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Martin buys NDP support Analysis: Liberal budget's in ruins as Martin adopts the NDP agenda in order to survive

Analysis: Liberal budget's in ruins as Martin adopts the NDP agenda in order to survive

OTTAWA

Layton told Paul Martin that the price of survival was nothing less than the equivalent of a new Speech from the Throne, written by the NDP. Paul Martin, dizzy from gazing into the abyss, surrendered without a fight.

We have, today, not just a whole new budget, one radically different from that presented by Finance Minister Ralph Goodale in February, but a whole new government agenda, the agenda of the NDP.

This agenda, which the Liberals agreed to in principle yesterday, includes billions in new spending: on social housing, university tuition, public transit, foreign aid, pension protection, the environment, to be paid for by gutting corporate tax cuts and by diverting surplus funds meant to pay down the debt -- in short, by abandoning the very fiscal discipline on which the Prime Minister made his reputation.

The most that can be said in the Liberals' defence is that some spending had been planned in some of these areas. But they had never planned to spend so much, so soon, on so many things.

Mr. Goodale should resign. His budget lies in ruins. The new NDP budget will significantly increase federal spending, much of it in areas of provincial jurisdiction, while reducing economic competitiveness and fiscal probity. The Finance Minister had said repeatedly such measures were fiscally impossible. What can he say now?

The deal is a triumph for Mr. Layton. Instead of having his party's platform and supporters plucked away by the Liberals, as has happened so often in past elections, he has forced his agenda on a government so weak that it will prostrate its principles in order to increase its chances of survival.

In the next federal election -- whenever it is held -- NDP voters won't flee to the Liberals for fear of wasting their votes.

Instead, Liberal support will bleed to the NDP, the Party That Knows What it Wants. The Party That Gets Things Done.

The country will pay a high price.

The deferred reductions in corporate taxes will widen the gap in productivity between Canada and the United States. But since some of those tax cuts weren't planned to take effect until late in the decade, the $4.6-billion of new spending slated for this year and next will have to come, in part, out of budget surpluses.

This money would normally be applied to the national debt. Now that it won't, Mr. Goodale's hopes of reducing the debt-to-GDP ratio to 25 per cent have been compromised.

When, in the next decade, the social costs of caring for the elderly baby boomers start to climb, there will be less money available for those needs.

All because of this soul-selling contract.

The Conservatives will fight these changes to the death. It makes a mockery of their support for the February budget, which no longer exists.

It will make any future tax cuts -- personal as well as corporate -- much harder to implement. And it undermines the principles of prudence that have made Canada the envy of finance departments around the world.

The Bloc will also oppose these measures, because they intrude on Quebec's sphere of jurisdiction, and because the Bloc just wants the Liberals gone.

Everything hinges on the three independent MPs. No one can say whether the budget will survive second reading, or any motions of no-confidence.

Mr. Martin's strategists may calculate that this deal will solidify the Liberal vote on the left. If so, they're wrong.

This deal will solidify and expand NDP support, while sending centre-right voters to the Conservatives. In the long run, Liberal prospects will be even dimmer

All that, to increase the odds of surviving until the fall from 90-10 against, to 60-40 against.

The Prime Minister should have brought the NDP Leader into the cabinet. The Finance portfolio should be vacant.

Finally, we can stop calling Paul Martin Mr. Dithers.

He has a new name: Dr. Faust. And Jack Layton is his Mephistopheles.

jibbitson@globeandmail.ca

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