Will budget rescue Canada and the Conservatives?

This is from the Star.

Of course, not all voices counted equally I expect! His economic advisory council crammed with corporate leaders no doubt has a big say. Ultimately Harper and company make the final decision. It sounds as if Harper has learned his lesson and will put enough in the budget to buy off the Liberals and also pacify if not please the majority of Canadians. Ignatieff may growl and complain but in the end will likely help pass the budget.



WHO HAD A SAY
The Harper government claims to have conducted the most comprehensive and inclusive budget consultations in Canadian history. Here's its accounting by the numbers:
46 municipalities consulted
5,400 letters, emails and submissions from groups, individuals
70 formal roundtables
4 meetings between Flaherty and his economic advisory council
7,200 online responses
102 discussions with provincial/territorial officials
680 organizations consulted included manufacturing, forestry and mining

As their careers hang in the balance, Harper and Flaherty bank on a plan for all reasons
January 25, 2009 Les WhittingtonBruce Campion-SmithOTTAWA BUREAU
OTTAWA–While the rest of the world turned their eyes to U.S. President Barack Obama's inauguration ceremonies in Washington, Stephen Harper and Jim Flaherty spent last Tuesday afternoon fine-tuning the budget that will spell the fate of their Conservative government.
With only days to go before the most important federal budget in many years, the Prime Minister and his finance minister got together at a Toronto hotel where Harper had just finished a prebudget session with business executives.
After unprecedented Canada-wide consultations prompted by the near-death of the government in December, decision-making on Tuesday's economic package was still in play even as the deadline for sending the budget out for translation and printing neared.
"There was a myth that the budget was written two weeks ago, but it was a work in progress almost right up to the last moment," a Conservative official said last week.
As one of the earliest federal budgets in memory – the finance minister normally speaks to Parliament in late February or March – the blueprint to be unveiled Tuesday was by necessity a hurry-up job.
On top of that are the unusually high stakes. Hanging in the balance is not just the fate of the Conservative government but the political careers of Harper and Flaherty.
Only Harper's suspension of Parliament last month saved him from defeat at the hands of opposition MPs angered by the lack of economic stimulus in Flaherty's Nov. 27 fiscal statement. And the Liberals and New Democrats are still threatening to topple the Conservatives if the budget fails to live up to Canadians' expectations.
Above all, the $250-billion package of spending and tax measures was being prepared against the backdrop of the worst economic crisis in modern times.
"The process is certainly the most challenging, the most difficult of the four budgets I've done, this being number four," Flaherty told the Star.
For both Harper and Flaherty, the transformation from anti-spending hawks to purveyors of a massive deficit has been a harsh one.
Private-sector markets have broken down "and the only player who can fill that gap is the government," Flaherty said.
After last Tuesday's meeting, things began to move quickly.
Trying to prime the public for bad news, the Prime Minister's office took the step Thursday of breaking budget secrecy to reveal the planned deficit would reach $64 billion over two years.
As far back as mid-December, Harper had alerted Canadians to the depths of the developing economic calamity by revealing Ottawa might run up a huge budget deficit to try to rescue the economy.
But the roots of Tuesday's budget can be traced back further – to the economic turmoil that gathered momentum last autumn. At the time, the Conservatives insisted as part of their election campaign that Canada would duck the worst of the downturn, even as stock markets plunged and job worries grew.
"We will not be running a deficit. We will keep our spending within our means," Harper said in a Toronto speech on Oct. 7, 2008. "This government will not panic at a time of uncertainty."
Was the Prime Minister too slow to confront the rapid economic slide? His critics think so. But, in an interview, Harper dismissed that criticism, saying the recession was not evident at the time of the election. "The leader of a country doesn't go out and predict a recession when nobody else is," he said.
He was soon forced to put the economy at the top of his agenda. The day after the Oct. 14 election, he said his government would be focused on protecting "our earnings, our savings and our jobs."
Within the government a realization hit home that dramatic action would be needed to kick-start the economy as the housing market slowed, domestic automakers floundered and pension savings were battered. That view was confirmed as Harper spoke to other world leaders – including November's summit of G20 leaders in Washington – where they jointly pledged to take action to stimulate the global economy.
By then it was apparent to the Prime Minister and others that "this was not just a financial crisis," a senior aide to Harper said.
As the crisis shifted from Wall Street and Bay Street into the wider economy, business conditions began to worsen faster than anyone had predicted, the aide said. "It was probably clear to him (Harper) earlier than many others that we would have to take actions that were pretty significant."
Fast forward to now and the federal Conservatives are on the edge of what they call the "most important" budget in several decades.
The document to be tabled in Parliament on Tuesday is in part the product of extensive consultations by Harper, Flaherty and other Conservatives with interest groups, premiers, economists and others across the country. More than 7,000 people sent ideas to Flaherty on the finance department's online consultation site.
The Conservatives say this process has put them in a position to respond with confidence to Canadians' needs.
"Our main job was to listen and the listening has been very helpful," Flaherty said. "The people who have given us advice will see many of their views reflected in the budget on Tuesday."
But the consultations were also a public relations offensive to make up for the fact that the Conservatives' fall economic statement fell flat, disappointing both business leaders and ordinary Canadians.
As usual, the finance department had since late summer been putting together a series of recommendations and policy alternatives for the government to consider for its fall update, which serves as a jumping off place for the full-scale budget early in the following year.
A pivotal figure in this effort is Rob Wright, the deputy minister of finance and an official with 34 years' experience in the federal government. He funnels the department's prebudget work upward to the minister's attention and carries the Conservatives' political priorities back to the department so officials can shape the final policy measures.
Also in the forefront of the budget exercise were key figures in Flaherty's office – chief of staff Derek Vanstone and Kevin McCarthy, his senior policy adviser – as well as Harper's own top officials and several top bureaucrats.
They include Guy Giorno, Harper's chief of staff; Patrick Muttart, his deputy; Darrel Reid, director of policy, and Jasmine Igneski, an adviser on economic affairs, environment and energy security. Kory Teneycke, the director of communications, is advising on how to sell the budget – and its whopping fiscal shortfall – to the media and, through them, to Canadians. A key figure for two reasons is Kevin Lynch. He's clerk of the Privy Council, government's most senior bureaucrat. And for four years he was deputy minister of finance.
Still, political reality trumped policy analysis this time around. And ultimately the major decisions were taken by Harper and Flaherty. The budget, likely to run about 300 pages, is being printed this weekend: 12,000 copies (8,000 in English and 4,000 in French). It is expected to contain multi-billion-dollar spending promises for infrastructure, training for laid-off workers, support for auto and other industries, tax breaks to help average Canadians and measures to free up consumer and business lending.
Will it be enough to win over the opposition parties and keep the Conservative government alive?
Harper says he doesn't expect his opponents in Parliament to agree with every measure but hopes politicians of all stripes will co-operate for the sake of the economy.
"I know that parliamentary politics is about conflict," he said. "But I think everyone is expecting – from provincial, federal governments, business and labour, opposition and government – that people will try and find common ground on the things they agree on rather than focusing on the things they don't agree on."


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