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Expect stimulated debate over the budget

Finance Minister Jim Flaherty is sending out mixed signals in advance of next week’s federal budget: deficit-fighting restraint, and pre-election spending, aka stimulus spending (stimulus spending if necessary, but not necessarily stimulus spending).

Canadians are worried about the precarious economic recovery. Officially the recession is over, but that bit of news hasn’t made its way down to the frontlines just yet. More stimulus spending will be needed.

We’re also worried about record deficits, now north of $56 billion.

The Harper government will try to tackle both issues next week, perhaps unveiling its inner contortionist.
Of course, much of the already announced stimulus spending is set for this year, including projects in the townships. This is sure to lead to opposition charges the government has been long on pledges and short on actually delivering money. Likewise, they’ll challenge the effectiveness of the government’s choices.

Witness Liberal critic Gerard Kennedy, for instance.

“Will we get value, or will we get a big mess?” he asked, taking the government to task for the much-publicized partisan use of infrastructure money whereby Conservative ridings received far more funding.

“The jury is out on whether any of these things worked,” he added.

In support of their choices, 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’s a convenient after-the-fact argument should the multibillion-dollar deficits be 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.

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.

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