The truck driver, the bank teller, the retiree. The salesperson, the farmer, fisherman. ... We cannot worry about what they say about us around the boardroom tables, but we must care what they talk about at the kitchen tables.
Prime Minister Stephen Harper, at a Conservative Party convention, Saturday, March 17, 2007
Ahh, the old populist ploy. The farmer versus the businessman, the kitchen table versus the boardroom table. The literal juxtaposition isn't as important as the symbolism. Nobody expects or wants a government that runs on corporate power, so why bother raising the subject? Simple: What Mr. Harper was appealing to is the age-old collectivist code, big business versus the people, the rich versus the poor and the struggling workers.
No other explanation for Mr. Harper's comments is plausible. It is also the explanation that does more to help us understand yesterday's budget, a massive, unconservative and fiscally irresponsible expansion of government.
Instead of a budget true to Conservative themes and commitments as we have come to know them in recent years -- tax cuts, smaller government, tight spending controls -- Finance Minister James Flaherty delivered a truckload of blarney. The leftist media used to warn of a Tory hidden agenda. They were right. Yesterday Mr. Flaherty unveiled so many previously unheard-of Tory themes and agenda items he could win a starring role on a Las Vegas stage as an illusionist.
From no hidden agenda to a thousand hidden agendas. A large number of these new measures are even desirable, from corporate tax cuts to raising to $400 the value of goods travellers can bring back to Canada after a 48-hour trip abroad. There are dozens of such items, but for each good one there are matching programs and measures that need not have seen the light.
The tax games over new auto purchases, punishing people with large vehicles with $4,000 penalties and rewarding small-car buyers with $2,000 rebates, is pure class warfare painted green, market mechanisms run amok. Speaking of green, the ethanol-farm lobby won another couple of billion dollars in direct aid, accompanied by a bizarre regulation that will claw back profits if the companies earn rates of return in excess of 20%.
Some of the tax measures make sense, such as more realistic capital cost allowance provisions and a promise to keep reducing corporate tax rates, although the changes are small and dragged out over years. Some, including Roger Martin and Jim Milway on this page, see the tax moves as beneficial, and well they may be in some sense.
But they are nothing compared with the continued drag Ottawa and the provinces impose on the economy by simply taking up so much of what Canadians earn and could be spending on other things besides government priorities.
The tax measures, in short, are all minor events against the massively expanding scale of government revenue and spending. As others note through the National Post today, spending is soaring and any hints of significant future tax cuts have evaporated. All we are left with is the gimmick of the tax-back guarantee, in which the tax cuts will be limited to the amount of interest saved on the money used to reduce the national debt.
What all this means is that taxable Canadians now have no hope of meaningful tax cuts -- the Tories are certainly not going to run on a tax-cut platform in the next campaign. And, logically, there is now no hope of a government that aims to cut spending.
The budget also signals there will be no election this spring, nor this year. Prime Minister Stephen Harper's Tories are not prepared to go to the polls -- they simply don't have the numbers. If the Tories did have the momentum, they would have produced a budget that deliberately challenged the opposition parties, on taxes and spending, leaving all parties no choice but to defeat the government. The Tories did the opposite, winning Bloc support with their extravagent fiscal-imbalance payoff.
Whatever spin Tory insiders are feeding the media about their constant readiness to force an election, it's belied by the budget. This is a budget that sets them up for another year of government, with an eye to a 2008 election--but only if this budget wins them enough support among the bank tellers and around the kitchen table.