The Conservatives' proposed budget -- which was the highlight of last week's return of Parliament -- was a remarkable document, for several reasons. But it was most remarkable for its optimistic projections of economic growth.
Finance Minister Jim Flaherty claimed that the economists he consulted assured him that Canada would experience "moderate growth" for the next five years. But one should remember that, the last time he consulted economists, none of them (according to Mr Flaherty) forecast the recession -- which arrived, full blown, shortly after the Conservatives were elected.
As the above clip demonstrates, Mr. Flaherty has a talent for denial -- as does his boss, the Prime Minister. After all, it was Mr. Harper who claimed during the election campaign that "The country will not go into recession next year and will lead the G7 countries." And it was Mr. Flaherty who promised that "We will not run a deficit." Yet, this week, the Finance Minister boldly asserted that -- while the country is now in hock to the tune of $55.9 billion -- it is not facing a structural deficit, despite what Parliamentary Budget Officer Kevin Page claims; and, therefore, there is no need to raise taxes.
Except the budget does raise taxes -- by increasing Employment Insurance premiums an additional fifteen cents on every $100 of insurable earnings. This tax increase is broad based. It hits everyone who brings home a pay cheque. But, as he raised taxes on every working Canadian, Mr. Flaherty reduced taxes on corporations yet again. When the Conservatives came to power, the corporate tax rate was 22.12%; they reduced it to 19.5% two years ago, then to 18% last year. The government plans to further reduce the rate to 15% by 2012. "We are staying the course," Mr. Flaherty bragged, "to having the lowest corporate income tax rate in the G7 (group of nations) by 2012."
We are just beginning to emerge from the wreckage of the economic policies of the last thirty years. Those policies brought us to the edge of another Great Depression; and this government continues to believe that more of the same is the way to prosperity. Girded with that certitude, the Finance Minister boarded a government jet and flew off to southwestern Ontario to sell his plan. The cost of the flight was just under $9000. It would have cost just over $800 to fly commercially; but we were told that Mr. Flaherty's schedule required that he fly on government aircraft.
The latest budget lays bare this government's priorities. And it proves that John Kenneth Galbraith was right when he wrote, "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."