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The Liberals' strategic error: going short

The Liberals had a strategic policy choice: Go long or go short. They chose to go short, and it hasn't worked, at least not yet.

Who knows if going long would have succeeded? That would have been much riskier politically. It would have meant, in policy terms, raising taxes beyond the modest rollback of Conservative corporate tax decreases and/or stringing out the return to a balanced budget, or both. In return, the Liberals would have had more revenue to propose more arresting social policy improvements.

Of course, the Conservatives, themselves big spenders, would have lashed the Liberals as "tax and spenders," which is what's happening anyway. Why not wear the moniker proudly, and pledge something dramatic to Canadians for additional taxes such as catastrophic coverage?

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The answer: The Liberals feared running any campaign on raising personal or consumption taxes. And, apparently, they feared eliminating any of the targeted tax breaks beloved of the Conservatives that have pockmarked the system. Nor did they want to remove any of the spending programs that the Conservatives had so lavishly spread around the country and injected into base budgets, again fearing a negative reaction.

Going long, for example, would have been the Liberals canning the Conservatives' ineffective family allowance cheques (called child benefits) and using the money for daycare, or raising the GST and using the money to cut personal income taxes and to spend on one or two high-profile social policy improvements. Given the party's doldrums and Michael Ignatieff's image problems (augmented by the Conservative attack ads), this would have been both exciting and risky.

As it is, the Liberals have a series of social promises, none really large enough to catch much attention politically. Take, for instance, the $1,000 to $1,500 yearly grant for students at university or college (a "learning passport") - it's one of those pledges that sound better than they'll be in practice.

Most university students (community college ones are different) come from middle- to upper-income families. Giving them a grant makes no sense. Similarly, the sum won't really tip the balance on whether students attend school. It would have been far better to augment existing student aid for those who really need help, rather than creating a new program where many already exist.

The "learning passport" is the Liberals' most expensive promise, at $980-million. The other 28 are medium- to small-bore targeted programs, some very worthy but financed somewhat shakily by assumed savings from the corporate tax rollback, $500-million from a wireless spectrum auction and one of those amorphous promises to find $500-million through a review of government spending.

Wisely, the Liberal platform doesn't project Ottawa's fiscal situation five years ahead, as the other parties do, a projection that is more guesswork than anything. And the Liberals add a "prudence reserve" of $1.5-billion, rising to $3-billion, a fixture of the Chr├ętien-Martin years that the Harper government unwisely scrapped.

But no sooner had the Liberals unveiled their platform than they looked at the polls, saw health care at the top again, and pledged a 6-per-cent indexation for health-care transfers when the current agreement expires in 2014.

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This promise gave everything to the provinces without asking for anything in return, but that didn't stop Mr. Ignatieff from saying what he'd want the money used for. Having given away the shop, he'd be in no position to demand anything of anybody. He'd be scrounging to find the money for his new promise. Like the other party leaders, he talks much about health care without making much sense.

The Liberals, scarred by their carbon tax promise in the last election, are now recommending a cap-and-trade system for greenhouse-gas emissions. But they don't say how it would work. At least they haven't invented $7-billion in revenue for the federal government from such a scheme, as the NDP does.

What the Liberals have done, however, is fallen into the pit of crass political opportunism by promising to fund a hockey arena in Quebec City, then saying a Liberal government would be open to similar follies elsewhere in Canada. Campaigns sometimes make otherwise sane people say the silliest things.

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