Tag Archives: Jeffrey Simpson

Harper isolated on NATO defence spending

From Jeffrey Simpson

Mr. Harper’s isolation could be read indirectly into the reporting of last week’s phone call between him and U.S. President Barack Obama. Whereas the Canadian “readout,” or report, of the conversation made no mention of defence spending, the White House reported that “the President stressed the agreement on increased defence investment in all areas is a top priority at the NATO summit.”

A “top American priority” is always to cajole NATO allies into spending more on defence. That priority is certainly not Mr. Harper’s. He has developed an ambivalent and somewhat contradictory attitude toward the military, and it toward him. The Prime Minister and his advisers and the top military brass circle each warily, harbouring their respective reservations about each other.

To put matters aphoristically, Mr. Harper’s government likes the idea of the military more than it likes the military itself.

The idea of the military means history, monuments, medals, ceremonies, parades and repeated rhetorical praise. The military itself means buying equipment, deploying it, dealing with veterans and wrestling with a budget that always seems to go up unless the political masters get tough.

The military has produced some nice headlines to an image-obsessed government, notably from the Afghanistan mission, but it has also delivered headaches and bad headlines, especially over procurement. Delays and problems have beset such purchases as the new generation of fighter aircraft, maritime helicopters, search and rescue aircraft, ships and some smaller gear.

For this government (as for previous ones), the military seems always set on a permanent “ask,” but for the military, this government like previous ones, promises more than it delivers and takes on missions that stretch the military’s means of delivery.

Appeasing the base

Excellent column by Jeffrey Simpson on the Conservatives focus from now until 2015

Almost all you need to know about Canadian politics in the next two years can be summarized in one simple number – 10 per cent.

Ten per cent is the share of the electorate that has deserted Stephen Harper’s Conservatives since the last election. In that contest, the Conservatives captured a shade less than 40 per cent of the votes. For months now, polls have given the Conservatives about 30 per cent.

At 40 per cent, the Conservatives would win again, likely with another majority; at 30 per cent, they would lose power. Their aim – and it will drive almost everything they do in the next two years – will be to recapture all or most of the difference.

What about the other 60 per cent of the voting public? The Conservatives could care less about them. The overwhelming majority of those people aren’t going to vote Conservative, period.

Nik Nanos, the pollster, asks this interesting question on an ongoing basis: Could you imagine voting for a given party? He consistently finds that 60 per cent of voters reply that they could not imagine voting Conservative. The party’s ceiling, therefore, is 40 per cent.

No matter what the Conservatives have successfully done in office, no matter how hard they have tried and how much money they have spent, no matter how favourable the economic circumstances, no matter how inept the other parties, the Conservatives have never shattered that 40-per-cent ceiling. But if they don’t crawl back close to it by the time of the next election, they will struggle to be re-elected, let alone to win another majority.

Given this strategic imperative, you might think that midway through a majority government’s term, a party mired at 30 per cent would be rethinking its strategy. That would be to misunderstand the Harper government.

Instead of rethinking, the Prime Minister has doubled down on his long-term strategy, which depends on polarizing the electorate and identifying and mobilizing the Conservative vote. He reshuffled his cabinet to add younger ministers of the same type as the more experienced ones: hard-edged communicators and sharp-elbowed partisans. He regrouped people in his office and at party headquarters who are unreserved loyalists. There are no even mildly discordant voices, let alone fresh faces or new views, in Mr. Harper’s inner political circle.

Depressing.

Queen’s Park, we have a problem

Ontario’s debt problem just got a whole lot larger

Few people talk about debt. It isn’t sexy, and it certainly won’t win votes. In a little over two decades, from 1990-1991 to today, Ontario’s debt-to-GDP ratio has tripled. If you believe the government’s projections in Thursday’s budget, between 2009-2010 and 2017-2018, the province will have added about $90-billion in debt. The total debt will be about $280-billion.

It doesn’t matter, under these circumstances, which party forms the next government. The debt will still be there, large and growing, and very vulnerable to a hike in interest rates. Ontario, like other governments, can pile up more debt and get financing at low rates. When, inevitably, those rates rise, the burden of financing the debt will jump.

Thursday’s budget, in this sense, was like the recent federal one. The media and opposition parties in Ottawa focused on all the changes. Fair enough, but the biggest, silent increase in the federal budget was money for seniors’ pensions. That didn’t get a whisper of attention, because the costs go up quietly.

So, too, the post-budget coverage and debate in Ontario swirled about new spending in some programs while restraint is exercised in others; whether the Liberals met the NDP’s bargaining positions to get the budget passed and so remain in office; and whether the deficit will be going slightly up or down. But beneath the radar screen will be the buildup of debt, and the very real question about whether the province can manage it.

Ontario could finance its debt more easily if economic growth and accompanying government revenues grew at least as fast as debt-servicing costs. But economic growth is going to be about half the increase in costs of servicing the debt.

As the budget itself notes, Ontario’s productivity lags behind that of the United States, as does business investment. The province’s cost competitiveness has eroded. What the budget didn’t mention is that energy costs are soaring. Programs also are rising for such items as seniors’ drugs (up 5.4 per cent) and public-sector pensions (most public-sector employees have defined benefit plans, whereas private-sector employees don’t). Then there are provincial arbitrators who pay no attention to a government’s ability to pay, thereby driving up costs (see police, for example) by looking only at other settlements.

Premier Kathleen Wynne’s government was in the tightest of spots, not a place from which to talk about difficult stuff such as the buildup of debt. Her Liberal government finds itself between Conservatives, who hound it with demands for an election, and New Democrats, who play an annual game of political extortion with their list of demands.

It’s a terrible way to run a legislature, let alone a government, but that’s the way the opposition parties wish to play their hands. So the Liberals seek what they call a “balanced approach” between Conservatives who want bigger cuts in public spending and New Democrats who instinctively want to spend lots more, with the money coming from the business sector and the better off.

With the size of the Ontario economy, when it either goes spiralling into a recession or the painful cuts are made, it is going to impact us all.