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Federal budget political posturing

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Yesterday was budget day in Ottawa and we learned the fiscal plans of the federal government. The Harper government proclaimed they are outstanding stewards of the nation's finances. But, as is the case with much of the spin turned out by the tireless gnomes in the Prime Minister's Office, the situation is somewhat more nuanced than that.
Let's consider a few examples of their less-than-stellar economic stewardship.
It's a general principle tax regimes should be even-handed as well as transparent. The Harper government uses the tax code to provide selective deductions to groups of voters the Conservatives aere trying to attract. These small cuts for expenditures on transit, sporting goods for kids, etc. have produced only one measurable result - a loss of revenue to the federal purse. 
Reducing the GST from seven per cent to five per cent was also a ploy to get votes and it costs more than $6 billion annually.
Virtually every economist will tell you cutting income tax would have been better for the economy. The GST hits everybody - rich and poor - but reductions in the income tax can be designed to help those most in need of relief. Clearly, Harper felt optics and re-election trumped sound fiscal administration.
The Harper government took great pride in the strength of the Canadian banking system during the recent world financial crises. They failed to mention the regulatory framework established by the previous government was in large part responsible for that.
I suppose we can be grateful Harper didn't try to dismantle it.
As the government moved into significant deficit spending to combat the recession, it began an advertising campaign termed Canada's Economic Action Plan aimed at demonstrating it was spending our tax money on worthy projects.
But long after Canada returned to positive growth, these ads continue to be aired and even promote a jobs program that doesn't yet exist.
The Harper government also presided over poor administration of major spending programs. The procurement process for buying new ships and aircraft for the armed forces was repeatedly shown to be deficient. We paid more than $200 million for plans for ships when similar vessels had already been built by both Norway and Denmark at a much lower total cost.
The proposed acquisition of the F-35 fighter is another example.
It has never been explained how the number to be bought was determined nor what role these planes will play. Is the main objective of military procurement to make a splashy announcement and then a year or two later quietly cancel or drastically cut back the project?
Then there is the inconvenient revelation by the Auditor General that $3.1 billion went unaccounted for. Apparently, the money is gone but we don't know where. It takes talent to lose several
billion dollars.
The government has also taken to attacking private sector firms for acting in a rational way.
First, the favourite whipping boy, the chartered banks, are attacked for the fees they charge their customers. Never mind that fees in Canada are lower than in the U.S. and banking services are more numerous in Canada. 
After its strategy for increasing competition in mobile phone service in Canada failed miserably, the government turned to attacking the three major service providers for their fees and inadequate coverage compared to U.S. providers. Never mind that the Canadian land mass is more than double and the population is less than 1/10th that of the U.S., so costs are predictably higher.
Bashing the three telcos makes political sense - but no other kind. 
David Bond is an author and retired bank economist. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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