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Conservatives have pushed Canada to the brink of deficit


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Gotta love the Harris boys club running Ottawa!

Tax cuts by Conservatives leave government hamstrung: Critics; Shrinking surplus limits ability to respond to crises, former finance ministers say

The Toronto Star

Thursday, March 13, 2008

Page: A23

Section: News

Byline: Richard brennan and Bruce Campion-Smith

Source: Toronto Star

The Conservatives today will attempt to kill a Liberal-sponsored bill that would make education savings tax deductible, a plan they say is unaffordable and would plunge Canada into deficit.

But federal Finance Minister Jim Flaherty's worries about the program's costs highlight a fundamental change in the country's finances - coffers emptied by Tory tax cuts that leave the current government with little cash to spend, and do the same to future governments.

If a future government wanted to boost funding to cities or dramatically hike spending on the environment, it would be hard-pressed to find the money without cutting other programs or raising taxes.

The shrinking surplus is in line with Prime Minister Stephen Harper's long- held belief that the federal government should "stick to its own knitting," said Nelson Wiseman, a political scientist at the University of Toronto.

"It's not interested in launching programs in areas of provincial jurisdiction. It likes tax cuts, it wants to reduce the size of government," Wiseman said of Harper's Conservative government.

Liberal MP Ralph Goodale, a former finance minister, called it "ideology run amok."

"They have obviously taken the view ... that you should have severe handcuffs on the federal fiscal framework in order to curtail and ultimately diminish the value and the effectiveness of the government," Goodale (Wascana) said in an interview.

When the Tories took over in February 2006 they inherited a surplus that topped $13 billion. After trimming the goods and services tax by two percentage points, which meant lost revenue of more than $11 billion a year, and cuts to corporate and individual taxes, the Conservatives are left with a surplus of just $2.3 billion in the coming year.

Flaherty cites it as an example of prudent financial planning. But critics say the razor-thin margin leaves little ability to implement new programs or cope with emergencies or a slowing economy.

Thanks to the Liberal policy of keeping a $3 billion contingency, the country weathered two currency crises, the 1998 ice storm, the 2003 SARS crisis and the terror attacks of Sept. 11, 2001, Goodale said.

But now that the Tories are eating into that contingency fund, Canada has "no wiggle room left" and is perilously close to going into the red should any little "hiccup" in the economy come along, he said.

"Even a rounding error could push them into deficit again. If there is a 1- per-cent variation on either revenue coming in or on expenditures going out they will be back into deficit once again. It is grossly irresponsible to run that close to the line."

Former Ontario Liberal finance minister Greg Sorbara said if Canadians want to see where the Conservative government is taking them, they only have to look into Ontario's recent history.

"This is exactly the agenda the Conservatives followed in Ontario under Mike Harris and Jim Flaherty and Ernie Eves. Their intention, as we heard later, was to cut the revenue base to the bone so as to prohibit future governments from (undertaking new programs)," Sorbara said in an interview.

Sorbara said the SARS outbreak and the blackout in August 2003 put the province in trouble.

"With that we went from a province that had been moving more toward balancing to a province that was almost $6 billion in debt."

It's because of Canada's slim surplus that Flaherty says the government will torpedo the federal Liberal proposal that would let parents make a $5,000 tax deductible contribution to a child's registered education savings plan.

While Liberals say the proposal - now before the Senate - would be a popular incentive to encourage education savings, Flaherty says it's a costly scheme that means $900 million in lost tax revenue. That's why today's ways and means motion on the budget includes a clause to nullify it, if it becomes law.

Flaherty defended his budget plan, saying the days of "March madness" - with the Liberals awash in excess funds - are over.

"Every March all of a sudden there'd be $10 billion or $15 billion. .. . They'd just go spend the money on pet projects," he said. "We're not doing that anymore."

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Gotta love the Harris boys club running Ottawa!

[color:purple]

Come on ... what's there not to like about the club and the dude who is leading it???

He likes to wear dead animal legs around his neck and is a real cowboy too! I heard he's gonna be there for the first clubbing of a seal pup at this year's slaughter too.

450_cp_harper_080310.jpg

Prime Minister Stephen Harper wears a wolverine fur stole while meeting mushing teams at the Arctic Winter Games in Yellowknife, N.W.T. on Monday, March 10, 2008. (Jeff McIntosh / THE CANADIAN PRESS)

stephen_harper_prime_minister.jpg

harper_cowboy.jpg

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The Liberal Solution: Throw money at it.

And some say Stephen Harper is a stain.

But the last Conservative Budgets have been biggest spending budgets in Canadian history - more than any Liberal government ever - who's really throwing money at it?

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It's the method to the madness in liberal spending that gets me. Money that goes out to float an already unstable economy against the absolutely inevitable. $1 billion to manufacturing doesn't change the fact that the same can be done in some foreign country on a cheaper wage and a cheaper part. If anything it will only lead to increased over-production. Unfortunately, a lot of manufacturers are going to be screwed, either today, tomorrow or five years down the road. I'd rather a Canadian government who recognizes at least to a degree, the inevitability the manufacturing sector faces and focuses more on providing its citizens and businesses with tax relief in order to give some sort of stimulation, all the while buckling down for a recession, which IRONICALLY seems to come right after a very long Liberal reign.

Maybe we need a war.

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It's the method to the madness in liberal spending that gets me.

So who just did this:

Investing in the country’s manufacturing heartland.

In February 2008, Parliament passed the Government’s $1-billion Community Development Trust to support communities and workers. Budget 2008 builds on this investment by providing $250 million for an Automotive Innovation Fund to help Canada’s automotive sector adapt to the challenges of the future.

Oh yeah - Conservative Budget 2008

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I'd rather a Canadian government who...(etc. etc.)...all the while buckling down for a recession

They guys are doing the complete opposite, blowing through the contingency and prudence reserves (established by Liberal Govts), spending more than any Gov't in Canadian history and putting the country one "SARS" away from a deficit.

To get the Govt you want I think you're either gonna have to relocate to Texas or vote Liberal.

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