Thursday, October 8, 2009

Michael Ignatieff to Have an Adult Conversation With Canadians

Michael Ignatieff is going to do something that no member of our current government has tried to do. He is going to have an adult conversation with Canadians about what needs to be done to get us out of the financial mess we're in. The Conservatives have spent the summer cutting ribbons, many on projects where the ribbon was cut long before the stimulus spending.

But what the Reform-Conservatives have not done, is treated like the intelligent human beings I believe we are, and given us realistic predictions on how they plan to get us out of this, if in fact, the economy is turning around.

They won't even come clean on where the money went, and what the true state of our books are. The Parliamentary budget officer will be releasing his report in a couple of weeks, but he'd also like to track the stimulus spending. The problem is, the government is stone-walling, and won't provide him with the information. Why? What are they hiding?

They just continue to run horrendous attack ads and like a flock of punch-drunk sheep, we seem to be lapping it up. We've got to pay attention here. I for one am glad that someone is going to be honest, because frankly, I'm sick of being lied to.

Ignatieff to talk tax hikes, cost-cutting to tame deficit
By: Joan Bryden,

OTTAWA - Michael Ignatieff is preparing to embark on a politically risky "adult conversation" with Canadians about the painful measures necessary to eliminate the country's ballooning deficit - including the possibility of tax hikes.

Senior party insiders told The Canadian Press that the Liberal leader is about to launch a blunt discussion of the realistic options available for staunching the flow of red ink.

That includes tax increases, major spending cuts, remaining mired in deficit for years longer than anticipated, or some combination of the three.

Ignatieff won't disclose his own prescription for taming the deficit until the brink of an election, which now seems unlikely this year.

Insiders say he wants a better idea of just how bad the fiscal books are and how willing voters are to bite the bullet before making any detailed proposal.

Still, by showing a willingness to even broach the hot-button issues of tax hikes and budget slashing, Ignatieff is taking a huge risk.

Voters typically balk at the notion of paying more taxes, even for a good cause - as Ignatieff's predecessor, Stephane Dion, discovered when he proposed a carbon tax during the last election. (But last election the Reform-Conservatives were telling us that there would be no deficit UNLESS we voted Liberal)

And the governing Conservatives are masters at framing the tax debate in its most simplistic terms: Taxes are bad; big-spending Liberals want to make you pay more. (The Ref-Cons are admitting to a 56 billion dollar deficit. We know they lie, so I'm guessing it's worse)

Ignatieff felt the impact of the Tory spin machine last spring when he mused that tax hikes might be necessary down the road. The Tories pounced instantly and Ignatieff reversed himself before the day was out.

But insiders say that was before this fiscal year's deficit had ballooned to $56 billion - the largest deficit in Canadian history despite Prime Minister Stephen Harper's assurances only a year ago that the country could weather the global recession without plunging back into the red.

And it was before independent parliamentary budget officer Kevin Page had forecast a structural (not technical) deficit of almost $12 billion by 2013-14 - a figure Liberals expect to go up in Page's next report in a couple of weeks.

They say Ignatieff is now willing to gamble that Canadians want some honest, straight talk about the true depth of the deficit hole, and that they already know that climbing out of it cannot be pain-free.

"It's the elephant in the room," said one strategist.

Ignatieff intends to kick off discussion of the tough choices ahead with a speech Thursday to the Chamber of Commerce in London, Ont. That will be followed by a series of townhall-style meetings to engage Canadians in the debate.

For the past few days, Ignatieff has been laying the groundwork for the debate with repeated attempts to demonstrate that the Tories' relatively rosy fiscal projections are misleading, if not an outright lie.

Harper and Finance Minister Jim Flaherty maintain the deficit can be eliminated by 2015-16 through economic growth and some unspecified government belt-tightening (would that be putting an end to using our tax dollars for partisan knife throwing? Not likely) They've vowed not to raise taxes or slash transfer payments to the provinces for health care, post-secondary education and social assistance. (And they're such an honest lot)

On Wednesday, Ignatieff slammed the government for including a stealth tax in last month's economic update: $15.5 billion worth of increased employment insurance premiums.

He pounced on a report by economist Dale Orr, who argued that increasing payroll taxes is one of the worst things a government can do as the economy is struggling to recover from a job-killing recession.

"Will the prime minister admit that his way out of his own deficit is to raise taxes and do so in such a way that it kills jobs?" Ignatieff demanded Thursday in the House of Commons.

The government maintains the premium hikes are not a traditional tax increase but simply a temporary adjustment as a result of the way the EI program is structured to maintain an account balance over time.

Orr said he's planning to release another report next week which will recommend hiking the GST temporarily back to seven per cent for a couple of years. That would generate $14 billion a year in revenue and would ensure the deficit could be eliminated by 2015, he said.

Liberal insiders seemed lukewarm to that particular idea but they said it's the kind of option that needs to be discussed openly and honestly. Orr said it's encouraging that Ignatieff seems ready to at least talk about the fact that the deficit will not just disappear painlessly.

"We do need to look seriously at these options, all right. We certainly do need to do that," he said in an interview. Still, Orr said Ignatieff must disclose details of how he would tame the deficit before he'll be taken seriously. "I'd like to see quite a bit of detail before I'd call it an adult conversation."

Fair enough.

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