Not what taxpayers had in mind.....measures to entrench the stench.

Tories expected to slash party funding
Nov 26, 2008 08:32 PM
Julian Beltrame
THE CANADIAN PRESS

OTTAWA–Symbolic cuts to politicians' perks, temporary relief for pension plans and a political grenade – ending the $30 million public subsidy to parties – are expected highlights of Thursday's federal economic statement.

Finance Minister Jim Flaherty will ask the five political parties to give up the $1.95-per-vote subsidy they get to pay for staff and expenses.

Opposition parties are likely to see the measure as a declaration of war only weeks after the election because of the Conservatives' commanding strength in fundraising.

The president of the Treasury Board rejected that suggestion.

"It would hurt us the most," said Vic Toews, although he refused to confirm the measure publicly.

Such a measure would cost the cash-strapped Liberals $7.7 million, the NDP $4.9 million, while the Bloc Quebecois would take a $2.6-million hit and the fledgling Green Party would be out $1.8 million.

Stephen Harper's Conservatives, who won the most votes, stand to lose $10 million.

But proportional to revenues raised last year, the taxpayer subsidy represents 37 per cent of the totals raised by the Tories.

That's far less than the 63 per cent chop for Liberal coffers, 86 per cent for the Bloc and 57 per cent for the NDP. The Greens stand to lose 65 per cent of total revenues.

The government might also use the fiscal update as an opportunity to avoid substantial salary increases for federally appointed judges.

Sunday is the deadline for the government to respond to recommendations that would give the judges pay increases much higher than the government proposed.

A steady stream of leaks have come from the government aimed at portraying the Conservatives as willing to share the pain.

Little has been said about how much pain Canadians may endure in the coming months.

The Tories were talking tough Wednesday.

"I urge the member to wait until tomorrow, and we will see who wants to lead by example," House Leader Jay Hill said in response to a question.

Harper's director of communication Kory Teneycke also appeared to be throwing down the gauntlet to the opposition.

"I'll see whether other political parties are willing to walk the walk with us when it comes to constraining spending or is this just about constraining other people's spending and not their own?" he said.

Thursday's update, the Harper government's first come-clean with Canadians since repeatedly dismissing the possibility of recession and deficits, will officially concede the likelihood of both.

But the multi-billion dollar stimulus package being prepared to prevent the economy from falling into an even deeper hole will have to wait until the budget early next year.

Instead, Flaherty is expected to announce several measures to rein in spending by MPs and top mandarins, such as restrictions on travel and expenses.

As well, the update will cut or trim the $6,500 salary increase for MPs scheduled to go into effect April 1, which could save up to $2 million.

A bigger saving could be realized from cancelling Christmas bonuses for management-class civil servants and executives of Crown corporations that can add 10 per cent to their pay packets.

For Canadians, the government is expected to offer temporary relief from mandated withdrawals from registered retirement income funds (called RRIFs), a measure estimated to be worth about $135 million.

"Tomorrow's statement, as I said to the House before, is not a mini-budget. It is an economic update," Flaherty said.

Industry Minister Tony Clement also was non-committal in reaction to news that Magna International will close two Toronto-area plants and lay off 850 workers, although he said the government was seized with the issue.

The Conference Board predicted that 15,000 auto sector jobs will be lost next year.

The measures – particularly the controls on MP and bureaucrat expenditures – were dismissed by opposition parties as symbolic gestures that pale compared to the bold responses to the crisis from other nations.

"They're into the gimmicky stuff and they're not acting quickly enough on the substantive issues that are effecting people," said Vancouver Liberal MP Ujjal Dosanjh.

NDP Jack Layton said his party will co-operate with the belt-tightening, but added Canadians want more.

"We know that for every billion spent (on infrastructure) you create 11,000 jobs and that's what other countries are doing," he pointed out.

Since the economic slowdown accelerated into a full-fledged global recession earlier this fall, the U.S. has already begun spending or committed to spend US$1.5 trillion, Britain $418 billion, Germany $213 billion, Japan an estimated $275 billion in response, and China close to $600 billion – almost all in fiscal stimulus.

Canada has announced no new stimulus, although it injected more than $100 billion into domestic money markets to ensure banks have sufficient capitalization to continue lending to homeowners and businesses.

Clement said the tepid response shows the government is acting prudently and not panicking.