#11 – Flaherty’s floundering financial fix.

There are no more passing report cards for Jim Flaherty. Harper’s finance minister is toast. On November 27 last year, he brought the Harper government to its knees with an ill-conceived economic statement that ignored reality. Given a reprieve by the Governor General, he brought in a budget at the end of January that made everybody choke. All it did was ensure our federal government would fall deeper in debt. He produced a budget that lacked planning and focus and did no measureable good for anybody.

In fact, the budget did more wrong than right. It trivialized the serious flaws in Canada’s employment insurance and, in doing so, kept funds from the people in the most desperate need. All his tax cuts could do was put the country deeper into debt. They did nothing to solve the immediate problems: the need for job creation and financial stimulus.

The budget made much of a tax credit amounting to 15 per cent of the costs of some limited home improvements that homeowners carry out this year. You get the tax credit next year. Home Depot or Rona can beat that deal any time with just some sharp marketing and give you money back at the same time.

The municipal infrastructure support plan has been a bad political joke. It is not enough and Flaherty failed to solve the basic problems of how to get the money moving immediately to where needed. Besides, infrastructure programs do not receive funding until announced in the community at least six times, by the local Conservative politician. If you do not have one of those people representing your riding, you can hardly expect very much largess from Ottawa.

The only hope for Flaherty’s foolishness was that President Obama’s rescue plan for America would cover all of North America. It did not as Americans, once again, proved that their idea of free trade is not fair trade. We have to work hard on the Americans to convince them that we are all in the same boat. We also have to cheer on Obama’s recovery program because when he gets the U.S. out of the deep doo-doo, it will pull our economy with it. And that is reality.

Meanwhile, Flaherty has missed every opportunity to soften the short-term recession hit for Canadians. We need to get cash money into the hands of people who are going to spend it immediately. Any program that can do that is worthwhile. All the rest are lies. While watching details on that January budget on television, Canadians were seeing commercials touting the Conservative’s tax-free savings plan. Our taxes (or deficit) pay for those television commercials that encouraged Canadians to do what is the most harmful thing in our current economic situation: put their money in banks. And they have been doing it in record numbers.

What Flaherty’s budget did accomplish was to wash out the proposed coalition of the Liberals and NDP supported by the Bloc Québécois. It was hardly that the budget was too persuasive. If anything, it was because the budget was so bad. The Liberal’s Michael Ignatieff saw that he did not need the coalition. Without the threat to political funding that was in the earlier economic statement, Ignatieff could let the Conservatives destroy themselves. Over the summer, Canadians will continue to get ample evidence that Harper’s government has no answers. This fall or, at the latest, early next year, everybody will be ready for an election. It is hardly the best solution for Canadians but Ignatieff needed the time to get his party organized and, at the same time, let the voters see the ineptness of the Conservatives.

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