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May 8, 2005

Vote-rich? Try rich-rich

"This is a radically stupid way to do federalism." Paul Wells takes a hard and timely swipe at the Martin-McGuinty travesty, though unlike me he waited until after they'd reached an agreement before denouncing it. The worst part is, there's no opposition to any of this. Martin shells out $5.75-billion to Ontario to shut McGuinty up for a few weeks about the "$23-billion gap"? Harper's hardly likely to object, having sided with the premier himself. $5-billion for daycare? The Conservatives have promised at least a much. Another $5-billion for the cities? The Tories aren't promising quite the same deal, but will honour any agreements the Liberals strike. $2.8-billon more in equalization payments to Newfoundland and Nova Scotia? They're down with that. Meaningless health care accords, with billions and billions out the door to the provinces in exchange for six magic beans? No problemo. A budget that, even before the recent goldrush, projects a $12-billion increase in spending over the next two years, on top of the $17-billion increase recorded last year? The Tories abstained. And $4.6-billion for the NDP? Ah, well now, the Tories are firmly opposed to that one. But why? What's the difference? UNALLOCATED SURPLUS: A great piece by Terry Corcoran in Saturday's Post explains why the Layton budget is particularly smelly:

In an unprecedented move, Finance Minister Ralph Goodale tabled new legislation yesterday: the Jack Layton Supplementary Measures Act, a special spending bill based on Mr. Layton's secret budget agreement with Prime Minister Paul Martin. Never before has a Canadian government given itself such freewheeling fiscal elbow room. Certainly Don Drummond, former finance official and now chief economist at TD Financial, has never seen anything like it -- a $4.5-billion slush fund that government can dip into at will. "For years government has wanted an instrument that would allow it to allocate spending without having to say what it's for. This act will do it." ... Here's how it works. Sometime in August, 2007, the federal government will check the final numbers from fiscal year 2005-6. If there's more than a $2-billion surplus, that extra money above $2-billion can be spent. For example, if the surplus is $5-billion, the first $2-billion will be used to pay down debt, but the remaining $3-billion must be spent on the grab bag of unspecified areas. Same thing the following year. As Don Drummond put it yesterday, this is the first time Ottawa has been able to "define the money before it defines the program." The Layton list, sprawling over a dozen broad issues -- environment, housing, transit, training programs, foreign aid, energy, education, aboriginal, tuition fees -- is an open field. Not only are there no programs, Ottawa doesn't even have a jurisdictional outlet for tuition fees, for example. (Oddly missing from the list is a $100-million union pension fund bailout, mentioned in earlier news leaks.)... In a brief news release, Mr. Goodale called all this "new investments" that build on the "fiscally responsible manner" Ottawa is spending money. Here's how it works: Ottawa spends what it gets, when and how it wants, without parliamentary approval.


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