bit of a disadvantage.Â So let me list what I know from preliminary reports.Â The following summary is from the January 26th Globe and Mail.

The Tories are planning to run deficits totaling $64-billion over the next two fiscal years, including $34-billion in the first year and $30-billion in the second. Other spending announced in recent days:
$1.5-billion in funding to boost training for laid-off workers including even those who are ineligible for Employment Insurance
$500-million in targeted support for older workers
$1-billion in funding for renovating social housing
$600-million for on-reserve aboriginal housing
$400-million for seniors’ housing
$75-million for housing for people with disabilities
$1-billion community adjustment fund for single-industry and resource towns hardest hit by this economic crisis (forestry, mining and agriculture communities). This national fund would have flexible criteria for applicants in order to help their communities adjust to the changing economic climate
$160-million for new investments in arts and culture
$150-million in forestry industry aid, including more than $100-million to develop new uses for forest products and $50-million to help promote the industry abroad as environmentally responsible
$550-million for farmers, including half a billion to help adjust to tough times and $50-million to expand slaughterhouse capacity (Tories Regroup Ahead of Pivotal Budget Globe and Mail January 26th)

In many ways, this is such a paradox.Â Firstly this is such a turnaround from even six months ago to where we are now in terms of government spending.Â Secondly, I used to debate “economic stimulus” with regard to a quarter of a percentage rate cut!Â It’s like I’ve been lifted up and dropped on Jupiter.Â However, this is earth and now in Canada we’re looking at spending $64 billion more over the next two years than we bring in?Â Wow, what a stimulus.

The next question is will it work?Â Will it bring us back to a time just last year when the unemployment rate sat at 6.1% and Canada’s economic growth rate was forecast at 3% plus?Â That almost seems like a fairy tale now.Â Its almost like we’re in the fourth quarter of a football game 30 points down with 7 minutes left and we are throwing last ditch touchdown strikes to the end zone.Â Hopefully something will stick!

The kicker in all this is the politics.Â I can write about the proposed economic stimulus all I want but if the politics donâ€™t fall right, we’ve got another story to tell.Â You all remember the drama last December when the Bloc, NDP and then Liberal leader Stephane Dion almost pulled off the improbable by proposing a coalition only six weeks after the Conservatives were elected with a stronger minority.Â That whole scenario is playing out again, but this time with Iggy as Liberal leader.Â He says he’ll wait until Wednesday to decide the government’s fate.Â Don’t be surprised with the latest poll numbers if he pulls the plug.

Some of you might say Iggy is a lot smarter than that.Â I agree, however, remember events last December went awry very quickly for the Tories.Â Iggy is not going to let the Conservatives walk all over him like they did with Dion.Â It might not be this time, but I think he will pull the plug on Harper when he’s pushed.Â It might not solve anything in the short term, but the Liberals have found new life in Iggy.Â The politics of Ottawa have changed from what we’ve known over the last two years.

Some might argue the true villain of this economic malaise now resides on a Texas ranch.Â Dubya, where are ya, when we need ya?Â I’m sure President Obama must be still shaking his head after his economic briefings.Â However, it is all a long story now.Â The Canadian economic blueprint back starts this week.Â Let’s hope somebody has it right.

You make also like

Canadian Politicos: Waiting for Defeat Snatched from the Jaws of Victory

Buying Fresh Buying Local: What’s Up With The 3000 Km Caesar Salad?

In Search of the Liberal Party of Canada

Election 2008: Dumb Luck Wins Every Time