Canada's New Parliamentary Budget Officer Doesn't Disappoint - Stephen Harper

After former Parliamentary budget officer Kevin Page locked horns with the Conservatives over their voodoo math, he was replaced by someone whose inexperience would be much easier to manipulate.

Not that Jean-Denis Frechette isn't a nice man, but as Michael Warren noted of his appointment, in the Star:

... the appointment of Jean-Denis Frechette as Page’s replacement should come as no surprise. Frechette, who was plucked from obscurity in the bowels of the Parliamentary Library, lacks almost any relevant experience. His appointment leaves the future of the PBO in doubt.

That’s a shame. From the outset Page showed the courage to speak truth to power. Despite persistent efforts by the government to reduce his budget and diminish his role, he attracted a small cadre of highly qualified staff.

Frechette's office has just released a report that could have been drafted in the Conservative Party war room.

Apparently taxpayers have saved thirty billion dollars in taxes, most of the breaks for the low-middle class. We should be overjoyed, right? Hmmm

Dennis Howlett of Canadians for Tax Fairness quarrelled with the interpretation. He noted that in actual dollars, most of the savings when to Canada’s rich.

According to figures supplied by the PBO, the top 20 per cent of income earners got $10.9 billion, or 36 per cent of the total, while the bottom 20 per cent got $1.9 billion, or only six per cent. “That’s a huge amount and who has got that money? Most of that in dollar amounts has gone to upper-income Canadians...."

David Akin over at Sun media couldn't wait to sing the praises of the Harperites. Under the ridiculous headline: Middle class, not rich, reap most from Harper tax cuts

... And the PBO says "low-middle income earners" have benefitted the most among all groups. The tax savings for these folks amount to a 4% increase in their after-tax income. For the richest 10%? An improvement of just 1.4%, the smallest of any income level ... notes that "low-middle income earners" live in households where annual income is between $12,200 and $23,300 a year.

More troubling however, is where the report places the low-middle class. There is no official poverty line in Canada, but in 2009, it was determined that to stay out of poverty, the following incomes were required

1 person: $18,421
2 persons: $22,420
3 persons: $27,918
4 persons: $34,829

The median level of this new definition of low-middle class, is $17,750.00, which sits below what even a single person requires to stay out of poverty.

According to a 2008 report by the Organisation for Economic Co-operation and Development, the rate of poverty in Canada, is amoung the highest of the world's wealthiest industrialized nations.

And Canada has the second worst infant mortality rate amoung those nations, topped only by the United States; which begs the question: why aren't the pro-lifers marching against these state sanctioned late term abortions?

Cuts to the GST again only benefit those with disposable income and in Ontario and other provinces, Jim Flaherty's HST was put on things that we never used to have to pay tax on.

The Ontario government did help to alleviate some of the stress with a monthly Trillium fund benefit, but it still hurt the average citizen.

Another tax benefit touted by the disillusioned, is the Working Income Tax Benefit. But according to Carlton University economics professor Frances Woolley

The stated goal of WITB is to provide "tax relief for eligible working low-income individuals". This makes little sense, as many of those eligible for WITB will pay no federal income tax. The WITB recipients who do pay federal income tax will find that WITB adds to their marginal effective tax rate, because an extra dollar of earnings will reduce their WITB payment. But I guess everyone wants a tax break, even people who don't pay much by way of taxes.

People earning between $12,200.00 and 23,300.00, don't need lower taxes. They need a raise.

And what of the thirty billion dollars in lost revenue? Frechette's report doesn't address that. While the Conservatives have put our National Healthcare on life support, we need to discuss what throwing money at the rich has done to the average Canadian, not to mention our fiscal sustainability.

When the Harper government came to power, they inherited a surplus of 13.8 billion dollars. Even before the economic crisis the Conservatives had already spent through that with their misguided tax policies. Yet at the time they refused to even admit that we were in trouble, only acting when the prospects of a coalition government threatened to topple their power.

Even if they manage to balance the books. (I'm not holding my breath), our debt is now through the roof. According to the International Monetary Fund's 2013 forecast, Canada’s gross combined government debt sits at 87% of GDP, or the 13th highest among the 30 most advanced economies.

Are tax cuts really the answer? It's pretty clear that we should be increasing government revenue, not depleting it.

But the New Parliamentary Budget Officer has done his job. He's made Stephen Harper look good.

Don't taxpayers already fork over a bundle for that?

Just When You Thought the Republicans Couldn't Get Any Stupider

I read a headline today and I thought it was a joke: Republicans eye a return to George. W. Bush's budget. Are they kidding me? George Bush almost bankrupted the country and they want a rerun of that?

And Obama is now reaching out to big business. I am not anti-corporation, but the only reaching out that should be done to big business, is an extended hand demanding some of the taxpayers money back. Corporations have become dependants of the state and governments appear to be quite willing to be enablers to their addictions.

They need a time out.

One million homes were repossessed in the United States last year. That's where Obama's attention should be. Not on pandering to corporations. They had their turn. The trough is empty.

And Republican money launderer Tom Delaye, is blaming the Liberals for his troubles. Of course he is. Heaven forbid he should take responsibility for his criminal activity.

This should be a very interesting and frightening two years.

Bill C-15 Should be Given the Respect it Deserves. Anyone Got a Match?

With so many other things going on, Bill C-15 is one thing that we cannot allow to be trivialized. And we certainly can't allow it to be passed.

With the economic crisis and this government's horrendous handling of our finances, this is something we should look at. Putting more people in jail is not going to solve the drug problem. And this is not a government who wants to put money into rehabilitation or the health issues of drug addiction.

They just want to pander to their base and charge us for it. Besides, Stockwell Day used to be a regular pot user, though I suppose he's not the best example for the cause.

So instead of throwing billions of dollars into building American style super prisons, it's time to call a truce on this damn war against drugs, where the only enemies become the police and a government that wants to marginalize it's citizens.

There is a group in the United States made up of police officers and clergy who agree.

I don't smoke pot, but I'm not stupid enough to believe that doing so should be a crime. Legalize it and decriminalize it. It's a no-brainer.

Another Winner James Travers. But ... but ... but ...

I really like James Travers and will continue to promote him as a progressive member of the media, who are sadly too few and far between these days.

I have found myself annoyed with even him, sometimes though. Mainly because he is, or at least he was; constantly bringing up the sponsorship scandal, seemingly using it as balanced reporting when writing of Reform-Conservative corruption.

That doesn't mean I condone Adscam. Not by a long shot. I never really liked Jean Chretien and never voted for him, though I think he makes a great statesman now.

The infrastructure for the sponsorship scandal was created by Brian Mulroney and capitalized on by the Liberals; but I felt that by bringing it up so often, it hindered our chances of getting rid of the horrible Harper regime. We can't defend Harper by comparing him to Chretien. Both men may be devoid of principles; but Chretien is gone and Harper is still the albatross around our necks.

Travers column today is very good, as he suggests that backward thinking by the Harper team will hurt us in the long run. However, he, like many others, is clearly missing the point. The media and pundits and everyone else, who thinks that Harper or Flaherty have abandoned Conservative principles; need to understand one thing and one thing only: THEY NEVER HAD THEM!

Neoconservatism is like the anti-Christ of conservative economic theory. They might want to read up on radicals like Friedrich Hayek (correction) and Roger Douglas, to get a glimpse into our financial future.

Hayek urged reducing government intervention in people's social and economic lives to a bare minimum. No social programs, no environmental or consumer regulation. In Hayek's world, government officials do not serve the public. Instead, they are self-serving empire builders ... Harper studied Hayek as an undergraduate at the University of Calgary and developed his free-market philosophy.

Hayek opposed democracy referring to a nation's citizens as the 'bewildered herd', and one Hayek strategy was to : starve government and fuel the voluntary sector. Remove as many activities as possible from the public-policy arena and put them in the hands of private charity providers. Let the wealthy elite, not the people, determine Canada's social and environmental justice policies.

George Bush ascribed to this free marketeering and almost bankrupted the United States. But that doesn't stop Harper and Flaherty from moving full speed ahead. A record deficit is a dream come true, and from here on in; Roger Douglas takes over, with his simple message; "Don't blink". They won't.

Travers: While U.S. looks ahead, we drift backwards
February 2, 2010
By James Travers National Affairs Columnist

Some coincidences are too delicious. On the very morning this week that Canadians woke to find they have new, even lower greenhouse gas emission targets, Americans learned that China is surging ahead in the renewable energy race.

Before any remaining climate-change deniers fire email bullets from their grassy knolls, what follows is not primarily about climate change or even how successive federal governments failed to act. No, it's about the difference between talk and a conversation ....

Jim Flaherty Says "Damn I'm Stupid" But I Refuse to Smarten Up

Despite repeated warnings and advice from this country's top economists, our finance minister, who used to be a personal injuries lawyer; thinks he has a better idea.

Bankrupt the country.

Of course, what many of this country's top economists may not realize, is that neo-conservatives have no desire to fix the economy. They just want to reduce our revenue, to justify slashing social programs.

It's an ideology based on social Darwinism, so nothing they say will sink in.

The stage has been set. Canada is toast.

Raise GST, rating service says
By ROSS MAROWITS
The Canadian Press
December 3, 2009

MONTREAL — Canada should tackle its growing debt and the threat of chronic structural deficits by increasing the GST, perhaps to nine per cent, and cutting program spending, the co-president of the DBRS rating service said Wednesday.

While politicians are loathe to raise taxes, dramatic action is required to prevent the country’s debt from spiralling out of control, Peter Bethlenfalvy said in an interview.

"It’s not whether they (taxes) will go up, it’s 100 per cent certain that they will go up."

The Conservative government reduced the Goods and Services Tax to five per cent from seven per cent a few years ago. But a reversal is now required to help improve the country’s fiscal health, he said.

Bethlenfalvy said raising the consumption task is probably the "smartest" tax to increase. He praised moves to harmonize the GST in Ontario and British Columbia.

"It shouldn’t have gone down two per cent, it should go back up, and maybe two percentage points higher," he said after presenting DBRS’ views on Canada’s economic position following the global financial crisis.

The country will hit a "brick wall" that will require major spending cuts unless expenditures are reduced and revenues increased without choking off the economic recovery.

Failure to act will see interest costs increasingly become a more significant part of the deficit, said Bethlenfalvy, who hopes to spur popular support for tough measures.

"We can’t, as citizens, keep demanding a pension plan, health-care services, education and, at the same time, not pay for them."

Several other voices have also recently called for drastic spending cuts and higher taxes to slay the debt elephant that stalked Canada in the 1970s, 1980s and 1990s.

TD Bank economist Derek Burleton and Bank of Montreal economist Douglas Porter said governments will have to shift their attention from stimulating the economy to how to kill the monster they created.

Government officials couldn’t be immediately reached for comment. But Finance Minister Jim Flaherty recently dashed talk of tax hikes, saying the federal government won’t raise taxes or cut transfers to provinces or individuals in order to pay off Ottawa’s deficit.

He also insisted that government stimulus spending was a temporary measure and that it doesn’t plan to undertake major new initiatives in next year’s budget.

Flaherty said the Conservative government will only move to balance the budget when a "firm" economic recovery has taken hold. He has previously said that stimulus spending and lower tax revenues will result in five years of budget deficits.

Faced with a deep recession, the government initiated stimulus spending packages totalling $61 billion.

Canada’s current account deficit, a broad measure of the country’s economic dealings with the rest of the world, widened to a record $13.1 billion in the third quarter.

The federal debt recently passed the $500-billion mark and is rising at $1,772.58 a second.

Why is Jim Flaherty Still Talking When No One is Listening to Him?

The Reformers must now be speaking in tongues or something because everything that comes out of their mouths sounds like blah, blah, blah, blah, blah ...

They have no credibility on anything. An action plan short on action, when the only plan was to benefit the party. 100 million dollars on self promotion at taxpayers' expense.

Now we learn that bankruptcies are on the rise and this dim wit Flaherty comes out grinning like an idiot telling us not to worry, be happy. I'd say he should be replaced but the whole damn government needs to be replaced, because sadly he's the best they've got.

Yep ... a personal injuries lawyer, and he's got the best credentials to run this country's finances. And we wonder why we're in the mess we're in.

Canada’s wasted opportunity: no future growth

OTTAWA – Liberal Finance Critic John McCallum said today’s speech by Minister Flaherty leaves Canada down a deep fiscal hole after wasting the opportunity to invest in Canada’s future economy.

“Never has so much been spent to achieve so little,” said Mr. McCallum. “The Harper Conservatives wasted a historic opportunity to invest in Canada’s future economic growth, and instead chose to waste billions in public funds on advertising, signage and pork-barrel projects to further their political interests ....“

How Can We Have an Adult Conversation When Harper Thinks Everything is Dumb?

There was a great editorial in the Toronto Star about having an adult conversation over the necessity to raise taxes. But when the subject comes up Harper just calls it 'dumb' and then accuses Michael Ignatieff of wanting to do just that. How many tax dollars have the Reform-Conservatives wasted with warnings that the Liberal leader will use the 'T' word?

Well someone is going to have to, because the Ref-Cons have clearly lost control of this country's finances. Instead they try to hide their mismanagement with complicated websites and flowery announcements.

Smarten up, Grow up, or step aside. This is no time for childish games.

Can we have an adult conversation about taxes?
Toronto Star
October 26, 2009

At the risk of insulting a generation of 4-year-olds, it's time we had an adult conversation in Canada about taxes and public services.

Most 4-year-olds have figured out that when you go to the store to get something you want, you have to be prepared to pay for it. Yet Canada's political leaders and business interest lobbyists would rather spit nickels than admit this basic fact. It's a problem with all political leaders and parties – not just those I disagree with.

For Canada's political right-wingers, their insistence that we can have massive tax cuts without suffering any decline in public services is worse than childish; it's delusional. Any 4-year-old knows if you go to the store with less money, you're going to come away with less candy. Eliminate government waste, they say, and we can have lower taxes without cuts in services.

Sounds good, particularly when provincial and federal auditors provide an annual source book for examples of stupid things that have been done with public money. But, at heart, most Canadians know and appreciate the fact that our public money is spent on services Canadians value in their everyday lives: Public health care, education and transit systems. Paved roads, sidewalks, sewer systems, clean water. Public services we couldn't do without.

Then there's the right-wing's childish fantasy that if you lower tax rates, government revenue will actually increase. We can all pay less tax, and government will get more revenue.

Try that one on a 4-year-old. It defies logic. Here's the reality: Data from the OECD demonstrate that, since 1995, tax revenue in Canada has dropped from 36 per cent of GDP to 33 per cent of GDP. That may not sound like much, but it represents a loss of nearly $50 billion a year in public revenue. And we wonder why Canada plunged into a $50 billion deficit magically overnight.

Finally there's the self-serving right-wing argument that our public services aren't as good as they should be, so why not cut them? This from the very people whose successful campaigns to reduce public revenue have weakened those services in the first place.

Any 4-year-old can tell you that you don't get what you don't pay for. Lower public revenue and you can expect roads full of potholes and long waiting lists for elective surgeries.

Arguments from Canada's left flank are sometimes equally childish.

Too often, it campaigns for better public services as if they can be provided free. Better services won't cost us anything because the higher taxes needed to pay for those services can be paid by people we don't know. People who make a lot more money than we do. Big corporations but not small businesses.

It's the "anyone but me" solution, which is no more adult than a child who takes candy from a store and then claims his friend did it.

The "anyone but me" line would be amusing if it wasn't such an obvious stall tactic for taking true responsibility for the provision of public services.

It used to be that people who made over $100,000 a year qualified as rich and therefore for membership in the people we don't know who are going to pay for our public services club.

Then someone noticed that a construction worker or an autoworker who worked a lot of overtime could make over $100,000 a year. So Canada's left flank shifted the income cut-off to $150,000.

There are lots of problems with both the economics and the politics of the "anyone but me" proposition: If you set the income cut-off high enough to be politically comfortable, there aren't enough people to pay for better public services; If you raise taxes by a large enough amount on a small group of people, they'll try to find a way to avoid paying them; Politically speaking, people aren't stupid. They simply don't believe you when you tell them they can have something for nothing. At best, then, the argument undermines the credibility of the case for greater investment in public services.

At worst, it reinforces the right-wing mantra that taxes are a burden to be avoided. That's particularly true when the left tries to have it both ways, opposing taxes on the grounds that they impose a burden on working families (or whatever the code phrase for "us" today).

Take, for instance, B.C.'s New Democrats who based a campaign – a losing one at that – around the idea that a carbon tax imposed a burden on everyday people. Similarly, Ontario's and B.C.'s New Democrats are fighting battles against a "tax grab" over the harmonization of Ontario's Retail Sales Tax with the GST.

In an earlier era, a broad coalition of the left went to war against the GST and in the process fed a populist anger that landed in the lap of Preston Manning and the Reform party.

The tax trap is also why the carbon tax campaign sank Stéphane Dion's political career. Dion tried to sell carbon taxation as tax reform – as a way to cut taxes rather than as an investment in meaningful environmental change.

This strange debate that separates taxes from the services they pay for would be little more than a political oddity if it weren't for the fact that as Canadians confront the challenges of global warming, economic dislocation and an aging population, we're going to need to make significant new public investments.

We're going to have to be able to talk about how we pay for them.

Here's the adult reality: Nations that have the most highly developed systems of public services pay for them with all kinds of taxes, including sales taxes and payroll taxes that everyone contributes to because everyone knows there is no such thing as a free lunch.

You really do get what you pay for. Just ask any 4-year-old.

Parliamentary Budget Officer Says Harper's Economic Update Was a Work of Fiction

Not that anyone should really be surprised, but our budget watchdog has stated that the economic update Stephen Harper presented with much pomp and ceremony, was not only dishonest, but intentionally misleading.

Since he can play the piano, maybe it's time he quit his day job.

Ottawa's reporting on stimulus spending gets poor grade from watchdog
Parliamentary budget officer Kevin Page uses words such as ‘uneven,' ‘inconsistent' and ‘missing' to describe government's record to date
Steven Chase
Globe and Mail
October 13, 2009

The Harper government has done such a spotty job of reporting on its progress in stimulating the ailing economy that it is thwarting efforts to measure whether this spending is making a difference, Ottawa's budget watchdog says.

Parliamentary budget officer Kevin Page uses words such as “uneven,” “inconsistent” and “missing” in a report released yesterday describing the federal government's record to date.
He said Ottawa is falling far short of the United States in reporting on the progress of its stimulus spending – that is, in detailing how much of the $47-billion injection is in the economy now.

This matters, Mr. Page said, because Canada needs to know how much of the recent signs of economic recovery are due to stimulus spending – to separate it from what might be real growth at work.

“There's still doubt about the recovery, about how strong it's going to be. We need to know how much is due to government and how much is due to other factors,” Mr. Page said.

In polite but trenchant criticism, the budget officer's analysis released yesterday suggested the government's third report to Canadians on stimulus spending progress – delivered on Sept. 28 – didn't accomplish much.

“Given that more data are now available to provide evidence of the economic stimulus impacts, it is to be expected that the quality of reporting would progressively improve. However, the format and content of the third report is largely unchanged from previous iterations.”

Mr. Page, appointed by the Tories in 2008 to scrutinize budgeting and forecasts, has become a thorn in Ottawa's side by questioning government estimates on everything from the cost of the war in Afghanistan to fiscal outlooks.

The United States, the parliamentary budget officer notes, is now reporting biweekly how much stimulus spending is reaching each state. Washington is also assessing the economic impact of its stimulus package based on money already in the economy. “We are nowhere near this,” he said.

Eight months after it announced a stimulus package, the Harper government continues to focus its reporting on process: how much stimulus funding has been allocated to projects, rather than making a priority of detailing how much is actually stimulating activity.

The Tories say more than half of the infrastructure and housing projects so far announced have begun, but their main message in reporting is that “90 per cent” of this year's planned stimulus “has been committed.”

Mr. Page said “committed” is too vague to be helpful, using the example of a neighbour who's asked him to cut down a dead tree on his property.

“I keep saying I am committed to taking that tree down, I am 90-per-cent committed – even 100-per-cent committed,” Mr. Page said. “But I still haven't done it in two years. She wants to see the saws and noise and at that point she can say, ‘Okay it's coming down.'”

“It's not until you know that the projects are not only committed, but launched – and people are making progress – that you know there's going to be economic value created by that money spent.”

The Conservative government is nevertheless dismissing the notion that it's not disclosing enough to Canadians.

“As soon as we announce a project, it's made public and posted on the web,” Chris Day, spokesman for Infrastructure Minister John Baird said. “Our focus is getting projects approved and creating jobs.” (And they're such honest little twits)

Opposition parties charge that the paucity of information on stimulus progress reports reflects the fact that the money is only slowly trickling out across Canada.

Stephen Harper and the Big Lie About Deficits

Now we all know that Stephen Harper will do or say anything to get elected and stay in power, but it's rather interesting listening to him lie about future deficits that could get out of control. Mind you this is going to work in his favour if he ever gets a majority. He'll be able to fulfil his goal of dismantling our country and justify doing it.

Toronto Star columnist, James Travers, suggests that the Liberals need to continue to hold Harper's feet to the fire over this flip flop.

Travers: Michael Ignatieff must target Tory deficit
Toronto Star
October 10, 2009

Conservatives want the coming election to be about Michael Ignatieff; Liberals want it to be a referendum on Stephen Harper. What both want is a forced day's march from what Canadians need. It's been as dramatic to watch the Liberal boss learn what he doesn't know about politics as it was entertaining to watch the Prime Minister play the piano. But neither tells enough about how either would cope with the testing future now racing here at high speed.

Ignatieff's internal troubles and Harper's latest congeniality riff only hide the Ottawa rebirth of the Big Lie. Last fall Conservatives got away with saying there would be no recession or deficit because other parties feared voters couldn't take the truth. This fall, Harper is successfully selling the fantasy of a painless recovery because his main rival is still bruised from musing that raising taxes is a viable way to again balance the federal budget ....

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,
THE CANADIAN PRESS

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.

Why Stephen Harper's Economic Plans Will Fail

I've said several times before that as an economist Stephen Harper makes a great shoe salesman. He apparently has a masters in economics, but has never worked as an economist, so why would we believe that he is the best choice to lead us out of this crisis? We can't.

One of the problems in studying Harper's past, is that his heroes; the ones who slash and burn their way through social programs, and sell off everything of value, have failed. Ronald Reagan, Margaret Thatcher, Mike Harris.

Instead of learning from their mistakes, he is doomed to repeat them. He once told a professor that he was concerned that Canada's massive debt and deficit under Mulroney, could cause a run on the Canadian dollar. What does he think now?

If he had a majority with a 56 billion dollar and counting, we would have nothing left.

Brooke Jeffrey in her book Hard Right Turn, discusses the situation a decade ago. Mike Harris was the Ontario Premier, Ralph Klein was Alberta's, and the Reform Party were the Official Opposition on Parliament Hill.

She opens her book by saying that in Toronto there were rallies and demonstrations at Queens Park because of Mike Harris' cuts to health care, education and social services. Her cab driver volunteered the information that he had been fooled into voting for Mike Harris' "Common Sense Revolution", which he learned made no sense at all. "I didn't expect them to pick on blind people and little old ladies."

Not long after she was in Alberta and found the same demonstrations and rallies targeting Ralph Klein. "The premier and his controversial treasurer, Stockwell Day, were adamant the cuts would go forward as planned." They didn't need to, because Alberta was in the middle of an oil boom and had money to burn.

"The striking thing about Klein's comments was his choice of language. It was almost identical in tone and content to arguments Mike Harris had used to defend his actions in Ontario a few months earlier. Klein's refusal to consult in any meaningful way with the affected groups was equally firm.

"The success of Ralph Klein in Alberta in 1993 was dismissed by many as a regional fluke, but the election of Mike Harris in 1995 in Ontario raised serious concerns about the direction the country seemed to be taking. Neo-conservative politicians ... were now in power in two of Canada's richest and most important provinces.

"Concern turned to disbelief when the upstart Reform party of Preston Manning became the Official Opposition, after the 1997 federal election. Conventional wisdom said that the party was just another Western protest movement. Founded in white hot anger, it would soon fizzle and collapse ... I was less surprised than most observers ... but probably more distressed. My in-depth knowledge of Reform's extreme positions and unprecedented rejection of basic liberal values made me more inclined to take them seriously than most mainstream politicians, and I worried about the potential damage they could inflict on the fabric of Canadian society if they succeeded in becoming a force to be reckoned with."

"... Were we on a slippery slope, with even more right-wing governments in other parts of the country? Had there actually been a major shift in public opinion from the traditional centre-left majority? Were many Canadians abandoning their well-known compassion and tolerance for the politics of self-interest, anger and resentment, and if so why?

"...Both premiers (Harris and Klein) believed the protests and civil unrest were inevitable. The visceral opposition to their plans had nothing to do with the draconian measures they adopted to implement their radical agenda, or their steadfast refusal to consult with stakeholders.

"If Canada is to avoid the fate of Britain and the United States, now struggling to repair the damage caused by their decade of right-wing excesses (for the U.S. they suffered another horrible 8 years of George Bush), the very real and disturbing consequences of the neo-conservative agenda must be clearly understood by all Canadians." (Hard Right Turn: The New Face of Neo-Conservatism in Canada, Brooke Jeffrey, Harper-Collins, 1999, ISBN: 0-00 255762-2, Pg. 1-6)

What we have learned since then, is the reason why Mike Harris, Ralph Klein and now Stephen Harper, are following the same path; is because all three men were brought to power by the Fraser Institute, the National Citizens Coalition and Conrad Black. (Black also helped with the career of Margaret Thatcher). Ironically Klein, Harris and Thatcher were all forced into retirement by their own parties. Dare we dream?

Harper Apologizes and Admits He's Wrong in the Same Week. Maybe Pigs Really Can Fly.

It's been quite a week for Stephen Harper. Communions, misquotes and 'dumb' remarks.

If he blamed bad food in Peru on his actions that caused the Parliamentary Crisis, was there something in the water in Italy?

Harper who never apologizes, actually said he was sorry to Michael Ignatieff, not for another venomous partisan attack, but for misquoting him.

Now, after calling the predictions and recommendations made by the Parliamentary Budget Officer, Kevin Page, dumb; he's admitting that he is wrong. (Now mind you, it doesn't mean he's going to take the advice of an economist with far more experience than him. That would be asking too much).

Flying pigs, flying donkeys, hell freezing over ... all three at once? There's definitely something going on here, and I've got to admit, I'm a little frightened. Just how bad are things?

Harper abandons time limit on deficits

Jul 10, 2009
Tonda MacCharles

Les Whittington

Ottawa Bureau

L'AQUILA, Italy–Prime Minister Stephen Harper has scrapped his government's controversial promise to stop running annual budget deficits in five years.

For the first time, Harper said today that keeping the government's pledge to balance Ottawa's books by 2013-14 will depend on how quickly Canada's economy recovers.

"We will allow the deficit to persist if necessary," Harper said. "We will not, in order to meet some timetable, start raising taxes and cutting programs."

Until today, the Conservatives had insisted they had a timetable to end deficit financing. Finance Minister Jim Flaherty had brushed aside critics who said the government's spending initiatives and massive tax cuts would make it impossible to return to budget surpluses by 2013-14.

But Harper told reporters after the G8 summit in Italy that the government won't be bound by that promise.

He said a recovery in the Canadian economy will be "well under way" by early 2011, which will result in higher tax revenues and lower expenses for Ottawa.

But "if the recession turns out to be longer than that, for example, or the recovery turns out to be shallower, then that will change the pattern of the recovery from the current deficit," Harper said.

The Prime Minister was responding to comments earlier this week by Kevin Page, the independent parliamentary budget officer, who said the government's budget deficits are so large that Harper could only balance Ottawa's books in five years by raising taxes or slashing programs.

The Prime Minister insisted that, even if government revenues are slower to recover than predicted, he would not hike taxes or cut programs. "That's a very dumb policy," Harper told reporters.

He criticized Page, whose fiscal projections he said were more "pessimistic" than most.

Page said this week that cumulative federal budget deficits in the next five years will reach a whopping $156 billion, half again as high as the Harper government has predicted.

Harper said the global economy is still fragile and he does not yet advocate winding down stimulus spending.

Despite having recently claimed that 80 per cent of the government's billions in stimulus spending is committed, Harper admitted today it is a challenge to ensure the money actually gets spent. "It's a reality that it is tough to get it out the door."

Dumb Da Dumb Dumb. A Little Music to Walk the Plank By

We learned this week from Canada's Parliamentary Budget officer that if this government doesn't curb their spending and raise taxes, especially the GST; this country is going to be in serious trouble.

George Bush's theory of economic bliss, failed and it failed miserably. It's time we move on, and bring back a little fiscal responsibility.

While in Italy at the G8 Summit, Stephen Harper couldn't wait to throw his two cents in, and that was about all it was worth.

With intellect and diplomacy, he mustered his best grasp of the English language and called Kevin Page's predictions 'dumb'.... 'dumb'???? What is he, six?

Mr. Page is an officer of the Government of Canada, and the best our Prime Minister can do is critique his predictions and recommendations, as 'DUMB'!!!

Prime Minister Stephen Harper said in Italy on Friday he won't follow the "dumb" advice from Parliament's budget officer by raising taxes to balance Canada's post-recession books.

We will not start raising taxes and cutting programs. That's a very dumb policy and, to the extent, frankly, that the parliamentary budget officer suggested it, it's a dumb position," he said.

I was reading the press announcement, when not long ago the Conservatives were touting his expertise, selling him as the jewel in the crown of their (non-existent) Accountability Act. Yet today he is just DUMB??

Mr. Page is highly qualified for this position. He is no stranger to the federal budget. In his 25-year career as a public servant, he has worked on fiscal forecasting, policy and expenditure portfolios for three key departments: the Department of Finance, the Privy Council Office and the Treasury Board. He also has experience in farm financial programs.

Like Stephen Harper, Kevin Page has a Masters in Economics, but unlike Stephen Harper, he has 25 years working as an economist. Harper has not worked in his profession for one single day. Before entering politics Jim Flaherty was a personal injuries lawyer. So who's dumb and dumber here?

Harper got it all wrong, budget watchdog says
Jul 07, 2009
Toronto Star
Les Whittington
OTTAWA BUREAU

OTTAWA – Canada could shed a total of 1.2 million jobs this year and next, the parliamentary budget watchdog predicts.

Suggesting that Prime Minister Stephen Harper's government has vastly underestimated the impact of the economic recession, Kevin Page says the employment picture is much worse than the federal Conservatives predicted in the January budget.

Page also says the Harper government's claim that it will be able to stop running annual budget deficits in five years cannot be believed. He says that in 2013-14, instead of balancing its books, Ottawa will still run a $16.7 billion deficit, according to those who have seen the independent budget officer's latest findings.

The cumulative federal budget deficit over five years will hit $155.9 billion, Page forecasts. Based on recent government estimates, Finance Minister Jim Flaherty's calculations call for a cumulative deficit of only about $100 billion over five years.

Page, appointed parliamentary budget officer last year, has consistently produced economic forecasts that have proven more accurate than those from Flaherty and private-sector economists.

The latest report has been provided to the House of Commons finance committee and will be made public later this week.

In it, Page says the medium-term outlook for employment is "significantly weaker" than predicted in Flaherty's Jan. 27 budget. Conservative MP Ted Menzies, Flaherty's parliamentary secretary, said the government has acknowledged that unemployment is going to get worse.

"Anyone can guess at what the unemployment numbers are going to be," he said.

Menzies (Macleod) also said that Page's deficit projection failed to take account of possible billions of dollars in savings on government programs or extra revenue from the sale of major Crown assets. (The Harper government will be subsidizing buyers, and the buildings they already sold, we needed, so are now leasing them back. There will be little or no revenue.)

Page's report says unemployment, currently at 8.4 per cent, will average 8.7 per cent this year, compared with Flaherty's estimate of 7.5 per cent for 2009. Page sees the jobless rate going as high as 9.4 per cent in 2010.

Based on the government's forecast, Canada stands to lose 160,000 jobs in 2009. But Page says the worse-than-predicted employment picture means that actual total job losses in 2009 could go as high as 530,000.

For 2010, the government's forecast of 7.7 per cent unemployment suggests about 200,000 jobs could disappear. But Page says job losses next year could be as high as 700,000.

Liberal MP John McKay (Scarborough-Guildwood) said Page's latest report proves the Conservatives are dreaming when they claim the government can quickly return to balanced books in a few years.

"This is a structural deficit, no ifs, ands or buts about it," McKay said.

Jim Flaherty Vows There Will be no Deficit on His Watch

Jim Flaherty has been called a fiscal conservative, devoted to lowering taxes and reducing spending.

He has also been called a complete windbag, with no morals and even less skill at managing anything, other than a kiosk on the beach.

OK those last comments were mine, but I stand by them.

Before entering politics he was a personal injury lawyer, which should be 'enough said', but I think his experiences, which would have been mostly combative, have left him distrustful and unbending. They have also given him the ability to sacrifice truth for gain.

Perhaps my opinion of his private practice might be a bit harsh, but when I think of personal injury lawyers, images come to mind of clients with white collars and canes in the courtroom, who shed those things once outside, and go hang gliding.

But my opinion of Flaherty sacrificing the truth for political gain is spot on. Let's just follow his little magic show since the last election campaign.

Flaherty vows there will be no deficit

TORONTO — There will be no deficit on his watch, even on a temporary basis, Finance Minister Jim Flaherty said Wednesday.

In responding to the worsening global financial crisis that has slowed economic growth in Canada and elsewhere, “we'll do what we have to do, so long as we remain economically prudent. We're sure not going to run a deficit ... We will maintain a surplus in Canada and we will continue to pay down debt.” ....

Now some might argue that he was forced by the big bad opposition to do a 180 ,but that's garbage. He always had a choice. Besides, according to those in the know, we were already in a deficit, possibly as much as a year before he fessed up.

Is Flaherty Hiding a Deficit Already?

I have to blog a bit about Flaherty and his past record in Ontario of selling property in an attempt to hide the deficit. David Graham in his blog “The World According to cdlu” points out a parallel move being done now by the federal government.

They are selling government properties and leasing it back. Who in their right mind would sell property they own only to lease it? Unless you are badly in need of short term cash influx. Exactly the same thing happened in Ontario and we found out afterwards that they hidden billions dollar deficit from everyone.

Flaherty poised to be 'Deficit Jim'

Before this economic downturn hits bottom, it's almost a given Mr. Flaherty will wear the Deficit Jim label as the Conservative who put the red back into Canada's budget books for the first time since they were balanced in the mid-1990s.

It's been almost two years since his most notorious flip-flop - the Halloween announcement the government would break its pre-election promise and start taxing income trusts - and now he's careening oward another big-gulp policy reversal. Mr. Flaherty, it seems certain, will have to renege on his hell-or-high-water vow that the Conservatives would not lurch into deficit.

He's now waffling on that campaign promise in the face of $10-billion deficit projections by some economists, a red tidal wave that could not be rebuffed with spending cuts or tax increases.

The problem is that when you lose your credibility, anything you say from there on in, sounds like the adults in the Peanuts cartoon: Waaaa, Waaaa, Waaaa, Waaaa, Waaaa.

Jim Flaherty and Lisa Raitt are speaking the same language and I no longer listen to either of them.

Harper Exploiting Economy to Push Privatization Agenda

Wink, wink. Of all the Harper ideologies, his goal of privatizing everything, is probably the strongest. During the 2006 election campaign, the media picked up on the fact that every time one of the Conservatives said 'choice' it really meant 'private', so it became kind of a fun game.

Now with the economic crisis, Harper may finally get his wish, as his government looks to sell EVERYTHING. If it's got Canada or Canadian in front of it, it could soon be toast.

Nothing like selling us off in a buyer's market. Mike Harris did the same in Ontario, so Jim Flaherty has experience. In fact, he hid a six billion dollar deficit in the sale of our province's assets.

Ottawa considering asset sales, from VIA Rail to Royal Canadian Mint
'We're not going to exclude anything off the top,' source says, but privatization of such iconic Crown corporations unlikely

STEVEN CHASE
OTTAWA

Globe and Mail,

Jun. 02, 2009

No government asset is being spared scrutiny as the Harper government considers auctioning off holdings while it grapples with record deficits, sources say - and therefore those under review include entities such as the Canadian Broadcasting Corporation, VIA Rail and the Royal Canadian Mint.

Sources say while all government assets are on the table for a review first announced last fall, it's unlikely the minority Conservative government would move to spin off "highly iconic elements" such as the CBC or Via Rail in the short term.

"Everything's going to be included. We're not going to exclude anything off the top," the government source said.

"Everything's in."

However, the source said it's hard to imagine CBC or Via Rail being part of a privatization.

The review includes all government assets including Crown corporations as well as billions of dollars in federal land and building properties. The list includes Ridley Terminals, a cash-strapped coal-shipping Crown corporation in Prince Rupert, B.C.

Just last week the Tories announced they will seek buyers for the nuclear reactor business of Atomic Energy of Canada Ltd., Ottawa's flagship nuclear company.

Finance Minister Jim Flaherty first announced this asset review last November, although at the time he publicly ruled out selling the CBC. The review process was more formally launched after the Jan. 27 budget and Ottawa aims to generate up to $4-billion through privatizations or sales in this fiscal year.

The Tories are under pressure to generate cash as Ottawa struggles with shortfalls that could stretch for half a decade.

Last week Mr. Flaherty warned Ottawa will run a record $50-billion deficit this year alone and economists have predicted the projected shortfall for next year will rise, too.

Facing criticisms that it would be foolish to sell assets in a depressed market, Prime Minister Stephen Harper has pledged that this process will not lead to a "fire sale" of holdings.

The Harper government is depending on billions of dollars from asset sales as part of its plan to re-balance the books in Ottawa by 2013-14. Many economists though have suggested this deadline for eliminating the deficit is unrealistic without significant tax increases or spending cuts.

As the 2009 budget indicated, the assessment will take into account "the current relevance of the assets to government's core responsibilities, and of their market value."

In some cases, the budget said, the review may decide that "selling an asset to a private sector entity may generate more economic activity and deliver greater value to taxpayers."

It's expected the asset review could take four to five years - with perhaps 20 to 25 per cent of holdings reviewed each year.

Mr. Flaherty hasn't said whether possible saleable properties might also include the Canada Mortgage and Housing Corp.

It's likely, however, that assets headed for the block will include some holdings of the Canada Lands Co., a Crown corporation with a real-estate portfolio totalling about 970 hectares.

Last November, Mr. Flaherty suggested a selloff might include the CN Tower, but quickly made it clear he was joking.

If the government fails to sell the amount of assets it's hoping to unload, then the federal deficit will grow further - unless Ottawa can find spending cuts elsewhere.

The Conservatives Have Found a Replacement for Flaherty

And the good news is ... HE CAN COUNT!

Canadians have learned today that after the abysmal performance of Jim Flaherty, they were able to find a suitable replacement, even on such short notice.

They call him 'The Count' and without using notes or anything, he's already out performing his predecessor.

In a speech to the House of Commons today, he outlined his reasons for replacing the former finance minister, and why he would do things differently.

The Count's maiden Speech:

One.... One mistake I would not make.

Two ... Part two of the muster and bluster.

Three - Part three of the pure hogwash.

Four ... Four upset premiers.

Five ... Five minute specials ... Canada for sale.

Six ... Six Brain Cells working

Seven -- Seven say recession not mild.

Eight ... Eight eye blinks per nanosecond

Nine ... At least Nine times worse than imagined

Ten - Ten year plan?????

Big Bird is already running attack ads calling the Count an intellectual elitist who thinks he's better than everyone else simply because he can count. Our new finance minister countered by telling Big Bird he was just yellow.

Bert and Ernie were unavailable for comment. They are still reeling over Harper's views on same-sex marriage.

Harper and Obama Will Never be Friends

Canada's Conservative movement is almost standing alone now as the Bush administration has been replaced with the intelligent and common sense driven Obama administration.

But where does this leave our current Prime Minister? Certainly not a friend of the new American President. Their ideologies are the exact opposite, and though Harper tried to exploit Obama's visit, it wasn't long before he returned to his base, who clearly wanted McCain.

Fortunately Michael Ignatieff has a very good relationship with the new U.S. government, so things will be so much better when he becomes the Prime Minister of Canada.

Harper attacks Liberals, Obama in private speech to party

Mar 13, 2009

Jennifer Ditchburn

THE CANADIAN PRESS

OTTAWA – Stephen Harper made two very different sales pitches for his economic plan this week: one a public pep talk to jittery Canadians, the other a private smoothing-of-the-feathers for uneasy conservatives.

The marquee speech Canadians saw on television Tuesday or read about the next day was about how the economy would recover swiftly and strongly through targeted spending in the budget.

The other was behind closed doors Thursday evening to a group of key conservatives – sharply partisan remarks that ripped into the Liberals, libertarians, the Obama administration's tax policies and Wall Street.

The prime minister spoke at a conference sponsored by the Manning Centre for Building Democracy, a conservative think-tank run by former Reform Party leader Preston Manning.

The prime minister's office did not signal beforehand that he was giving the speech, and refused to make his remarks available afterward.

In a recording obtained by The Canadian Press, Harper goes after the Liberals in a election-campaign style attack, saying the current situation would be much worse had they been in power.

"Imagine the stance Canada would have taken when Hezbollah and Hamas terrorists attacked Israel. Imagine how many Liberal insiders and ideologues would be now in the Senate, the courts and countless other federal institutions and agencies – I should say, how many more," Harper said to laughter.

"Imagine the costs of going through with the Kyoto and Kelowna accords with no plan to actually achieve anything on either the environment or aboriginal affairs. Imagine what a carbon tax would be doing to our economy in the middle of a global recession."

He twice pointed disdainfully to tax hikes U.S. President Barack Obama introduced for the highest tax brackets.

Harper urged the crowd not to "forget that Conservatives being in power has made an enormous difference."

The prime minister has been criticized in some conservative circles for allowing the government to go into deficit with spending programs designed to stimulate the economy. At the conference, which continued Friday, some high-profile conservatives warned against watering down conservative ideas to win votes.

"Conservatives should stop having the internal debate in their head and all the philosophical arguments, and talk about hard specific ideas that make a difference in people's lives, have the courage to stand up and fight for the things we know are right," said Tom Long, a former leadership candidate for the Canadian Alliance.

"We have tried going out and selling things we don't believe in – how's that working?" Said Michel Kelly Gagnon of the Montreal Economic Institute: "If you want to vote for a centrist party, you can vote for the Liberal party of Canada. They're very good at that."

But Harper vigorously defended his policies, arguing that compromises had to be made to face the economic reality.

"I'm talking about compromises that address the reality of the lives of real people."

He went on to deride the spendthrift culture in the United States and the recklessness of Wall Street. Harper, who has been described as a libertarian in the past, surprised some in the audience by critiquing those same ideals.

"The libertarian says, `Let individuals exercise full freedom and take full responsibility for their actions.' The problem with this notion is that people who act irresponsibly in the name of freedom are almost never willing to take responsibility for their actions."

Mike Brock, a Conservative blogger who attended the conference, called the speech bewildering.

"The treatment to classical liberals and libertarians – of which I consider myself – was nothing short of stunning," he wrote.

"The condescension was literally dripping from his mouth. Was this his response to the disillusionment that libertarians across the country have had to his government and its policies of late?

"If it was, it did not build any bridges. Rather, it burnt them right down."