Prairie Tory

Couldn’t have said it better myself.

Wow. What a heartening story. Isn’t it amazing what a little bit of democracy and the rule of law can bring about? I wonder where the coverage of this story is in our media? Globe and Mail, Toronto Star, CBC, CTV??? Were the media elites in the Toronto-Montreal corridor even aware of this? I doubt it.

Oh well, maybe a jihadi will be kind of enough to set off a car bomb outside the church and get the attention of the media.

h/t

Within the conservative movement, its generally accepted that deficit financing is unacceptable. I tend to agree with that, that said, I came across this report from the Conference Board of Canada, saying Canadians should support short-term deficits in order to stimulate the economy.

They propose a stimulus of 1% of GDP which would work out to 10-13 CDN$. Even with the endorsement of a respected non-partisan group like the CB, I don’t like the idea of a double-digit deficit, even if its just for one year.

The other interesting tidbit I heard today was that even though we’re expected to go into recession in 2009, its not expected to be long or deep, and western Canada isn’t expected to go into recession at all.

I guess we’ll see how prescient or accurate these groups are, when the budget gets presented in January.

John Ivison had a good piece on the NP Full Comment Blog about the options that the government is considering, lets hope they pursue the most prudent options possible, that leave us with little debt to clean up afterwards. I like the idea of increased spending on skills training, and re-training given the inevitability of layoffs in the auto sector, and other sectors of the economy. I’m not as sure on enriching the EI program, although if I have to choose between taxpayer money going to businesses, and taxpayer money going to individuals, I’ll choose individuals every time. Especially when its focused on allowing people to transition to different jobs, and/or learn new skills that will benefit our economy going forward.

I still prefer tax cutting, and budget balancing to deficits and Keynesian spending, and this may turn out to be a more conservative budget than I first suspected. But handing out billions upon billions of dollars to failing businesses (which our government seems prepared to do in order to appease automakers in Oshawa, Windsor and Detroit). Thats an option I just can’t digest.

Whats being forgotten in this debate over how much government should spend to stimulate the economy, and the G-20 meeting that pegged the number at 2% of GDP is that we’re already on track to deliver that level of stimulus to the economy, without sending us back into structural deficits, or possibly even a temporary deficit – depending on how daring the current government decides to be regarding tempting defeat in Parliament over the budget.

Ten days ago Jacqueline Thorpe of the Financial Post wrote a column arguing that Canada is already awash in fiscal stimulus. Spending 30 billion dollars to stimulate the economy would be fool-hardy. It likely would have little effect on the economic situation, and two it will return us to deficits at a time when we can least afford it. The baby boomer generation is starting to retire. The workforce is going to shrink, now is not the time to burden the future workforce with paying back debt. Paying back that debt will require a smaller workforce to pay higher taxes. That won’t be good for our long-term economic health. Not to mention, the negative impact that will have on our standard of living.

What makes the entire debate really hilarious is that the Canadian economy is already slated to benefit from 31 billion dollars in tax relief in 2009-10 (which, coincidentally amounts to 2% of GDP – exactly whats called for by the G-20), most of that coming from income and corporate tax cuts that PM Harper introduced about 13 months ago, prior to the economy getting sideswiped by a credit crisis in the United States.

In a related note, the automotive sector in Canada wants about six billion dollars in loans and lines of credit, etc. to help their ailing companies. Its going to be very difficult, and the fight over this will be ferocious, but the Prime Minister needs to say NO. These companies will never adapt, learn and compete if every time things get tough, the government rides in to save them.

As I posted earlier, corporate welfare is an addiction that needs to be kicked. Canadian business is far too accustomed to receiving taxpayer money in the form of grants and handouts from different levels of government. Its time to take the bad-tasting medicine. It may taste bad, and you may still hurt in the short-term, but long-term you’ll be glad you did, and you’ll be stronger for it.

Lets hope that the Prime Minister takes the principled conservative approach that is ultimately in the national interest.

Mark Milke’s latest report for the Fraser Institute on corporate welfare in Canada states that we’re now over 182 billion dollars between 1994 and 2006. Thats a staggering figure. Here’s some of the main conclusions from his report.

In 2006 alone, Canada’s federal, provincial, and local governments spent $19.3 billion on corporate welfare, almost double the 1995 figure of $10.3 billion.

The cost to each taxpayer who paid income tax in 2006 was $1,291, which was 38% higher than the 1995 figure of $934.

Over 12 years, the total cost per tax filer who paid tax in every year amounted to $13,639 per person (in 2008 dollars)

Between 1994 and 2006, provincial governments spent $98.5 billion on corporate welfare. The federal government spent $61.4 billion and municipal governments spent $22.5 billion.

Quebec disbursed the highest amount of public money to corporations: over $5.4 billion in 2006. Ontario followed at $2.4 billion, then Alberta at almost $1.5 billion, then British Columbia at just under $950 million.

Since 2004, the federal and Ontario governments have made available $752 million to Canada’s automakers, mostly in the forms of grants.

Imagine how much wealth could’ve been created had this money been returned to the taxpayer in the form reductions to income, business, and investment/capital taxes. Or, if this money had been spent maintaining our armed forces. Imagine the good that could’ve been done overseas for people in places like…say…Afghanistan.

Then again, what would Senator Colin Kenney do with his time, if he wasn’t able to publish studies that pick apart the state of our military and emergency preparedness?

No government at any level should be using our money to pick winners and losers in the private economy.

On his blog, David Frum links (I’ve linked to the entire piece at AEI) to a lengthy study of the origins of the financial crisis that the United States, and now the rest of the western world finds itself in. Its author, Peter Wallison, does a great job.

I hope that Stephen Harper can fight off the urge to follow the same path that the United States is going down. Now is not the time to be borrowing large amounts of money to give to struggling sectors of the economy.

It would really be nice to have a government that was committed to letting market competition work.

I remember a Policy Options issue last Spring that talked about how the ‘07 Quebec election could change the landscape of Quebec politics forever. Well, throw that away for now. The political landscape has now been reset. This could very well just be a snap-back election, but somehow I doubt it, given the quick rise, and faster fall of Mario Dumont and the ADQ. I guess Quebecers aren’t quite ready to give up their ancient tribal brand of politics quite yet. Sovereignty is – unfortunately – a front burner issue again. Thank you Stephane Dion, Jack Layton, and Stephen Harper.

Jean Charest’s Liberal Party won 66 seats in the election on Monday, compared with 51 for the PQ, who rebounded nicely from last year’s disaster under Andre Bosclair. Mario Dumont’s ADQ came back to earth with only 7 seats, two better than the ‘03 election when they won 5 seats, and 34 less than last year’s election when they broke through with 41 seats.

Given his inability to solidify his gains, Mario Dumont has now resigned. I don’t have any idea who would be the front-runner to take his spot. Hopefully they can find someone competent because of all the jurisdictions in Canada, Quebec seems to need that third choice more than any other, given the polarization between the federalist Liberal Party and the separatist Parti Quebecois.

Charest, in contrast, has done something that hasn’t been done since the 1950s in Quebec politics. He’s won three straight mandates from the people of Quebec. Jean Charest’s political resiliance is remarkable. The one-time leader of the Progressive Conservative Party was thought to be dead meat after being reduced to a minority government in the last election, yet he rebounded and has come back strong, winning a majority for the 2nd time in three elections.

Well, it looks like the ride is over for Stephane Dion. It sounds like Michael Ignatieff will be voted in as – at least – interim leader of the Liberal Party, until a formal convention can be held in the spring.

If Ignatieff is chosen as leader this coming Wednesday, I think the likelihood of an election over the budget in January becomes less likely. I think the best thing that Michael Ignatieff could do for himself, to help endear him to voters will be to work with the government, and help steer us through this economic crisis that will likely last most of 2009. That period will give him the time he needs to put together a platform and revamp Liberal fundraising efforts.

Then again, it may hurt him in a post-economic downturn election. As David Frum noted, 2010 and 2011 may be very good years for incumbent governments, giving the current government a reprieve for this year may be turn out to be a big mistake.

Its certainly not a boring time to be an observer of national politics in Canada.

I’m part of the 74% majority because I didn’t vote for Stephane Dion, and I don’t want him as my Prime Minister. I think if Stephane Dion wants to be Prime Minister, or any of his compatriots in this fiasco, they should be willing to face the electorate and win a mandate from the people. Its called “popular sovereignty”. Legitimate government requires the consent of the governed.

Stephane Dion, Jack Layton and Gilles Duceppe did not receive my consent to form a coalition government.