National Affairs
Flaherty really got out the checkbook
Claire Hoy
When it gets to the nitty-gritty, i.e. winning elections, all politicians are pretty much the same. Why try to convince people of the strength of your ideas when you can just buy their votes with their own money?

For the past few weeks, Prime Minister Stephen Harper, sensing a good shot at a majority government, has been touring the country making grandiose spending promises that, well, make one think the profligate Liberals hadn't been booted out of office after all.

On Monday, Finance Minister Jim Flaherty continued the theme, pledging to hand over $39.4 billion of your taxes to the provinces over the next seven years to repair what most premiers claim - and the federal Tories used to reject - is a so-called "fiscal imbalance."

With the hopes of a majority dancing in their Tory, it's a moot point whether the "imbalance" really exists or not. If their political enemies are claiming it does, and it can help them by addressing it, then by golly, let's start writing those cheques.

The same thing with Harper's new-found enthusiasm for the environment. Never mind that much - indeed, most - of the claims of impending disaster from the environmental activists are wildly overstated, the polls show that the public is buying it so, bazoom, out comes $1.5 billion over the next three years for the provinces to reduce the dreaded greenhouse gas emissions.

And so it goes. Some $1.5 billion in extra equalization payments, plus an annual three-per-cent hike in social transfers to all the provinces for post-secondary education and child care spaces, a cool total of $16 billion. Toss in $16.3 billion in new funding for infrastructure in the province, $500 million a year to the provinces for labor market training and an extra $115 million to finance the three northern territories, and you've got a spending record Pierre Trudeau could have bragged about.

Naturally, with the Quebec election next week - and a tight, three-way race underway there - the Tories are sending that province an extra $2.3 billion (although much of that was previously announced) in the hopes of helping Quebec Premier Jean Charest win.

To be fair, however, and much unlike the previous Liberal governments of Paul Martin and Jean Chretien - which depended on Ontario votes for their existence - Flaherty is actually offering taxpayers in the country's most populace province (and in Alberta too) a significant break. Since Ontario and Alberta are the province which don't get equalization, the budget earmarked $700 million to immediately ensure they get their full share of social transfers. What's more, he says he'll legislate a strict per-capita distribution of health care transfers after 2014, when the current 10-year health accord with the provinces expires. And also on the plus side - and very much unlike the Liberals - the Tory budget gives tax breaks to families with kids. Good.

A two-income family with two kids earning $80,000, for example, would save $610 because of the child tax credit of $310 per child. They'll also be eligible for an extra $100 annual grant on a registered education savings plan contribution of $2,000 or more. A one-income family with two kids and a $50,000 income will save $829. Not bad.

Back in the day when Flaherty was a key member of Mike Harris's Ontario Tory regime - you remember them don't you - the government that Ontarians hated so much they gave them an even bigger majority the second time than the first - he appeared to be a disciple of the notion that smaller government is better government.

They actually used to talk about us being over-taxed. Not any more.

Looking at the possibilities of a spring election - and who wouldn't, given the abysmal performance of Liberal Leader Stephane Dion so far? - Flaherty predicts that government revenues will continue to rise each year until at least 2010, at which point he says he'll cut the dreaded GST to five per cent.

He predicts that after using $3 billion to pay down the national debt next year, the government forecast will be just $300 million, dropping to zero surplus in 2007-08. But governments consistently underestimate their revenue - they don't really want you to know how much of your money they're taking from you - and the fact that Ottawa continues to roll in cash has little to do with governments and much to do with the ongoing entrepreneurial skills of our private sector (yes, the same people that Liberals and New Democrats in particular love to blame for all our ills.)

So there it is, Flaherty's second budget.

The opposition wants more spending and claims that all the Tories are worried about is winning an election.

Imagine that.