Will Layton be able to sell budget deal?

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by L. IAN MacDONALD
Sun Media, Friday, March 4, 2011

In the cross-talk between Jack Layton and Jim Flaherty this week, the elements of a possible budget deal are emerging. The only question is whether Layton can live with what's on offer, and whether he can sell it to the NDP caucus, which is extremely skittish at the prospect of supporting a Tory budget.

In a television ad taped in January but released only this week, Layton said: "It's time to roll up our sleeves, put the partisan games aside, and start getting results, like increasing assistance for seniors in need and giving a little help for those who are caring for a parent at home."

He's talking about topping up the Guaranteed Income Supplement for hard-pressed seniors, which the NDP says would cost $700 million, as well as unspecified funding for home care, stealing a page from the Liberal playbook.

On Wednesday, Finance Minister Flaherty met reporters following the Conservative caucus, ostensibly to announce March 22 as the date of the budget, which was the worst kept secret in town. The real purpose of Flaherty's appearance was to send positive signals to Layton.

"There are lots of things we can do in a budget," Flaherty said, quite unprompted. "As I've said before, if you look at people who actually need help in Canada, there are a group of older people in Canada, who are not entitled to Canada Pension Plan benefits, who could use some support from government. That's something we're looking at."

Quote, unquote.

In other words, it's a deal on the GIS. Asked if he planned to have further talks with the NDP, and whether the budget was closed, Flaherty replied: "Oh, no, it's not closed, it's not finished."

He added: "Now there are discussions that are continuing. I expect there'll be some items in the budget that will engender consideration by opposition parties--at least I hope so."

The only opposition party in this conversation is the NDP, the Liberals and the Bloc Quebecois having taken themselves out of it --the Grits with their demand Flaherty rescind corporate tax cuts legislated four years ago, and the Bloc with their demand of $5.5 billion for Quebec.

Flaherty also made it clear that two NDP demands, exempting home heating oil from sales tax, and increasing CPP contributions, are off the table.

The first is technically unfeasible and the second would require approval of the provinces. The provinces that have harmonized their sales tax with Ottawa already have stipulated their exemptions up to 5% of revenues.

"This is an issue that is not simple," Flaherty said. "And sometimes it's presented as a simple issue. We have five provinces that are harmonized and if we make a change with respect to the HST it affects all those provinces and their revenues as well. It's like making a change to the Canada Pension Plan. It's not simple because we have to have two-thirds of the provinces, with two-thirds of the population of the country with us, to make a change. So these are not matters that can just be announced in a budget and the federal government decides these things. This is part of the federation. We have to work with our partners in the federation."

Over to you, Jack. It's called the balance of power. And you've got it.

 
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