If impatience could be turned into money, Liberal Leader Michael Ignatieff could stimulate this country out of the recession all by himself.
It has been precisely 11 days since Finance Minister Jim Flaherty unleashed his whopper of a budget, weighing in at 343 pages, for an average of $117-million in stimulus spending per page. Mr. Ignatieff this week declared the plan was "not working."
He's right, clever fellow. It's not working. But then, it's not law yet, either, since it's still in the early stages of working its way through the House. "The billions of dollars set aside for infrastructure have not been paid out," Mr. Ignatieff pointed out, quite accurately - presumably because one still needs the approval of Parliament before one pays out the billions of dollars one has set aside for infrastructure.
Story continues below advertisement
"I cannot help it if I am an impatient man," Mr. Ignatieff explained.
Impatience is a forgivable thing in a politician. Recklessness is not. And the problem with the debate over Stimulusmania 2009 is that, well, there isn't any real debate. The position of the three opposition parties can be described in one word - More! - and Mr. Flaherty seems happy enough to get shoved in that direction.
Not to be outshone by his coalition non-partner, the NDP's Jack Layton joined in the pile-on. "Thanks to the Conservatives' destructive policies, the Toronto Dominion Bank is forecasting that 325,000 jobs will be lost in Canada this year," he huffed. The bank is indeed making that forecast.
What it's also saying, though you won't hear this from Mr. Layton, is that the federal package is plenty large as it is and won't accomplish much anyway. Going into the budget, TD said that Canada's economy would contract by 1.4 per cent this year. After witnessing a pile of grim new economic numbers, then taking into account Ottawa's historic spending burst, its new forecast is ... a contraction of 1.4 per cent. "It's too early for the government to revisit the stimulus spending," says Derek Burleton, TD's director of economic analysis. "You're not going to see any real benefit until the U.S. economy picks up."
Story continues below advertisement
But nobody wants to hear that and the Tories, having been tried, convicted and nearly hanged last fall for economic complacency, aren't going to get caught in the trap again. Just because Canada's recessionary fate is largely out of our hands doesn't mean we shouldn't run up a good half-decade's worth of deficits. But suppose the government did return with a second economic package, as Mr. Flaherty implied was possible, given the brutal employment numbers. What more could it include?
After all, the first, 11-day-old plan - the one that's not working - already proposes to buy off every industry and interest group that could plausibly lay a claim on the federal treasury. Shipbuilders, farmers, slaughterhouses, auto companies, cruise ship operators, home renovators, and tourism workers all benefit. The oil patch gets financial help with its carbon problem. Publishers of community newspapers and magazines, under threat from new digital media, are to get $30-million over two years. But new media also gets $29-million. You knew conservatism and fiscal prudence had gone the way of the Edsel when the promoters of Montreal's Just for Laughs festival praised the Flaherty budget for lavishing money on festivals. Comedians no longer exist just to give us the giggles: now they're economic stimulus. Who knew?
But still the government is expected to do more. The Bloc Québécois cries out for help for the aerospace sector (because of layoffs at Bombardier) and asks about federal loan guarantees for forestry (because the ability to rack up more debt is exactly what forestry companies need). Both industries already receive a healthy dose of public money, but it's not enough. It never is. Which is why Mr. Burleton, parliamentary budget officer Kevin Page, and most other sentient human beings believe it will be a stretch to balance the budget in five years, even if there's no increase to the size of the stimulus package at all.
To get there, Mr. Burleton adds, Canadians may eventually have to pay more taxes. But which ones? The latest data from the Canada Revenue Agency show that nearly one-third of tax filers already pay no federal income tax. (That's up from 18 per cent in the late 1960s.) For the rest, the average income tax bill has grown 17 per cent since 1988, adjusted for inflation. But many of those people can still be sold on Mr. Flaherty's big-spending approach because their industries get money out of it.
Story continues below advertisement
So the pool of voters who rely on, or are net beneficiaries of, federal cash grows larger and larger, and the group that carries the burden of it gets smaller. That's the logical result of the Bailout Nation. Mr. Ignatieff is a thinking man: Doesn't he see the danger in this?