November 28, 2008
Don't forget why they REALLY wanted their coalition...
From: The Globe and Mail
OTTAWA - The Harper government is proposing to end a $27-million subsidy for political parties in today's fiscal and economic update - a measure taken in the name of federal belt-tightening that also threatens to hit opposition parties especially hard in the wallet.
The Conservatives have traditionally fared the best at grassroots political fundraising and depended less on a per-vote subsidy, introduced by former Liberal prime minister Jean Chrétien when he passed legislation in 2003 ending corporate and union donations to federal parties.
The controversial measure is likely to distract attention today from looming fiscal problems facing the Tories.
Finance Minister Jim Flaherty is expected to announce in the update that the federal government could run its first budget deficit in half a generation next year - a historic slide back into the red that could deepen when the Tories introduce a planned economic stimulus budget early next year.
The Tories are expected to publish a range of forecasts today including projections showing a deficit in the 2009-2010 fiscal year - which would be the first shortfall in 13 years.
Opposition parties denounced the proposal to end per-vote subsidies in the name of economic restraint as a partisan power play.
"They're using the update to hurt their rivals... it's playing Karl Rove politics - getting people upset against the political class generally," said NDP finance critic Thomas Mulcair, referring to a former adviser to U.S. President George W. Bush.
The Tories are expected to make it costly for rival parties to fight their proposal by introducing legislation to eliminate the subsidy, worth $1.95 per vote annually. The legislation is expected to be a money bill and therefore a confidence vote, which means defeating it could trigger another election. If this happened, the Tories could blame rival parties for refusing to make sacrifices.
"We will see who wants to lead by example," Conservative government House Leader Jay Hill told MPs in the House of Commons yesterday.
The Tories would lose the most money in absolute terms - because the subsidy is distributed according to the number of votes received in the last election - but the proposal would hit other parties such as the Liberals and Bloc Québécois more because these organizations are less successful at fundraising and more reliant on the per-vote subsidy.
Liberal finance critic Scott Brison said his party was still deliberating on whether to oppose the proposal, but said it marks an early return to political gamesmanship by the Tories after the election.
"Stephen Harper is trying to change the channel," he said, accusing the Tories of trying to redirect attention from Ottawa's weakened financial state.
The Tories, however, will defend their proposal, saying parties would still benefit from generous tax credits for individual political contributions and taxpayer reimbursement of candidates' expenses.
Today's fiscal snapshot is not going to put a price tag on the sort of "unprecedented" fiscal stimulus that Prime Minister Stephen Harper warned may be necessary after a global economic summit last week. And it will not contain major measures to jump-start the economy. The Tories say they're postponing these until the 2009 budget, a document often released in late February.
Still, under pressure to act as other countries divulge their stimulus plans, the Tories announced yesterday they're moving up the budget date.
The Tories are wrestling with exactly how to stimulate Canadian economic growth given that foreign demand - not domestic demand - is the biggest problem on the horizon.
They would first like to have a better sense of what president-elect Barack Obama's incoming administration plans to revive U.S. growth, given the United States is Canada's largest trading partner. And they're puzzling over which policy tools would have the best impact in Canada.
New infrastructure spending could take up to 18 months to flow and make an impact while consumers might just bank rather than spend any government cheques sent their way, they say. Temporary tax cuts could work, but incur a political penalty when rates rise again after the stimulus period ends.
Ottawa is expected to run a surplus for the current fiscal year. But a deficit is all but certain for the next fiscal year. Private-sector economists and a parliamentary budget watchdog have already forecast deficits ranging from $3.9-billion to $10-billion.
When Mr. Flaherty predicted a $1.3-billion surplus for 2009-2010 in last year's budget, he was counting on economic growth of 2.4 per cent. But Canada's economy will now do well to grow at all next year - according to the private economists he consults in formulating his outlook - and may even contract, according New York-based Merrill Lynch's Canadian analysts.
The Finance Department's own calculations suggest Ottawa loses $3-billion in revenue for every one percentage decline in economic output, or more precisely, in inflation-adjusted gross domestic product.
Stéfane Marion, assistant chief economist at National Bank Financial and a former Finance official, defended Mr. Flaherty's decision to wait to unveil a set of policies aimed at boosting economic growth.
Since the decline of U.S. consumer demand is the biggest blow to Canada's export-driven economy, Mr. Flaherty should wait to get a better idea of what Mr. Obama's administration will do to spur spending south of the border, Mr. Marion said.
To be effective, he said, any stimulus package would have to be the equivalent of least 1 per cent of Canada's $1.6-trillion economy, or $16-billion. Derek Burleton, director of economic analysis at Toronto-Dominion Bank, said any stimulus program would have to be between $10-billion and $20-billion.
The International Monetary Fund has advised countries to deploy fiscal programs worth 2 per cent of GDP, or $32-billion, to stimulate economic growth.
Copyright 2008 - The Globe and Mail
Opposition takes hit as Tories move to cut $27-million subsidy for parties
Flaherty expected to predict first deficit in 13 years
By: STEVEN CHASE AND KEVIN CARMICHAEL
November 27, 2008
OTTAWA - The Harper government is proposing to end a $27-million subsidy for political parties in today's fiscal and economic update - a measure taken in the name of federal belt-tightening that also threatens to hit opposition parties especially hard in the wallet.
The Conservatives have traditionally fared the best at grassroots political fundraising and depended less on a per-vote subsidy, introduced by former Liberal prime minister Jean Chrétien when he passed legislation in 2003 ending corporate and union donations to federal parties.
The controversial measure is likely to distract attention today from looming fiscal problems facing the Tories.
Finance Minister Jim Flaherty is expected to announce in the update that the federal government could run its first budget deficit in half a generation next year - a historic slide back into the red that could deepen when the Tories introduce a planned economic stimulus budget early next year.
The Tories are expected to publish a range of forecasts today including projections showing a deficit in the 2009-2010 fiscal year - which would be the first shortfall in 13 years.
Opposition parties denounced the proposal to end per-vote subsidies in the name of economic restraint as a partisan power play.
"They're using the update to hurt their rivals... it's playing Karl Rove politics - getting people upset against the political class generally," said NDP finance critic Thomas Mulcair, referring to a former adviser to U.S. President George W. Bush.
The Tories are expected to make it costly for rival parties to fight their proposal by introducing legislation to eliminate the subsidy, worth $1.95 per vote annually. The legislation is expected to be a money bill and therefore a confidence vote, which means defeating it could trigger another election. If this happened, the Tories could blame rival parties for refusing to make sacrifices.
"We will see who wants to lead by example," Conservative government House Leader Jay Hill told MPs in the House of Commons yesterday.
The Tories would lose the most money in absolute terms - because the subsidy is distributed according to the number of votes received in the last election - but the proposal would hit other parties such as the Liberals and Bloc Québécois more because these organizations are less successful at fundraising and more reliant on the per-vote subsidy.
Liberal finance critic Scott Brison said his party was still deliberating on whether to oppose the proposal, but said it marks an early return to political gamesmanship by the Tories after the election.
"Stephen Harper is trying to change the channel," he said, accusing the Tories of trying to redirect attention from Ottawa's weakened financial state.
The Tories, however, will defend their proposal, saying parties would still benefit from generous tax credits for individual political contributions and taxpayer reimbursement of candidates' expenses.
Today's fiscal snapshot is not going to put a price tag on the sort of "unprecedented" fiscal stimulus that Prime Minister Stephen Harper warned may be necessary after a global economic summit last week. And it will not contain major measures to jump-start the economy. The Tories say they're postponing these until the 2009 budget, a document often released in late February.
Still, under pressure to act as other countries divulge their stimulus plans, the Tories announced yesterday they're moving up the budget date.
The Tories are wrestling with exactly how to stimulate Canadian economic growth given that foreign demand - not domestic demand - is the biggest problem on the horizon.
They would first like to have a better sense of what president-elect Barack Obama's incoming administration plans to revive U.S. growth, given the United States is Canada's largest trading partner. And they're puzzling over which policy tools would have the best impact in Canada.
New infrastructure spending could take up to 18 months to flow and make an impact while consumers might just bank rather than spend any government cheques sent their way, they say. Temporary tax cuts could work, but incur a political penalty when rates rise again after the stimulus period ends.
Ottawa is expected to run a surplus for the current fiscal year. But a deficit is all but certain for the next fiscal year. Private-sector economists and a parliamentary budget watchdog have already forecast deficits ranging from $3.9-billion to $10-billion.
When Mr. Flaherty predicted a $1.3-billion surplus for 2009-2010 in last year's budget, he was counting on economic growth of 2.4 per cent. But Canada's economy will now do well to grow at all next year - according to the private economists he consults in formulating his outlook - and may even contract, according New York-based Merrill Lynch's Canadian analysts.
The Finance Department's own calculations suggest Ottawa loses $3-billion in revenue for every one percentage decline in economic output, or more precisely, in inflation-adjusted gross domestic product.
Stéfane Marion, assistant chief economist at National Bank Financial and a former Finance official, defended Mr. Flaherty's decision to wait to unveil a set of policies aimed at boosting economic growth.
Since the decline of U.S. consumer demand is the biggest blow to Canada's export-driven economy, Mr. Flaherty should wait to get a better idea of what Mr. Obama's administration will do to spur spending south of the border, Mr. Marion said.
To be effective, he said, any stimulus package would have to be the equivalent of least 1 per cent of Canada's $1.6-trillion economy, or $16-billion. Derek Burleton, director of economic analysis at Toronto-Dominion Bank, said any stimulus program would have to be between $10-billion and $20-billion.
The International Monetary Fund has advised countries to deploy fiscal programs worth 2 per cent of GDP, or $32-billion, to stimulate economic growth.
Copyright 2008 - The Globe and Mail
