Flaherty To Release Budget, But Real Question Is Will It Be Allowed To Pass?

There won’t be many surprises in Tuesday’s budget, as most of the details have already been deliberately leaked by the minority Conservatives.

The real drama surrounding this financial document, which will plunge the country into deficit for the first time in more than a decade, isn’t what’s in it but whether it’ll be supported by the Official Opposition. Given that the Bloc Quebecois and NDP are expected to vote against it, it’s up to the Liberals to allow its passage. If they don’t, the government will fall, possibly forcing yet another election.

Finance Minister Jim Flaherty laced up his new work boots Monday, in anticipation of the big day.

“I need those in my line of work,” Flaherty joked, referring to the steel inserts in his practical choice of footwear, a notable change from the dress shoes he’s bought for previous budgets and a symbol of his government’s admission of tough economic times ahead.

Among the items we already know about: $7 billion for infrastructure, with that cash being divided among roads and sewer repairs, fixes to crumbling colleges and universities, and green projects. We also know there will be $2 billion for social housing, $2 billion for job training, another billion to help single-industry communities, and tax cuts, although it’s uncertain how much has been earmarked for that.

“If you looked at the last budget it was the size of a telephone book,” noted Craig Alexander of TD Canada Trust. “This one will be remarkably large. The idea is that if the government opens its wallets, it can try to provide additional support to the economy. It’ll come through the form of additional government spending investment but it’ll also come through tax cuts.”

In all, this economic stimulus package will thrust the company into the red to the tune of $64 billion over the next two years, Canada’s first dip into negative territory since 1996 under then-PM Jean Chretien.

The Opposition is making hay over the fact that this is a budget seemingly against the Conservatives’, and Prime Minister Stephen Harper’s, principles, and a vastly different tone compared to a few months ago when the governing party was talking about eliminating extra spending and cutting funding to all political parties. The latter move infuriated the Opposition and led to a dramatic showdown in Ottawa that ended with Harper successfully lobbying the Governor General to prorogue Parliament in early December.

Now that Parliament has resumed, Liberal Leader Michael Ignatieff hasn’t said whether his party will support the budget – he has said he wants to read the lengthy document and consult his caucus first, before announcing his party’s position on Wednesday.

If the government does fall, an election isn’t necessarily the only outcome. Both the NDP and Bloc Quebecois are still promoting the idea of a Liberal-led coalition government first promoted in late 2008, an idea Ignatieff has been cool to in the past but hasn’t ruled out.

So what do Canadians think of the looming deficit? A recent Canadian Press-Harris-Decima poll found 58 per cent now support the idea of having the government spend more if it means we get out of this recession sooner. That’s a 10-point jump from previous in January.

Also, 77 per cent of poll respondents feel the measures will help Canada’s economy within two years, while 43 per cent say the effects will be felt within a year.

But when CityNews went out to find out what people on the streets of Toronto we’re saying, we found that not everyone’s enthused about the government’s plan to head into the red.

“Money doesn’t grow on trees. I don’t think we can spend our way out of it. I think we have to make do with less for awhile,” one man opined.

Another individual was more optimistic, saying, “We’ve been there before. We can become strong again.”

Flaherty will present the budget at 4pm Tuesday, and we’ll have all the highlights shortly thereafter on CityNews.ca.