The Canadian National Newspaper: The Politics of Canada's Federal Budget

Stephen Harper’s Minority Conservative government brought down its third budget on Tuesday, 24 February 2008. Finance Minister Jim Flaherty had barely begun delivering the budget speech before the NDP and Bloc Quebecois announced they would vote to topple the government. Liberal parliamentarians under Stéphane Dion did not jump at the opportunity to join the other opposition parties to defeat Harper’s minority government.

Liberal Leader Dion said he would consult his caucus before deciding whether Liberal MPs will abstain or vote yes on a series of budget votes. If the Liberals’ joined the NDP and the Bloc and voted against a budget measure the Harper government would be defeated and an election forced.

A recent poll taken by the Canadian Press Harris-Decima survey had the two major parties in a virtual statistical tie. The Conservatives were nominally ahead of the Liberals 31-30. The poll was taken on March 1-2, 2008 shortly after the federal budget and just after the news broke of the Chuck Cadman bribery allegations and the war of words between Finance Minister Jim Flaherty and Ontario Premier Dalton McGuinty.

While the Conservatives and Liberals appeared stalled, the NDP were at 17 per cent nationally. Interestingly the Green party rose to 13 per cent nationally and was actually a point ahead of the NDP in Ontario — 18-17.

With these kind of polling results, it was not in the interest of either major party to force an election that would change little in the make up of the House of Commons. An election would most likely result in another Minority Government.

Some election "hawks" contend the Liberal Party and leader have been weakened by the strategy of abstaining on key votes that saw the Liberals prop up the minority Conservative government throughout the fall. They have been urging Dion to take a stand against Harper and let the chips fall where they may.

A few political observers have suggested that those pushing for an early election were hoping that Dion would be defeated and that Michael Ignatieff or Bob Rae who are waiting in the wings, would take the leadership of the party away from Dion. The new Liberal leader has fully embraced his former leadership adversaries and brought them into the inner circle of power in the Liberal party. Some groups that were instrumental to Dion winning the leadership race have been shut out of power and even alienated from Dion and the Liberal party.

After weeks of agonizing, Mr. Dion announced that Liberals will not bring down the minority Conservative government over its latest budget. He poured scorn on the Tories for "a terrible lack of prudence and vision" over the last two years and dismissed the budget as a "grab-bag" of watered-down Liberal proposals that will accomplish little. However, Mr. Dion said it is not sufficiently bad to force the country into an election. "Under the circumstances, I don't see enough in this budget that would justify that we precipitate an election that Canadians do not want for now."

The downside of continuing to support the Conservative minority was immediate as NDP Leader Jack Layton said that he was the real leader of the official Opposition. Layton in an interview said, "The Harper agenda is a very conservative agenda and it's one that the Liberal party seems prepared to support. So whether it's on the war or on the budget, they seem to be comfortable allowing that direction to go forward."

It is easy, however, for the NDP and the Bloc to take strong stands against the Conservative minority when they know it will not result in an election without the support of the Liberals. The NDP opposed having an Inquiry into the “Cadman” bribery scandal because they thought it would benefit the Liberals.

One factor that was apparently in Mr. Dion’s mind when deciding not to force an election is the four by-elections being held on March 17. These by-elections are expected to bring in some much needed new talent to the Liberal benches. Former NDP Ontario premier Bob Rae is expected to easily win one of the vacant Toronto seats.

Martha Hall Findlay, another leadership contender, expressed her relief that a general election would not interrupt her campaign to win the by-election in another Toronto riding. Hall Findlay said "A few of us are looking forward to Mar. 17 and we do hope the government stays alive."

Dion is clearly hoping for a better performance in this round of by-elections than the last set. The Liberals were resoundingly defeated losing all three contests. Two were lost to the Bloc and Outremont riding in Montreal was lost to the NDP. To quote one prominent political commentator, “Dion has already lost one safe seat – Outremont – since becoming leader. He cannot in his current weakened position afford another defeat on Liberal territory, especially outside Quebec where the party does not have the excuse of a corroded brand to fall back on in the event of a disaster.”

If the Dion Liberals win all these contested ridings which were held by the Liberals his reputation will be greatly enhanced and several strong performers will join his team. Bob Rae and Martha Hall Findlay seem to be heading to easy wins.

The controversy, however, that erupted over the dumping of David Orchard, the high profile former contender for the Progressive Conservative Party leadership, and appointing an elected female provincial NDP MLA, to a riding in Saskatchewan has severally damaged the Liberals chances in that contest.

That federal riding was won by the Liberals by only 67 votes over the Conservatives. Choosing an elected NDP provincial politician is not likely to win many Conservatives or NDP to support the appointed Liberal candidate. It also may have alienated some Liberal supporters and the supporters of David Orchard.

Ironically, Mr. Orchard was instrumental in Stéphane Dion winning the Liberal leadership race, bringing over 150 delegates to back Mr. Dion. Orchard is known for his strong views on Canadian nationalism, being anti-free trade, and supportive of the environment and social justice.

Ralph Goodale, the Liberal boss of Saskatchewan, reportedly did not want the independent minded Orchard to compete with him for being the Liberal representative for the province. Orchard’s opposition to the War in Afghanistan and his consistent stand on social justice issues and for native rights also may earned him a few enemies in the Liberal party.

The other riding in play is Vancouver-Quadra. It has been Liberal since John Turner won it in 1984. Here the Conservatives will mount a strong challenge to the Liberals. Harper’s budget will play well there but the recent scandal over the “alleged offer” of a one million dollar insurance policy to Independent Member of Parliament (M.P) Chuck Cadman if he would vote against Paul Martin’s Liberal minority government and force an election has damaged the Conservative’s and Harper’s image. Cadman was a B.C. M.P. and this issue will have a more serious impact in that province. If the Dion Liberals lose this riding it will certainly hurt his standing.

The other problem Mr. Dion faced on the budget is that according to polls Canadians generally liked last month's federal budget, especially the offer of a tax-free savings account. However, this satisfaction did not seem to produce any additional support for the Conservatives. A Canadian Press Harris-Decima survey found that 52 per cent of those sampled were either very or somewhat satisfied with Finance Minister Jim Flaherty's proposals. Only 26 per cent stated they were dissatisfied.

According to the poll a majority of those who identified themselves as Liberal voters liked the budget. The proposed tax free savings account which would allow individuals to save $5,000 each year, where interest and capital gains would accumulate tax free, was approved by 78 per cent of respondents with 58 per cent saying they would like to take advantage of the program.

Mr. Dion also must fear the economic situation. Many believe that the United States is on the brink of a recession or already in one. The U.S. economy nearly stalled in the final quarter of last year. Economists think growth could be even slower in the current quarter. Some believe the American economy is contracting. The massive budget deficits that the George W. Bush administration has run up coupled with the hundreds of billions of dollars being spent on the wars in Iraq and Afghanistan have contributed to the American economic decline. The fear is that this economic downturn will impact Canada.

The Bank of Canada has said the United States is likely to suffer a deeper and longer slowdown than previously thought. The reasons are largely because of the collapsing U.S. housing market. The Bank of Canada said important downside risks for Canada’s economy are materializing and, worse, “in some respects intensifying.”

Accordingly this may not be the best time for Dion to defeat the government when the North American economy is headed for difficult times. It may be prudent politics to leave these economic difficulties to Harper’s Conservatives.

Edward C. Corrigan is a lawyer certified as a Specialist in Immigration Law and Immigration and Refugee Protection by the Law Society of Upper Canada in London, Ontario. He can be reached at LINK.

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