Flaherty's follies: Having fun with finance

One of the ironies of money is that you’re damned if you have it and damned if you don’t. Still, I’d rather be in Finance Minister Jim Flaherty’s new shoes March 19 when he delivers the second Conservative budget of the new millennium. He’s swimming in cash and he may well be putting in place what the Tories believe is a “winning condition” for a spring election.

Even if recent polls showing a Tory surge are misleading, Stephen Harper might, after trying to brand M. Dion, strike while the iron is hot. (I know I’ll be watching my backside!) Having a dazzling budget in his holster will be a big help in the ensuing battle at the OK Corral.

The current practice of governments, thinking we’re kind of slow, is to announce spending in advance of a budget, and announce it again on budget day, hoping to get two news cycles out of the same taxpayers’ dollars. Principal here have been the monies announced recently in Quebec and Ontario for green-related transit and other green spending.

This may well become a pattern - and a crafty one it is - of transferring the money for the greening of Canada to the provinces, counting it both as infrastructure and green money, and leaving the provinces the questions of accountability.

There will be a new formula for equalization, coupled with new support for post-secondary education. With the green infrastructural money noted above, these will become the government’s redress of the ”fiscal imbalance”. These monies may also be claimed to be a major aid to the municipalities, seeking to kill four birds with one stone. And while there may be a bit more money offered municipalities, any extra cash will likely be on a one-time basis. The Conservatives see the municipalities as a provincial responsibility and they’re very keen on getting the feds out of spending in provincial jurisdiction.



Likely more for the military

There will likely be more money for the military, some realignment of the spending already promised, and foreign aid monies may further be shifted to the war in Afghanistan. There will likely be a plan for redirecting funds taken last year from feminist interests, legal rights agencies, culture, and other Liberal-NDP-BLOC priorities, and there may well be more for security, reminding us that “the opposition is soft on crime and terrorism,” an almost certain campaign slogan.

The Tories will not meet the expectations of First Nations Peoples, though some money will be forthcoming, much announced previously. There will be little for public day care and not nearly enough for meeting the challenge of poverty.

We don’t have much of an inkling of whether or not the budget will further lower the GST. Some personal tax savings will likely be promised as a reward for reducing the national debt, and this could be used to justify vigorously lowering the national debt. But more than this is expected by the electorate.

The Tories floated the idea of family tax splitting that would have significantly helped upper middle class families where only one spouse works outside of the home. This was seen by 77 per cent of the electorate in a recent poll to be appealing.

But it appears to have lost the support of the Prime Minister. Instead, we may find a reduction in the rate of income tax that the middle class and the very poor pay, and some tinkering with EI. Alternately, tax cuts could aim at particular groups of taxpayers that apparently Tories refer to as the “Canadian Tire vote”.

Regardless, there likely will be goodies for Corporate Canada, making the budget difficult for the three opposition parties to support, and likely some lowering of capital gains taxes.

In short, the budget will further the process of redirecting monies to support a conservative vision of what men and women need and deserve without presenting the Conservatives’ more radical right-wing agenda. They hope that those who complain about such ‘moderate’ measures will actually help confirm other voters’ desire for a change.

It’s unlikely that there will many cuts to program spending, as these may be saved for another year, made easier if the government achieves a majority and especially if the economy goes south. But a few may be included to help the opposition defeat the budget, leading to a spring election.

Predicating a budget’s content can be a mug’s game, and I wouldn’t recommend taking my musings too seriously or spending the likely “goodies” in the budget until they are in your pocket. But the Tories will be partying on the 19th and, as usual, they (and the other parties) will have their spin machines on overdrive.