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The Politics of the Budget Game

March 10, 2010 - Ray Pennings

Every budget is political.  In minority government contexts, they are designed either to pass the House confidence test or to serve as a platform for the government to go to the polls. Which flavour of budget was this? The Conservatives telegraphed clearly, in advance, that continuing to govern was their priority, and the Liberal opposition confirmed immediately following the budget that they were not ready for an election either. Thus, at the blandest level of analysis, to quote one M.P. at a post-budget reception, “It’s going to pass, so by definition it is a success.”

But the upcoming vote on this budget must not be its measure of success. Both the budget itself, and opposition responses to it, are important positioning pieces for their parties. How, where, and when parties propose to spend taxpayer money is usually more helpful in determining political agendas than the fluffy “motherhood and apple pie” rhetoric comprising most partisan speeches and brochures. In a sense, the budget and formal responses to it are laying the foundation for the next party platforms.

The Bloc and NDP—neither of whom are contending to be the governing party—have a clearer purpose in responding than do the Liberals. To be successful and well-supported, these parties must convince constituents that their own priority issues—Québec interests and the working left—are best advanced by a third party vote. So, not surprisingly, the analyses from these parties focused on what the government failed to do in their priority areas.

As our own budget-day analysis indicated, the Conservatives did not use this budget to advance a larger vision.  With a single-minded focus on returning to balanced budgets with minimal pain, the budget’s five-year timeline is clear: any new initiatives proposed by any party in the next election will have to be off-set by specific cuts or tax increases. The Conservatives are calculating that long-term fiscal prudence is the voter’s priority, and that they can ride the wave of having managed Canada through this global economic crisis in better shape than most countries. They want to win the “best able to manage into the future” vote.

So the Liberals are in a box. They will contest the Conservatives’ claim to fiscal prudence, arguing that they themselves conquered the deficit in Paul Martin’s years as Finance Minister.  In fact, they will argue that the $92 billion of foregone GST from 2006-2015 has foolishly diminished the government’s capacity to maneuver. But conversely, the Liberals are also expecting that their Montreal Big Ideas conference will provide some inspirational planks around which to build their next platform—planks which inevitably involve a significant price tag. The Conservative political machine, then, will poke holes, demonize, and cost-monger the Liberals’ proposals—whatever they might be—in the same way as they successfully pilloried the “Green Shift” in the last election. Voters in 2008 chose safe fiscal management over bold environmental ideas; both leading parties are trying to discern if those priorities have changed today.

What this unfolding narrative does not address is the significant challenge that imminent demographic change is likely to wreak on status quo. The Parliamentary budget officer, international reports, numerous think tank reports from across the spectrum, and even the government itself have highlighted how the coming “population bomb” (as Foreign Affairs labeled it) will mean fewer workers and consumers (straining all parties’ predictions of economic growth), and will also put incredible strain on our social system and the expected level of care and service. There is near-universal acknowledgement of the problem, but there have been no significant structural changes proposed in the political realm to address it. The political narrative continues to unfold on short-term ideas, while the long-term challenge exists without a consensus answer.

Politics follows culture, which is one reason why politics tend to be inherently conservative. We elect lawyers and economists; managers, in a word—folks who won’t rock the boat too much or depart from the cultural orthodoxy too radically. Polls rein in anything too far ahead of the curve. And while this makes for stable and responsible politics (no small matter!), it also makes for excessively short-term politics.

The old “pan-Canadian consensus” isn’t up to the challenge of the coming generation; the debate on what government should or should not do simply isn’t broad enough to face down Canada’s 21st-century problems. It’s too much to expect that leadership from governments, who spend most of their efforts following. We need institutions that can mind the gap: think tanks, civil advocacy associations, trade unions and corporate lobbies, all working to cultivate and sustain the long-term renewal of Canadian society. We need more than markets and governments; both have proved in the past decade that their visions are essentially managerial and short-term. They are critical contributors to the public good, yes—but by themselves incapable of renewing our social architecture.

This is the great public project of Canada’s 21st century.

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This Article Belongs To ...

  1. March 2010: 2010 Budget Edition
    CPIP - 2010 Budget Edition

    The 2010 Special Budget Edition of CPiP features Cardus' Federal budget analysis, political responses to the budget, and a special Canadian Think Tank Index summarizing the views of the Canadian policy landscape 72 hours after the budget.

    Download the PDF.