The budget road show comes home to Ottawa this week

Harper and Flaherty keep the consultations going until the last minute

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by L. IAN MacDONALD
The Gazette, Wednesday, January 14, 2008

Never has there been a budget whose process was still ongoing so close to the delivery as the one Finance Minister Jim Flaherty will read in the House the week after next.

That's less than two weeks from now, and in the normal course of events the budget speech and documents would be in translation by now, on their way to the printers.

But the government is still in consultations with stakeholders, including a town-hall meeting in Flaherty's area of Oshawa-Whitby last Thursday and Stephen Harper's meeting with private- sector advisers in Montreal last Friday.

But those were just warm-ups to the main consulting event, Harper's hosting of provincial and territorial premiers for dinner followed by a day-long meeting in Ottawa tomorrow night and Friday.

Being so close to the Jan. 27 budget, this meeting is more about tone than substance, more about visuals than actual outcomes.

"This is like Flaherty consulting the provincial finance ministers, only at the level of first ministers," says a senior official in the office of Quebec Premier Jean Charest.

But in the circumstances of the economic crisis, no one is going to disrupt the mood of everyone going along to get along. No one would dare. And that's to Harper's great advantage. All the premiers will be on their best behaviour. Besides, they all want to know what's in it for them, as in how much money.

In terms of the "shovel-ready" stimulus Ottawa plans to pump into the economy, almost all of it will be public-works projects or procurement within provincial jurisdiction, including programs for cities, which are constitutionally creatures of the provinces.

Paul Martin discovered this during his two-year tenure as prime minister, when he made cities a priority for his government. He ended up writing a lot of cheques to the provinces. Cities remain a high policy priority and power base for the Liberals in opposition. And since their support is essential to pass the budget, municipal projects are sure to figure prominently in Flaherty's final product. In that sense, while Michael Ignatieff might not be at the table of the first ministers' meeting, he is very much an important player.

The next thing the premiers will be looking for is assurance from Harper that their existing transfer and equalization payments from the feds will not be touched or affected by the economic emergency.

They can take that to the bank. Any indication to the contrary from Harper would be a declaration of war at a time when the voters have a policy of zero tolerance toward bickering between Ottawa and the provinces. After the disastrous economic statement in November, Harper needs consensus, not confrontation, with the provinces.

But the premiers will also want to avoid any suggestion of beggar thy neighbour. It should be noted that when Ottawa came up with a $4-billion rescue package for the Ontario auto industry, Charest did not jump up and demand billions of dollars of new federal investments in Quebec's aerospace industry.

Which isn't to say some of the premiers won't have some pet projects to discuss. For the last year, Charest's office has been promoting a high-speed rail link in the Ontario-Quebec corridor. This is in the realm of what goes around comes around, an idea that has been around for at least 30 years, and whose time might finally be at hand. There are all kinds of reasons for doing it, including environmental ones. And from Quebec's perspective, Bombardier's transportation division is the world's leading builder of rail cars.

But this is not in the realm of the shovel-ready. Just getting a dedicated rail corridor for a bullet train could take years.

There's already $33 billion of approved infrastructure money in Ottawa, most of it at Transport Canada, which is one of the reasons John Baird was sent there as transport minister in the October cabinet shuffle.

Baird is known as a guy who gets things done, and shakes the system up to get them done. This was the case at Treasury Board, when he pushed through the Accountability Act in 2006, and at environment, when Harper needed a plan on global warming in 2007.

Baird's current assignment is to move all that infrastructure money, most of which has been backed up in the bureaucracy, through the pipeline and out to the provinces. He will have more, much more, money to shovel out the door after the budget.

 
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