Economics: Canada: Conservs' Fed budget could bring down govt, implications of budget if passed will have ripple effect

The new national budget for 2007 will be presented by the minority Conservative Govt on March 19. Meagan Fitzpatrick of CanWest News Service via Financial Post, "Federal Budget set for March19" (Feb20,2k7).

The Budget this year is bound to be frawt with political and Canadian national economic significance. Thinking about the Federal budget this year, before I read the Fitzpatrick article, I jotted down some quick notes in anticipation of what mite be relevant. I came up with three points:

1.) Rejection by Parliament's 3 opposition parties should they line up against a govt's Budget would mean the govt falls - Harper's Conservs are ready for this eventuality;

2.) The 2k7 Budget will have news one way or another on the Conservs' own green programme - how much money is directed to a renewed conservation / antipollution program, and in what ways the Mar19 budget presentation will either make it harder or easier for the 3 rejectionist parties to vote for the Budget;

3.) The question of whether Harper will put money into expanding the Alberta tar-oil fields X5 (quintupling their size in consort with corporate investors) should be included; if so, will he thereby as a foreseeable consequence commit to grandiose further pollution by continuing the free pass all govts in the past have given makers of oil-fueled cars? (And don't foget buses, trucks, planes, skidoos, and lawn-mowers.) I suspect that this is the biggest contradiction that will appear in the Budget (or, strategically, it could possibly be ignored ... which would be shame on the Conservs for less than forthr+tness).

Well, I did get to the Fitzpatrick article. First off, there's to be some kind or other of tax cut. Probably on the smallish side. Probably more directed to relief for the middle-class and below (votes!).

The government will present this year’s federal budget on Monday, March 19, Finance Minister Jim Flaherty revealed in question period Tuesday, one day earlier than many had speculated.

Flaherty has repeatedly promised the budget will contain tax cuts, and he again made the statement Tuesday.

“I’m not going to get into the type of tax relief, but we have some commitments with respect to tax relief that we have yet to fulfil and we’re looking at various tax reduction options. But there will be further reduction of tax in budget 2007 in addition to what has been announced,” Flaherty told reporters following question period.

Economy > Canada

Analysts who monitor government finances suggest that it may be difficult for the government to deliver on its promises of tax cuts.

Another matter I should have anticipated is the hot potato of the fiscal imbalance among the 10 provinces in regardd to Federal grants to help each make ends meet. This dividing up the funds the Feds make available to provinces has never been rationalized, never bneen made a matter of "equality" (of course, according to some fucntional definition of equalization ... like dollar per population numbers province by province, or some other transparent principle of equalizing the present imbalance to create balance. Previously, certain provinces received the Fed largesse to buy votes. The rest of Canada tends to think Quebec has been "the most equal pig of all" to cite the phrase from the satirical novel 1984 by Aldous Huxley. But Harper has a Quebec strategy for his next election campaign, and he works closely with Jean Charest's provinical Liberal Party that presently governs Quebec where an election will take place soon. As to fiscal imbalance:

Don Drummond, TD Bank [Toronto Dominion] chief economist and a former associate deputy finance minister, said last week that he suspects the annual cost of fixing the fiscal imbalance alone will eat up most of the projected budget surplus for this and future years. The so-called fiscal-imbalance is a federal-provincial feud in which the provinces argue Ottawa takes more money from them than it gives in services.

Flaherty and Prime Minister Stephen Harper have indicated that the upcoming budget will address the fiscal imbalance — Flaherty on Tuesday called it a “long standing thorn” in the side of federal-provincial relations.

Our second Canadian economic matter in this blog-entry, is also from Financial Post, Paul Vierira,"CRTC strikes TV fund task force" (Feb20,2k7).

The pressure applied by ["private" broadcasters] Shaw Communications Inc. and Quebecor Inc. to reform the Canadian Television Fund appears to have paid off as the CRTC [Candian Radion & Televisin Commission] struck a task force yesterday to review how the $250-million agency operates. News of the task force was released just hours after Jim Shaw, Shaw's outspoken chief executive and the CTF's most vocal critic, said his company would resume monthly payments to the fund after securing promises from the federal regulator and the government to examine how the TV production financing arm is managed.

We've written previously regarding the CRTC in other respects, especially in relation to the state-broadcasting corporation which sycophantically has an imbalanced influence on its watchdog's board of directors (all political appointees and stacked by the Liberal Party which has only been out of power for a year, with its appointees dominating the Senate, the judiciary, the CRTC and numerous other so-called "public" institutions. Canada has been mostly a one-party state based on fraud and corruption for a long time.

Further Research:

Conserv govt wants to revamp state & free-enterprise communications across the continent (Feb14,2k7)

New ways of copyr+t needed for digital-info age (Jun27,2k6)