The January 27th Conservative Budget!
Stimulus or Another Gold Plated Conservative Bamboozle?
January 24, 2009
Don Currie, Chair, CPS

Canadians have a right to be skeptical about the likelihood of a far right Conservative minority Government tabling a federal budget on Tuesday January 27th that will actually provide work and wages for the million and a half unemployed, assist families confronted with losing their homes and savings and fund urban and rural municipalities in need of infrastructure funding.
Nothing will change until the government is changed!
The Conservative Government budget proposals have been crafted and approved by a blue ribbon committee of big business corporate and finance capitalist advisors. Organized labour, farm and poverty organizations have been excluded from the process. The big city mayors have been sidelined and the opposition party leaders given cursory and formal hearings. Governments such as Danny Williams of Newfoundland-Labrador have been given the cold shoulder.
The corporate media is spreading the myth that the country is obliged to give Prime Minister Harper the benefit of the doubt and must form a great national consensus around his leadership. Defeating the Harper Flaherty budget and replacing the minority Conservatives with a majority of Coalition MP’s evokes frenzied outrage by the far right.
A massive public relations campaign orchestrated by the Conservative Party brain trust and dutifully spread by Can West Global, right wing pundits, hysterical right wing day time radio talk show hosts and carefully timed and massaged polls, are designed to convince Canadians that they must continue to support the very Government that created the mess we are all in, until Prime Minister Harper discovers the way out.
Such propaganda puts matters on their head. First we must get rid of the Government that has caused the problem and then we can institute the reforms that are necessary. Prime Minister Harper is not part of the solution; he is the main cause of the problem.
It is inexcusable for Opposition Leader Michael Ignatieff to continue to waffle on the need to defeat the Harper Government. He fails to answer the question why we need a Conservative minority government with a long record of economic failure, to implement the reform program essentially the creation of a majority coalition? What skills does Ignatieff lack that Harper possesses to do the job that needs to done.?
There should be no illusions. A Conservative budget however cleverly disguised will be a budget primarily devoted to protecting wealth and privilege, profit margins for big business and predicated on the fundamental interests of the Banks, the stock market and big investors. It will contain tax bribes and a classic neo-conservative trickle down approach, in which stimulus will be filtered through a state apparatus dominated by corporate and banking oversight. It threatens to be a massive pork barrel and the main instrument for the re-election of the Harper Conservatives. There will be some gestures and minimal benefit to working people, but they will be overwhelmed by the bulk of the stimulus going to finance capital.
The belief that a Conservative minority Government with a long record of aggressive neo-liberalism, hostility to labour, a government deeply indebted to the Alberta energy corporations, the Vancouver Canacord crowd, the Bay Street brokers and investors who were riding high when ABCP was a license to steal; a government that has expressed nothing but contempt for Parliament and the majority opposition; that such a government is capable of tabling a budget for the common good stretches gullibility to its ultimate political absurdity.
The budget will be a Conservative budget, crafted by Conservatives in their electoral interests and their desperation to cling to power. To think otherwise is illusory.
Why should the NDP, Liberal and Bloc majority believe otherwise? On the eve of the budget the Conservative Prime Minister Stephen Harper continues to assert that things are not so bad. In a January 19th interview with McLeans Magazine Harper said: “I still think the underlying reality is that Canada enters this recession in a pretty strong position compared to most Western industrialized countries. We’re entering the recession later; all the indications are it will not be as deep here and we should be able to come out of it sooner.” One wonders who Prime Minister Harper is talking about? It is certainly not the unemployed and millions more threatened by years of depression.
What Harper is saying is not exactly what the Bank of Canada is saying. The Bank of Canada yesterday released figures showing that from 4th quarter 2008 to the second quarter 2009 GDP will decline an average of 2.7%. The real cost of that decline is lay offs in all sectors of the economy, prices for agriculture products falling and serious underfunding of basic social services in all provinces and municipalities. Housing prices are declining while rents remain high. Exports of energy and mineral resources and forestry products have fallen. The Consumer Price Index for food and basic necessities is actually rising in spite of declines in the price of gasoline.
Predictably the Bank of Canada gives support to Finance Minister Flaherty’s contention that the recession is due mainly to “global developments” and the “downturn in external demand, especially from the United States” That fiction is the excuse the Conservatives use to adopt a “wait and see” approach to job creation. That approach is based on the fact that there are wealthy sections of the population that can “weather the storm” and are only looking for comfortable safe harbours for themselves until they can return to clipping and dipping. They are the political base of the Conservative Party.
What all political parties refuse to confront, and that includes the NDP is the fact that the budget will be tabled in the midst of a costly imperialist war in Afghanistan (estimated to be costing Canadian taxpayers about $2 billion annually and rising) and the worst global economic crisis of capitalism since the Great Depression. Even President Obama had the courage to admit that was the reality.
Prime Minister Harper is not talking about the overall state of the economy he is talking about the state of bank and corporate profits which remain high. And why wouldn’t they?
Finance Minister Flaherty before the federal election agreed with G7 states and later at the Bush sponsored G20 in Washington to spend 2% of GDP, roughly $30 billion to stimulate the economy. That is the amount that “experts” tell us is the amount that should be allocated as a “stimulus” to the economy.
Let it not be forgotten that a lot of “stimulus” has already been injected into the economy. But it hasn’t been for the unemployed.
The first stage of a so-called “stimulus” has already been completed with the Harper Government flooding the banks with an initial $25 billion in liquidity on election day and then adding another $50 billion by removing toxic mortgage debt from the banks and transferring it to Canada Mortgage and Housing, essentially burdening the people with bank debt. The banks were not distressed according to Flaherty but took the money anyway and now refuse to lend to cash-starved businesses. Before a penny was spent on job creation the banks got $75 billion from the public purse.
The Harper Conservative Government has been in power during the entire period of the unfolding of the financial crisis. It was in power when the Banks stood by while the sub-prime contagion was allowed to cross into Canada and create the Asset Backed Commercial Paper (ABCP) bubble that wiped out $32 billion of assets of Caisse Populaire of Quebec and Alberta Treasury Branch and a large number of upper middle class private investors. The settlement reached to cover the losses is backed by a Federal Government guarantee because the Banks reneged on their promise to back the ABCP scrip.
We leave it to the “economists” explain to workers, farmers and taxpayers to explain why we shouldn’t conclude that before a penny has been spent on the working people, the Harper Government has effectively, given, loaned, deferred, back stopped or by other devious means, transferred more than $140 billion to the banks and the wealthy before spending a penny on the needs of the people. And this is the government the media is advising we should continue to support.
The second phase of the “stimulus” is the budget that will set the whole country agog on January 27th. The budget will appeal for equality of sacrifice between the banks and the unemployed, the wealthy and those on EI, the homeless and real estate developers. The media pundits will be furiously explaining why 2% of GDP or $30 billion must be credible since it has been vetted and approved by a blue ribbon committee of big business advisors. There will be complicated and learned statements from the Conference Board, the CD Howe Institute, the Fraser Institute as to why it is reasonable and unavoidable that the bulk of the funds flow through the banks, the biggest private financial institutions and tightly controlled government agencies before it hits the streets and helps people.
Part of the money, it remains to be seen how much, will be administered by a tightly controlled Conservative Government P3 Crown Corporation called PPP Canada Inc.
Cities and municipalities are unlikely to be able to access this fund because most are broke and cannot come up with the funds that will be needed to match private funds for urgently needed infrastructure projects. The PPP Canada Inc. fund has been sitting on $1.7 billion since it was set up in 2006 and not a penny has gone to renew infrastructure.
Whatever happens on January 27th organized labour, coalition MP’s and the conscious left, will have to display the utmost vigilance to prevent a massive fraud being perpetrated on the public looking with hope to Parliament to act in their interests.
There is an answer to the questions “where do we start” to use the resources of the country for the people who really create the wealth of the nation. In the current situation it starts with defeating the Harper Conservatives, forming a coalition government and implementing a program of modest reforms and go from there.
Left Turn Canada!