Boom fuelled historic spree

THE GOODIES Mini-budget was only the beginning Tories say Liberals bribing taxpayers

OTTAWA— An unexpectedly vibrant economy and a windfall of tax revenues from the oil and gas boom have allowed the federal Liberals to uncork a preelection spending spree of historic proportions.

Forced by the opposition parties into a mid- winter rendezvous with voters, Prime Minister Paul Martin’s government has produced an array of costly new measures and programs meant to warm the hearts of just about everyone in society.

In his Nov. 14 mini- budget, Finance Minister Ralph Goodale tapped into the government’s larger-than-expected budget surpluses to dangle $39 billion worth of income tax cuts and new spending in front of Canadians. But that was only the beginning. In the two weeks since, the Martin government has wheeled out plans to devote many more billions of dollars to araft of social, economic and defence initiatives.

There is $700 million to reduce the backlog of immigrants, $ 1.5 billion for the forestry sector, $350 million for arts and culture, $755 million for farmers, $5 billion for new military aircraft, $ 1.4 billion for worker training in Ontario — plus other handouts.

According to some estimates, the total of the announcements just since Nov. 14 is in the range of $20 billion. But Goodale’s officials dismiss that accounting as misleading. They point out that many of the announcements were for the rollout of money in previous budgets. Even so, including the $5 billion agreement reached in Kelowna, B. C., at the First Ministers meeting on aboriginal issues last Friday, the government has proposed new spending of almost $ 11 billion in the past two weeks on top of the $39 billion in tax cuts and spending.

Goodale’s largesse is clearly designed to entice voters and remind them of how well the economy is performing under the current government. But the Conservatives are aghast at the spending spree and are hoping Canadians will agree with their charge that the government has jettisoned financial planning in a re-election bid.

“ In its dying days, the Liberal government has resorted to trying to bribe Canadians with their own tax dollars on an unprecedented scale,” says Tory MP John Reynolds.

“ Is it not true that the Liberals have thrown away any fiscal plan they may have had in their desperate effort to distract voters from their decade of corruption?” The Liberals strenuously reject that accusation. Under pressure from opposition MPs, Goodale has repeatedly noted that the government has managed to keep its books in balance for seven years after inheriting an annual budget deficit of $38 billion from the previous Tory government of Brian Mulroney. He has also stressed that, despite new spending on healthcare and other social programs, the government continues to pay down the $499 billion national debt. And the economy continues to perform well, with unemployment at a 30- year low, Goodale said.

Still, economists warn that the long- term commitments to additional federal spending could prove troublesome if the economy goes into decline. Aslump in business conditions could reduce the flow of revenue to Ottawa’s coffers. That could in turn force the federal government to renege on its promises or see the federal budget slide back into a deficit position.