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Lawrence Martin

In the Finance Minister's case, the issue is credibility Add to ...

Thomas Mulcair, the NDP critic, says Finance Minister Jim Flaherty should be sporting a dunce cap. Liberal Leader Michael Ignatieff doesn't have any headgear in mind - he's demanding Mr. Flaherty's resignation.

The opposition is getting pointed. The surplus Mr. Flaherty forecast last fall has, as of this week, turned into a projected $50-billion deficit. In the annals of Finance Department flip-flops, hairpin turns and staggering reversals, nothing quite compares.

The last time this country spilled this much red ink was in 1993, when the deficit reached $42-billion. It had taken the better part of two decades to get it jacked that high. Under these Tories, it has happened in the space of months.

Stephen Harper came to Mr. Flaherty's defence in the Commons yesterday. The PM has become an outstanding Commons debater, resiliently dismissing all charges thrown at him. And gentleman Jim Flaherty is quite the counter-puncher himself. But it's the track record, not the rhetoric, that needs be weighed.

The country's need to spend large sums and delve deeply into deficit is not at issue. Given the global conditions, there were few options and, as Mr. Harper has made clear, our deficit is nowhere near as large as those faced by the United States and other countries. He is right to mock opposition members who demand he increase spending while insisting that he bring down the deficit.

What grates, however, is what the Conservatives did to get us here. Even by modern standards of cynicism, the degree to which sound public policy was sacrificed at the altar of crass, exploitative politics has been something to behold.

The Tories came to power in a minority situation. With the political pressures paramount, they concluded that, even as Conservatives, they best not be fiscally prudent. Down went the surpluses racked up in the Chrétien and Martin years. They also calculated that cutting the GST, while shoddy public policy, was good politics. So they lopped off two percentage points, losing huge revenues brought in by this smart policy of their Conservative forebears.

With the demolition of the stock market last September, it became clear that the days of surpluses were kaput. But, there being an election, the Harper team could not admit to reality. On the hustings, the Prime Minister spoke of continued surpluses while Gentleman Jim vowed, "We're sure not going to run a deficit." The Conservatives "came to office looking years down the road," he said. "Our country is better off today thanks to exactly such an approach."

Parliamentary budget officer Kevin Page was sounding the alarm, saying the deficits could be very substantial. The Harper team wanted him guillotined, but Canadians soon learned that Mr. Page was correct. The Flaherty budget in January put the deficit at $34-billion.

Through the rash of contradictions, the Harperites have been defiantly trying to portray themselves as sound economic managers. Mr. Flaherty, we recall, was the author of the income trust flip-flop. His office violated his own government's fiscal rules in payments made to one of his speechwriters. He brought on weeks of unnecessary controversy with a wild outburst dissing Ontario as an investment opportunity wasteland. He delivered November's boneheaded economic update, which almost brought down the government.

Another Flaherty pledge is that despite the $50-billion deficit, no tax increases will be necessary. The Tories are still beating up on Mr. Ignatieff for suggesting rather obliquely that some time this millennium, there might have to be tax increases. Anyone who doesn't believe this needs to visit the dunce-hat counter as soon as possible.

Some of Mr. Flaherty's work isn't his own doing. It's under the direction of the fellow he works for. Were it not for the weakness of the Liberals, who have been hapless on the attack, he would have been in much more trouble by now.

Perhaps feeling the bite of the Conservative attack ads (a weekend poll showed they may be working), the Grits were more virulent yesterday. Mr. Ignatieff showed a degree of passion and rancour that has been missing at times. His party is vowing to keep up the Flaherty resignation demands, and it has a case for doing so.

The issue is credibility. In the case of the Finance Minister, it's hardly in abundant supply.

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