Bottom Line Of Flaherty's Pitch Is Next Election
Date: Friday, November 24 2006
Nov. 24, 2006. 01:00 AM
Ottawa—What's the bottom line on Jim Flaherty's first federal financial update? It's that Conservatives are relying on rigid ideology and flexible politics to win the next election.
Just 24 hours after the Prime Minister's disorienting flip-flop on Québécois as a nation, the finance minister laid out an economic strategy for Canada that small-c conservatives will find stabilizing. Lower taxes, smaller government and less intrusion into provincial affairs are part and parcel of a plan that is long on vision and short on detail.
That absence of fine print is revealing. It means Stephen Harper, after rolling the dice on national unity, is now confident his minority government will live at least long enough to bring down a second budget in the first quarter of next year.
A nervous Prime Minister would have inflated the traditional fall forecast into a mini-budget laced with election-ready campaign promises. Instead, Harper and Flaherty largely limited themselves to rough outline to be filled in later.
Still, politicians are by nature cautious and Flaherty did include a safety net.
Starting next year, interest savings generated by reducing the national debt will be passed on as reduced personal income taxes.
Flaherty says the Tax Back Guarantee — now doesn't that read like an election ad? — will produce a $700-million windfall in 2007. By 2011, it will be $1.4 billion if Tories are still around and still cutting debt.
But four years is forever in politics and it's an open question if the modest dividend from the most recent $13-billion debt reduction will buy many votes. After all, $700 million divided by about 23 million eligible voters comes out at just few pennies more than 30 bucks a ballot.