Sunday, February 11, 2007

The Budget

This has been said, but it bears repeating.

The "fiscal imbalance" is a crock. Most serious people familiar with the issue know this; to this day, I have never seen a convincing case made for its existence, and have seen countless ones made claiming, with sound and solid numbers, that it is a myth. Stephen Harper is a respectably intelligent economist, and thus surely knows it doesn't exist. Jean Charest and Andre Boisclair probably know too.

Nevertheless, Jean Charest and Stephen Harper have something critical in common: they both need to fix the fiscal imbalance if they want to meet their primary political goal - in both cases being re-elected, in Harper's case with a majority.

If Charest loses the coming Quebec election to the Parti Quebecois, the Conservatives will be at a disadvantage in their campaign against the Liberals, the Liberals being traditionally seen as the party best able to handle the threat posed by the PQ. This raises the question of the so-called "fiscal imbalance" - the ridiculous notion that Ottawa has too much money and doesn't fork over enough of it to the provincial governments. Nevermind the fact that Ottawa actually gives more money to the provinces than the originally postulated size of the imbalance. But being that it was a myth to begin with, it's hardly surprising that the size of the imbalance can be changed to suit whichever political actor needs to use it to his advantage.

Quebeckers, for their part, are convinced that the imbalance exists - mostly because all of their major political parties say that it does - and that Jean Charest promised to fix it. That means Jean Charest's chances of winning his election depend in no small part on his success or failure on this issue.

Harper and Charest need each other. Expect the federal budget - due around March 20 - to contain lots of goodies for the provinces in general, and Quebec in particular. This will give Charest a boost and possibly deliver him the election, and Stephen Harper will defend a weak flank. It's a win-win politically for them, though given that the fiscal imbalance is a myth, it's hardly a win for Canadians.



At 2/13/2007 1:02 a.m., Blogger Miles Lunn said...

I like what Gordon Campbell said about the fiscal imbalance that there is only one taxpayer and it its governments fighting over the same money. The reality is most Canadians care about the services they get and the best value for the tax dollars and less about the different levels squabbling over who gets what.


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