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Tories regroup ahead of pivotal budget

Harper team reveals spending plans, places budget in veteran hands as part of survival strategy

From Monday's Globe and Mail

OTTAWA — An unprecedented series of announcements previewing tomorrow's federal budget continued through the weekend as the Harper government pledged to set aside the partisan gamesmanship that turned its last economic foray into a near-fatal political crisis.

"We have grown-ups running the budget process," a senior government official told The Globe and Mail yesterday on condition of remaining unidentified by name. "There will be no juvenile political games."

The source said the Prime Minister's chief of staff, Guy Giorno, has seen his influence over the budget superseded by two veterans with more than 70 years of combined experience; the Clerk of the Privy Council, Kevin Lynch, and a senior adviser to the Prime Minister, Bruce Carson.

The comments and gradual early unveiling of the budget are part of a comprehensive strategy to win opposition support and survive the confidence votes that will follow today's Speech from the Throne and tomorrow's budget.

The plan includes an extraordinary series of budget previews, beginning last week when Prime Minister Stephen Harper's office indicated the country will run deficits totalling $64-billion over two years.

The latest departure from traditional pre-budget secrecy came from Human Resources Minister Diane Finley, who announced yesterday on CTV's Question Period that the budget will include $1.5-billion in training funds for laid-off workers.

Over the past three days, half a dozen Tory ministers have publicly revealed nearly $6-billion of its contents. More is expected to be divulged today by Infrastructure Minister John Baird.

The Conservatives say they're trying to make sure their entire budget gets publicity rather than risk measures being overlooked in the torrent of budget-day spending news. Also, they argue, leaking budget measures was standard practice under the Liberal governments that preceded theirs. "The budget hasn't been all kept [secret] for budget day in more than a decade," one senior official said.

Still, leaks in the Jean Chrétien and Paul Martin era tended to be imprecise hints transmitted through anonymous sources — not public statements by cabinet ministers as the Tories have done.

"I've been looking at these things for 30 years and can never remember the specifics of any measure being announced in a fairly formal way like this," Toronto Dominion chief economist Don Drummond, a former federal Finance official, said.

The unusual strategy is to cement public support for the budget and, thus, for the minority Harper government, leaving no reason for the Liberals to vote against it and defeat them. "The goal seems to be to delay the executioner," Liberal finance critic John McCallum said.

The NDP has already said it will oppose the budget and the Bloc Québécois has set the conditions of its support extremely high.

Last fall's economic statement led to the creation of the Liberal-NDP coalition and the near-death of the government. Government officials have pointed fingers at Mr. Giorno, Finance Minister Jim Flaherty and at Mr. Harper himself for the statement and its inclusion of such initiatives as suspending the public service's right to strike and the effort to eliminate voter subsidies to political parties.

While nobody has been reprimanded for the November difficulties, it now appears clear the government wants to send a message that it has learned its lesson.

Shifting responsibility for the budget may serve to demonstrate to Liberal Leader Michael Ignatieff, who must decide whether to keep the government alive, that the Conservatives are serious about changing their approach.

The government official's statements are in stark contrast to Mr. Harper's refusal in his year-end interviews to take any responsibility for last fall's political crisis, or to acknowledge that the fiscal update — which he had personally approved — was a mistake. A number of Conservatives now feel that Mr. Harper has to either eat crow and take responsibility for the fiscal update, or assign blame to one of his top operatives for the ensuing political crisis.

One Tory insider also said that the PMO has sent out messages that individual ministers are not to draw attention to themselves during the budget process by pushing forward controversial ideas.

"There's a sense now that now's not the time for gimmicks," said the Tory. "We just have to appear serious at this stage. We can't appear to be poking our fingers in people's eyes."

The new co-operative attitude on behalf of the PMO has also been on display with respect to the premiers, business leaders and the civil service. Observers also say Mr. Harper's authority has been curbed, his agenda circumscribed and his instincts to attack Mr. Ignatieff curtailed.

"He has put himself in a pickle," said Peter Woolstencroft, a political scientist at the University of Waterloo, and an expert on Canada's Conservative movement. "By not being adroit in November, he has created a circumstance that, unless he wants to be defeated, forces him to present a richer budget than he might have wanted."

Within days of last month's parliamentary prorogation, the call went out from three separate government departments to begin gathering information from provinces on what they need to cope with the economic turmoil. Those ministers included Mr. Baird, who is also Transport Minister, Ms. Finley and Mr. Flaherty. Aboriginal Affairs Minister Chuck Strahl was called on to do the same with Canada's native leaders.

The provinces have put forward hundreds of ideas for how to spend the multibillions the government plans to make available for roads, bridges, water-treatment plants, broadband initiatives and the like. The premiers also met with the Prime Minister for a full day-and-a-half (a first), and trotted out suggestions for how to reform Employment Insurance and spend money on retraining and other things.

It was a far cry, said one provincial bureaucrat, from last year when Mr. Flaherty advised international investors that Ontario was one of the worst places in the world to invest.

But whether the Prime Minister can rebuild trust quickly is still a question.

When asked whether Mr. Harper would have done so much consulting without the sword of the coalition hanging over his head, the bureaucrat said "no way, no way. This isn't in their DNA. They're playing against type here."

Similar efforts at openness have taken place within the federal civil service. While a number of cabinet ministers and employees believe the bureaucracy is filled with Liberal sympathizers, the government has nonetheless drawn on its ranks for ideas. Civil servants have responded by spitting out 400 infrastructure projects that can be moved ahead quickly. A good number will see the light of day tomorrow.

Experts say that whether the provinces, bureaucrats and interest groups get exactly what they want from the budget is almost beside the point. What Mr. Harper has tried to do is listen hard enough so that, even if people don't like everything they see, they won't complain about not being consulted.

BY THE NUMBERS

The Tories are planning to run deficits totalling $64-billion over the next two fiscal years, including $34-billion in the first year and $30-billion in the second. Other spending announced in recent days:

  • $1.5-billion in funding to boost training for laid-off workers including even those who are ineligible for Employment Insurance
  • $500-million in targeted support for older workers
  • $1-billion in funding for renovating social housing
  • $600-million for on-reserve aboriginal housing
  •  $400-million for seniors' housing
  • $75-million for housing for people with disabilities
  •  $1-billion community adjustment fund for single-industry and resource towns hardest hit by this economic crisis (forestry, mining and agriculture communities). This national fund would have flexible criteria for applicants in order to help their communities adjust to the changing economic climate
  • $160-million for new investments in arts and culture
  •  $150-million in forestry industry aid, including more than $100-million to develop new uses for forest products and $50-million to help promote the industry abroad as environmentally responsible
  •  $550-million for farmers, including half a billion to help adjust to tough times and $50-million to expand slaughterhouse capacity

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