The host of the Agenda talks to the Finance Minister.

And then a bunch of smart people, including our Andrew Coyne, talk about the budget.

Jim Flaherty is your average Canadian suburbanite. Sure, sometimes he lets his hairdresser put too much gel in his hair, but when it comes right down to it, he’s just a guy. A Canadian. Like you. Like me.

Indeed, so committed is Mr. Flaherty to staying true to who he is and who he serves that, when necessary, he’ll commandeer a government plane and fly three hours, at a cost of something like $3,600, to a coffee shop in London, Ontario so he can meet with his fellow man while television cameras record the moment for posterity.

“Some would urge us to turn at this crossroads. Experience tells us this would eventually lead us backward.” — Jim Flaherty

“More than any time in history mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray that we have the wisdom to choose correctly.” —Woody Allen

“I got the crossroad blues this mornin’, Lord. Babe, I’m sinkin’ down.” — Robert Johnson

Flaherty: As I rise in this House today, our nation is at a crossroads. Some would urge us to turn at this crossroads. Experience tells us this would eventually lead us backward.

Super-Expert Analysis: Wait… what? If you turned left at a crossroads, how would you wind up going backward? You’d have turned left, not around. (Who wrote this speech? My Dad? My Dad has a terrible sense of direction. You’re supposed to be retired, Dad. Why are you confusing Jim Flaherty?)

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Flaherty: We can see our destination on the horizon. It is a high point, not only in our nation’s history of increasing prosperity, but also a high point to which the world will look for inspiration.

Super-Expert Analysis: Our destination is Yao Ming?

•••

Flaherty: [Our destiny] is a Canada in which our children and grandchildren will surpass us.

Super-Expert Analysis: Although not if we’re sharp enough to Continue…

Let’s get the good news out of the way first. The unilateral elimination of all remaining tariffs on production inputs in today’s budget is terrific public policy, a shot in the arm for Canada’s manufacturers, and a timely example to the rest of the world. It will lower costs, save on paperwork, and improve productivity. It will make Canada the G20’s first tariff-free zone, and as such is likely to prove an attractive incentive to locate a plant here.

End of good news.

Here is the prepared text for the budget speech Jim Flaherty has just finished delivering in the House of Commons. Below is the metaphorical part.

As I rise in this House today, our nation is at a crossroads. We have passed through some steep and rocky terrain. Much of the territory was uncharted. We were prepared, and we protected ourselves. We are making our way through, and our compass has not failed us. The way forward remains challenging.

Some would urge us to turn at this crossroads. Experience tells us this would eventually lead us backward. We need to keep helping those who need a hand up. We need to stay on course. We can see our destination on the horizon. It is a high point, not only in our nation’s history of increasing prosperity, but also a high point to which the world will look for inspiration. It is a Canada in which our children and grandchildren will surpass us. It is a Canada for which they will be grateful.

“Let’s be clear,” Jim Flaherty told a news conference during today’s budget lockup for journalists. “This is a tough budget.” Several journalists watching in the room next door burst out laughing.

Like its predecessors, the 2010 budget (“Leading the Way on Jobs and Growth” — the rhetorical inspiration here comes for once not from Australia, but from Paul Martin circa 1994) features a few killer charts that seek to tell the whole story. One of the big ones this year is titled “Rapid Decline In Deficits.” It begins with a rapid increase in deficits, from $5.8 billion in 2008-2009 to $53.8 billion in 2009-2010, wafting gently down to $49.2 billion in 2010-2011, then to $27.6 billion, $17.5 billion, $8.5 billion, and finally to $1.8 billion in 2014-2015. Hey, that’s a rapid decline in deficits.

It had better be. For once I packed away a couple of old budgets to keep me company in the lockup. And here’s what those deficits were projected to be, only a year ago: $1.1 billion in 2008-2009, $33.7 billion in 2009-2010, then $29.8 billion, $13 billion, $7.3 billion and $0.7 billion in 2013-2014. So: over the six years where the two forecasts overlap, Flaherty is admitting he screwed up his forecasts last year by an aggregate total of $76.8 billion.

That’s really bad.

You kind of need to watch this guy Flaherty. “We are going to eliminate the deficit,” he said, sternly, all serious-guy like. “I’m the guy who paid down $37 billion in debt in my first three years as finance minister.”

And that’s true. The figure includes $13 billion in surplus from Ralph Goodale’s last budget. Flaherty had been Canada’s finance minister for six weeks when he cashed Goodale’s check. So Flaherty is the guy who swiped one-third of his bragging rights from the Liberals.

And now, every few months, he gets into a feud with Kevin Page, the Parliamentary Budget Officer. Page says the deficit will be bigger than Flaherty projected. Flaherty puts on his little Irish-cop smirk and says, poncy little crat doesn’t know what he’s talking about. And then the deficit turns out bigger than Flaherty projected.

Every time.

It’s clockwork, like Lucy with the football, but Flaherty’s poker face never wavers. There’s something almost admirable about it. Which is handy because when it comes to the sort of thing you’d like to be able to admire a finance minister for, like, say, being dependable, he’s got nothing for you.

Continue…

UPDATE

Runners-up: Blair (“So this is what taxpayers look like.”); Amateur Hour (“If I dial 99, does Barbara Feldon answer?”); Jonathan McKinnell (“These shoes have hardly any soul, reminds of me of some of the people I work with.”); CAPS (“Mr. Prime Minister, I finally managed to pull this out of my a**. Do you still want it back?”); and Jason G. (“This is the worst Blackberry ever.”)

Winner: Confirming my bias toward Lucky-Charms-themed humour as it pertains to our Finance Minister, I’m giving it to Patchouli (“Can I get these in green?”) Send your address and shoe size to me at scott.feschuk@macleans.rogers.com and your Dr. Scholls will find their way to you, Patchouli.

•••

Because the only way I could like this photo any more was if it featured Gary Lunn and platform boots, I am declaring a bonus caption challenge:

No vote, but I’ll declare a victor on Friday morning. The winner will receive one (1) set of Dr. Scholl’s Massaging Gel Insoles.

So here is how budget day will work at Macleans.ca.

At this very moment, our Paul Wells, Andrew Coyne, John Geddes and Philippe Gohier are sequestered in a downtown Ottawa conference room with various other journalists, bureaucrats and government officials, scrutinizing at length the federal budget. They will be freed at 4pm and will burst forth with all sorts of news and analysis. So you have only to hold your breath for another three hours.

I, possessing only rudimentary math skills, am not in the lock-up and am instead skipping joyfully around the capital, delighting in the freedom of movement that is allowed when most everyone else is being held captive. I’ll be in the House for Question Period at 2pm, in the foyer for scrums afterward and then back in my seat for the budget speech by Jim Flaherty at 4pm. Some sort of written account will follow.

A few weeks back I tried making the case for tax hikes over spending cuts as the main way the federal government should tackle its deficit problem. My argument relied heavily on the rather obvious observation that not spending is hard. I rhymed off a list of stuff people don’t like governments to scrimp on: funding schools, filling potholes, equipping soldiers, and—this was before the Vancouver games opened—winning Olympic medals.

Today, Michael Ignatieff left little doubt that after the West Coast gold rush, his Liberals aren’t going to let the Conservatives off easy the last of my just-for-instances. Ignatieff threw his support behind the plea from the athletes’ lobby for Ottawa double its contribution to the winter sports portion of the Own the Podium program to $22 million from $11 million.

Continue…

The main focus of the build-up to this week’s federal budget is not what’s coming next but what’s coming to an end. The government vows to deliver no significant new spending, so the 2010 budget Finance Minister Jim Flaherty is slated to table on Thursday must, by default, draw attention to the winding down of the two-year stimulus spending spree he launched last year.

Most of the debate surrounding this Keynesian public-works binge—especially the $4-billion Infrastructure Stimulus Fund created in the 2009 budget— was over whether it would be enough to beat back the recession. (As the Globe and Mail’s redoubtable Janet McFarland reports this morning, most of the spending will flow after the worst of the downturn is well behind us.)

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A Senator’s busy retirement

Photograph by Mitchel Raphael

Tory Sen. Linda Frum held a book launch in her home for Anthony Julius’s new book Trials of the Diaspora: A History of Anti-Semitism in England. Julius, a lawyer and professor, famously represented Diana, Princess of Wales in her divorce from Prince Charles. Diana knew Julius because he had helped her sue a newspaper after its photographer invaded her privacy by snapping photos of her working out.

Photograph by Mitchel Raphael

When Diana asked Julius to represent her for her divorce, he had never done that kind of legal work: “This would be my first divorce,” he told her. Diana quickly said, “It will be mine, too,” and said they would figure it out together. Attendees at the book launch included Immigration Minister Jason Kenney and recently retired senator Jerry Grafstein, who is part of a group of investors interested in buying the National Post, Ottawa Citizen and Montreal Gazette, and who will soon launch the Wellington Street Post, an online paper named after the famous street that runs in front of Parliament Hill. The website plans to cover politics from a federal perspective.

Bev Oda’s hair fascinates

Photographs by Mitchel Raphael

Three years ago, Liberal MP Glen Pearson, known for his humanitarian work in Sudan, asked the government for aid for Sudan, and $3 million was approved. The money went to such projects as women’s centres that helped on the educational and micro-enterprise front. When Pearson was in Sudan this year, he took with him pictures of International Co-operation Minister Bev Oda to show the Sudanese the minister who had approved the funds. They were surprised to learn it was a woman who had approved the money, and also that she was not white. But the most fascinating thing for them was Oda’s short blunt haircut. Sudanese women are known for their elaborate hairstyles.

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For a sneak preview of this year’s budget, please consult last year’s budget.

The upcoming federal budget will contain no new spending measures or tax cuts beyond what the Harper government has announced already in its plan to stimulate the economy, says a senior government official. The budget, to be tabled on March 4, will simply implement the second year of the “economic action plan,” the stimulus package unveiled in last year’s budget, the official told reporters in a briefing Monday.

The Star finds a government official who suggests there will indeed be spending cuts, but another government official—conceivably the same one cited by Canwest—speaks only to a reduction in the rate of growth of government spending. Economists, wordsmiths and fans of financial terminology can debate the difference, if any, between those two statements.

No word yet on whether the government, entering into an era of restraint, will cut down on the number of unnamed officials it employs.