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Election would ‘jeopardize’ recovery: Flaherty

In Canada on September 21, 2010 at 21:26

Election would ‘jeopardize’ recovery: Flaherty

Finance Minister Jim Flaherty said the Liberals, NDP and Bloc Quebecois might opt to form a coalition, as they did in late 2008, to topple the governing Conservatives -- a risk, he argued, Canada cannot afford during this uncertain recovery.

Christinne Muschi/Reuters

Finance Minister Jim Flaherty said the Liberals, NDP and Bloc Quebecois might opt to form a coalition, as they did in late 2008, to topple the governing Conservatives — a risk, he argued, Canada cannot afford during this uncertain recovery.

Paul Vieira, Financial Post · Tuesday, Sept. 21, 2010

OTTAWA — Finance Minister Jim Flaherty launched a blistering attack Tuesday on his political opponents, warning Canadians they are itching for an election campaign on a policy agenda that would “jeopardize” Canada’s recovery and limit long-term growth prospects.

According to prepared remarks delivered at an Ottawa luncheon, Mr. Flaherty said the Liberals, NDP and Bloc Quebecois might opt to form a coalition, as they did in late 2008, to topple the governing Conservatives — a risk, he argued, Canada cannot afford during this uncertain recovery.

A possible election “would jeopardize our economic recovery, just as we enter the home stretch,” Mr. Flaherty said before a luncheon audience of roughly 400 people, which included senior Conservative Party members and strategists, as well as key members of Liberal Party caucus.

Should such an election produce a government led by Liberal Leader Michael Ignatieff, and backed by the NDP and Bloc Quebecois, then the gains Canada recorded in the last several years would be erased, the Minister warned in a highly-partisan speech.

Mr. Flaherty focused in particular on a pledge from Mr. Ignatieff to refrain from implementing tax cuts scheduled in the coming years on corporate income. He also alleged a Liberal-led government may choose to increase the GST and slap a slew of new taxes, such as a levy on iPods.

“If they seize the wheel, ladies and gentlemen, they’ll have us on the rocks,” Mr. Flaherty said. “The Ignatieff-NDP-Bloc Québécois tax hikes would not only jeopardize our recovery from the global recession. The coalition’s policies would also squander our Canadian advantage, and limit our long-term prospects. They would set us on the same downward spiral other countries are now trying desperately to escape.”

As Mr. Flaherty delivered his remarks, the Liberal Party shot back with a statement indicating the Conservative government is set to proceed with a big tax hike of its own, beginning in 2011, through higher Employment Insurance premiums.

The EI premium hikes — part of the government’s plan to return to budget balance — will cost roughly 220,000 jobs, the Liberals said. Labour groups and business organizations have pushed the Conservatives to hold off on EI hikes, as the recovery remains fragile.

The Liberal Party also blasted the Conservative economic record, arguing Mr. Flaherty “put Canada into deficit even before the recession” started, by increasing program spending by 18% in the three budgets the Minister tabled in the years before the financial crisis.

His speech comes just as Parliament returned to work this week, with Liberals arguing the Conservatives should keep stimulus flowing well into next year to ensure all projects get the money they are entitled to.

Projects not completed before a March 31, 2011 deadline could lose out on federal stimulus cash set aside for infrastructure. Meanwhile, the NDP has said Ottawa should come up with a second round of stimulus spending, just like the Obama White House, because unemployment remains high.

The latest poll done by Ipsos Reid for Postmedia (which owns the National Post) indicated the Conservatives have the support of 34% of voters, compared to 31% for the Liberals and 16% for the NDP. The poll was conducted between Sept. 8 and Sept. 12.

Mr. Flaherty reiterated his plan to fully implement the government’s two-year, $46-billion stimulus before the end of this fiscal year, ending March 31. The government would then proceed with budget-cutting policies aimed at returning Ottawa to budget balance by mid-decade. The Minister said last week the deficit for the 2009-10 fiscal year likely exceeded the $50-billion mark, or close to the original $54-billion projection.

“The opposition coalition will say we should be warm and fuzzy,” he said. ”Our history shows we’re willing to work hard, to work together, and to make tough but balanced choices when necessary, for the sake of our achieving our shared goals.”

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