Thursday, March 22, 2007

Federal Conservative Budget

The federal conservative budget is official. How does it rate? I give it thumbs up on political considerations. Why, because the conservatives are literally handing out money on every street corner across the country. It is a budget that was designed to meet the challenge of a federal election if the opposition joined to defeat the budget or some other non-confidence matter in the House of Commons.

It now appears the budget will not be defeated as the conservatives have earned the support of the Bloc, which is no surprise. The conservatives threw billions at Quebec to gain votes in that province. Now the Premier of Quebec, in the dying days of a provincial election, has promised huge tax cuts to the voters in Quebec. Sadly, the money Charest claims he will use the previously committed $700 million in federal transfer payments earmarked to specifically finance health, education and the environment for the people of Quebec. The resulting total tax windfall for Quebec voters if Charest is re-elected will allow a couple in Quebec to save about $750 a year.

Quebec gets $2.3 billion out of this budget. Literally, one third of all money flowing to the provinces from the federal government will go to Quebec. All this and they are still asking for more. Now get this. Charest is also asking for the federal conservative government to get its spending power under control. Well, I agree with that and then maybe we wouldn’t have to give Quebec so much money to buy their votes. Quebec is a province that is hopelessly in debt to the extent of $5.3 billion as of last year and their budget deficit is expected to grow by another billion in the next year or so. If you don’t believe me then ask the provincial auditor general for Quebec.

The federal conservatives have, on sound advice, attempted to resolve the fiscal imbalance among provinces. Unfortunately, the shameless act of Charest in the dying days of an election campaign in Quebec makes it look like he is buying an election with western oil via the conservative’s new equalization formula.

The federal conservative budget on balance is sound notwithstanding one would have thought a strong conservative like Harper would have paid down the debt as opposed to spending increases. The equalization formula has been improved notwithstanding the conservatives broke their promise to Saskatchewan voters to remove oil and gas revenues. Interestingly, Brad Wall, the leader of the Saskatchewan Party is backing the Premier of Saskatchewan’s opposition to the new equalization formula, which Saskatchewan conservative MP Gerry Ritz doesn’t understand.

The budget is worthy of your support considering the Harper conservatives are governing from a minority position. Don’t be surprised if Prime Minister Stephen Harper finds a way to get a federal election going on the strength of the federal budget. This would allow the voters to pass judgment on the federal conservatives performance and their budget. Call the election Mr. Harper – a majority government is possible.