An empty, almost flippant budget
By Andrew Coyne - Thursday, March 4, 2010 - 178 Comments
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.
The rest is simply bewildering. It was to be expected the budget would be inadequate; nothing suggested it would be quite so trivial as this. A merely inadequate budget would have made no cuts in spending in the coming year, notwithstanding a deficit projected at $54-billion, but would have pencilled in cuts in succeeding years. If it were really inadequate, it would have left these mostly unspecified, leaving skinflint critics like me to splutter at the vagueness of it all. We’ll believe it when we see it, we’d say, in the pleasant anticipation of the scathing articles we would write about next year’s budget, when the government would once again fail to deliver on cuts — the economy is still just a little too fragile, it would claim, again — pushing off the day of reckoning yet another year into the future. Continue…
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What if stimulus spending actually built something stimulating?
By John Geddes - Monday, March 1, 2010 at 10:16 AM - 23 Comments
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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Don Drummond on testing times ahead
By John Geddes - Thursday, September 10, 2009 at 9:06 AM - 7 Comments
This week’s issue of Maclean’s features a story about how the aftermath of the recession is likely to play out in a federal election—whenever the campaign comes. A key figure in the story is Don Drummond, the former federal Finance official whose insider knowledge of Ottawa has made him an indispensable commentator since he joined TD Bank Financial Group as chief economist in 2000.
In the story, Drummond talks recession and recovery. He explains why stimulus spending had little to do with making the downturn hurt less than the worst projections; low interest rates and other monetary policy measures, he says, did the heavy lifting. And he predicts that beating back the federal deficit, which both Tories and Liberals vow to do without raising taxes, will be enormously difficult because so much government spending is viewed as uncuttable.
But he had even more interesting analysis to offer than could fit in the magazine piece. In this additional edited portion of our conversation, Drummond discusses why, even if the recession didn’t hit as hard as many feared, the climb back is likely to be an unusually long, tough slog.
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Stop the shovels
By Andrew Coyne - Tuesday, June 23, 2009 at 11:55 AM - 50 Comments
How much has Stephen Harper’s government actually spent on stimulus? Who knows?
If, by the time you read this, Canada has not been plunged into another election, it will be a blow to lexicographers everywhere. At one point there was serious prospect of an entire campaign being fought on the question of whether billions of federal dollars had been “committed,” “approved,” “announced” or, in fact, spent. Ah, the semantic might-have-beens.To be sure, the government’s second report on “Canada’s Economic Action Plan,” the proximate cause of this silliness, uses all of these terms and more, in an effort to impress the public with how much spending has been rushed “out the door” since January’s hurry-up budget. The effect is quite dizzying, even without the commingling of spending programs with similar names on wholly different timetables with which the government further obscures its intentions.
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Harper's plan to survive the recession
By John Geddes - Thursday, June 11, 2009 at 3:19 PM - 60 Comments
In releasing his second quarterly update on his “economic action plan,” Prime Minister Stephen Harper today left little doubt about his government’s strategy for thriving—or at least surviving—through this recession.It’s a three-part plan based on three questions. What’s happening now? How will things look when the economy picks up again? What will be the long-term cost of weathering this downturn?
The answers he hopes voters will come to believe: Conservatives acted fast to spend money to combat recession; Canada will come through hard times in better shape than most countries; and Canadians won’t be saddled with higher taxes and endless deficits as a result.
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An interview with Finance Minister Jim Flaherty
By John Geddes - Thursday, June 4, 2009 at 10:30 AM - 11 Comments
Finance Minister Jim Flaherty has the toughest job in Ottawa, and maybe the most crucial: running Canadian economic policy during the worst global recession since the Depression.In a wide-ranging interview with Maclean’s earlier this week, Flaherty talked about everything from the expectations he raised with his Jan. 27 budget to whether the Conservative government can survive after governing through a punishing economic downturn.
