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Finance Minister Jim Flaherty gives an interview in Ottawa on Monday, Dec. 21, 2009.
Finance Minister Jim Flaherty gives an interview in Ottawa on Monday, Dec. 21, 2009.

Jeffrey Simpson

Minister Flaherty should heed his own advice and rise above petty politics Add to ...

"To them I say, rise above petty politics": Finance Minister Jim Flaherty's advice to the opposition parties in Ottawa.

Fine sentiments Mr. Flaherty offered the Canadian Club last week - sentiments that were then followed by a speech so petty and partisan, so over the top, so unworthy of a finance minister that, as the outstanding columnist Alain Dubuc observed in La Presse: "If we had to judge Mr. Flaherty by his recent diatribe, we would have to conclude that our minister of finance is a perfect idiot."

Mr. Flaherty is not an idiot, but he is part of the Harper government spin machine that works non-stop, every day, leaving journalists almost helpless to catch up with the latest exaggerations, inaccuracies and, when it comes to describing opposition politicians, distortions.

Mr. Flaherty's speech was much less about economics, his domain, than the Conservatives' attack-machine fear-mongering that the "Michael Ignatieff-NDP-Bloc Québécois coalition" is threatening to "force an unnecessary election."

This is completely false at every level. First, the Bloc was never part of the ill-fated "coalition" between the Liberals and the NDP almost two years ago. The Bloc said it would support the other two parties, but not enter an agreement with them. Second, Mr. Ignatieff made it clear then, and certainly subsequently, that he did not favour a coalition. Third, none of those parties has demanded an election since Mr. Ignatieff foolishly proposed one a year ago.

Mr. Flaherty, in his speech urging everyone to rise above "petty politics," warned, under this "coalition," that "nothing would be safe. No part of our economy would be spared. No taxpayer would avoid the hit." Said the minister - he of the let's avoid "petty politics" piety - "the coalition led by Mr. Ignatieff has its own agenda: power, power, power." And then, his little dig about the Liberal Leader, who had just slogged across Canada all summer, "I know he's been abroad for a long time."

Wrongly, Mr. Flaherty accused the "coalition" of proposing "across-the-board tax hikes." Wrongly, he said the Liberals favour raising the GST to 7 points. Wrongly, he accused Mr. Ignatieff of not ruling out a carbon tax. From thin air, Mr. Flaherty claimed "experts estimate" that coalition policies "would kill almost 400,000 jobs."

Which experts? Where? When? Why 400,000 jobs? Which "coalition policies," since none exist? Whenever a politician mentions a big, round number without the slightest evidence, you know he's making it up. Instead of this kind of partisanship, so depressingly typical of the Harper spin machine, perhaps Mr. Flaherty (and others) could talk about what comes next, economically speaking.

As Mr. Flaherty said in a speech Monday, the government and provinces injected a huge amount of stimulus into the Canadian economy during, but mostly after, the recession. Stimulus amounted to slightly more than 4 per cent of GDP in 2009 and 1.6 per cent of GDP in 2010.

Next year, the stimulus will be over, but all Canadian governments will be saddled with large debts. As governments contract, there will be a fiscal drag on the economy, especially since private-sector growth is now likely to be lower in 2011 than had previously been thought.

More important, as the OECD just reported in its survey of the Canadian economy, it will likely grow from 2010 to 2017 at slightly more than half the rate from 1998 to 2008. The raw rates of growth are these: 1.6 per cent for 2010-1017, compared to 2.9 per cent for 1998-2008.

That yearly, average gap of 1.3 per cent might not seem like much, but year over year, the cumulative effect of the gap will be 10.3 per cent less growth overall by 2017. That slower growth will be a drag on jobs, the unemployment rate, government finances and regional disparities, since the slower growth will be most noticeable in the six easternmost provinces, with Quebec and Newfoundland suffering the most.

Add it up: slower growth in the years ahead, an aging population, unsustainable increases in health-care costs, a high currency, fiscal restraint, widening regional disparities, low productivity, a sputtering, debt-laden U.S. economy, the buildup of government and household debt during the recession, unemployment above 8 per cent, to mention a few challenges.

You might think there would be grist in these self-evident challenges for something a little bit more elevated than the spin machine's reflective partisanship.

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