Sunday, February 1, 2009

Let's Talk Money: Canadian Budget 2009

When parliament returned on January 26th and Michelle Jean delivered the new throne speech, there was only one thing on every ones mind: Will Steven Harper's new budget be good enough for Michael Ignatieff?

I would submit that there was never a question of whether Ignatieff would support the budget, but how big of a price he would exact from the Conservatives for his support. And that variable was dependent on how good Jim Flaherty's work was, not the variable that decided on Liberal support.

Let's rewind to the events of early December. Jack Layton, Gilles Duceppe and Stephane Dion initiate proceedings for a preemptive coalition after the Conservatives unveil their politically disastrous Economic and Fiscal Update. When Stephane presents the agreement to his party for consent, Michael Ignatieff is one of the last MPs to sign his name. Then Harper issues a brief statement using that emergency broadcast thing, Stephane Dion gives a shoddy reply, and finally Harper prorogues parliament.

So most of that was review, but the key thing to notice is that Ignatieff was never keen on this coalition to begin with. So, when Bob Rae and Dominic Leblanc bowed out of the leadership race to give Iggy his coronation, that was the moment when the coalition began to slowly die inside. Not when Ignatieff decided to support the Harper budget.

I suppose there was always the possibility of Ignatieff tearing up the Coalition agreement but voting down the budget, but I just can't see that making sense in the eyes of the public, his actions would be viewed through the lens of December 2008.

So, that brings us to why Ignatieff doesn't like the idea of a coalition, and how he came to his final decision on the budget January 28th.

Firstly, Ignatieff has always been a bit more centrist than his party's current leftist affiliation would seem to suggest. There was his extremely controversial support of the war in Iraq and his comments during the leadership race of December 2006 on the events in Israel, both of which solidified this assertion. This is one possible reason that he had qualms about a coalition with the NDP, supported by the Bloc.

The second factor that I would hope was the deciding factor in his decision is the conditionality of the coalition's viability by an alliance with the Bloc Quebecois. As soon as the coalition was announced, Gilles Duceppe immediately came out and said something to the effect of, "This is good for Québec." Which, taken in context, translates to: "This is good for the Bloc Quebecois." Allowing a separatist party to hold the balance of power threatens national unity, and could be disastrous in a time of economic uncertainty when Québec has a tendency to ask Ottawa for money.

The party has no concerns about the rest of Canada, which in my own view, any legitimate federal party should be. I completely support the notion of a separatist party at the provincial level, as any province which has an overwhelming majority of people who want to separate from Canada should have the right to do so. But the purpose of the House of Commons is to look out for the best interests of all of Canada, not just one province.

Giving a separatist party the potential power to dictate the policy of our country would a mistake. Which makes me glad that Ignatieff choose not to do that.

What he chose to do instead is, in his own words, "Put Stephen Harper on probation." This was a smart choice in my view. Not voting for this budget would either had the consequence of giving power to the Bloc as suggested before, but it may have instead driven the nation into a constitutional crisis centered around Michelle Jean as she would have had to engage in a rare exercise of her authority.

Had she chosen to pick up the idea of a coalition government, her authority as an appointed official representing a foreign monarch would be questioned as to its legitimacy, prolonging political turmoil in a time of economic crisis.

Had she chosen to call another election, not only would Ignatieff have been crucified for refusing to give the stimulus to Canadians that they expected (not to mention spending another $300 million dollars on an election), but again the role of the Governor General would have been questioned as necessary if she is simply an extension of the Prime Minister's will.

Instead what Mr. Ignatieff did was buy himself time. What he lacks at the moment is national support for both himself and his party, and funding. These tend to be tied together, as we can see from the brilliant success of Harper's attack ad's on Stephane Dion leading to his success in the 2008 election.

Once the Liberals recover their fiscal robustness as a party by building support, and recover their political robustness by building a new financial base, Ignatieff can choose at any one of three times during the next year to throw down the gauntlet and force an election.

As a sidenote, I mentioned the possibility of Ignatieff being crucified in an election because of the size of the Conservative stimulus package. It may be possible that this stimulus package will end up doing nothing. Not being an expert on the economy, I have little opinion to offer on that point. But in the eyes of the public I know that all they see is the words "$65 billion" and "stimulus" and immediately assume that the budget will be good for them. The majority of voters don't have degree's in economics or finance. All that they know is that they don't have enough money right now, and the government is giving them money.

It's as simple as that. And for that reason alone, it would have been unwise for Ignatieff to vote down the budget.

I've digressed quite a bit in this post, so let's sum up.

Ignatieff wouldn't have gone with a coalition because Harper's not stupid enough to give him a reason to. The real wonder was exactly how much Ignatieff would demand for his party's support. And it seems to me that he worked out for himself, and for Canadians, a fair price. Regardless of what Harper is or isn't going to actually accomplish for the country.