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Barrie McKenna

Economic Action Plan ad blitz a snow job on taxpayer's dime Add to ...

A father of two small kids is working again. A young welder is getting training. A bike shop owner is reinvesting in his business. Jobs, a stronger economy, better roads, and money in your pocket.

Perhaps you weren't aware of all the wondrous things Canada's Economic Action Plan has delivered. No worries. Ottawa is spending as much $20-million on TV ads to make sure it's seared in your mind.

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This particular ad, titled "What it means for you," is from the Finance Department. There are others, including spots from the Canada Revenue Agency on tax cuts and Human Resources and Skills Development on job training.

Together, they're part of a massive feel-good ad blitz touting Ottawa's $60-billion Economic Action Plan. You can't turn on a TV these days without seeing one of the government's messages.

The problem is that the Action Plan money is all but gone, making the term "action plan" a bit of a misnomer.

The government's plan is more than two years old and the once-yawning federal surplus is now a deficit. Ottawa is borrowing money on your tab to explain where the cash went.

Surely, it's just a coincidence that the ad campaign matches the Conservative government's political message in the lead-up to the next federal budget, and a possible spring election.

Put aside for a moment the fact that Prime Minister Stephen Harper is running his next campaign with your money.

The message is also disturbingly disingenuous. The reality presented in the ads obscures the financial condition of the federal government and the major fiscal challenges that lie ahead.

The deficit reached $55.6-billion in 2009-10 and is likely to come in near $40-billion this year. Economists estimate that roughly $10-billion of that deficit is structural. That means it's unrelated to the economic cycle and Ottawa can't just grow it's way out of the problem.

Canadians can't afford any more of the Action Plan. Indeed, the Harper government almost certainly will have to cut deeply into many of the programs Canadians consider important, or find new revenue somewhere.

The tax cuts touted in the ads, including a planned 1.5-percentage-point reduction in the corporate tax rate, are essentially being paid for with borrowed money.

Don't look for any hint of the tough choices ahead in the March 22 budget. Finance Minister Jim Flaherty has already signalled it will be a status quo budget. No major new spending programs or tax cuts. Nor will he significantly reduce spending.

The Harper government is headed to the polls with one message - life is good.

Mr. Harper and Mr. Flaherty have promised to wipe out the deficit by 2015.

Perhaps they should explain to Canadians how they intend to get there - a point that parliamentary budget watchdog Kevin Page has made repeatedly in recent months.

Mr. Flaherty offered no hint in the 2010 budget. Facing a near-certain election this year, he won't be any more likely to want to talk frankly in this budget.

So the a bait-and-switch is likely to come in the 2012 budget. So far, the government has suggested that merely reducing the growth in spending would do the trick. Few experts believe this kind of administrative tinkering will be enough.

What could the Conservative government do? The conservative Fraser Institute has suggested that Mr. Harper should cut health and social transfers to the provinces by $3.1-billion and return program spending to prerecession levels. Do that, and the government could balance its budget in 2012-2013.

It clearly won't be easy. Mr. Page has warned that the aging population will put increasing upward pressure on spending.

And the provinces are not about to roll over and take cuts to transfers without a fight. It would mean breaking current agreements, which run until 2014. As it is, current transfers aren't keeping up with rising health-care costs facing the provinces.

Canadians deserve some honesty about the country's finances, not a snow job paid for with taxpayers' money.

That way they can make sensible choices, such as the merits of tax cuts versus less health care.

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