Majority muscle

Tories have a clear field and must capitalize when House returns

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Sun Media, Sunday, September 11, 2011

The Conservative caucus in Ottawa is a reminder there’s a new normal in town — majority government.

That alone gives Stephen Harper a clear field for setting the agenda when the House returns on Sept. 19.

The fact that the NDP and Liberals are both between leaders makes the prime minister’s life even easier.

The first thing on the government’s fall agenda is to repeal the long-gun registry as part of an omnibus justice bill that includes reviving expired anti-terrorism measures.

There’s no doubt a tough crime package plays well to the Conservative base, but the Tories do better with other voters, notably the Blue Grits who gave them their majority in Ontario, when they leave social issues alone and play from their real strength — the economy.

Which is exactly what Harper was doing last Thursday in his pep talk to the Conservative caucus, reminding them and the country that since July 2009, the Canadian economy has created nearly 600,000 new jobs, meaning all the jobs lost during the recession have been recovered and then some.

The other part of Harper’s narrative is that the global recovery is fragile, nowhere more so than the United States. Unemployment persists at 9.1% in the U.S., with zero job growth in August, nearly two points higher than Canada.

With economic growth flat in both countries in the second quarter, a double-dip recession can’t be ruled out, even though most economists predict modest growth in the second half of the year.

Barring a recession, there’s no chance of the Conservatives returning to economic stimulus, and every prospect Finance Minister Jim Flaherty will continue the push in his March budget for a return to balance by 2014-15, a year earlier than previously forecast. The push is already on.

Every department in Ottawa has been asked by the Treasury Board to identify 5% in cuts as part of an expenditure review that’s supposed to take $4 billion a year out of Ottawa’s $80 billion operating budget.

In business, a 5% cut in spending is hardly news, but in Ottawa it’s a big deal.

While the cuts will win the government no friends among bureaucrats, Harper’s office and Flaherty have been getting a lot of advice to spend down their political capital and do what needs to be done at the front end of the mandate. The 5% cut in operating spending is one thing. The funding of civil servants pensions is another example.

Two-thirds of public service pensions are funded by the government, when the best outcome for a defined benefits pension in the private sector is a 50% funding by the employer and the remainder paid by the employee.

It would be easy for Flaherty to grandfather existing benefits in public service pensions, while moving to a 50-50 funding format in the future — starting with MPs and senators. Then there are two big files looming on the Canadian federation — one is equalization, which often gives have-not provinces superior rather than comparable services over the haves.

Quebec’s $7-a-day child care comes to mind. And the other one is health care, with the 10-year federal-provincial accord expiring in 2014.

Ottawa’s going to extend it for two years at a 6% growth rate, but long-term that’s not sustainable.

Welcome to majority government.

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