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Not as stimulating as we hoped

In the absence of any pressing issues despite yet another round of election talk, the federal Liberals have been pushing what they dub Shovelgate, taking the government to task for its claim it has implemented 90 per cent of the stimulus spending promised by Stephen Harper.

The Conservatives have undoubtedly been, well, liberal in their use of numbers. So too have the opposition parties, which play up the most damning statistics to bolster their cases.

The truth lies somewhere in the middle. And it would come as no surprise to many that the government is hoping to promise much and deliver little. You could call it election posturing – it is – but it also might have something of a placebo effect. The economy, we’re repeatedly told, is closely tied to confidence: perhaps it’s more important to be seen to be doing something than actually doing it.

At the very least, that convenient after-the-fact argument should help if the multibillion-dollar deficits are smaller than initially forecast, the result of not actually spending the money announced over and over again in Conservative-friendly photo ops.

To be sure, some of the cash is flowing. Woolwich and Wellesley townships have received millions for projects completed, now underway or soon to get going. And there’s no arguing the stimulus spending has been a boon as these and other municipalities tackle a growing infrastructure deficit.

But we should also look at what we’ll have when the economy picks up again: some new roads, bridges and facilities … and a massive deficit to remind us of what it cost.

In the Liberals’ Shovelgate allegations – so named because of the government’s insistence that funding go to shovel-ready projects, the sooner to pump money into the economy – the most troubling figures relate to money allocated, but not going to business development and innovation. Already a low priority in the orgy of spending, those initiatives have seen some of the lowest percentages of actual funding. Only $71 million, or less than one per cent, of the $1-billion Green Infrastructure Fund has been allocated, for instance, they argue.

Many experts called for support of alternative energy sectors and other green technologies, the approach adopted by U.S. President Barack Obama. Their efforts were to little avail, however, which is unfortunate. Yes, municipal infrastructure needs to be addressed, but any economic benefits will be short lived, while the deficits will live on for years. Instead, a more balanced approach would have used opportunity to invest in technologies that will create lasting jobs and develop businesses that will be the core of the economy of the future.

Of course, we shouldn’t be surprised by the government’s choices. The last time Canadians saw record deficits was under a Conservative government, one that advanced trickle-down economics, cutting taxes to the wealthiest while boosting spending, often on pet projects and measures designed for political gain rather than the common good. Sound familiar? It’s precisely what has happened under Harper. This despite the fact that he’s championed the opposite course.

Such ill-advised moves as cutting the GST by two percentage points – the economic impact was negligible – and ramping up spending in an attempt to buy a majority left the economy in poor position to deal with the downturn.

The economy will recover, but government measures will not have been the factor they could have been.

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