Ask a simple question

By Aaron Wherry - Friday, February 3, 2012 at 8:38 AM - 0 Comments

Here are four of the first five questions asked by the NDP yesterday afternoon.

Will he rise in his seat and say to the country that the age of eligibility for OAS will not be raised to age 67, yes or no?

Will he raise OAS eligibility to 67 years, yes or no?

There is enough money for tax gifts for large corporations, but now seniors will have to wait until the age of 67 to get their $540 a month? Yes or no?

Is the eligibility age going to increase to 67, yes or no?

None of those questions received straight answers. The House did though spend the day discussing the pension system and Old Age Security—starting here, resuming here. For whatever it might foretell or explain, Diane Finley’s speech on behalf of the government is here.

The Finance Minister seems intent on doing something. A poll conducted by Ipsos Reid found 74% disapproved of raising the eligibility age to 67.

Never mind the major transformation?

By Aaron Wherry - Thursday, February 2, 2012 at 8:30 AM - 0 Comments

A week after the speech in Davos, CTV has the Prime Minister in “retreat.”

Sources have told CTV News that MPs told Harper during a Conservative caucus meeting Wednesday that reforming pensions “is not a vote winner” and complained they were taken by surprise by the plan.

The government has since toned down their language from the “transformative” changes that Harper spoke about in Davos. ”It’s a review . . . to make sure we have a sustainable, long-term fiscal plan for our country,” Finance Minister Jim Flaherty told CTV. He also said that the upcoming federal budget will have nothing to do with OAS.

Update 9:52am. A note from the Finance Minister’s office. Continue…

Harper and pensions: the choices you make

By Paul Wells - Tuesday, January 31, 2012 at 1:36 PM - 0 Comments

“There are tough, important choices that must be made,” Stephen Harper wrote to his caucus 16 days ago. All righty then. Let’s talk about choices and Old Age Security. One thing I’m going to resist doing is handing out white hats and black hats. There are fewer heroes and villains in this story than, well, choices.

Here (.pdf) is the Ninth Actuarial Report on the Old Age Security Program As At 31 December 2009, tabled before Parliament three months ago. The government says it took a look at that report and had a fright. “Demographic changes will have a major impact on the ratio of workers to retirees,” it says, with the result that “Total annual expenditures are projected to increase… from $36.5 billion in 2010 to… $108 billion by 2030.”

Out went the talking points. The cost of the program will triple! Something must be done! They were more reticent about the next paragraph, which says cost of the program as a fraction of GDP is projected to rise from 2.3% in 2010 to 3.1% in 2030, before declining after that. So 2030 will indeed be a high-water mark in the entire history of the OAS program’s cost, but it’s not really a tripling because everything, including our ability to pay, will have increased in the meantime.

Still, big bump up. Point taken. But then there’s this. Here’s (.pdf) the Second Actuarial Report on the Old Age Security Program As At 31 December 1991, tabled in Parliament on Feb. 7, 1994 — about the time a 34-year-old rookie Reform MP named Stephen Harper would have been getting used to his new job. That report said the total annual cost of OAS would grow from $34 billion in 2010 (it’s in the chart on page 4) to $119 billion in 2030. An even bigger increase than the one projected by the most recent report, but pretty much the same scale. And indeed, on Page 3, that actuary 19 years ago picked 2030 as the peak date for the cost of the OAS program.

Demographics doesn’t change radically from year to year. So anyone reading the 2nd, 3rd, 4th, 5th, 6th, 7th or 8th Actuarial Reports on the Old Age Security Program would have seen the same trend lines that the government says spurred it to action now. Never mind last May’s election — this could have been an issue in any of the last six federal elections. (As we’ll see, and as many of you already know, it sort of was, once early on.) There quite literally could not possibly have been more warning.

So that’s one thing.

Then there’s this. Continue…

Scary stories

By Aaron Wherry - Tuesday, January 31, 2012 at 11:25 AM - 0 Comments

The government sent up Joyce Bateman during QP yesterday to lament that the NDP wanted to expand the Canada Pension Plan. Specifically, the NDP’s plan in the last election was to gradually double CPP over a period of seven years.

Finance Minister Jim Flaherty was not present to hear this, which is perhaps just as well, seeing as how Mr. Flaherty also used to support an expansion of CPP. And, as David Akin notes, Mr. Flaherty also just allowed an increase in those dreaded payroll taxes.

‘EI will be managed on a truly break-even basis’

By Aaron Wherry - Thursday, January 19, 2012 at 1:17 PM - 0 Comments

Greg Weston questions the existence of the Canada Employment Insurance Financing Board.

But in all three years the board has been in existence, the Harper government has simply capped EI rates to spare Canadian workers from potentially huge premium increases. As a result, the rate-setting agency has yet to set a single rate.

The board’s other main responsibility is to invest any surplus EI funds. That has never happened, either. Since the government started capping EI contribution rates, the employment insurance program has been running a deficit now totalling almost $9 billion.

The NDP is unimpressed. For the record, here is how Jim Flaherty explained the CEIFB in announcing its creation. Continue…

Health spending: what Harper said, and the real outlook

By John Geddes - Thursday, January 19, 2012 at 11:44 AM - 0 Comments

The Prime Minister gave us plenty to mull over in his interview this week with CBC’s Peter Mansbridge—on oil pipelines, the Iranian nuclear threat, public service pensions—but the line that popped out for me was Stephen Harper’s surprising claim about the generosity of federal health transfers to the provinces.

His boast sounded precise. Asked by Mansbridge about the premiers wanting more money than the take-it-or-leave-it offer Finance Minister Jim Flaherty recently put on the table, Harper said: “In fact, our transfers on health care, according to projections, are going to grow more quickly than provincial spending on health care.”

If this were true, it would amount to an all but irrefutable rebuttal to anyone who argues the Conservative government isn’t doing its bit to shore up the health system. If Ottawa is on track to increase its share of health funding, then the provinces can hardly complain.

Continue…

Leading by example

By Aaron Wherry - Thursday, January 19, 2012 at 10:35 AM - 0 Comments

The Prime Minister raised the issue of MP pensions in his interview with the CBC earlier this week, but, as the Finance Minister has noted, it is beyond the official purview of the government. Today the Globe reports that support for the reforms will come from the Conservative caucus. Tony Clement meanwhile muses of leading by example.

“I think you’ve got to be fair to the employee [the MP] but you also have to be fair to the taxpayer,” he told CTV’s Don Martin. “We are very cognizant of that.”

He added that no decisions have been made and that already the government is leading by example as MP and cabinet-minister salaries have been frozen this year. MPs earn $157,000 a year; cabinet ministers make $233,247 and the Prime Minister earns $315,000.

Granted, whatever they are paid, those cabinet ministers presently comprise the second-largest ministry and second-largest cabinet in history—the minister now seven larger and the cabinet now 12 larger than the groups Mr. Harper presented upon first taking office. Back then, one of Mr. Harper’s advisors enthused that reducing the cabinet from 39 (as it was under Paul Martin) to 27 would save $15 to $20 million per year. Presumably, reducing it from 39 (as it now is under Mr. Harper) to 27 would save roughly the same amount now.

The austerity that dare not speak its name

By Aaron Wherry - Wednesday, January 18, 2012 at 9:19 AM - 0 Comments

The Finance Minister might be ready to cut some departmental budgets by more than 10%, but he’s not ready to say this has anything to do with “austerity.”

As he did last week, Flaherty bristled at the suggestion he is preparing to table a so-called “austerity budget” that will slash departmental spending beyond the previously announced $4 billion. Instead, Flaherty said he will seek to strike a balance between the need to restrain spending while at the same time supporting growth.

“The budget is about economic growth and jobs,” he said. “If you want to see an austerity budget go to the United Kingdom … with hundreds of thousands of people being laid off. That’s not Canada. Our purpose is to ensure that we have a balanced budget in the medium term and that we have long-term stable, solid fiscal realities.”

Indeed, one wonders if the Conservatives have decided to avoid the a-word altogether. A search of Hansard shows just two Conservative MPs have uttered the word in the last three years and both of those (Cathy McLeod and James Rajotte) did so to refute the suggestion that the government was engaged in any such thing.

Brand reform

By Aaron Wherry - Monday, January 16, 2012 at 10:33 AM - 0 Comments

If the Prime Minister is looking for advice, Scott Clark and Peter DeVries have already posted their budget submission.

Mr. Flaherty, you have recently referred to the need for politicians in Europe “to show political leadership and courage” to solve the EURO area’s problems.

Although Canada is not in a fiscal crisis, the federal government, nevertheless, does face policy challenges that will require that you also show political “leadership and courage” to address them. You will need to put ideology aside. You will need to reverse some past budget decisions. You will need to confront entrenched economic interests and do what is right for the economy. You will need to become more transparent and accountable, and you will need to make Canadians part of the policy development process.

Included in their recommendations is major tax reform: the elimination of special tax breaks, the elimination of EI premiums, raising the GST by two points and lowering both personal income and corporate taxes. They also advise deeper expenditure cuts, with that money reallocated to infrastructure spending.

Paying the bills (II)

By Aaron Wherry - Tuesday, January 10, 2012 at 5:30 PM - 0 Comments

The CBC reports the government will cut deeper into departmental budgets than previously planned. The Finance Minister raises the possibility that some departments may have to cut more than 10% from their budgets.

The Post reports that the Conservatives may try to adjust MP pensions, but the Finance Minister seems to defer.

On the issue of whether changes are afoot for the pension plans of members of Parliament, Mr. Flaherty said that is a decision for the House of Commons Board of Internal Economy, not the government.

The Board of Internal Economy is presently composed of three Conservatives, two New Democrats and a Liberal. Its meetings are conducted in camera.

Paying the bills

By Aaron Wherry - Tuesday, January 10, 2012 at 2:34 PM - 0 Comments

Scott Clark and Peter DeVries consider the Harper government’s health funding proposal.

The decision to tie the growth in the CHT to the growth in nominal GDP – a rate of growth that will be less than the current 6 per cent per year – clearly indicates that the federal government recognizes that it is facing a “structural deficit”  that needs to be confronted now. The Parliamentary Budget Office (PBO), international organizations and we have argued that the federal government is facing a small structural deficit now but that it will increase rapidly after 2015 due to demographic pressures on potential economic growth and health related spending.  To date, the Minister of Finance has denied the existence of a structural deficit and has publicly ignored any discussion of the demographic pressures. This is the first indication that he has seen the numbers and is worried, although it is doubtful he will admit this in public and/or release any internal research done on this subject.

Another year’s federal politics in 12 chapters

By John Geddes - Friday, December 30, 2011 at 2:07 PM - 0 Comments

Stages in the legislative process that make a bill law in the Canadian Parliament; ministers (not including the Prime Minister) on cabinet’s powerful Priorities and Planning committee; former political figures (not including sovereigns or social activists) memorialized in bronze around Parliament Hill—twelve is the number in each of these interesting categories. But for our purposes here, in this second annual stocktaking of the year just ending, it’s the 12 calendar months that matter. Pick just one political story for each page, and 2011’s kaleidoscope might just take a turn from jumbled to intelligible.

January: We glimpsed how Ignatieff thought a leader should look

By the start of 2011, we had long since figured out Stephen Harper’s disciplined style and thought we understood the limits of Jack Layton’s appeal. But Michael Ignatieff had taken over as Liberal leader in an odd way, with no conventional leadership race to bring him into focus. Instead, Ignatieff had been defined for many Canadians by Conservative attack ads. For those who had paid attention to him before politics, his globetrotting-intellectual persona still loomed large.

Then came his Jan. 25, tone-setting address on Parliament Hill to the Liberal caucus, with the media invited in. This was no detached thinker. Sleeves rolled up, Ignatieff ripped through a 15-minute speech in which he mocked Harper, invoked Barack Obama, and answered his own question—“Are we ready to serve the people who put us here?”—with a shouted, “Yes, yes, yes!” Hopeful Liberals saw a fiery campaigner, astute Conservatives a man ripe for ridicule. We didn’t know it then, but this was a clear foreshadowing of the campaign to come.

February: We watched Conservatives smoothly execute a key transition

As an opposition leader and especially as Prime Minister, Harper has shown a remarkable ability to shed and replace chiefs of staff, communications directors, and other key advisors. But the one constant in his electoral machine was the beard and brogue of Doug Finley, his  campaign director. When Finley stepped down at the very end of January as he recovered from colon cancer, the party began a testing transition. Guy Giorno and Jenni Byrne stepped into new roles.

For a lesser partisan machine, the loss of a figure as dominant as the Scottish-born Finley would have been a marked setback. Instead, the transition seemed to go off without a hitch. Spring election speculation continued unabated. As for Finely—who ran Harper’s winning 2006 and 2008 campaigns and was rewarded with a Senate appointment in 2009—Twitter awaited.

March: We marveled as the PM fell, yet defined the moment his way

It was no surprise when the Conservative minority was voted down by the opposition Liberals, NDP and Bloc Québécois on March 25. The House had been an increasingly fractious and angry place. The actual non-confidence vote, only the sixth in Canadian history, found the  government in contempt of Parliament for refusing to supply full cost estimates for fighter jets, crime bills and corporate tax cuts.

Yet Harper largely succeeded in burying those reasons by asserting doggedly that the real issue was the opposition’s refusal to support his government’s budget. “There’s nothing, nothing, in the budget that the opposition could not or should not have supported,” he said. “Thus, the vote today that disappoints me, will, I expect, disappoint Canadians.” His refusal to even minimally acknowledge that the election was triggered by anything other than a clash over economic priorities carried him into the campaign and, arguably, to victory.

April: We absorbed the potential of Layton’s NDP surge in Quebec

The orange wave surged over Quebec so unexpectedly that even senior NDP veterans had difficulty knowing what to make of it. By April 23, when Jack Layton climbed to the podium at Montréal’s Olympia Theatre to address his party’s largest ever campaign rally in the province, the possibility of an NDP breakthrough was widely acknowledged. The Bloc was running scared. The Tories and Liberals were looking elsewhere in the country for any gains.

At the back of the Olympia, Layton’s young Quebec organizers spoke, wide-eyed, of a dozen or so new Quebec seats being within reach. That seemed remarkable enough. Yet had they been able to fully take in the spectacle of Layton podium performance, and the crowd’s reaction, they might have dreamed bigger. Holding his talismanic cane aloft, smiling as only he could, hitting his applause lines like the pro he was, “Bon Jack” embodied an unlikely convergence of long, careful political preparation and recent, inspiring personal determination. You can’t make this stuff up.

May: We experienced Harper’s majority win as an inevitability

It’s an illusion of course, maybe even a delusion, to think anything in politics had to happen the way it did. There are always too many variables. Still, Harper’s May 2 election victory had that it-was-written feel about it. He steadily built toward the moment, from his near miss in 2004, through his two minority wins in 2006 and 2008. The train was rolling toward this destination.

And Harper’s campaign-trail consistency was remarkable. His rallies were a model of methodical planning and error-free execution. He refused to be badgered by media complaints into taking more reporters’ questions or exposing himself to unscripted encounters with voters. He stuck to his key economic message even when Layton’s rise might have unnerved a more skittish campaigner. Election night was full of compelling stories—Bloc and Liberal failures, NDP ascent—but it belonged, in the end, to the Prime Minister.

June:  We shrugged as a political financing experiment was cancelled

On June 6 Finance Minister Jim Flaherty reintroduced his spring federal budget, which was never passed in the rush to an election, with a key twist: Flaherty added a measure to phase out the $2-per-vote subsidy to political parties by 2015-16. The taxpayer subsidy was introduced by the former Liberal government in 2004, to compensate for the curtailing of corporate and union contributions.

The Conservatives’ first attempt to get rid of the subsidy, announced in the fall of 2008, triggered the ill-fated bid by opposition parties to form a coalition and replace Harper’s minority. But with Harper leading a majority, there was no chance of his being thwarted this time. Few Canadians took much notice. And so an attempt to make raising money less central to our politics comes to an end. Constant, clever, insistent fundraising appeals to the party faithful—a Tory strong suit—will be essential to any party’ success for the foreseeable future.

July: We saluted as our troops left a battle zone still in question

When Canadian soldiers moved in large numbers into Afghanistan’s violent southern province of Kandahar in 2006, military and political leaders were unprepared for how much the mission would come to dominate foreign and defence policy. The hard fighting they were soon engaged in was unlike anything Canadians had experienced in decades. Before exit day, 158 Canadian soldiers had been killed in Afghanistan, along with a diplomat, two aid workers, and a journalist.

The last Canadian commander of Task Force Kandahar, Brig.-Gen. Dean Milner, didn’t really want to leave. He would have preferred to stay a bit longer to help the Americans, whose troop surge into the province had put the Taliban on the run and stabilized previously volatile districts. Canadian troops remain in Afghanistan, but mainly engaged in training the Afghan National Army. But the years of fighting changed the place of the military in the Canadian public imagination—and Canadian political calculations.

August: We mourned Jack Layton, moved by what he’d come to mean

The death of the NDP leader on Aug. 22 at just 61 was not entirely surprising. The previous month Layton had announced that he was battling cancer for a second time, his ravaged face and desiccated voice shocking the country. But the way he died was unprecedented. He drafted a farewell letter and organized a public funeral in Toronto, knitting together the personal and political in his final weeks and days in a way that made them indistinguishable.

Layton came at the end to represent, in an era of deep cynicism about politics, an unapologetic zeal for total immersion in public life. All through the spring campaign, struggling back from a broken hip, Layton had exuded his relish for the democratic fray. Facing death, he didn’t shy from explicit partisanship. “Let’s demonstrate in everything we do in the four years before us,” he told the New Democrats in that last letter, “that we are ready to serve our beloved Canada as its next government.”

September: We were reminded by judges that even majorities face setbacks

With Parliament in session again, the Conservatives sitting pretty with their fresh majority, it seemed that nothing could slow the implementation of Stephen Harper’s vision. Then came the Sept. 30 Supreme Court of Canada ruling that the federal government could not shut down Vancouver’s Insite supervised injection clinic for intravenous drug users.

The unanimous 9-0 decision delivered a rebuke to the Conservative position that Insite’s clear track record since 2003 of helping addicts avoid infections and overdose deaths should be trumped by the government’s desire to send a strong anti-drug, law-and-order message. The ruling also validated the pro-Insite positions of the British Columbia provincial and Vancouver municipal governments. For those left disheartened by Harper’s resounding spring victory, the court offered a fall tonic.

October: We witnessed the lasting emotional power of a populist cause

From the time it was implemented in 1995, the federal registry for rifles and shotguns was deeply controversial. In the broadest of strokes, rural gun owners resented it, while urbanites who feared gun crime approved. Opposition gathered steam after a 2002 report from Auditor General Sheila Fraser put estimated the registry tab would climb to $1 billion by 2005.

With hot-button right-wing populist issues like abortion and capital punishment largely off the table in Canadian politics, the long-gun registry took on disproportionate importance for that portion of the Conservative base. Harper extracted maximum political benefit from attacking the registry. On Oct. 25, the bill to eliminate it was finally tabled in the House. A drawn-out, culturally fraught episode in Canadian political life was coming to a bitter close. Even the data in the registry was to be destroyed, so no province or future federal government, not to mention police force, could make use of the information. Few outcomes politics are so categorically one-sided.

November: We took comfort from a Canadian’s prominence in troubled economic times

The Cannes summit of the G20 club of major developed and developing nations was dominated by gloomy, even alarming, news about Europe’s deepening debt crisis. This was the backdrop for the appointment of Mark Carney, the Bank of Canada’s youthful governor, to head a key oversight body called the Financial Stability Board. Never mind what the FSB does—highly technical banking stuff. Pay attention to what Carney represents—solid Canadian economic management.

Carney is a fascinating story in his own right. His assessments of the state of banking regulation, economic policy and its international coordination, are parsed closely by rapt global market players. Beyond his personal qualities, he embodies the new Canadian swagger concerning our sound banks and solid government finances. But can Canada’s political and business leaders build beyond those oft-mentioned fundamentals to more innovative manufacturing and competitive service sectors?

December: We watched a familiar national shame unfold in the hinterland

On the first day of the last month of 2011, the federal government imposed what’s called third-party management on the Northern Ontario reserve community of Attawapiskat. That meant an administrator appointed by Ottawa would run the Cree community of 1,800 on James Bay, where a crisis of abysmal housing began drawing national attention in late November.

It was yet another example—they happen every few years—of a burst of media attention to the plight of an impoverished, remote First Nations village briefly forcing Canadians to contemplate the worst policy failure of successive federal governments. But how to break that desultory cycle? As Attawapiskat took centre stage, the Harper government was quietly introducing legislation to reform band council elections and improve financial transparency. Maybe this incrementalism will help where past grand gestures did little.

On the Supreme Court rejecting a national securities regulator

By John Geddes - Thursday, December 22, 2011 at 10:12 AM - 0 Comments

The key thing to keep in mind about today’s Supreme Court of Canada rejection of the Conservative government’s bid to create a national securities regulator is that the nine judges didn’t say it was a bad policy idea.

Their unanimous opinion, handed down this morning, only said the federal attempt to usurp the longstanding provincial regulation of stock markets and other securities trading is unconstitutional. Finance Minister Jim Flaherty’s proposed law, they say, “overreaches the proper scope” of the federal government’s broad constitutional power to regulate “trade and commerce.”

The court doesn’t doubt—and in fact confirms—that valid reasons for national securities regulation exist. But that’s not the point. Flaherty’s problem is that the provinces, under the Constitution, have jurisdiction over contracts and property matters. They’ve long regulated securities. The federal government failed to make its case that something about trading stocks and bonds and derivatives has changed so fundamentally in recent times that Ottawa must now step in.

“It is not for the court to suggest to the governments of Canada and the provinces the way forward…” the judges delicately say, before going on to suggest just that: “Yet we may appropriately note the growing practice of resolving the complex government problems that arise in federations, not by the bare logic of either/or, but by seeking cooperative solutions that meet the needs of the country as a whole as well as well as its constituent parts.”

Continue…

Health transfers: More on flat tires and etiquette

By Paul Wells - Wednesday, December 21, 2011 at 4:04 PM - 0 Comments

I discover, as I go over the year’s columns and blog posts, that I predicted all of this health-transfer business in April, at the height of the federal election campaign. The argument then was pretty close to the argument in Monday’s flat-tire federalism post; here’s the bit of my April column you should read if you’re only reading one:

Harper’s plan is to continue shrinking the federal government. It’s not a hidden agenda. He’s announced every part of it. Health care transfers will actually help. They’re just blank cheques to the provinces, good mostly for getting money out of Ottawa…

On the other end of the ledger, he’ll keep squeezing his revenues. That process began with the GST cuts after the 2006 election. It will continue with two policies Harper announced in this campaign’s first week. [Both, you'll recall, are to be introduced after the budget balances - pw] Income splitting will allow a higher-earning taxpayer to transfer part of his salary to a spouse for tax purposes—and cost $2.5 billion a year in foregone revenue. Doubling contribution room to tax-free savings accounts (TFSA) will cost even more. Economist Kevin Milligan has estimated a “revenue cost” of $6.6 billion a year once the TSFA increase is fully phased in.

Add the cost of those growing health transfers and the foregone revenue from Harper’s new tax promises, and you get more than $10 billion a year in reduced fiscal capacity for the federal government. And if Ottawa is locked into a few multi-year spending increases—on military equipment and prisons—there’s progressively less room for everything else. Economist Frances Woolley has said that to reach Harper’s projected savings without cutting defence, public safety or the Canada Revenue Agency, he’d need to cut everything else by one-third.

“Everything else” here includes departments like Environment, Fisheries and Oceans, Industry, Transports and Veterans Affairs.

The main obstacle to making my point comprehensible is all the garment-rending over the “cuts” in transfers from a 6% escalator to a nominal-GDP-plus-inflation escalator with a 3% floor. Tom Walkom is pretty sure that reduction from 6% increases to 4-ish or 5-ish per-cent increases will destroy everything. With John Geddes, I prefer to see it as a lot of money.  Continue…

Flaherty’s non-negotiable terms fit health spending reality [UPDATED]

By John Geddes - Tuesday, December 20, 2011 at 12:33 PM - 0 Comments

Finance Minister Jim Flaherty’s decision to lay down the law, rather than open up negotiations, on health care transfers from the federal government to the provinces might have been a tad undiplomatic. But there’s only so much anyone can say about the etiquette of federal-provincial relations without losing all contact with reality, and that leaves us with numbers, not niceties, to consider.

And the figures Flaherty put on the table look pretty big. He promises to maintain the current 6-per-cent a year pace of growth in health transfers to the provinces until 2016-17, and after that peg the annual hike to nominal gross domestic product growth, or the increase in GDP plus inflation. Projecting with confidence that far out is impossible, but you’d expect nominal GDP to grow by at least 4 per cent [check the update below].

Continue…

What the Conservatives promised

By Aaron Wherry - Tuesday, December 20, 2011 at 10:43 AM - 0 Comments

The new health transfer model apparently comes with no strings attached.

Like the six percent promise, that seems at odds with what the Conservatives promised during the campaign. This from the party’s election platform (emphasis theirs).

Canadians expect and deserve timely access to high-quality health care services. To help achieve that goal, we will work collaboratively with the provinces and territories to renew the Health Accord and to continue reducing wait times.

In our discussions we will emphasize the importance of accountability and results for Canadians – better reporting from the provinces and territories to measure progress, and guarantees covering additional medically necessary procedures.

In the spirit of open federalism, when renewing the Health Accord we will respect the fact that health care is an area of provincial jurisdiction and respect limits on the federal spending power.

Recognizing asymmetrical federalism, we will follow the precedent of a separate agreement with the Government of Quebec regarding the implementation of the renewed Health Accord.

Accountability was a favourite word of the Conservatives after the campaign too. The Health Minister invoked it as recently as a week ago.

What Jim Flaherty said

By Aaron Wherry - Tuesday, December 20, 2011 at 8:30 AM - 0 Comments

After the Liberals and Conservatives exchanged campaign promises in April, Jim Flaherty was interviewed by Kathleen Petty on CBC radio’s The House. Here is my transcript of the portion of that conversation that dealt with health care transfers and the six percent increase.

Petty. Now let’s talk about health care because Stephen Harper, this week, along with the Liberals and we know the NDP as well, have all agreed to maintain health care transfers to the provinces to six percent as the escalator year-over-year after 2014, which is when the accord expires. But it’s not found in the platform, it’s not found in the budget, except as an assumption in 2015-16 that says that it’s subject to discussion or review, so I’m not quite sure how this is all being costed out.

Flaherty. Well, it is, I can assure you that the six percent increase is built into the fiscal track. That is, we go forward when we budget and make certain assumptions. We have assumed six percent on an ongoing basis for the Canada Health Transfer and we’re committed to that.

Petty. For how many years?

Flaherty. Well, until 2014 and then thereafter. Now, we have to negotiate…

Petty. But what’s thereafter? That’s the part I’m asking.

Flaherty. Thereafter’s at least two years…

Pause. So there’s the caveat to the six percent promise, right? Well, there might’ve been the caveat, except for the fact that the interview wasn’t over and Mr. Flaherty wasn’t done explaining himself. Continue…

‘What the federal government campaigned on’

By Aaron Wherry - Monday, December 19, 2011 at 6:05 PM - 0 Comments

Ontario is unimpressed.

Moments after Mr. Flaherty announced the new five-year funding commitment, Ontario Finance Minister Dwight Duncan issued a statement, accusing the federal government of reneging on a promise made during the election campaign to support health care … “All we were looking to do was implement what the federal government campaigned on – 6 per cent a year growth in the Canada Health Transfer for the duration of the next health accord,” he said. “Today they backed away from that.”

The Globe counts Quebec, Newfoundland, Nova Scotia, PEI and Manitoba as standing, quite literally, in the general vicinity of the Ontario finance minister. Quebec is definitely displeased. Canadian Press counts Manitoba among the visibly angry.

Six percent, until it’s not six percent

By Aaron Wherry - Monday, December 19, 2011 at 4:49 PM - 0 Comments

The Finance Minister shows his hand on health transfers.

Under Ottawa’s plan, funding for health would climb from $30-billion in 2013-14 to $38-billion per year in 2018-19. Mr. Flaherty told reporters health transfers will continue to increase at 6 per cent a year until 2016-17 before moving to a system that ties increases to the growth in nominal Gross Domestic Product, which is a measure of GDP plus inflation.

The finance department release is here.

See previously: What did the Conservatives promise on health transfers?

What did the Conservatives promise on health transfers?

By Aaron Wherry - Wednesday, December 14, 2011 at 11:27 AM - 0 Comments

The Harper government is apparently eager to cap increases to health transfers after 2016 and is apparently willing to argue that their election promise to increase transfers at 6% per year was limited to two years. The Ontario government seems to think that’s not quite what the Conservatives promised.

… Ontario government officials pointed to an interview Mr. Flaherty gave to the CBC during the campaign. “We will keep it at 6 per cent for whatever the duration of the agreement is,” Mr. Flaherty said last April, adding that the length of the new accord will be negotiated with the provinces. “It could be two years, five years, whatever.”

During the election—on Friday, April 8, to be specific—Michael Ignatieff promised to maintain the 6% increase and challenged Stephen Harper’s willingness to do likewise. The Conservatives duly responded. Continue…

Parliamentarians of the Year Awards party

By Mitchel Raphael - Friday, November 25, 2011 at 3:11 PM - 0 Comments

Maclean’s 5^th annual Parliamentarians of the Year Awards ceremony at the Fairmont Château Laurier.  See winners here.

Immigration MInister Jason Kenney (left) and Ken Whyte, President of Rogers Publishing Limited

Liberal MP Rodger Cuzner (left) and NDP MP Pat Martin.

NDP MP Peter Stoffer accepts his award.

Stephen Harper’s communications director Angelo Persichilli and CBC’s Julie Van Dusen.

Continue…

The Commons: Ipso facto governance

By Aaron Wherry - Tuesday, November 22, 2011 at 7:06 PM - 0 Comments

Sean Kilpatrick/Canadian Press

The Scene. Adherents to the faith of smaller government take note, for the Harper government has successfully identified and eliminated one of the prime inefficiencies standing between us and true freedom.

“This government cannot say how many jobs were created after having spent $47 billion of Canadians’ money,” lamented the NDP’s Peter Julian this afternoon of the government’s trademarked action plan. “The program was so badly monitored that no one knows if it was effective.”

Of this, Mr. Julian can claim the authority of the auditor general, who apparently found no attempt by the government to determine precisely how many jobs it “created” (in the messianic parlance) with its billions in bridges, roads and hockey arenas.

But just because the government can’t—indeed, won’t—add, doesn’t mean Mr. Julian can’t subtract. “We now know that 72,000 full-time jobs were lost last month thanks to the policies of this government,” he asserted with his next breath. “Now that the truth is out, when will this government put aside bogus and unsubstantiated job claims and take real and immediate action to create jobs here in Canada for Canadian families?”

Jim Flaherty would at least stand to respond to this. Continue…

This is the week that was

By Aaron Wherry - Saturday, November 12, 2011 at 3:30 PM - 0 Comments

One part of the In-and-Out scandal came to an end with the Conservatives pleading guilty and claiming victory.

Romeo Saganash clarified himself and touted his skill. Niki Ashton asserted herself. Nathan Cullen continued to pitch cooperation. Paul Dewar set out his arts agenda. Peggy Nash won the endorsement of Alexa McDonough.

The Prime Minister, the Governor General, Nycole Turmel and Bob Rae remembered.

Continue…

‘Prudent planning’

By Aaron Wherry - Thursday, November 10, 2011 at 8:30 AM - 0 Comments

Scott Clark and Peter DeVries find the Finance Minister’s budget update to be “lacking in transparency, accountability, and a realistic assessment of economic and fiscal prospects and risks.” And they suggest Mr. Flaherty start planning like Paul Martin did.

Mr. Martin’s lesson was simple. Once you have chosen the policy actions you believe are required, and given the economic assumptions, choose “risk adjustments” or “allowance for prudence” that will virtually guarantee you will not miss the target. Such a situation is “win-win” for the government. If the economy turns out better then you get credit. If the economy performs as bad as assumed you also get credit for your “prudent planning” …

Mr. Flaherty wants to now claim that he will eliminate the deficit in 2015-16. This is a mistake because the risks and evidence are stacked against this happening. It is virtually certain that he will have to revise his planning assumptions before or in the 2012 budget. It will be even more embarrassing if he has to revise it immediately after the budget.