NDP and Conservatives get ready to play 'let's make a deal' on budget

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The Gazette, Monday, February 21, 2011

The only significance to all the polls showing the Conservatives surging to a double-digit lead over the Liberals is that they make a spring election on the budget less likely.

The Conservatives are not going to engineer their own defeat. There will be no poison pill in Jim Flaherty's budget, which will be early in the week of March 21.

And with each poll putting the Tories in or near majority territory, the price of a deal on the budget gets cheaper.

The Liberals and the Bloc Quebecois are not part of this budget conversation, because they've dealt themselves out of the game.

The Liberals say they'll vote against the budget unless Flaherty rescinds corporate tax cuts that were legislated in 2007 and come fully into effect at 15 per cent next January. Forget it, Iggy; it ain't gonna happen. This is a completely phoney issue.

The Bloc says it will vote against the budget unless there's $5.5 billion in it for Quebec, including $2.2 billion for harmonizing the GST and QST -the equivalent of what Ontario and British Columbia received for moving to a single sales tax.

But that's not likely to happen either, at least not before the budget. Ottawa doesn't disagree with the number, and has no issue with Quebec collecting the harmonized tax on behalf of both governments, as it already does. What Flaherty and Quebec Finance Minister Raymond Bachand have yet to agree on is the items that would be exempt from the tax, up to five per cent of the revenue base. And Flaherty has said they're unlikely to bridge the gap on exemptions before the budget.

That's part of Gilles Duceppe's annoyance. For all his railing in the House about Quebec getting its fair share of the tax pie, he's not at the table. The Charest government is Flaherty's interlocutor.

As for the rest of Duceppe's demands, including compensation for the 1998 ice storm, no one takes them seriously. Nothing infuriates English-speaking Canada more than the separatist leader saying it's Quebec's turn at the trough.

That leaves Jack Layton and the NDP as Flaherty's prospective dance partner. Indeed, the dance has already begun. Layton met with Harper late on Friday.

There are several reasons for Layton to avoid an election.

First, the narrative of making Parliament work is very good for Layton. It makes him look like a responsible leader, while Michael Ignatieff recklessly seeks to plunge the country into an unwanted election. Any time the leader of the fourth party in the House has the balance of power in his hands, that's a good thing for him. Layton has done this before, in the fall of 2009, when he got the government to extend employment insurance benefits by $1 billion.

Second, the Dippers are still trying to figure out why their vote cratered in two by-elections, in Winnipeg North and Ontario's Vaughan. The first is a historic NDP stronghold. The second turned into a classic two-party race between the Conservatives and Liberals, and the NDP vote disappeared. It is not in the party's interest to have an election where its seat count would fall from the high 30s to the mid-20s.

Third, there is the issue of Layton's health. While his prostate cancer is in remission and he's doing well, there are days when he looks frail and fatigued. He can probably survive 37 days on the road, but it wouldn't be his doctor's idea of an ideal path to a full recovery.

Layton has already made his terms for a budget deal known. Some of it is just wishful thinking, but some is quite within reach.

Uniquely in Canadian history, Flaherty has got five budgets through a minority House. He is a happy warrior by nature, a deal-maker by necessity, and quite the best minister in the government.

The essence of a deal would be topping up the Guaranteed Income Supplement for those seniors most in need. Flaherty hears Layton on this.

This would work for both of them. Layton would be seen to getting something for those hit hardest by the recent recession, and the Conservatives would be seen to have a heart. A Conservative government can never go wrong by coming down on the kinder, gentler side.

This is the cutting edge of a budget deal.

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