Harper’s very political budget

At first glance, there are no major transformations, but below the surface this government is escalating a dozen of its favourite combats

Revolution, ladies and gents! Light the torches! In his December year-end interviews, Stephen Harper used the term “major transformations” a half-dozen times. He made fun of earlier majority prime ministers. They let the bureaucrats put them to sleep! For years! No chance of that happening to Harper. Major transformations, coming right up.

Fast forward to this afternoon. “We will eliminate the penny,” Jim Flaherty told the Commons. It was literally the first new policy measure he announced. “Pennies take up too much space on our dressers at home.”

Now you know why Trudeau and Mulroney and Chrétien were such snoozers. It was the pennies. Weighing them down all day. Cluttering their dressers at night. Pennies wear a guy down. Harper, the Interac Prime Minister, will be fleet of foot, full of vim, and ready for —

— major transformations? No. I don’t have a searchable electronic text of Flaherty’s speech, but I do not see the word “transformation” anywhere in it. The rhetoric is altogether more reassuring. “The reforms we present today are substantial, responsible, and necessary,” he said, and “We will stay on course,” and “We will maintain our consistent, pragmatic, and responsible approach to the economy,” and “We will implement moderate restraint in government spending.”

A decade ago at the National Post, we’d have squeezed a month’s headlines out of the spin war between the Prime Minister and his Finance Minister over how to characterize this budget, because I am here to tell you there is one. “Some of the stuff that’s been out there about ‘major transformations’  may have been a bit off,” a government staffer who does not work at Langevin Block said to me.

Diverging motivation has led to diverging rhetoric. Flaherty needs to calm markets, so he speaks a language of continuity and reassurance. Harper needs to persuade movement conservatives a decade’s work was worth it, so he has become his own loudest cheerleader.

Which one of them is right on the substance of the thing? Both of them. There is no revolution in this budget. Most of the changes it announces have been coming for years and will take years to implement. Some of them are prudent and some less so, but together they add up to a few significant course adjustments. Advantage Flaherty.

Under the surface, however, this is an intensely political budget, perhaps the most interesting since Flaherty’s first in 2006.

Click here for all the latest news and insight on the 2012 federal budget

The surface calm will serve Harper’s most important strategic objective: avoid nasty surprises so voters can grow more comfortable with the Conservatives over time. Below the surface, this government escalates a dozen of its favourite combats.

This government being what it is, if you’re looking for a fight, check under “charities.” And indeed: “Recently, concerns have been raised that some charities may not be respecting the rules regarding political activities,” the budget document says. “There have also been calls for greater public transparency related to the political activities of charities, including the extent to which they may be funded by foreign sources.”

You see what they’re doing there?

Recall Natural Resources Minister Joe Oliver’s Jan. 9 open letter on the Northern Gateway pipeline project. He wrote that “environmental and other radical groups” use “funding from foreign special interest groups” to kill Canadian resource development. Stopping those groups, Oliver wrote, is “an urgent matter of Canada’s national interest.”

And now this measure. Who has raised concerns about political activities and foreign funding by charities? Ethical Oil and its affiliated Our Decision campaign, run by Conservatives with close ties to Harper’s government. Now, Ethical Oil isn’t a charity. Doesn’t claim to be. Tides Canada does. It takes money from outside Canada (environmentalism being a global movement and all) and spends it on political advocacy  to oppose oil sands and pipeline projects. This budget announces measures to make those activities harder.

This is not my theory. It was cheerfully explained to me by a government staffer in the budget lockup. The Kneecap Tides Canada Provision (my name, not Finance’s), incidentally, is tucked away at the end of Chapter 4, “Sustainable Social Programs and a Secure Retirement.”

Our antennae thus attuned, what else can we find? Most of it comes in the cuts. Their scale is not large. Even with the cuts factored in, program spending will be 6% higher in 2014-15 than today. But what gets cut?

  • Recall that in 2006 Harper tried to appoint Encana chairman Gwyn Morgan as head of a public appointments review committee. The opposition blocked the appointment because Morgan’s pretty conservative. Harper, furious, said he would simply appoint nobody to the post until the Conservatives won a majority. Now they have it. So what are they doing? “Eliminating the Public Appointments Commission Secretariat,” which (as Greg Weston of the CBC has reported) has sat in offices for years to support a commissioner who was never appointed. Why is the government doing the opposite of what Harper said in 2006? “The Government has significantly strengthened the rigour and accessibility of the public appointments system over the past five years,” the budget says with an admirably straight face.
  • In 2006 Laureen Harper stayed at the residence of Canada’s then-ambassador to France, Claude Laverdure. She did not like what she saw. Way too fancy. Word spread throughout Canada’s diplomatic network: don’t show off when somebody from the government comes to visit. Hide the good china. Too late: The goverment will “sell some official residences abroad and move to smaller ones, generating capital revenue of $80 million.”
  • The National Round Table on the Environment and the Economy, run by Jim Flaherty’s former chief of staff, a Mulroney-era Progressive Conservative named David McLaughlin, will be shut down. NRTEE has in effect been a sort of Parliamentary Budget Officer of environment-related pains in the government’s ass, releasing report after report about the gap between the government’s promises on greenhouse-gas reduction and the reality. So it’s dead. “A mature and expanded community of environmental policy stakeholders has demonstrated the capacity to provide analysis and policy advice for the Government of Canada,” the budget document says, in my favourite sentence ever. Like who? Like Tides Canada. See above.
  • The NRTEE closure, at least, is announced and, kind of, explained. Not so for the First Nations Statistical Institute, which is essentially Statistics Canada (ding ding ding) for aboriginal populations. Or, rather, was. A chart in Annex 1 shows the FNSI will have its budget cut by $5 million in 2013-14. I asked a Treasury Board guy how much its current budget is. He looked in the Estimates. “$5 million,” he said. Buh-bye.
  • Katimavik is cancelled, basically to soften Justin Trudeau up before Patrick Brazeau cuts into him on Saturday night.
  • If you’ve never heard of the Advanced Leadership Program at the Canada School of Public Service before, that’s because you haven’t been watching Sun TV. Brian Lilley went off on them for a couple of weeks earlier this year, because they “train bureaucrats to become better bureaucrats.” It’s a program for director-general and assistant-deputy-minister level bureaucrats who are on track to become deputy ministers and maybe, one day, Clerk of the Privy Council. They travel to other countries and compare notes with foreign colleagues. Gravy train! Gone. Annual savings, $6.6 million.
  • Shutting down Assisted Human Reproduction Canada is a direct result of a 2010 Supreme Court decision and will be largely uncontroversial, but one suspects some social-conservative groups will be glad just because of the name of the thing.

This is the Harper government playing offence on a bunch of fronts. It is playing defence too.

At the end of 2010 the Ignatieff Liberals started talking about a government that was spending more on “jets, jails and corporate tax cuts” than on Canadian families. This discourse, which was being advanced with unusual discipline and patience by Ignatieff, Scott Brison and Ralph Goodale, rattled the Conservatives because for the first time the Liberals were making a credible case that the government’s head was in clouds far removed from the preoccupations of working families. But by spring of 2011, the Liberals were back complaining about contempt-of-Parliament, the sort of thing that interests people who have never voted Conservative. The results of that change of Liberal strategy will be familiar to everyone.

But the New Democrats are more diligent on economic critiques than the Liberals have been, and the attack, once formulated, could return.

So this budget contains no new large tax cuts for corporations or anyone else. It contains one fascinating new adjective, committing the government to acquiring an “affordable” replacement for the CF-18 fighter fleet. And it points out that the Government has not built a single new prison since 2006 and has no intention of building any new prisons.”

This story has concentrated on the fine print because Colleagues Geddes and McMahon are bringing you the top-line numbers, and because with this government you really do need to read the fine print. But a word about those top-line numbers:

Departed Colleague Coyne used to point out how total spending would balloon between one year’s projections and the next. Stealth inflation of spending, and so on. But that’s no longer happening.

The 2009 budget projected that direct program expenses — the money the feds spend on programs and not on transfers to people or to provinces and territories — would total $121.8 billion in 2013-2014. Today’s budget projects only $113.7 in direct program expenses for 2013-14. Total program expenses — direct plus transfers — for 2013-2014 were projected at $254 billion in 2009. Today’s budget puts the number at $249 billion.

The government is holding the line, and in fact trimming it ever so slightly. Its long-term plan has always been to constrain the ability of any future government to create big new programs in areas of provincial jurisdiction like health, education or social services. I use a few names for this strategy, including “flat-tire federalism.” The 2008-09 economic uproar blew Harper off track. But he’s back.


Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.