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The Plan
The Tories have put together a nifty six-point plan to guide the country through economic turmoil.
This is basically just a promise to not be wildly negligent. In fact, it’s reasonably similar in spirit to the agenda Liberal leader Stephane Dion announced mid-campaign.
In reality, methinks the most important element of the package is having an economic policy wonk at the helm of the government during difficult times. That, if the recent light-on-promises, heavy-on-record campaign is any indication, is the real plan.
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A Deficit Budget?
The Conservative government have refused to categorically rule out the possibility of running a deficit for fiscal 08-09.
There are some interesting points to ponder, here.
First, running the odd deficit, so long as it serves to preserve and enhance the long-term strength and competitiveness of the Canadian economy, is not the end of the world.
The real risk lies the politics of the thing. The Tories have consistently pledged to avoid deficit spending. This sword takes on a double edge given the fact that the Liberal brand still competes well when it comes to which party voters think is better suited to manage the economy. The Liberals have built up a budget-hawk type of reputation ever since eliminating the deficit (on the backs of the provinces).
For the Tories to serve up a deficit budget would further reinforce the Grits’ fiscal credentials, thereby taking a major step back in terms of convincing Canadians that the Conservative Party are ready to govern the country steadily, responsible and indefinitely.
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Strategy
The Tory government should consult with the Liberal Party, at a time and within the parameters of the former’s choosing, to discuss viable options for working together on the economy. A broad consensus on economic management – which is not out of the realm, given the general economic orientation of both parties and the political considerations of both parties – could go a long way to ensure the survival of the 40th parliament for at least the next 18 months or two years.
The real question, perhaps, is whether the Conservative government will ram a series of confidence motions down the Opposition’s throat – a la erstwhile LPC Communications chief Scott Reid’s prediction – in an attempt to hobble its political posture whilst the Liberals endure an expensive and temporarily debilitating leadership contest.
The long-term relative strength of the Conservative Party will be determined in large measure by how the government manages and maximises the vulnerabilities of the Loyal Opposition. The stakes are awfully high and the nature of the challenge is extremely interesting: it’s a minority government, Canadians are electioned-out, deficit spending is not out of the question and the Conservative brand is newly ascendant whilst the Liberal brand is severely battered.
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Hang in there, Canucks. Gonna be interesting.
