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Stephen Harper is diminishing the federal government for a generation, not simply to eliminate the deficit, but to reshape Canadian politics.

He expects us to take more responsibility for our retirement; he expects environmentalists to get out of the way of the resource economy; he is shrinking what government does and how often it does it. He is forcing everyone from the CBC to the military to the regional development agencies to absorb cuts.

No longer fettered by minority parliaments or an economic crisis, Mr. Harper is giving us a government he thinks we deserve: less intrusive, less responsive, less expensive, less reliable, less, less, less.

Once we get used to this new reality, the Prime Minister believes, we will come to expect it. Whenever another political party comes to power, it will be able to tinker on the margins only. That's why this is not simply a budget. This is transformation.

Do not be misled by those who say the Conservatives are cutting program spending by "only" $5.2-billion, or that a mere 19,200 jobs will be lost in the public service. Look around the country and the world. Try to find another government not on the brink of calamity that is eliminating its deficit without raising taxes by making itself seriously and permanently smaller.

Those who believe that Mr. Harper has long harboured a secret radical agenda are both wrong and right. Wrong because this budget continues to increase payments to the provinces. Health care, education, welfare – all these and more Ottawa continues to fund through provincial transfers.

But right because Mr. Harper has always had a certain idea of government at the federal level. It should avoid national programs. It should live within limited means. It should protect the border and keep the streets safe. It should encourage growth through low taxes and the fewest regulations possible. And that's about all it should do.

Which is why this government aims to curtail – sorry, "streamline"– environmental reviews and bring down the hammer on environmental groups that it believes abuse their charitable status through political activism.

A government that frets about the safety and security of seniors is asking the next generation to wait till 67 to begin receiving Old Age Security.

A government that insists the budget can be balanced without corroding the services government provides plans to increase program spending by about 2 per cent annually, which inflation will eat up, all the way out to 2017.

This is not a progressive agenda for government. This is not the Canada of those who promote equity or social justice. This is how a genuinely conservative government governs.

Finance Minister Jim Flaherty, perhaps wary of the true import of his budget, himself played down its impact. Each department promises to absorb its losses through "operational efficiencies," "reducing overhead costs," and other feats of magic.

Nonsense. These departments will have to cut programs and trim services. Those who are being asked to do more with less will, in fact, do less with less.

Museums will increase admission fees, courts become more crowded. There are bound to be fewer inspections and less oversight. There will be less money for regional development or overseas aid. Embassies will get smaller; parks will close earlier.

The government insists much of this won't happen, that smarter flowcharts or better software will make everything right.

Put it this way. Either you believe, as the budget promises, that VIA Rail will "pursue productivity improvements such as augmenting the performance of heating, ventilation and air-conditioning systems on board trains," or you believe passenger cars will be colder in winter and hotter in summer.

What are we offered in exchange? A lot. In three years at the most, more likely two, possibly even one, the budget will be balanced, a feat virtually unequalled in the developed world.

Taxes will stay low, giving each individual more freedom and each business a better shot at making money, which will create jobs and improve living standards. The Conservatives mean it when they say a strong economy is their first priority.

That priority explains the decision to make Ottawa more interventionist on one front: scaling back tax credits for research and development while increasing direct grants. Experience suggests this can be a mug's game, but the current system isn't spurring innovation, and that's bad for the economy, so Mr. Flaherty is resolved to try something else.

As for the Conservatives' other great priority, building and maintaining the defence establishment, the military is being asked to cut back, even as the Conservatives promise to continue plans for new ships and planes. That will be a circle not easily squared.

Mr. Harper is gambling that this budget will become an ethos. He believes voters – at least, middle-class voters living in suburbs, who matter the most on election day – will come to prefer a minimalist federal government. They may call on provincial politicians to build more hospitals and hire more teachers and fix the roads, but all they'll ask of Ottawa is that it mind the store.

When another party does finally come to power, it will discover that minding the store is all it can afford to do without raising taxes, which the public will resist.

That's why this budget is so transformative. It takes a giant step toward Stephen Harper's vision of Canada's future.

It makes Canada a more conservative nation.