“Canadians know nonsense when they hear it.”

Today on Adler Online, guest host Roy Green (true Conservative Blue pundit extraordinaire) tried to nail down ol’ Flim-Flam Flaherty on his stunning failure to accurately predict Canada’s budget deficit as recently as 4 months ago.

Green - But how do you miss the deficit numbers by as much as you did in such a short period of time?

Flaherty - Oh it’s not... But... But it’s not a significant change.

You got that right. Being off the mark by about 50% is “not a significant change”. Flaherty then proceeds to explain, one more time, just how we are in so much better shape than the US, the UK, Japan, never really answering the question (no surprise there).

So Green tries again.

Green - But Minister … that $50 billion still represents a huge change from what you projected in January. So where I’m going with this is how do you now stick with that $30 billion number for next year?

Flaherty - A large part of it Roy is the auto settlements. I have a pretty good idea what the General Motors arrangement is going to cost. It’s significantly more than was anticipated, so this is a one time, one year payment. It’s not a continuing deficit and it accounts for a good part of the increase in the deficit that I referred to yesterday.

Still no answer except that now we know that apparently the GM deal is going to cost way more than anticipated. Nothing to indicate he has clue one about next year’s fiscal situation, so Green tries one last time.

Green - Minister, what do you say to the Liberals and their finance critic John McCallum’s challenges that you’ve lost all credibility? What do you say to Mr. McCallum?

Flaherty - Well I look for credibility and all I see on the other side is hypocrisy quite frankly. We asked them for their ideas for the budget, they had none. Literally none. Not one idea for the budget. And the only idea that they’ve come up with the budget according to Mr. Ignatieff is that he has a plan to raise taxes. That’s their only idea. None of the opposition parties are saying to the government, please spend less. What they are in fact are saying is spend more, but don’t increase the deficit, which is nonsense. And Canadians know nonsense when they hear it. (emphasis mine)

No answer to the question, but finally something honest from Flaherty’s own lips. “Canadians know nonsense when they hear it.”  Let us hope that Canadians remember this nonsense when it comes time to vote in the next election and turf this ex-ambulance-chaser-cum-financial-wizard. He is an embarrassment. 

“Mr. Harper left his balls out West….”

The Globe and Mail reports that the GM/CAW agreement will, in fact, result in provincial and federal taxpayers forking over billions to protect the pensions of GM retirees. This in spite of Harper’s and Clement’s repeated assurances to the contrary.

In decrying the blatant about-face, Kevin Gaudet, federal director for the Canadian  Taxpayers Federation, provides one of the best quotes I’ve seen in a while, stating, “Mr. Harper left his balls out West when it comes to taking a principle stand…”. Truer words were never spoken.

I presented my thoughts on bailing out any pension plans in the following letter to the editor, published by the Ottawa Citizen April 27. It now appears more relevant than ever.

“While I certainly sympathise with retirees from Nortel, Chrysler, GM and others who are concerned that their retirement incomes will be impacted by the current state of their companies and the recession, I must protest in the strongest possible terms any government action to guarantee 100% payouts from those defined pension plans.

I am one of the vast majority of Canadians who never had a pension plan, who never had an employer making matching contributions (or better) to my retirement funds. Now retired, what I have to live on I saved from my own earnings. And over the past 2 ½ years, thanks to Jim Flaherty’s income trust fiasco and now the global recession, my retirement fund has slipped to slightly better than 50% of where it was projected to be today. To put it in even plainer terms, my income is now half of what I had expected. As a consequence many plans have been cancelled or deferred indefinitely, and total retirement remains elusive as part-time work supplements my modest retirement income.

There are many, many of us in similar situations, and to ask us to now use our tax dollars to augment the pension incomes of others is neither fair nor appropriate.

By all means provide support to those workers who might lose their entire company pension, but under no circumstances should we be topping up pensions that have unfortunately suffered a similar degradation in value as the rest of us have experienced.”

“The greatest government theft of private wealth in history”

So says columnist Gerry Barker in this article in the Guelph Mercury.

Barker aptly likens Jim Flaherty to MAD’s Alfred E. Neuman (“What, me worry?”) and proceeds to articulate just a few of the boneheaded moves of this ex-ambulance-chaser now Finance Minister that make his judgement highly suspect when it comes to getting Canada through this recession with as little long-term damage as possible.

But the main thrust of his piece is focused on the Cons lies about income trusts. According to Barker, Flaherty and Harper were acting under pressure from senior corporate and insurance industry lobbyists whose companies were being negatively impacted by the growing popularity of the income trust investment vehicle. And so, without a shred of hard evidence and using highly suspect tax calculations, Harper and Flaherty reneged on a major campaign promise a mere 9 months into their mandate. As a consequence $35 billion or so of wealth in the  Canadian markets was effectively vaporized overnight, affecting thousands upon thousands of seniors and RRSP holders.

And the pain continues.  Now, current projections are that the government will lose billions in tax revenues annually as trusts (which were taxed in the hands of the taxpayer at rates of 40% or so) convert to corporations (which are taxed under the corporate tax laws at a maximum of 15%). However Flaherty still insists he made the right decision, and still refuses to provide the financial analyses that supported the decision in the first place. But let’s face it, he will never provide those figures for the simple reason that as soon as he does, everyone will see just how incompetent he and his “economist” boss really are.

As Barker says (MAD meets Pogo), “Alfred E. Flaherty met the enemy and, guess what? They is us!”

Conservatives help you pay less tax.

It’s true. And to prove it, I got this handy-dandy 14-page guide to tax savings in the mail today, complements of Cheryl Gallant, one of the more useless Con backbenchers on the Hill.

Basically it’s more Conservative Party propaganda touting their “Tax Cuts for Everyone” and “Tax Cuts for Hard Working People”. Every page assures us that “Families save with Conservatives” and lists as tax cuts such items as: medical expenses, child care expenses, GST tax credit, capital cost allowance for farmers, education tax credit, and other tax policies that were in place years before the Cons took power. Well it’s not the first, and won’t be the last, time they take credit for the work of others.

Calls in to Gallant’s constituency office asking if this was funded by the Party or by the Government have not been returned.

Stimulate this!

The President of Ford Canada, David Mondragon, has it absolutely right when he says that governments should be stimulating demand and not production.

The auto industry will not be salvaged by CAW or anyone else accepting a $7 an hour wage concession. To get serious, governments need to provide scrappage fees to get old vehicles off the road, offer deep tax breaks on new vehicle sales (starting with 0% GST, and provincial sales tax breaks), and other innovative ideas. How about tax-free RRSP withdrawals up to $20,000 to purchase a new or used vehicle?

To simply enable manufacturers to produce their vehicles more cheaply is nonsense. Parking lots full of dusty Impalas or Chargers will do no one any good. 

Damning with faint praise

As reported here (Report on Business), Dale Orr of IHS Global Insight Canada says Jim Flaherty "is certainly the best person in the Conservative cabinet to be the finance minister."

But wait, before we hang up that particular banner, what does the rest of the article say?

"Mr. Flaherty and the Conservatives should have taken better precautions against a deficit, noting they cut some rainy-day cushions and drove program spending up 13.8 per cent in their first two years."

"...he went too far in partisan attacks on Ontario's Liberal government and suggested Canada's most populous province was the "last place to invest" for business."

"...hard to find an economist who supports the Conservatives' decision to forgo $11-billion of annual revenue and cut the goods and services tax by two points..."

"It will also be the first time Ottawa has slid into the red from a surplus since 1970-1971."

"saw him fumble the relationship with Bay Street over a bid to end the tax deductibility of interest from foreign expansions, and underperform in selling a controversial equalization deal to Nova Scotia and Newfoundland."

"...he was removed from steering roles on two key agenda-setting cabinet committees."

And he's the "best person in the Conservative cabinet" to get us through this mess? We are in deep trouble my friends.

What a difference a week makes.

Harper will not commit to staying out of deficit.

No doubt they found some 'surprises' left by the previous Canada's New Government. Yup, that would explain it.

"wild experiments" - that's what weekends were for back then....

Harper: “This is not a time for wild experiments...”
McKay: “This is not a time to experiment with wild schemes...”
Flaherty: “... no responsible economic manager would suggest experimenting with risky new tax schemes...”.

Well, no shit Sherlock! Do these people actually think that, on Day 1 of an ABC government, the new ruling class will enact legislation that will toss Canada’s economy on its ear? In the middle of an international fiscal crisis? Of course they don’t. But they want us, the great unwashed, to believe that is exactly what will happen, and with disastrous results. You can almost sense that’s what they’d really like to see happen, just so they can say, “Told ya so!”.

Any prudent government will do whatever is needed, implement whatever short-term fiscal programs, bolster whatever institutions need to be bolstered, to get us all through this train wreck as unscathed as possible. I don’t care if their colour is red, blue, green or orange, none of the major Canadian parties would knowingly take any precipitous action that would intentionally hurt Canada or Canadians.

The policy positions that the opposition parties are floating are just that – broadly-defined positions. They will be studied, concepts and approaches refined, feasibility will be determined, implementation strategies will be developed, and then, and only then will they be implemented in the context of the international and Canadian fiscal environment of the time – months from now.

So while we may agree that this is not a good time for “wild experiments”, 6 months or a year from now may be exactly the right time for a well thought out and prudent implementation of an alternative fiscal framework for Canada, one which has been proven to work in other jurisdictions with very positive results.

Of course the Harper Cons don’t see it that way. They want us to believe that no one but them has any economic ideas worth considering, or the wherewithal to be responsible managers of the Canadian economy for future generations. (This from an economist who's only economic credentials are academic and a re-branded lawyer.) So instead they dabble with $100 here and $150 there, they obfuscate, they fear-monger, and they insult the intelligence of every one of us who doesn’t drink their particular brand of kool-aid.

It’s time for a change.

So if you were so smart.....

The markets continue to melt down. My retirement savings are dwindling by 5-10% A DAY! And like the majority of Canadians, I have no indexed pension to buffer the hit.

Meanwhile, Stephen Harper and Jim Flaherty can think of nothing better to say than, "We knew about this last fall and took the appropriate steps. Aren't we just super smart?" and "The fundamentals are sound. Our banks are sound." and my favourite, "It's all the United States fault. They were stupid and there's nothing we can do (shrug)."

Okay, if everything is so rosy in Canada, why the hell aren't Canadian banks the biggest buying opportunity out there today? If they are in such GREAT SHAPE, and the Canadian economy is SO STRONG, why isn't the smart money just flooding ashore by the boatload? Our economy should be BOOMING. Our bank stocks should be SOARING.

But we all know that isn't happening. In fact our markets are getting hit even harder, percentage wise, than the US markets.

Nope, Harper and Flaherty have not a clue between them. They're like a couple of deer caught in the proverbial headlights, saying whatever they think we'll believe while claiming a prescient anticipation of events that somehow eluded the rest of the financial world.

Not surprisingly, we're not getting the straight goods.

"The Harper crowd has started to sound very Trudeau-esque..."

Now that’s a quote you’re not likely to see showing up on the Conservative Party web site any time soon.

Jim Meek, in the Chronicle Herald, describes the latest underhanded move by the Cons to siphon money into one of Jim (Flim-flam) Flaherty’s favourite projects. The fact that his wife and his executive assistant are both on the board is a mere coincidence.

As Meek says, “The audacity at work here is nothing short of astounding.”

Fiscal mismanagement, thy name is Flaherty

The income trust fiasco is just one of several financial missteps by the fiscally-challenged Minister of Finance and his puppet-master, but probably one of the most damaging to Canada’s economy.

Now Diane Francis (National Post) again brings the incompetence of the government on this issue to the forefront with a report claiming that “A B.C. by-election was lost as a result of the income-trust flip flop and was a critical issue according to the losing Tory candidate.”

The article goes on, quoting Sue Riddell Rose, CEO of Paramount Energy Trust:

Ottawa's attack has ruined the junior oil sector, too, since October, 2006, despite soaring oil prices, she said.

"The junior oil sector is no longer vibrant. There is no exit strategy, which was to sell oil and gas assets to trusts," she said. Put another way, if oil prices had remained the same as when Flaherty made his tax announcement on Oct. 31, 2006, the oilpatch would be in "dire" straits. "They did not do their homework. They did not understand the industry and they have deceived the Canadian public," she said.

....

She said a rough guess is that Flaherty's folly has cost governments at least $1-billion in tax revenues ...

This was all a massive fraud perpetrated on Canadian taxpayers and income trust investors, and as I said back in December, is one issue that will not go quietly into the night. Nor do we want it to.