Federal budget positioning

The Liberal's decision to be made today, when the vote bells ring in the House of Common, will determine if the Conservatives remain in government. The three vague requirements on which the budget will be judge by Ignatieff and his caucus were the following, which the Toronto Star has the courtesy of presenting in comparison with yesterday's budget announcement:

"Protect the vulnerable"

• Extension of employment insurance benefits by five weeks for the next two years.

• Extension of protections to safeguard severance and termination pay for workers hit by company bankruptcies.

• Greater tax relief from the working income tax benefit to encourage low-income Canadians to find and keep jobs.

• Up to $150 in tax savings for low- and middle-income seniors through an increase in age credit amount.

• $1 billion for renovating social housing.

"Protect the jobs of today"

• $12 billion over two years for new infrastructure spending.

• $7.8 billion in tax relief measures and funding to stimulate the housing sector and to improve housing.

• $170 million toward a "more sustainable and competitive" forestry sector.

"Create jobs for tomorrow"

• $55 million over two years to help young Canadians find summer jobs, giving them valuable experience in the workforce.

• $2 billion to repair, retrofit and expand facilities at post-secondary institutions.

• $750 million for leading-edge research infrastructure through the Canada Foundation for Innovation.

• $110 million over three years to the Canadian Space Agency for more advanced robotics and space technologies.

Despite what appears to be addressing these main three requirements, the Liberals have some hesitations which they divulged yesterday, regarding the Finance Minister's projections.

"My concerns about the budget are have they underestimated the seriousness of the crisis? That affects all the numbers. If they make that judgment wrong, pretty well everything goes south, including their deficit projections," said Ignatieff in the Star.

Others referred incredulously to the budget's plan to turn big deficits into surplus in five years.

Liberal finance critic Scott Brison said "it's tough to trust" Finance Minister Jim Flaherty's projections, after he projected a $100 million surplus in November and now announced a deficit "before one penny is invested in stimulus."

The announced budget predicts it will help save or create 190,000 jobs while a $85-billion deficit is expected to occur over the next five years, with the economy recovering from this deficit around 2013.

NDP leader Jack Layton, whose position with the budget has been no secret, believes the announcement doesn't even pass the test laid out by the Liberals.

New Democrat Leader Jack Layton and Bloc Québécois Leader Gilles Duceppe swiftly condemned the budget as a failed "ideological" document that does not address the needs of the jobless and the most vulnerable, or move Canada toward a greener economy.

Their parties intend to vote to defeat the government on the budget, and Layton publicly pressured Ignatieff to do the same.

Layton said the budget fails on the very tests – helping the most vulnerable, protecting the jobs of today and creating jobs for tomorrow – that Ignatieff had set out.

I am not sure how Layton comes to this conclusion. Maybe he simply does not want to lose face.

"He has a choice to make," Layton told reporters. "It's either to prop up the Harper government and allow it to continue in a fashion that is clearly wrong-headed, or to pursue the agenda laid out by the coalition, which would create jobs for the future and would transform our economy and would really protect the people who are suffering the most from the economic crisis." [My emphasis]

Really Layton? And how do you figure? What different ideas would your coalition bring to the table? How would you, as opposed to the Conservative government proposals, transform the economy? By way of wishful thinking?

The Liberals are expected to present amendments to the budget, explains the Globe and Mail.

Some MPs, speaking on condition they not be named, said all options appeared possible, but that it was unlikely the Liberals would vote for the budget in its current form. It seemed probably they would propose amendments.

"Obviously, that could still lead to an election if they're not co-operative," one MP said.

At the top of the Liberals' concerns were objections that there was not enough softening of the employment-insurance rules, and that the tax cuts announced yesterday could leave the federal government mired in deficit years from now, even after the economy recovers.

[...]

"It is up to this party to decide whether the choices they made today are the right ones," Mr. Ignatieff told the Commons. "It will be a tough call. We will make this choice calmly and serenely."

For more details on the announcement, the National Post presents the highlights of the budget presented yesterday afternoon by Finance Minister Jim Flaherty. See also the Department of Finance's website.

Stay tuned...