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OTTAWA – Stephen
Harper’s minority government has extended its lease on
life, winning approval in principle Tuesday for a federal budget that will
plunge the country into deep deficit.
The big-spending budget aimed at stimulating the flagging economy passed easily
by a vote of 211-91, with NDP and Bloc Quebecois voting No.
Liberal MPs – with the exception of six Newfoundlanders who were given a
one-time pass to break party ranks – supported the Tory budget despite deep
misgivings.
Liberal Leader Michael Ignatieff chose not to risk forcing an
election – which his party is ill-prepared to fight and which Canadians don’t
want – in the midst of an economic crisis.
However, Liberals warn they may defeat the budget in future should periodic
progress reports show it’s not working as intended. The reports, the first to
be delivered in March, were demanded by Ignatieff as the price for his party’s
support.
The budget includes plans to spend $40 billion over two years on measures to
kickstart the economy, including infrastructure, social housing, home
retrofits, parks, tourism, railways and Arctic research. It also includes $2
billion in income tax cuts.
In the process, the budget projects the government will rack up towering
deficits of $86 billion over five years – the first time in 13 years that Canada
has plunged into red ink.
“Obviously, in our view, it’s the budget the country needs right
now,” Finance Minister Jim Flaherty said after the vote.
Some economists doubt the stimulus package will revive the economy and many
predict the deficits will be much bigger – and last considerably longer – than
the government hopes.
Moreover, some Conservative militants are incensed that Harper has abandoned
his conservative beliefs to secure Liberal support, after coming within a hair
of being toppled over last November’s stay-the-course fiscal update.
But while Harper has reversed himself on a number of fronts, he refused to
budge on Ignatieff’s request to postpone budget measures that could cost Newfoundland
and Labrador as much as $1.6 billion over three years.
His flat refusal put Ignatieff’s ability to control the fractious Liberal
caucus to its first test.
Faced with a mini-revolt by at least four of his six Newfoundland MPs,
Ignatieff decided to allow them to break ranks and register a protest vote
against the budget.
“I decided to permit them in the budget vote tonight a one-time vote of
protest to signal their displeasure – and my displeasure – at these unilateral
actions which in my view weaken our federation, cause strains in our federation
at a time when Canadians should be pulling together,” Ignatieff announced
prior to the vote.
The decision allows Ignatieff to avoid the dual daggers of disciplining his MPs
and alienating Newfoundland
voters.
However, it prompted sneers from the NDP and Bloc, who had wanted to defeat the
Tories and pursue an agreement – struck last November by Ignatieff’s
predecessor, Stephane Dion – to form a coalition government.
Bloc Leader Gilles Duceppe said Ignatieff showed “a total
lack of leadership.” Moreover, he argued that Ignatieff’s concept of
national unity seems to exclude Quebec.
Duceppe noted that the Liberal leader abandoned the coalition because it was
unpopular in the West, and then allowed his Newfoundland MPs to break ranks
over the budget because it’s unpopular in their province. Yet he forced
Liberals from Quebec to support
the budget even though their province has also complained bitterly about a
unilateral reduction in federal equalization payments.
NDP Leader Jack Layton said Newfoundlanders won’t forget that Liberals
allowed the budget to pass, no matter what damage it wreaks on their province.
“This little bit of window dressing isn’t going to fool anybody,” he
predicted.
“I think (Newfoundlanders) will have good memories that they couldn’t
count on Mr. Ignatieff himself and the Liberal party to stand up for
them.”
By the NDP’s count, Tuesday’s vote marked the 47th time the Liberals – first
under Dion, now under Ignatieff – have propped up the Tories in a confidence
vote.
However, Premier Danny Williams, who had called on Liberals to vote
against the budget, hailed Ignatieff’s decision.
“He shows real courage this early in his leadership to be making a move
like that. The MPs are being allowed to do what they need to do on behalf of
their province and I think the fact that a national leader recognizes that is
very important.”
Williams accused Harper of being divisive, a threat to national unity, and of
pitting provinces against each other.
He also suggested that Harper is using the budget to retaliate for the “Anybody-But-Conservative”
campaign Williams launched during last fall’s federal election.
“I’m a big boy. I understand that if you give an elbow, you’re going to
get an elbow back. But you don’t get hit over the head with a sledgehammer, and
that’s what this guy does,” Williams said.
“The Conservative party has to dump Harper or otherwise they’re going to
find themselves back in a phone booth with a caucus of a couple of
people.”
Newfoundland’s objection stems
from a federal decision to cap the rate of growth of equalization payments to have-not provinces.
The province no longer collects equalization but Williams charges that the
change in the equalization formula reduces related payments under the 1985 Atlantic Accord, which determines Newfoundland’s
share of offshore oil revenues.
Williams has pegged Newfoundland’s
loss at $1.5 billion over three years.
Ignatieff said a briefing for opposition MPs by federal finance officials
Monday suggests the reduction might be more in the range of $1 billion.
