Corcoran,

Only when you compare us to Europe

Canadians have much to be proud of and thankful for, including an economy and national fiscal structure that have so far withstood the ravages of a global financial crisis that still rips through parts of the world economy.

The strength of Canada’s position became doubly obvious this week, and not just because Canadians are free of the shock of lining up at bank machines pounding the screens for cash. On Wednesday, the U.K. budget painted a grim picture of a badly limping economy and a nation in fiscal crisis.

In his budget speech, Chancellor of the Exchequer George Osborne outlined growing U.K. debt burdens and a government scrambling to control deficits and spending. “I’m going to level with people about the difficult economic circumstances we still face and the hard decisions required to deal with them,” he said.

By comparison — and Britain is far from being the worst of a rotting group of fiscal apples — Canada looks as Finance Minister Jim Flaherty described. Over the years since the world financial crisis struck in 2008, Canada has emerged relatively unscathed. “These seven years have belonged to Canada,” he said.

Indeed they have, by comparison. The question is whether these seven years belong to the Harper government and Mr. Flaherty as platforms for claims to great policy achievement. “Where others have faltered,” he said, “we have maintained a consistent, steady hand.”

The budget Mr. Flaherty delivered Thursday, however, bears almost no relationship with Canada’s economic performance. For all we know, history will record that Canada rode through a global financial tsunami despite the Conservatives’ seriously unconservative budgets.

The fiscal record is certainly consistent, but nothing to boast about in itself. Over seven years of negligible growth and over the next few years, the Conservatives will have racked up $170-billion in deficits. Mr. Flaherty forecasts that the deficit spending will come to an end sometime in 2015. By that time, however, the Harper Conservatives will have boosted federal spending to new highs.

Calculations by the Fraser Institute show that if Mr. Flaherty had held spending to growth rates that match inflation and the increase in population — as one might expect from a conservative government — federal spending would be $10-billion lower than it is today.

The Conservatives, in other words, have used the financial crisis to entrench a new level of spending — $278-billion by 2017 — that will be almost 50% higher than when they took office. The federal debt will be 40% higher than it was in 2007.

That assumes, of course, that the economy co-operates and revenues keep pace with spending in coming years. The government also announced that its forecast spending levels will be achieved after major spending reductions that have not been explained or defined.

Mr. Flaherty’s new budget does not inspire confidence. Through some 400 pages of programs and spending measures, Mr. Flaherty’s “Economic Action Plan 2013: Jobs, Growth and Long-Term Prosperity,” reads like one of Jean Chrétien’s old pre-election Liberal Red Books, only bigger.

On and on it goes, from extended tax subsidies to some corporate sectors and trinkets to the arts such as expansion of the Endowment Incentives Matching Program. The manufacturing sector gets an extension of its “temporary” rapid capital cost allowance. That measure, in place since 2006 and worth $1.4-billion over the next four years, pretty much entrenches the temporary program as a permanently temporary sop to the manufacturing sector.

Like all budgets, this one is a mixed bag. It’s not all giveaways, pork and spending — as if the government were at the heart of the economy as a job-creating machine. Jack Mintz, chair of the School of Public Policy at the University of Calgary, cheered news that the massively ineffective boondoggles known as labour sponsored venture funds will lose their tax incentives. On the other hand, scores of tax credits and expenditures continue to exist.

What the Harper government has attempted with this budget, as with other parts of its “Economic Action Plan,” is to set the stage for two years’ worth of press releases and billboards announcing programs and developments, thus giving the impression that the state creates the economy.

The Canada Job Grant will be a $500-million gold mine of individual political announcements — small potatoes, though, compared with the “new” Building Canada Plan. Mr. Flaherty claims it will generate $47-billion in infrastructure spending over 10 years. The money will be matched by local and provincial governments to fund bridges, roads, subways and projects in every riding in the country.

The fact that many local and provincial governments have no money to spend may slow the flow of cash out of Ottawa. That, in turn, may help the government meet its deficit targets.

It may need such help. The economic forecasts on which the budget is based are — as usual — filled with risk, including slow growth in the United States, fiscal craziness in Europe, tumbling resource prices and doubts over the future of Canada’s energy exports.

But Mr. Flaherty can relax to the extent that, thanks to good fortune and previous efforts to control spending in the 1990s, the last seven years have been good to Canada. Let’s hope that good fortune continues.