Why Budget and Throne Speech will most likely pass
In December, parliament was prorogued following a threat by the opposition parties to form a coalition that would have been led by Stephane Dion, included Jack Layton and the NDP in cabinet and relied on the separatists for support. The move was a reaction to the fall fiscal update that included an end to political subsidies for political parties. A non-confidence motion was tabelled by the Liberals leading the Prime Minister to ask the Governor General to prorogue the parliament until today. A lot has changed over the past month, but today in Canada's parliament returns with a throne speech followed by a crucial budget tomorrow.
At the time the coalition was proposed, opposition to the initiative was obvious across the country. Rallies for Canada took place. Temporarily, Conservative numbers shot up well into majority territory as Canadians outright feared a coalition government consisting of Liberals, NDP and Bloc Quebecois members. Poll numbers rattled the Liberal caucus leading to a quick decision to appoint Michael Ignatieff as leader of the Liberal Party through a caucus vote. Today, Stephane Dion is not even included in the shadow cabinet and will hide somewhere in the backbenches until the next election. Despite the rhetoric, NDP leader Jack Layton and Bloc leader Gilles Duceppe know the coalition is likely dead. What is taking place now is positioning to say later that Michael Ignatieff and the Liberals are solely responsible for propping up the Harper government. Today in the House of Commons, Michael Ignatieff makes his debut as leder of the opposition.
In the United States, during the time parliament was prorogued, an inauguration took place and America now has a new president. He will be working on a US stimulus package and in many ways has already changed the game in Canada. His election gives Harper the chance to work with him on the economy, auto sector, free trade, security, energy, the environment and Afghanistan. He is expected to visit Canada in February, but that visit might be prosponed if there turns out to be a coalition or election. The leadership bar has now been raised for both Harper and Ignatieff heading into this new session of parliament.
Today there will be a throne speech and tomorrow Jim Flaherty will present one of the most important budgets in Canada's history. Consultations have been broad and the numbers show that the government has been listening:
46 municipalities consulted
5,400 letters, emails and submissions from groups, individuals
70 formal roundtables
4 meetings between Flaherty and his economic advisory council
7,200 online responses
102 discussions with provincial/territorial officials
680 organizations consulted included manufacturing, forestry and mining
Consultations with the Premiers have also taken place and there seems to be support from them to put games aside and get to work on the economy. Meetings have also taken place between Flaherty, Scott Brison and John McCallum, and also between Stephen Harper and Michael Ignatieff. Despite being largely a waste of time, Flaherty has also met with the Bloc and NDP. Both parties have basically said they will not support the budget despite not having seen it. Both Layton and Duceppe are clining to the coalition - the only way either man will get into cabinet.
Tomorrow's budget will take us back into deficit. 34 billion this year. 30 billion next year. There is a possibility that the government will be in the red for the next five years. The economy is likely to get worse despite the stimulus package over the next four years. We already know there will be money for various industrial sectors including automotive, foresty and mining. There is also likely to be money for affordable housing, public transit projects and projects promoting research and innovation. Some money will be used for retraining and there will likely be some kind of reform to EI included in the budget. There will likely be tax relief to the middle class, but tax cuts are likely to be minimal due to opposition threats to bring the government down over the issue. The remainder of the budget will be interesting with a few hints likely in today's throne speech.
At the end of the day expect this budget to pass. Liberal demands for support will largely be met. Bringing down the government, forming a coalition and issuing a new budget would take months and would delay stimulus to the economy in the process. Finally, Michael Ignatieff knows that it will be difficult for the Conservatives to govern during this recession or otherwise tough times. He knows full well that his chances are better waiting for poll numbers to improve, rebuilding his party and hoping the economic situation punishes the incumbent as a way to take power in the long term as oppose to forming a coalition and taking the heat for joining with socialists and separatists, governing in bad economic times and then tried to get re-elected later on. Expect Liberals to take credit for parts of this budget. By demonstrating he has the confidence of the House, Stephen Harper will live to fight another day while Michael Ignatieff distances himself from the coalition. By passing the budget, it will be unlikely that the Governor General will grant a coalition as oppose to an election should the government be defeated in the future.
Hopefully Barack Obama inspires Canadian politicians to get past partisan politics and get to work on behalf of all Canadians during these economic times. While I have not seen the budget document at this point, I fully expect it will ultimately pass with Liberal support. Like most Canadians, Michael Ignatieff has no interest in a coalition where he would be held hostage by the separatists and Jack Layton's outdated and irrelevant socialist policy positions. By the same token, Stephen Harper will do what it takes to stay in power. For now politics is back to normal in Canada, but it will not be long before an election takes place in the future.
Thanks for reading...
Darryl
Update: 7 billion for infrastructure will also be included. This allocation will likely include money for green projects, roads and public transit and also construction projects at Canada's colleges and universities. More to come as further details leak...
