Friday, June 27, 2008

Oops he did it again

Reading the story this morning in the Globe and Mail where Mr. Dion admitted that the Carbon Tax in his Carbon Shift plan would impact Alberta and Saskatchewan the hardest left me shaking my head.

I have to admit, my first reaction was "What are you thinking?"

However, thinking more deeply on it I find myself impressed. I for one am tired or politicians who lie to me about the tough issues. Mike Harris claimed that he could reduce my taxes by 30% but still maintain the level of government services that I had become accustomed to. Larry O'Brien, the Mayor of Ottawa, stated he could freeze property taxes and still maintain services. Of course both were wrong and I cannot shake the feeling that they knew their promises would be impossible to keep when they made them. In other words, they told the voters what we wanted to here, knowing it was untrue and enough voters in both cases believed them.

Stephane Dion has taken a different approach. He has come right out and said the Carbon Tax will have an impact on producers of high carbon products and it so happens most of those producers are in Alberta and Saskatchewan. Politically, it is bass ackwards but from the standpoint of integrity you really cannot find any fault. Perhaps, Mr. Dion is going to be a different kind of politician.

Then I began looking at the impacts. By Mr. Dion's reckoning 40% of the revenues from the Carbon Tax will be from the two provinces I mentioned. If the total projected revenus of $15 billion is correct the 40 % works out to $6 billion. Forgive me, but when you compare that to the profits that the oil and gas extraction companies are making these days $6 billion is not really going to make that much of a dent. And that is assuming these companies do not pass on at least some of the cost of the Carbon Tax to consumers, which we all know is not going to happen.

So really, the oil and gas industry in Alberta and Saskatchewan should be more concerned about the continuing economic slowdown in the US and what that could do to the economies of China and India. Because the impact of simultaneous slowdowns in those three countries will have a much greater impact on the oil and gas industry than Mr. Dion's Carbon Tax.

Wednesday, June 18, 2008

Someone at Liberal Party HQ is thinking

I find it interesting that there is a rumour of a cabinet shuffle tomorrow so the Liberals release the "tax cut" portions of their tax shift plan today.

It virtually guarantees headlines about Liberal tax cuts tomorrow.

Now if Stephen Harper does announce a cabinet shuffle tomorrow it will drown out the "tax increase" portion of the plan, somewhat, when it is released.

So now Stephen Harper has a choice. Have the rumoured cabinet shuffle or wait until after the plan is completely released giving the plan two solid days of wall-to-wall media coverage. That after all is all the Liberals can hope for from this announcement. Coverage of the plan will quickly fade as the summer progesses.

Either way however, the Liberals have wrong footed the Conservatives by giving them two equally bad choices of what to do tomorrow.

So what is it going to be Mr. Harper?

Allow the complete release of the Liberal tax shift plan and the resulting indepth media coverage? Or to put it another way, allow the Liberals to create that all important first impression of the plan.


Use your cabinet shuffle to shift some of the attention to you but at the cost of competing with the release of some of the more controversial aspects of the Liberal tax shift plan? That certainly would take some of the Liberal thunder but not before Canadians hear about planned Liberal tax cuts.

Back to you Chess Master.

Tuesday, June 10, 2008

Thank you Mr. Dion for not forcing an election this summer

After all what compelling issue could you have forced a summer election over?

There are several issues that many would say fall into that category. Let's take a look at each.

1) Conservative Scandals: Some would say we should point out the recent Conservative scandals. However, you and I both know that none of those scandals are fatal and that scandals tend to be most effective in hurting a sitting government when they have had time to grow in the minds of the electorate. Forcing an election too early after scandals break leaves you wide open to accusations of political opportunism. I could just see the Conservatives and their apologists in the media howling about the Liberals disrupting the summer of Canadians because of selfishness on the part of the Liberals. Then of course, there is the optic of a party that was thrown out of office less than three years ago over scandal complaining about the scandals of another party. That would negate any benefit of these scandals for you Mr. Dion.

2) The Immigration Bill: This would certainly resonate with your base but the whole idea of the next election is to grow your support beyond your base. This issue is not one that will do that. As well, you know that Immigration policy in this country is alive and ever changing so nothing the Conservatives did this spring cannot be reversed or changed when you are safely ensconced in the PM's chair.

3) The economy: Really what are you going to do about what is happening in the economy at the moment? Do you have some magic powers that will allow Alberta to make tonnes of money on high oil prices without effecting Central Canada? I doubt it. The fact is running on the economy now would be bad timing. You have to do what Jean Chretien did. Run on the economy after it has began to recover. That way as it continues to recover you can take the credit for it. Do not do what Bob Rae did. Run on the economy when it was going into the crapper. That just leads to you being blamed (wrongly) for that situation and costing you big time.

4) Your environmental plan: This is going to be an exciting policy but we both know that trying to explain it during the 36 days of the politically overheated atmosphere of an election campaign is a recipe for disaster. No real debate would take place and whatever statements you or anybody else made about the plan would be discounted as partisan election politics. As well, it does not take much political savvy to realize that one "beer and popcorn" moment would force your plan off the election agenda, probably leaving holes in Canadians' understanding of it. Holes the Conservatives and other climate change deniers would be all too happy to fill, to yours and Canada's disadvantage. You are correct to spend the next couple of months explaining this policy in the less politically charged atmosphere of the summer.

Of course there is some danger in waiting but that is politics.

Some believe the Conservatives will come back stronger. That tends to defy political trends. You have been observing politics long enough to realize that after two years a malaise sets in amongst the electorate with regard to a sitting government. So the second half of a government mandate is usually about managing that malaise so as to reduce its impact on the government's re-election chances. So far, this government has been brutal in doing so and that has been reflected in some recent polls. Whether those polls are a harbinger of a trend that is advantageous to you or just a blip remains to be seen. You will have a better idea in the Fall.

Some state that waiting gives the Conservatives time to come up with an agenda which they will then put into a Throne Speech and combine with another cabinet shuffle. We have seen that movie before. This government thinks small and has no talent in its caucus. For it to have three Throne Speeches and three cabinet shuffles in three years is a sign of weakness and they will be hard pressed to overcome that.

Then there is the Conservative Policy Convention. That is going to be fun to watch. Either the control freak Stephen Harper will allow free discussion, including from the more wing-nutty branch of his party (probably blowing a gasket in the process) or he will attempt to control what comes out of that convention. Either way, much of the work of the convention will be overshadowed by that dynamic blunting the benefit of the convention for the Conservatives.

Mr. Dion, it remains to be seen whether your current strategy will work. After all there are no sure things in life. However, I agree with you that forcing an election this summer would have been a bad idea that would have probably lead to a Liberal defeat. Recent events seem to show that the Liberals have turned a corner and are now moving forward again. Given a few more months the Liberals should be able to build on that and generate some momentum.

We will see.