Just wait until we get a majority! (Part 7)

I am sick of this minority parliament. I'm sure it is the opposition coalition of the Liberals, socialists and separatists are forcing Harper to make decisions like this: Minister of Agriculture defends protectionist policies in the poultry and milk industries. We need a stable majority government so that we can start standing up for free trade.

Giving up agriculture supply management to join free trade group

So let me get this straight. In order to join the Trans-Pacific Partnership free trade group Canada will have to agree to stop a policy that makes common foods more expensive. I think this has to be the very definition of win-win.

Of course the caveat is that Canada won't have to eliminate supply management immediately. It seems likely that they will be on a "liberalization schedule." Which is diplomatic speech for you don't ever have to really do that. But still it will at least create one pressure to encourage liberalization that will counter the special interest groups that try to stop it.

Flaherty confirms that the budget will not be balanced in 2014

Finance Minister Jim Flaherty has announced that the deficit will not be eliminated as quickly as the government had promised. The plan to get out of deficit was based on an assumption that the economy will continue to improve at a certain rate. As has become increasingly clear the economy is not going to improve sufficiently. Who could have possibly have predicted that this would happen?

Oh wait…

I did!

And I wasn’t the only one.

Hell, anyone paying half attention to what was happening in Europe and the United States even back in April could have easily predicted that the Ministry of Finance’s optimist was misplaced. The only thing I can conclude is that no on at the Ministry reads financial news.

History has shown, time and time again, that deficit slaying does not take place on the back of economic growth alone. Real cuts and hard decisions have to be made. If the Government of Canada truly wants to put its finances in order, it has to be far more proactive.

Just wait until we get a majority! (Part 6)

I am sick of this minority parliament. I'm sure it is the opposition coalition of the Liberals, socialists and separatists are forcing Harper to make decisions like this: Finance Minister Jim Flaherty will confirm that deficits will run longer than promised. We need a stable majority government so that we can start standing up for fiscal sanity.

One good crime reform

As bad as the Conservative government's crime reform agenda is and has been, there is one bright spot that I think should be noted. The Conservatives are planning on altering the criminal code to allow greater discretion for the individual to defend himself or herself against an aggressor.

As things stand now it is deeply ambiguous who would get in more trouble. The person that tried to rob you, or you for punching out the person who tried to rob you. Correcting this, and freeing the individual to defend his or her own self and property is an important positive move.

Federal government can't spend money on infastructure, it has no money

As pressure continues for the federal government to introduce another round of new spending, the Federation of Canadian Municipalities are adding its voice and suggesting that commuter infrastructure would be a good way to spend all that money that the federal government doesn’t have.

The first thing that comes to my mind is that even among Keynesians the usefulness of government infrastructure spending as a way to improve the short term economy is disputed. The effects on the job market are too narrow when you consider that it only employs people with specific skills, and usually it takes too long for these projects to be launched. So even if you do think that boosting aggregate demand is the thing to do (which I don’t) you have to wonder if infrastructure spending is the best way to do that.

The next thing that comes to my mind is that Toronto desperately needs a better system for commuters. I spent two weeks commuting from the Newmarket area to midtown Toronto and I vowed never to do it again. “Stimulating” the economy may just be a convenient excuse to tackle the problem. Although I would think that even if there is disagreement on what should be done and how it should be done, pretty much everyone agrees that something needs to be done.

The third thing that comes to my mind is something that I mentioned in the first paragraph: the federal government has no money. The Government of Canada has been in deficit since the 2009/2010 budget and the Minister of Finance was betting a return to surplus on a fast growing economy, which is a dubious prospect at best. So if the federal government has to borrow money without even having to take on new projects, you have to wonder where this new spending is going to come from. How much more money do we really want our government borrowing? Also, if you have to borrow just to pay your day to day bills, is that really the best financial moment to invest in a large capital project?

Back in 2007 the Government of Canada may have been able to afford the cost of improving commuter infrastructure, but over the last few years the gluttony of spending has made it impossible. It would be incredibly financially prohibitive to spend the billions it would require.

Fortunately there are things that governments can do to take pressure off the system, if they have the political will. But at some point governments will have to spend money to address the problem and that money has already been wasted away.