Have the Canadian Liberals backed themselves into a corner?

Tuesday, January 27, 2009

Over the past few days there have been daily reports on the new spending we're going to see in the next Canadian budget, to be tabled on Tuesday. Today there is a report on $7 billion extra to be spent on infrastructure:

The federal government plans to spend at least $7 billion on new infrastructure projects in an effort to boost the sagging economy, Transport Minister John Baird said Monday.

The measures will be included in Tuesday's federal budget, Baird told a news conference in Ottawa.

While he didn't provide any further details, Baird did offer the following breakdown of how the money will be spent over the next two years:

  • $4 billion for an infrastructure stimulus fund to help provinces, territories and municipalities.
  • $2 billion for repairs and construction of colleges and universities.
  • $1 billion for sustainable green infrastructure projects.

Now, the whole reason presented for the attempted coalition late last year comprised of the Liberals, the NDP and the Bloc was addressing the economic crisis; in fact the title of the accord is:
An Accord on a Cooperative Government to Address the Present Economic Crisis
And the other document published by the coalition lays out details of the coalition's economic policy, including the following:
Economic Stimulus Package

The top priority of the new Government is an economic stimulus package designed to boost the domestic economy beginning with (but not limited to):

• Accelerating existing infrastructure funding and substantial new investments, including municipal and inter-provincial projects (such as transit, clean energy, water, corridors and gateways). This would include addressing the urgent infrastructure needs of First Nations, Métis and Inuit;
• Housing construction and retrofitting; and
• Investing in key sector strategies (like manufacturing, forestry and automotive) designed to create and save jobs, with any aid contingent on a plan to transform these industries and return them to profitability and sustainability.

With the emergence of this coalition and the demand for a large stimulus package, that means that the Conservative government has been given a huge amount of leeway for a ton of new spending, and the only issue I can see that would be worth going to an election over would be whether the Conservatives are trying to bring about too many tax cuts. If they don't overstretch their hand there then an attempt to take control of government through a vote of non-confidence plus a request to the Governor-General or an election would be based on minutiae such as "we proposed more funds for retrofitting houses while they are going to spend more than we wanted on repairing universities and colleges" or something of the sort.

Add to that the fact that the Liberal Party still doesn't have all that much cash and it's hard to see what choices are available to them at the moment. Ignatieff also hasn't clarified whether he would be in favour of working with a coalition, which limits his options; either he:

1) Works with the opposition to bring down the government and ask to become Prime Minister, a bit of a risky strategy, or
2) Votes against the budget, says he's not for the coalition and an election is called, then has to fight a battle on two fronts by both explaining why he rejected the coalition and why Canadians should vote Liberal this time around, or
3) Votes with the budget, finds a reason to not support the coalition, and then spends the next while making himself better known to the public, raises funds for the party, looks for an opportunity another day.

My guess is that he'll go with option 3.

In the meantime the Conservatives are expected to spend and spend big this time around, and that's a pretty easy order to carry out. The approach they will likely go with will be tame but confident - that they're focused on a non-partisan budget with no surprises, but that they're willing to head into another election if necessary.


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