Age may gauge budget deficit comfort
OTTAWA— Through a combination of tragic happenstance, judicious use of a holiday weekend and a sporadic parliamentary schedule, Bill Morneau’s $29.4-billion gamble on economic growth is facing less immediate debate than any federal budget in recent memory.
But Thursday, the battle was engaged, even if it ran smack into an Easter weekend, then a two-week break, after debate was already shortened by the sudden death of Conservative MP Jim Hillyer.
A Commons intervention by Conservative Jason Kenney and his national petition to save us from structural deficits (complete with donation button) look suspiciously like an unofficial leadership kickoff for a potential front-runner energized by his budget opposition.
The question for Kenney is whether Canadians, including a good chunk of the Conservative base, will rise up with indignation at the Liberal spending spree, or whether this is seen as an overdue break from the incremental, boutique tax credit days of the Stephen Harper government.
It isn’t just lack of Commons time that will make Kenney’s campaign tough.
It is the larger question of whether young Canadians — those who voted Liberal — are so used to rolling the dice on their own budgets, with hefty mortgages, heavy credit card debt and longer-term car loans as a route to their own financial growth that they merely shrug when their government does the same.
Perhaps those who rail against living beyond your means and de- mand fiscal accountability are part of the older demographic that is loyal to Conservatives. By echoing that base, Conservatives again risk shouting at the converted even as they are unheard by the demographic they must woo in order to grow.
In an interview with the Star in his Centre Block office Thursday, Morneau would not couch this divide in political terms.
“You should choose the right economic measures for the time that you’re in,’’ he said.
That might imply that, in the past, as the CEO of Morneau Shepell, he would have been a proponent of balanced budgets. He wouldn’t confirm that, but he is talking about balancing the books in five years if the economy grows as he expects, so, rather than structural deficits, we may simply be in a cycle that requires spending now.
A study released Thursday by Abacus Data could give Kenney and his Conservatives pause.
While it came as no surprise that only 12 per cent of Liberals and 21 per cent of New Democrats oppose this fiscal plan, Abacus found 41per cent of Conservative supporters “accepted or supported” the government’s fiscal plan.
However, when asked whether they would pass the budget if they had a vote, 70 per cent of Conservatives said no, and there is your ideological divide.
Overall, however, even though a substantial slice of this country did not like the move into deficit, about seven in 10 felt it was probably the right thing to do right now.
Another factor, not polled by Abacus, but stressed by Morneau, was that the Liberals did not surprise anyone.
Voters don’t like surprises and this budget was widely telegraphed.
Kenney has a sizable constituency and his words will carry more weight on this matter than anyone on the opposition bench and when he says Liberals have taken Canadians down a $119-billion deficit path “and counting” over the life of a mandate, Conservatives will listen.
Morneau is courting some risk, even though he has certainly built in enough cushion to balance within five years.
Surprise-averse Canadians should again not be surprised if those deficit numbers come in smaller than projected Tuesday.
But it could constrain further spending and, even if it is needed, Liberals will not hike the GST. There is $7 billion in revenue available with every point increase in the tax, every year, within easy reach.
Is there a fiscal reason that this government does not need this revenue? Or is it a political decision? Liberals did not campaign on hiking the GST and provincial leaders who have hiked taxes shortly after being elected — without advertising this during the campaign — have faced harsh judgment from voters.
“First and foremost we promised Canadians we would reduce their taxes,’’ Morneau said. “We really believe we have laid out a plan for growth which is prudent.
“Canadians hired us to do something new.’’
This may all seem new and radical right now, but if the Liberals are set to balance the budget as they ask for another mandate, this will hardly be classed as a revolution. It’s going to be tough to get opponents to the ramparts. Tim Harper is a national affairs writer. His column appears Monday, Wednesday and Friday. tharper@thestar.ca Twitter:@nutgraf1