Tom Walkom writes, in this morning's Toronto Star, that Stephen Harper is a victim of his own success. That was the reason he and Jim Flaherty were sending mixed messages last week. Flaherty said that the government's goal of balancing the budget by the next election would have to be postponed:
In laying out all of this, Flaherty was onside with most standard economic analysis. The International Monetary Fund has warned that the teetering world economy cannot withstand too much fiscal austerity. It says that countries with some leeway — like Canada — should move cautiously to balance their books.
Bank of Canada governor Mark Carney has said that if the U.S. forges ahead with its so-called fiscal-cliff plans to slash government spending, the Canadian economy will go into a tailspin.
What Carney didn’t say, because he didn’t need to, is that now — with the U.S. in turmoil — is no time for Ottawa to make deficit reduction its overriding priority.
Then the Conservative base erupted. Michael Den Tandt wrote in the Postmedia papers that "conservatism is in retreat;" and the Canadian Taxpayers Federation angrily retorted that the Harper government might renege on the tax breaks it promised in the last election.
Enter Stephen Harper, who stoutly proclaimed that his balanced budget promise would be kept. Flaherty meekly fell in line. "Fiscal predictions, he told reporters, didn't mean that much."
Walkom writes that, having promised to balance the nation's books by 2015, Harper finds himself in a hole:
Will all of this be enough to satisfy Harper’s hard-liners? I’m not sure it will. To keep together the coalition that gave his Conservatives a majority government, the prime minister may have to do something really stupid.
It wouldn't be the first time he's done something stupid. One of the reasons he's in a hole is that 2% cut in the GST.
