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Sunday, January 15, 2006

Cheshire economics 


If the media are now going to blunt every criticism of the Conservative budget by describing it as just another attack on Harper, then neither the Liberals nor the NDP will be able to generate any traction.
What we are seeing now from the Conservatives is what I am calling Cheshire economics -- promises appearing from thin air like the Cheshire Cat's smile, then quickly disappearing before they can be pinned down.
This CP story is headlined Federal election campaign enters final week with attacks focused on Harper, which trivializes some serious concerns:

A Tory government would boost user fees to finance costly election promises, Layton warned. . . "They relieve you of your cash in other ways, with user fees and charges and things they don't call taxes," he told supporters . . . Martin was also in warn mode, saying the Conservative platform doesn't add up and costly pledges to help cities build infrastructure, housing and sports facilities could suffer. "Mr. Harper won't tell us what he'll cut, he won't tell us which programs he's going to cut and which services he's going to cut," Martin said . . . "But let me tell you, something is going to have to give."
Meanwhile, we're already seeing some Conservative cutbacks appear and promises disappear. When Harper released the Conservative budget, it included a letter from the Conference Board of Canada (pdf) trumpeting its affordability.
So Saturday we got the news that the budget had been quietly reissued because originally it hadn't listed $26 billion in hidden spending cuts.
Today we find out that the budget approved by the Conference Board didn't include billions Harper has now promised to Quebec, nor does it include his promise that Canadians can go elsewhere for health care if necessary:

[Conference Board economist]Darby says the version of the platform he was given to vet didn't include a Conservative party health-care guarantee which states patients will be transported to another jurisdiction if they can't get timely care at home. It also omitted a Tory platform promise to redress the so-called "fiscal imbalance" between Ottawa and the provinces. Darby wouldn't comment on whether the timely health-care guarantee would bear a significant cost. "Talk to Harper," he said. "It is not in the platform I received from them." It's also not clear what the Conservatives expect to pay to redress the fiscal imbalance . . .
Now, Goodale and the Liberals argue that the so-called fiscal imbalance doesn't really exist. So maybe this explains it -- the Conservatives were promising anything to sound good in Quebec, but later on they intended to announce that -- surprise, surprise -- they actually don't owe the provinces anything after all.
But beware, Ontarians -- don't make that appointment at the Mayo clinic just yet.
'Would you tell me, please, which way I ought to go from here?'
' That depends a good deal on where you want to get to,' said the Cat.
'I don’t much care where--' said Alice.
' Then it doesn’t matter which way you go,' said the Cat.
' --so long as I get SOMEWHERE,' Alice added as an explanation.
' Oh, you’re sure to do that,' said the Cat.

UPDATE: And as POGGE notes, check out Tilting at Windmills where Ian Welsh says the capital gains tax exemption will distort the Canadian economy by encouraging speculation in housing and in securities.

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