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Tue, 11 Feb 2014 22:30:00 GMT | By Deirdre McMurdy, MSN Money

What’s behind the 2014 federal budget

The Tories are determined to be seen as moderate and responsible ahead of 2015.


Deirdre McMurdy

Way back in the mists of time, there was an Ottawa bureau chief for Global News by the name of Doug Small. In 1989, he obtained a copy of the federal budget prior to its public release by then-Finance Minister Michael Wilson. He was not only criminally charged with possession of stolen property, his case went to trial.

These days, it’s the government that does most of the pre-budget leaking — a practice that started with Liberal Finance Minister Paul Martin. Mr. Martin’s rationale — which has only gained credence in the days of information technology — was that financial markets don’t handle surprises well.

To avoid jolting surprises and to ensure the politics of support and inclusion, he also began the custom of quasi-public consultation with a broad range of industry associations, accounting firms, corporate and labour leaders.

Given the proximity to the 2015 federal election, there’s no surprise that the government has forecast a modest $2.9 billion deficit for the next fiscal year, down from $5.5 billion (demonstrating its prudence, it’s also setting aside $3 billion for a “rainy day”).

Then there’s the decision to sell off the remaining shares of General Motors at a tidy profit (demonstrating its acumen and the fact it stepped up to save Canadian jobs in a crisis).

Neither is anyone likely to make much of a meal — at least politically — of spending on further infrastructure improvements, skills training, the expansion of Internet service in the information age or increasing cigarette taxes.

Furthermore, it was all done in a tone designed to under-promise and over-deliver. Expectation management, after all, is the name of the game in the public and private sector.

But it’s also a budget that fully reflects the Tories’ focus on its traditional Western Canadian and rural voter base as well as its new-found pillar, the suburban immigrant population.

In their recent book, The Big Shift, Darrell Bricker and John Ibbitson discuss how the Conservative Party’s core focus on low taxes, sound finances and law-and-order values resonate with the increasingly affluent — and increasingly large — population of “strivers” who are first- or second-generation Canadians.

“In other words, New Canada — suburban, immigrant, multicultural, middle class — found common cause with Old Canada — the white and often rural stock who are descendants of settler culture,” they write.

For this peculiar demographic combination, the ability to manage the economy is a top priority. And that’s clearly reflected in new spending that totals a very modest $700 million.

Despite all the weeks of strategic leaks and heavy-handed foreshadowing, however, there are still lots of surprises attached to federal budgets. That’s because over the past few years, each one has formed part of a legislative grab-bag known as an omnibus bill.

Sure, we were warned in advance about things like spending on infrastructure stimulus, rural Internet initiatives, and apprenticeship and internship programs this year. But given this government’s penchant for massive budget omnibus bills, there may still be surprises yet to come.

Increasingly, these bills have been used to push through everything from copyright legislation to major amendments to environmental protection standards to public service compensation and pension changes.

This highly contentious practice began in the days of fragile minority governments, when endless debate made it tough for the Conservatives to get anything approved in Parliament.

Instead of introducing separate bills related to various proposed policy initiatives or changes, the Tories bundled them all up into one giant package for debate and approval. In order to pass the money part of the bill, Opposition parties have had to hold their noses and take what comes with it — often long after the budget part has been revealed. Either that, or the government would fall on a non-confidence motion (something triggered by failure to approve a budget) and everyone would be plunged into an election.

Of course, this time around, there’s already an election in the cards next year. But no party seeking re-election wants to give their opponents much to shoot at. As this budget clearly demonstrates.

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