OTTAWA — The Conservative government’s third report on its economic action plan is silent on one key question: how quickly the money is getting out the door.
The Tories delivered a clear message Monday as they released the report: the government is taking immediate action on the economy, funding stimulus projects that could be stalled by an election.
“In the province of Nova Scotia, I think we have a very high rate of success when it comes to these infrastructure projects and injection of funds into the communities,” Defence Minister Peter MacKay said Monday. “We’re seeing a lot of projects well underway, some of them completed. The fields at St. Francis Xavier is a good example.”
The Liberals are delivering a contradictory message: the government is acting too slowly and the Liberals would do better.
“The fact is the Harper government has failed to ensure that funds are flowing to projects at a time when an unprecedented number of Canadians are losing their jobs,” Liberal MP Scott Brison said Monday. “They refuse to provide the real truth on when the projects are actually started.”
Observers with no stake in the political to and fro, though, say both sides are full of bologna: Shovels will go into the ground for most infrastructure projects next summer, not this year. A Liberal government wouldn’t be able to make things happen any faster. And an election would make no difference to the economic recovery.
As Prime Minister Stephen Harper released his report in a carefully choreographed media event in Saint John, N.B., on Monday, he said 90 per cent of the economic stimulus in the plan is committed, but that doesn’t mean 90 per cent of stimulus projects have started. A Liberal analysis released last week suggested the real number is only 12 per cent.
The Tories could have cleared up the dispute by revealing what percentage of projects have been started but they don’t want to make that clear, says Charles Cirtwill of the Atlantic Institute for Market Studies, a Halifax think-tank.
“They know how many cheques they’ve cut and to whom they’ve cut them and how many shovels are in the ground,” he said.
“It’s embarrassing to them. This is the ugly bogeyman of stimulus. Every economist told them there’s no way they can do this fast enough to have any impact on the recession anywhere any time before 2010. So for the prime minister to stand there today and say the economic action plan is having an important part in the overall recovery of the economy, that’s just foolishness and he knows that.”
Given that job numbers have started to turn the corner, Mr. Cirtwill says, Ottawa should be turning off the stimulus tap now.
Erin Weir, an economist for the United Steelworkers, agrees that most of the work won’t get started until next construction season, but he figures that’s actually not bad because too many people will still be unemployed then.
“The labour market is likely to continue to get worse before it gets better, so even if a lot of the construction does happen next summer, there certainly will be a pretty desperate need for those jobs,” he said.
The Conservatives appear to be exaggerating the immediate impact of their stimulus measures because it fits with their political message about how an election would wreck all their work.
That’s silly, Mr. Cirtwill said, and Nova Scotians recently rejected a similar argument.
“That was the exact same dumb argument Rodney MacDonald tried to use,” he said. “No one bought it. No one believed it. It wasn’t true and they were having a hard time standing in front of microphones with a straight face and saying it. The simple fact of the matter is that government goes on, election or no election. As Harper said, most of the cheques are already approved.”
NDP MP Peter Stoffer, whose party is going to vote with the Tories this week, says his Sackville-Eastern Shore constituents don’t want an election but he doesn’t believe an election would have any impact on the economic recovery.
“Everyone in this game understands the bullshit that’s going on around here,” he said. “You’ve got the Conservatives saying, ‘Look what we’re doing,’ but they haven’t done most of it. Some money has hit the streets but nowhere near as much as what they’re saying. And for the Liberals to say only if we were in power, things would be better, it’s simply not true.”
Mr. Stoffer said the deficit likely would have been smaller under the Liberals because they wouldn’t have cut the GST as the Tories did.
The Liberals say the government could have acted faster to get money out the door by handing it straight to municipalities, as under the gas tax mechanism, but the provincial governments would have screamed because then they would get no say over the money. And there’s no guarantee that would have been faster, Mr. Cirtwill said.
“They could have gone the gas tax route, but all that would have meant was another level of government being too slow to cut cheques,” he said. “No government, in the face of Gomery and everything that’s gone before, is going to rush the money out the door.”
Spending too quickly would inevitably lead to money being wasted, he said, and politicians don’t want to be blamed for that.
Mr. Weir said even an election followed by a change of government likely wouldn’t have much effect on the economy.
“I’m not aware of any large economic differences between the two main political parties,” he said. “If you compare the Liberals and the Conservatives, both have the attitude that deficits are a bad thing. But both aren’t promising to balance the budget instantly either. Both want to continue corporate tax cuts and not increase any other taxes. I just don’t see any huge change in economic policy, even if the Liberals were somehow able to form a government.”