Budget should spark less drama
Voters didn’t like 2012 tactics
Finance Minister Jim Flaherty is preparing to unveil a “stay-the-course” budget in March that will be far smaller and, the government hopes, less controversial than last year’s sprawling magnum opus, with a focus on innovation and training, but no major new spending or cuts, nor any change in the finance department’s current timetable for achieving a balanced budget.
The 2013 budget will, however, likely contain some modest, cost-neutral measures intended to bolster aboriginal economic development, according to government insiders — including enabling greater access to private property on reserves, for bands that welcome such reforms, as proposed by First Nations Tax Commission head Manny Jules.
This would ignite further opposition among some within the Idle No More movement, who deem private-property rights tantamount to assimilation. However, many Conservatives believe property reform on reserves is long overdue, as a matter of human rights as much as economics. Such reforms would be in keeping with the government’s emerging aboriginal strategy — that is, to engage on a case-by-case basis with those among the country’s 600-plus bands that express a clear desire to pursue economic growth.
Skills-training measures in the budget, flowing from the government’s stated concern about a looming labourmarket crisis, are expected to focus on four specific groups: aboriginals, older workers, new immigrants and the disabled. There will be modest new investment in innovation, knowledge, science and technology.
As work proceeds on this budget, Flaherty revealed this week that he has been battling a rare skin disorder. However, his office has said it hasn’t affected his ability to do his job.
On the overarching question of balancing the books, the government intends to tread carefully, insiders say: It will reiterate its desire to eliminate the federal deficit by 2015, while making it clear that factors beyond its control — in particular distressed economies in Europe and the United States — could derail that plan. Expectations are for modest economic growth this year of about two per cent, or slightly below that, down from 2.2 per cent or slightly higher.
Though there is no plan to impose major new spending cuts, officials are re-examining some proposed spending reductions that were considered but not implemented last year, with a view to finding additional incremental savings. There continues to be a vocal wing in the Conservative caucus pressing for faster and deeper reductions. Last year these hawks were overruled, with an initially expected $8 billion in cuts reduced to just over $5 billion on budget day.
From all this, the government’s strategy for reelection in 2015 begins to emerge. It is not, on the face of it, a bad strategy.
Last year at this time the prime minister was just off his trip to Davos, Switzerland, where he’d made headlines with pronouncements about dramatic changes in the offing, most notably the hike in the age of eligibility for OAS. Insiders set the stage for a “transformational” budget that would, above all else, streamline the relationship between government and the economy. The linchpin was to be a more efficient process for securing approvals for resource-development projects.
In Budget 2012, Flaherty delivered in some respects on the promise of change, but at heavy political cost: The Conservatives rammed great tracts of legislative reform that was not remotely budgetary into the first of two omnibus budget bills. In doing so, they effectively circumvented the democratic process, denying MPs the opportunity to debate the various pieces of legislation. They were soundly hammered for this by the opposition and in the media.
Come the fall, the second budget bill was broken up somewhat at the opposition’s request: This was an early signal that the government’s political radar system — exhaustive internal polls — had registered a measure of popular discontent over its tactics, and that it was resolving to play nice, or at least nicer, in hopes of shoring up its democratic credentials. But then along came the F-35 debacle, just before Christmas, and sent that effort to the ditch.
The 2013 budget plan indicates, among other things, an understanding that Canadians have had their fill of transformation for now, and that a time of quieter consolidation is in order. The Conservatives will continue to work the economy into every speech, because their data indicate that is what Canadians want to hear. But they will try to do so in a way intended not to raise so many hackles, with a view to the election campaign now two years and a bit away.
This is in keeping with the prime minister’s recent onset of the warm and fuzzies, as demonstrated by his “day in the life” turn on Twitter. Harper remains the government’s best communicator, by far: Expect him front and centre regularly this winter, culminating in a cabinet shuffle in a few months that will put some fresh faces on the front benches.
For the opposition New Democrats and Liberals, none of this is good news: It means the Conservatives, having done what they consider to be the heavy lifting, are settling back into the comfortable centre, where they have had their greatest electoral success.