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New federal budget has all the flaws, and most of the virtues, of the last one

The federal budget introduced by finance minister Jim Flaherty Monday was, as expected, a near-clone of the one he tabled in March, shortly before the government was brought down.

(Photo: Dimitri Vervitsiotis/Getty)

The federal budget introduced by finance minister Jim Flaherty Monday was, as expected, a near-clone of the one he tabled in March, shortly before the government was brought down over (depending on who you ask) Stephen Harper’s contempt for parliament, Flaherty’s refusal to eliminate the tax on home heating fuel, or Ottawa’s stalling on paying HST compensation to Quebec.  As a result, Monday’s budget has virtually all the flaws, and most of the features, of the March budget.

The few new elements of note were telegraphed well in advance by Flaherty or Harper, so there are no real surprises in the new document. There is $2.2 billion  set aside to give to Quebec, on the assumption there is a federal-provincial deal by mid-September on harmonization of sales taxes. Also, the Tories have made good on their long-standing vow to eliminate the per-vote public subsidy to political parties, phasing out the $2.04 per vote payment in four increments of 51 cents per year.

Business reaction to the budget has been muted, precisely because there are no real surprises. That said, it would be nice if the Conservatives would put their majority to work and start to push a little harder on some small-c conservative principles. For example, Canada is still without a proper procedure for evaluating foreign investment and ownership. The national securities regulator remains in limbo. And perhaps most importantly, we still have no idea of the sorts of cuts the Tories intend to make to reduce and eventually eliminate the federal deficit.

In the March budget, Flaherty promised to eliminate the deficit by 2014-2015, a year ahead of the previous schedule. Yet that document was noticeably vague on the details, and Canadians had every expectation that such details would be provided in an Annex to the reintroduced budget. No such luck. While sticking to the accelerated schedule (after some waffling during the election), Flaherty still has no details to offer, pending a program spending review being led by Treasury Board President Tony Clement. (That is why the budget sticks with the 2015-16 projection.) All Flaherty would say is that not every program might survive, though Canadians – not to mention the public service – have no idea where the cuts might be made.

It is interesting to consider what constraints, if any, there were on what the Conservatives could do with this budget. On the one hand, Flaherty (and the ultimate decider, Harper) probably felt morally bound to introduce something almost identical to the March budget. After all, Harper spent the entire campaign declaring that the whole election was based on a fraud—bringing in the identical budget is a way of directing a clearly upraised finger to the opposition benches.

But there is an additional constraint on majority government, one that is not always given enough attention. In a minority situation, the government always needs to make various compromises or bargains with one party or another to stay in power. And while some see that as a virtue, it does mean that when power is shared, so is accountability. Now that he has control of the Commons, Stephen Harper has to take full responsibility for the measures he introduces and for the performance of his government. In four years, voters will know precisely who to thank if things go well in the country, and who to blame if they don’t.

That is why the hope that (or in some quarters, the fear) that Harper would use his majority to push through some radically conservative agenda is probably forlorn. Odds are, the prime minister will spend the next four years engaged in the same sort of targeted vote-buying activity he has spent the last five years perfecting.