Dion's Troubles Mounting

I doubt that the mini-budget would be a problem for Dion and company to swallow as long as it just contains tax cuts plus a cut to the GST. Although Liberals have opposed the one percent reduction they will simply say that Canadians do not want an election and that Liberals are responsible and will make parliament work. Ho Hum. The refrain is like a lullaby. The Conservatives need to place a much more powerful poison pill in the budget to force the Liberals to defeat them.


Dion's troubles mounting
Tory mini-budget a predicament for Liberal leader

John Ivison
National Post


Wednesday, October 24, 2007


OTTAWA -A lucky rabbit's foot may be Stephane Dion's best hope for avoiding the early election that threatens to end his brief tenure as Liberal leader. As things stand, though, it may not work any better for Mr. Dion than it did for the rabbit.

The Liberals thought they had weathered a storm over the Throne Speech, after Mr. Dion indicated his caucus would abstain from the main vote today if the party's amendments were defeated, which they were on Monday.

Now word comes that the Conservatives plan to turn the annual fiscal update into a mini-budget, replete with tax cuts, to either provoke an election or embarrass the Liberals into voting alongside the government.

The Liberals may not have problems agreeing to swallow the corporate and broad-based income tax cuts in the Tory budget -- both of which they are committed to in principle -- but the Conservative plan to cut another point from the GST, at a cost in forgone revenues of $5.4-billion, is likely to provoke severe indigestion in the Liberal leader's office.

Both Mr. Dion and his finance critic, John McCallum, have been vocal critics of the GST cut. Earlier this month, Mr. Dion accused the government of "squandering" $12-billion a year to pay for the two-point cut in the GST, "money that could otherwise have been used more productively."

Mr. McCallum pushed the idea in caucus of increasing the GST back to 7% from its current 6%, a move his party rejected. "From an economist's point of view, it's a capital crime to use up so much fiscal room in such an unproductive way," he said at the time.

As an economist, he would know -- and he may well be right. But the equation must be judged in a purely political light now that a vote against a mini-budget that included a GST cut would almost certainly send the country to an election. [The Bloc and NDP would likely vote against the government.]

Mr. McCallum would not be drawn on the issue yesterday. "We'd have to see. I think the Conservative record is poor -- rising income tax, boutique social engineering credits -- it's bad policy. But I can't comment on a hypothetical minibudget," he said.

In effect, the debate whether or not the Liberals should twist or stick has likely been resolved already. By most accounts, the party is in no position to mount an effective campaign. In choosing to abstain on the Throne Speech, Mr. Dion has signalled he is prepared to listen to his jittery caucus and accept emasculation until the campaign organization has been rebuilt.

"[In the past five months] no effort has been made to assemble a competent campaign operation and now the party is forced to choose between political humiliation and a potentially disastrous outing," said one Liberal. "When self-preservation is in question, what one deems an unacceptable loss of face has a way of becoming quite elastic."

It won't quite be sold like that, of course. The message will be that Liberals like tax cuts and that cutting taxes is the last thing over which they would force an election.

There are dangers in this for the Conservatives -- there is no pressing need to unveil a mini-budget now, other than the cynical, politically expedient desire to humble the Liberals and provoke an election. As one Grit put it, indelicately: "No girl likes to go home with a boy who acts too horny. And [Stephen Harper] can hardly keep his hand away from his fly these days."

But the person who will be weakened most of all is, of course, Stephane Dion.

The NDP is already positioning itself as the "effective opposition" to the Conservatives, and Mr. Dion is in danger of watching the Liberal left wing melt away as he allows the Tories free reign.

Nearly a year after the leader-ship contest, things should be getting better, not worse. The leader should be showing signs of the inner certainty that prompted him to lambaste interim leader Bill Graham for backing an extension to the Afghan mission -- "Our role is to check the government. We're in Opposition. Wake up you guys!" he said at the time.

But times have changed, and Mr. Dion has exhibited none of the backbone that helped get him elected. In which case, his current predicament must be put down, not to bad luck, but to cause and effect.

© National Post 2007