When I sat down on Thursday to watch the Finance Minister deliver his economic update, I expected it would be bad: after all, a lot of it had been leaked beforehand. But I had no idea how bad. I thought Flaherty was going to say that he needed time to prepare a stimulus package. That was disappointing, as we need stimulus now, but what he said was far worse. He announced $4.3B in cutbacks in 2009. He projected modest surpluses in 2008 and 2009 that were based on no stimulus being provided in the next 13 months. (His figures also assumed no recession, which is totally unrealistic as economists estimate the recession could create a $50B deficit if left unattended.)
Some media outlets (like the Globe) are now saying that Flaherty only meant he'd consider a stimulus package in a few months. But Flaherty explicitly stated that the government provided as much stimulus as is needed in 2006, that it has met the 2% of GDP suggested by the IMF, and that nothing more is needed. (...which is untrue: the 2006 policies are doing very little to stimulate Canada's economy now; most of them - such as the GST cuts - didn't do much of anything then; in addition, we need something more than tax cuts.)
Flaherty's economic update showed a government that is unfit to manage the economy in this time of crisis. Harper adheres to a right-wing ideology that flies against the recommendations of every economist in the country, and almost every economist in the world. As Flaherty made crystal clear, the Number One priority of the government is to not be seen to run a deficit. Helping Canadians is not on the agenda.
The meat of the economic update, and the reason it was presented, was to tell the country that the government would not provide fiscal stimulus. But then Flaherty threw in a whole whack of other announcements. Some, like minor short-term help for pensioners, were meant to bring the public onside. Others were mean-spirited but economically insignifcant policies meant to goad unions and opposition parties and deflect the conversation from the main point: no fiscal stimulus. He announced the government would cut subsidies to political parties. He announced a ban on civil service strikes (for a period in which no strikes are expected). He slammed pay equity agreements and announced an end to them.
In the face of a united and effective opposition, Harper has backtracked and said he will remove the abolition of political subsidies from the economic update. Note that he didn't say he wouldn't introduce the idea again, just that it would be taken off the table for this particular vote.
I'm still reeling from what the government did in the economic update. It was so outrageous, so egregious, that I can't see how Harper can ever regain the confidence of MPs. He has gone back and forth on abolishing political subsidies all week and nobody has any confidence that he isn't planning to introduce it again at the first opportunity. His extreme unwillingness to provide fiscal stimulus and his craven politicking over the economy expose a leader who is not interested in citizens after they vote.
However difficult it will be for the opposition parties to form a coalition, they have to try. Even if they fail, there's no going back to the old spirit of cooperation. Some of us have said for years that Harper has a hidden agenda that will frighten Canadians. We got a glimpse of it this week.