What's new, yet not so new: Finance Minister Jim Flaherty will introduce the 2011 budget today in the House of Commons and it will be very similar to the document he tabled in March, before the minority government fell and the election was called. Now that the Conservatives have won a majority, there is no doubt the budget will pass, which means volunteer firefighters, parents with kids in arts programs and family caregivers can count on the designer tax breaks that were in the pre-election version. Since so much of this budget is old news, the media lock-up will be only two hours long rather than the bulk of the day.
What to watch for: The $2-per-vote subsidy that now goes to political parties is dead, and it will be phased out over four years. The government is setting aside $2.2-billion for Quebec in compensation for harmonizing its provincial sales tax with Ottawa. It is also promising to phase out the deficit - forecast at $29.6 billion for 2011-2012 - by 2015, one year earlier than it said it would in the March budget. But don't expect to see the details on how this will be done until next year's budget. Treasury Board President Tony Clement is only starting the job of identifying what can be trimmed.
What to really watch for: There are now serious questions about whether growth forecasts in the budget are too rosy. A lot has changed since private-sector economists provided the numbers, including the devastating tsunami and nuclear crisis in Japan. Europe's debt woes continue and there are signs that the economic recovery in the United States has stalled. Mr. Flaherty has said he is worried about a recession, but he is sticking with the earlier projections of 2.8 per cent growth in 2012 and 2.7 per cent in 2013. If those numbers prove wrong, it will hurt the government's bottom line.
What's at stake: The government has said it will maintain transfers to the provinces for health and education and that it plans to balance the books by reducing administrative costs and ending some programs, not replacing retiring public servants. But the Conservatives are counting on increased tax revenues from economic growth. On CTV's Question Period Sunday, Liberal MP David McGuinty, who represents an Ottawa riding, said it is hard to see how the Conservatives can slash $4-billion to $5-billion a year without major cuts and restructuring. But Dean Del Mastro, parliamentary secretary to Prime Minister Stephen Harper, said that's "absolutely false."