Inkless Wells

Inkless Wells

Paul Wells on all the latest out of Ottawa—along with the occasional post about jazz. Follow Paul on Twitter: @InklessPW

Cut and won

by Paul Wells on Monday, February 8, 2010 8:24pm - 53 Comments

The last time I was in Edmonton covering a provincial budget, Treasurer Stockwell Day was implementing a single-rate personal income tax. Goodness, that was 11 years ago. Anyway, the eyes of the nation, or at least of parts of Ottawa, will turn again to Edmonton tomorrow when rookie provincial budget minister Ted Morton delivers the save-Stelmach-if-he-can-be-saved budget. What follows will be instructive for the rest of us.

The partisan context is way different in Alberta than federally, of course: the Stelmach Progressive Conservatives are outflanked on the right by Wildrose Alliance and face no credible opposition to their left. That’s why Morton is treasurer, after all; after running up the fastest spending increases of any province in Confederation for a decade, the Klein-Stelmach Conservatives must now paint themselves as late but firm converts to fiscal discipline. But the Harper Conservatives, who face no opposition to their right, will nonetheless be watching what Morton does, and how it’s received, with interest.

That’s because the Harper Conservatives must decide how, or whether, to dig out of the federal deficit. When I quizzed several senior Conservatives on the matter before the New Year, they still seemed genuinely unsure and nervous about how fast to proceed. Cut popular programs and you seem mean. Let deficits bloat and you look out of touch (and, perhaps, demotivate part of your base). I know what they’d like to do: hold taxes and transfers steady, leaving cuts as the only option and program spending as the only target. A year or two of that would cut sharply into the Liberal program legacy. But the question is whether they dare do it.

Along come today’s Harris-Decima numbers, canvassed in the Globe by Bruce Anderson. Respondents are asked whether they want to “continue stimulus spending” or “control spending.” That very mild choice — neither option is phrased in an unflattering way — produces a pretty even split, with partisans of “continued” spending outnumbering fans of “control” by 51% to 49%, 44%, without a huge amount of variation by geography or demographic.

Anderson reads this as a big yellow light to the Conservatives, but I don’t know about that. I know Liberals who used to tell me, when Chrétien was in office, that if you’re all alone in favour of a policy that attracts 40% support, that’s a pretty good day at the office. The other parties divide the rest (subtract most of Quebec), and you’re fine.

To be really helpful, polling on deficit-control options should test some loaded language. That would show us how strongly the various camps cling to their beliefs. How would people feel about “deep cuts to the budgets of popular and useful programs” compared to “letting Canada pile yet more debt onto the next generation”? Or conversely, how about “giving Ottawa the tools it needs to build a fairer Canada, even if it means settling the bill a little further down the road” versus “shutting down the playpens of out-of-touch Ottawa mandarins”? You can phrase these things a lot of different ways. And people will respond differently as the language gets hotter.

My hunch is that spending cuts have a fierce and resilient constituency the Conservatives can tap and hang onto. But I’m not sure of that. Morton’s budget and the reaction to it will help begin to tell the tale.

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  • MJH

    The west in definitely NOT in and the Alberta budget willl have zero effect on the federal political scene.

    • Chris B

      Yeah, all the West has is a PM from Calgary, a Treasury Board Minister from Alberta (BC), Industry Minister from Calgry… need I go on? How much more "in" can you be? Or maybe if by "west" you mean "the Alberta right wing". Because you know that being in does not mean that every policy has to suit you. Not even Quebec gets that.

      • mad as hell

        Just wait a bit. that will change. In Ontario and Quebec conservatives could not be elected dog catcher. Harper was right to move to calgary. People in Etobicoke are way to smart to vote for such an idiot. Only in calgary can he rise above the average.

        • Ex- Pat Nflder

          I know you people in Ont are just to smart to vote for the Harper Conservatives,thats something so easy to see as you put Mcginty back in power, now that's some smart people,how's that working for you again.
          All us dumb people out here in western Canada,( who are the only people creating jobs and actually give something back to this ungreatfull country) will sit here waiting for advice from you and the rest of the Ont liberals before we dare make a move as to who should form our next goverment.How do you feel about the Wild Rose,i'll have to burn my party membership if i can't have the support of all you smart people in Ont.

        • Ex- Pat Nflder

          I know you people in Ont are just to smart to vote for the Harper Conservatives,thats something so easy to see as you put Mcginty back in power, now that's some smart people,how's that working for you again.
          All us dumb people out here in western Canada,( who are the only people creating jobs and actually give something back to this ungreatfull country) will sit here waiting for advice from you and the rest of the Ont liberals before we dare make a move as to who should form our next goverment.How do you feel about the Wild Rose,i'll have to burn my party membership if i can't have the support of all you smart people in Ont.

  • Anon

    "the Stelmach Progressive Conservatives…face no credible opposition to their left."

    And as a left-wing Albertan (yes we do exist) that makes me very angry. The problem is that our parties are run by liberal idealists who are too busy living in their own liberal worlds to bother trying to connect with the average person in this province. Sorry for the rant.

    • burlivespipe

      I'd say there are too many termites attacking the principles of those few liberal progressives. Taft seemed to have a very good idea and sustainable program to offer Albertans last time, but they just can't get past that ol' Trudeau hate-on. Says something about them just as much as it does about left-wing albertan politicians, doncha think?

      • http://intensedebate.com/people/colbycosh colbycosh

        Why is it a mystery that Albertans hang onto their tribal hatred for Trudeau, but NOT a mystery that the Alberta Liberals still can't let go of a brand Trudeau wrecked? The former is normal primate behaviour (indeed, it's arguably straight-up game theory); it's the latter that is hard to explain, except by reference to masochism.

        • http://intensedebate.com/people/Crit_Reasoning Crit_Reasoning

          I like your "masochism" theory. It's the only explanation that makes sense. The Alberta Liberals seem to enjoy being pummelled during elections and marginalized the rest of the time. It probably makes them feel virtuous.

      • Calgary Junkie

        If the Liberal Party here in Alberta can't figure out that:
        A. They should change their name, and
        B. They should find a way to merge with the NDP and Greens

        Then there is no hope for them. It all seems so screamingly obvious and do-able. Yet the Liberals here hang on their albatross of a name, while repeating ad-nauseum that they have "no connection" to the federal Liberals.
        And then there is all the free publicity and hoopla the new merged Party would generate with a leadership convention.

        • hazzard

          I think it says everything anyone needs to about the quality of voter in Alberta/Canada/Most Democracies that the name of a political party is the only requirement for someone to not vote for them. And yet "we" complain that there's never enough debate of issues.

  • http://theplaceofbiff.blogspot.com biff

    Fiscal conservatism will be the new center for some time to come. It's not about ideology so much as about economic survival. It's happening in Europe, in the US: Obama was a blip of "hope and change," misread as an ideological shift to bigger government – the tectonic shift is starting to happen. No one's laughing at the "tea parties" any more, and the Dems will likely be demolished this year for failing to recognize this fact.

    Canada trails slightly, but only slightly as the leftist media have overplayed popularity of statism for some time.

    Which makes Iggy's talk of a massive new entitlement program – national childcare, as tone deaf as one would expect from an Ivy league academic.

    • http://intensedebate.com/people/DerekPearce DerekPearce

      Bush had nothing to do with the inherited, can't be turned on a dime US deficit? How about an unfunded prescription drug plan plus two wars plus tax cuts? The Dems may lose a few seats but will hardly be "demolished" for continuing with Republican profligacy. And by the way, people are still laughing at teabaggers…

      • Kevin Lafayette

        First they ignore you, then they laugh at you, then they fight you, and then you win. Looks to me like those tea parties, that for some reason a lot of people like to use homoerotic references to, is in about stage 2 or possibly even 3 of that particular observation.

        • http://intensedebate.com/people/DerekPearce DerekPearce

          If Republicans get truly serious about cutting spending then the tea partiers will have made an impact. Until then they are being duped/co-opted/ huckstered by Palin and Fox.

          • kcm

            Teapartier fans quoting Ghandi…must be the en times.

      • http://theplaceofbiff.blogspot.com biff

        Blame whoever you want (Dems controlled the house btw, but Bush should have vetoed their massive budgets),

        but right now its the Dems pouring on the spending, A THREEFOLD increase in the deficit.

        It's like complaining that driving 62 mph was too fast, but then shrugging at the driver going 180 mph.

        As for laughing at the tea partiers, of course there are. They are increasingly in the minority though.

        Imaging actually laughing at the notion of limited government at a time when the budget deficits are literally unsustainable. Those that are laughing will no doubt be scratching their heads next November.

        • http://intensedebate.com/people/straittohell straittohell

          Oops. The Democrats did not get control of the house until February 13, 2007. Check the handy chart on this link http://en.wikipedia.org/wiki/110th_United_States_…

          That gave them less than two years out of the eight that the Bush train wreck sped through Washington. Most of the structural budget challenges were insterted by the Rethuglicans long before that.

          It is easy to laugh at the Tea Party for claiming to be mad about fiscal matters while simultaneously hoisting a grammatically challenged poster accusing the President of being a Nazi-socialist pig-dog.

          It is easy to

  • http://theplaceofbiff.blogspot.com biff

    Harper will move more towards economic conservatism.

    Incrementally, as he has always moved. No sudden changes. He won't plan on giving up the center any time soon.

    On the incrementalism point, isn't that whole scaaaaary hidden agenda looking more and more rediculous, more to do with wishful thinking and scare mongering than intelligent analysis.

    The logical flaw in that meme always amazed me: to keep power he must keep the center, but he's sooooo radical that he'll go down in a blazing glory of radical far rightism.

    How ironic given the Liberal's move to the far left, embracing most pet left issues (carbon tax, anti war/accusing troops) such that the NDP appears more centrist at times.

    • Anon

      I always love reading prognoses from Always-Wrong Conservatives.

      Don't ever stop. It's a real time-saver for me: "What's the correct course of action? Listen to what the Conservatives recommend and do the opposite." Works every time.

    • http://intensedebate.com/people/Jenn_ Jenn_

      biff, you're making me crazy. The country is Canada, the word is centre.

    • Jan

      The carbon tax is leftwing? Did you know the conservative American Enterprise Institute favours it over carbon trading?And surely you're not suggesting conservatives don't believe in the Geneva convention? Mind you, on a day when we read Harper's thinking of buying a bridge, I supose anything is possible.

      • Tony

        I like a Carbon Tax over Cap-Trade. I like money to be collected and deposited back into the region that supposedly needs change. I don't like being taxed so that TO can have a festival or a gay-pride parade (not homo-phobic, or big building).Most of all, I don't like being taxed to serve the failed province (or distinct province) of Quebec.

        Somehow, I doubt you like a carbon-tax as much as cap and trade if it wasn't serving you.

        Let's look to Copenhagen where we were told that the developed nation owed the undeveloped nations. Well, by that logic Central Canada owes the historically underdeveloped regions of AB and BC and Sask :)

        Or does logic matter? Don't worry US mid-term elections are coming soon :)

        • kcm

          "Well, by that logic Central Canada owes the historically underdeveloped regions of AB and BC and Sask :) "

          Pity those guys only recently got a demographic push…i wonder why you leave the north off your list…hmmm:)

    • Kevin Lafayette

      Actually, Harper is proving that the hidden agenda was there all along. I mean, if "real" conservatism is so scary that they cannot actually try it till they get the majority, isn't that a text book definition of a hidden agenda?

      The only problem is, I think the real conservative agenda is so well hidden, that Harper won't ever actually find it.

  • http://intensedebate.com/people/s_c_f s_c_f

    What's happening to the Tories in Alberta now is what happened to Mulroney's Tories in '93. They tacked so far left, that when they eventually lost that ground to the Libs, their base had disappeared. The Libs took the votes from the center, and on the right 19% had defected to the Reform party, leaving them with just 16%.

    The Alberta Tories have been tacking to the left, where there are really few votes to be won. They have been moving into the territory occupied by the 26% of the electorate that vote Liberal in 2008. Meanwhile, their base has been defecting.

    Political suicide.

    The other thing that has been happening, is that as the years have passed, liberals have been moving into the party to get a shot at power, and this has diluted the Tory brand.

  • phil

    Yes.

    Clearly having “continue stimulus spending” or “control spending” as poll choices is far too reasonable. Respondents might be forced to consider each on it's own merits. Better to find language which might invoke fear or anger or another emotional response.

    Then the pundits will have a much clearer narrative to attack/defend, or maybe a narrative that adheres more closely to their "hunches".

    Have I misread?

    • http://intensedebate.com/people/Inkless Inkless

      Yup. Here's an explanation you won't want to take at face value either. But what the heck. The question is how tenaciously respondents cling to their support for one option or another. For instance, I may want to continue stimulus spending, but not at the cost of endless bottomless debt. I may want to control spending, but change my mind as soon as I hear what will be cut. And the firmness of commitment to each option may be asymmetrically allotted: partisans of restraint could be way, way more obstinate in their preference than supporters of continued spending. Or vice versa. Trying several different phrasings of similar questions would be one way to find all that out.

      Now you get to read all this as further proof of my bad faith. The fun just never ends around here.

  • http://intensedebate.com/people/Gaunilon Gaunilon

    I'd read it less ambiguously. The CPC either holds taxes steady and cuts spending, or they're toast in the next election.

  • Dot

    Buffalo hunters, won't you come out tonight?
    Come out tonight, Come out tonight?
    Buffalo hunters, won't you come out tonight,
    And dance by the light of the moon.

    Probably not. Morton will have free reign.

  • Anon001

    The Wild Rose Alliance (aka Preston Manning's Stalking Horse) held a convention the weekend before the Alberta budget.

    Manning will have another get-together in Ottawa not long after the Conservative federal budget on Mar 4.

    Rick Anderson now appears to live in Calgary full time.

    Is there a story there somewhere?

  • Toporious Tony

    I just came up with a f*cking brilliant idea: how about the Supreme Court of Canada recognize deficit spending as a violation of human rights and possibly even Charter rights? Which it is, by any reasonable analysis. If they can "read in" brand new unenumerated rights for the gays, they can do it for taxpayers.

    Here's how you sell it: you point out, correctly, that deficit spending represents a transfer of wealth from tommorow's largely non-white populace to today's largely white populace. If current trends continue women will form 137% of the workforce by 2040, so you could conceivably go with the gender angle too. The Supremes would *have* to rule it a violation of rights, and if they don't, we could take it to the UN.

    We all support human rights here, yes? Being intelligent, mathematically proficient individuals, we understand how disastrous deficit financing is, yes? So we all agree that a rapid, immediate achievement of a surplus condition is not only sound economics but our duty as rights affirming human beings, lest we be accused of crimes against humanity by the next generation? Good.

    • http://intensedebate.com/people/DerekPearce DerekPearce

      Trying to argue for fiscal conservatism by wrapping it in snide cultural resentment is not going to win moderates over.

      • Toporious Tony

        Hets talking politics here; lose the snark and add some value to the convo, or beat it.

        • http://intensedebate.com/people/DerekPearce DerekPearce

          As opposed to the snark of casually equating deficits with "unenumerated gay rights," just because you don't like both? Right.

        • http://intensedebate.com/people/Jenn_ Jenn_

          You betcha. While I reject your argument that deficits=human rights abuse, I concur with the premise that passing off our debt to future generations is unfair. It can be unfair because women will rule the future world if you like, for myself the premise doesn't change no matter what demographics make up the future generation.

          So I have to ask. If Toporious Tony feels so very strongly about not running deficits, why the hell does he not only vote for, but also shill for, the guy that put us in a structural deficit in the first place? I mean, I understand the original vote–surely it came as a shock to discover the structural deficit began even before the recession. But now? Now that we know? Why haven't you turned on this guy?

          • the Hulk

            Which federal party is currently advocating for fiscal restraint? None of them! Could you imagine how much the Lib/NDP coalition would have spent? Our choices amount to spend, spend more, and spend even more. Despite all of the hatred for Harper that many people have, he really isn't much different from a Liberal when it comes to spending. Maybe it's time for the Reform Party II.

          • http://intensedebate.com/people/CanadianSense CanadianSense

            Ralph Nader tried that in the US and how did that work out for the Democrats?

          • TedTylerEzro

            I might stay home myself, so it isn't all just empty rhetoric from Reform Tories.

          • Toporious Tony

            3 years, twenty billion dollar surplus. That was Harper's outstanding record before the coalition parties demanded he spaz out fiscally. An adult conversation about politics must feature at least two (2) adults speaking intelligently and – this is key – *honestly* about politics. There was no deficit, structural or otherwise, until the opposition demanded more spending in the fall of 2009.

            You're welcome to your opinion Jenn but not your own facts, and the facts are 1) Harper's record prior to the coalition's demands for a deficit was excellent, and 2) Harper did not want to spaz out fiscally, the coalition demanded it of him, the alternative being they'd just take over and do it themselves.

            It's a bit ridiculous that the people who for years claimed to be frightened that Harper would take an axe to social programs are now feigning offense that he is now running a deficit. It doesn't resonate at all. At least change your name to "Don" or "Hank" or "Steve" or something believable if you're going to comment here and pretend to be a FisCon, because I'm just not buying a girl named "Jenn" is a legit fiscal conservative, thus, argument fail.

          • http://intensedebate.com/people/Jenn_ Jenn_

            What have you got to back up your "facts" because I've got Kevin Page behind my facts. You'll note that I made sure to put "structural" in before "deficits" everywhere in my original post, because I am not for one second taking offense that Harper has run a deficit during a time when economic stimulus is required. It is the deficit *before* we began spending on the stimulus that I have a problem with, caused by the unwise vote-grab of lowering the GST right before the economy slowed, which lessened the revenue raised by taxes as people and businesses earned less.

            And while I can well appreciate that this little girl can't possibly understand finances, in spite of working in the industry for the last twenty years, a guy named "Kevin" whose actual job it actually is, said so.

          • Toporious Tony

            I'm astonished to see a woman reference facts,numbers, and even providing an url (!) for once, give me a minute to recover from shock.

            OK, we're good. You got a quote from Page saying that in 2009-2010, a fiscal year we haven't even completed, we are *projected* to have a small deficit. That doesn't at all rebut my claims that for the first three years of Harper's mandate he brought in a total surplus of nearly $20 billion, nor does it support your claim that there was a structural deficit pre-recession.

            Page's projected deficit is so small that it could easily be within the margin of error of his estimate and turn into a surplus; after all, the economy did better in the second half of the year than many people thought. But let's look at what you originally said:

            "the structural deficit began even before the recession."

            The "recession" is acknowledged to have begun in the fall of 2008. You provide an estimate of a deficit in a fiscal year beginning in April 2009, at least six months after the recession began and ending a year and a half after the recession began!

            Nice try sweetie, bonus points for being funny, which I have never seen a feminist do before, and for using facts, albeit from the wrong period. I think we can build on this going forward.

          • http://intensedebate.com/people/Jenn_ Jenn_

            Well, we are making progress! Congratulations on noticing the funny. You are quite correct (at least I shall assume you are since I have no knowledge that doubts it) that in the first three years of Harper's mandate he brought in a total surplus of nearly $20 billion. What we needed was twice that (or so). And we would have had it if Harper had only reduced the GST by 1% instead of going for the second percentage point.

            The thing is, there was a 3 billion dollar contingency fund. And, since Page was projecting a 3 billion dollar shortfall in 2009-10, I take that to mean they used the entire contingency in 2008. Now, while I would have expected the extra 18-20 billion to go toward debt reduction, that should have given us another (roughly) 1.2 billion in interest we didn't have to pay. That, combined with the 1% GST revenue we didn't receive, would have left us more or less even, without the stimulus effect, going into 2010.

          • http://intensedebate.com/people/CanadianSense CanadianSense

            Jenn,

            What did Kevin Page note as the largest growth in spending? Do you agree with the cuts to Education, Healthcare, Social Services in transfer payments to the provinces in the 90's and we should NOW adopts zero growth to deficit slaying?
            Do you also agree with using the EI surplus by the Liberals ($ 54 Billion) to meet a balanced budget?

          • http://intensedebate.com/people/Jenn_ Jenn_

            Of course I hated every one of those. As I shall hate zero growth to services. The only one of those hated measures that I actually objected to was the changes to EI.

            Getting out of deficit is a brutal, horrible thing to have to do. Have to do it we must. Hence my objection to the GST cut, and also all the little tax credits that may make $30 or $50 bucks difference on your tax bill at the end of the day. Sure, whooee, there's a dinner out for most of us (if you don't drink). But now there's a deficit to slay.

          • the Hulk

            Which federal party is currently advocating for fiscal restraint? None of them! Could you imagine how much the Lib/NDP coalition would have spent? Our choices amount to spend, spend more, and spend even more. Despite all of the hatred for Harper that many people have, he really isn't much different from a Liberal when it comes to spending. Maybe it's time for the Reform Party II.

  • kcm

    What i find amusing about this deficit fighting debate is that AB's already seen the promise land of no deficits [ didn't they even eliminate the debt]? So, the question is where do you go from there? The answer is straight back down the deficit hole as soon as you can. This whole balanced budget/ no deficit spending ideology is a sham, like most ideologies…or more fairly like every reasonable issue that fanatics help to morph into an ideology. We'll always have politics and politicians ergo, we'll always have a market for new spending cuz that's where the votes are. Keynes had it right…run up the surpluses in the good times, ride out the bad times with deficit spending. The debt free dream is just that a dream…people being people and politicians being politicians.

  • RayK

    51%-44%, not 51%-49%.

    • http://intensedebate.com/people/Inkless Inkless

      Hey that's true. Sorry. Sloppy of me. Fixed.

  • http://intensedebate.com/people/Crit_Reasoning Crit_Reasoning

    Good blog post. All indications are that Morton's budget will include tough cuts. Danielle Smith will provide a detailed "alternative budget" on Tuesday or Wednesday that will probably include even deeper spending cuts.

    • Dot

      Tom Flanagan, Roger Gibbins and Ken Boesenkool are probably working on it already.

      • http://intensedebate.com/people/SisyphusThis SisyphusThis

        It's probably not much work. They just have to say stuff.

  • http://intensedebate.com/people/PhilCP PhilCP

    I recall some of the fanfare around the transition to the single rate tax.

    It was pitched as more beneficial to low income earners vs high income earners because the sample low income earner was reducing their tax burden by 80% (from $500 to $100) whereas the sample high income earner was only reducing their tax burden by 20% (from $10,000 to $8000).

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