Favorable Liberal poll - another nail in the coalition coffin?

Nik Nanos released a telephone poll taken January 3-7, showing the Ignatieff-led Liberals have passed the Harper-led Conservatives:

1. Liberals 34%
2. Conservatives 33%
3. NDP 19%
4. Green 7%
   

The BQ has 29% in Quebec, and Quebec has about 25% of Canadian population, so I infer that the national BQ support must be close to 7%, which makes the above total roughly 100%. But since the BQ only runs in Quebec that's probably irrelevant anyway.

The poll also suggests Conservative support has increased in the West, but I think it's hard for them to increase their seat count much at all (they're pretty near 100% already). That means less support in the rest of Canada, possibly fewer Ontario seats, probably fewer Quebec seats.

Stronger Liberals numbers in Quebec and Ontario could raise their seat count quite a bit. With a little luck, some soft voters who supported the NDP in the last election might switch their support. It's optimistic but not unrealistic that Liberals could form a minority government with those numbers. I hope they last.

But why would Mr. Ignatieff form a coalition now, risking the possibility of a minority later? Perhaps these poll numbers are sufficient defense against an abuse of confidence votes?

The result which interests me is the shift of support within Quebec away from the BQ to the Liberals. If the BQ would lose seats to the Liberals, wouldn't they want to avoid an election? But to avoid an election, there is a strange potential that the BQ could support the Conservatives. That just doesn't sound right.

Will EI be the critical budget item?

I expect the upcoming budget to contain tax cuts. You can't expect Conservatives to bring out a budget without them. It wouldn't be fair to expect a complete capitulation and get only 100% of what the opposition asks for, and nothing the Conservatives want.

I also expect infrastructure spending. No one denies it's time for shovel-ready projects. However, the projects presented in the budget should be examined to see whether they're a) re-announcements of already committed money vs. new money, and b) really shovel-ready for 2009 vs. spending programs over several years. Past Conservative announcements seem very prone to these two, IMHO. Anyway, I think any party in government would have some trouble finding shovel-ready spending.

But Mr. Harper in a CTV interview (check out Scott's DiaTribes and Far and Wide) said he doesn't want to make EI more generous. However, if EI measures are omitted from the budget I wouldn't see this as a dirty partisan trick; only a different set of values. Ones which I don't share. What I don't think is fair is generalization of EI as paying people not to work. EI is an insurance system against downturns just like this one (although I won't speak to how effective it is nowadays). Honestly, without it what can you do? Use your savings (sell investments? I thought there were buying opportunties), move somewhere to a new job (where is that, now?), start your own business (like what?).

Strengthing EI was one of three priorities Mr. Ignatieff mentioned in response to a "first-100-days" question in his first town hall meeting. I hope he stands up and pushes hard for an EI boost. Unemployment is both an economic and a social problem. Flaherty says he expects big job losses soon. The CCPA plan suggests $3.4B for EI. Carol Goar has a good article on EI repairs.

But can Iggy support a budget without an EI boost? Maybe. But how will that reflect upon him? Is it something the BQ and NDP will dress him in for the next election?

Can Harper put in something for EI? Maybe. I doubt it, based on past performance. The opposition will claim whatever EI love he gives as not enough, and his own party might not support the EI measures. It could be lose-lose for Harper to put any EI help in the budget.

Charts comparing this and previous recessions

The Digerati Life has a post with charts of the current recession overlaid on the average of all previous recessions post-WWII.

It looks to me like this mess is going to last a long, long time. The best chart IMHO is unemployment which tracks very closely with the average. If we can avoid extraordinary unemployment (e.g. the equity market declines already appear extraordinary) we might be getting off easy.

Back from Iggy's 1st town hall

As I write this I realize my notes are incomplete and reflect my personal interests, and how difficult a reporters job is. Note to self: improve note-taking skills for next time.

The venue was a small theatre at Neptune with a sold-out crowd. They (Halifax Chamber of Commerce) had to add a second meeting tomorrow afternoon.

Mr. Ignatieff said he would value the upcoming budget using a quote from Joseph Howe: "What is right? What is just? What is for the public good?" He also wants to know how much of the spending is "shovel ready", i.e. how fast can the money be disbursed.

The spending should be green, but qualified that could apply to evolutionary improvements as well as brand new technologies. He'd like to see the GM deliver the Chevy Volt.

Scott Brison followed that with an example he called the Atlantic Energy Corridor, which could deliver green electricity (wind, tidal, hydro) to markets outside Atlantic Canada. It made me wonder about how to deal with NS Power as both a generator and a distributor, yet competing with other generators (see my earlier post).

Mr. Ignatieff suggested spending on summer employment for students.

Mr. Brison said he'd like to change the tax system to encourage venture capital, referencing Ireland as an example.

Mr. McCallum said we need to get banks lending again. I didn't quite hear everything he said, and think he simplified that a lot as was necessary for the time allotted. IMHO that's a pretty detailed and complex topic to get into in this context.

A question asked Mr. Ignatieffwhat he'd do in his first 100 days if he were PM on Monday. He joked that part of the question sounded pretty good. He simplified his answer to 3 points:

1. Tax cuts for low- and medium-income workers, and a possible one-time-only income boost
   
2. Changes to EI including a reduced waiting period, faster claims processing and equality of qualification across the country
3. Shovels in the ground, by spending 80-90 hours/week on the phone to every mayor in the country to find out what they can spend right now. Halifax mayor Peter Kelly was in the back of the room, and joked (I think) he had a $1.2B list for him.
   

One of the last questions asked if he still supported the coalition. He replied "my position is still coalition if necessary, not necessarily coalition." He said he would not compromise the unity of Canada or his liberal values, and re-iterated the Joe Howe quote "What is right? What is just? What is for the public good?" He said he wouldn't dismiss the coalition as an option, saying Mr. Harper had acted quite unpredictably and against the public interest by pulling $6B out of the economy instead of stimulating it.

My interpretation or opinion is he genuinely wants to keep his options open, and wants to see the budget before making any decision.

Budget, election, coalition? More fretting.

I think Chantal Hébert may be right about a federal election this year. Even if the Liberals support the budget, Mr. Harper will be aggressive in parliament proportional to the Conservative poll numbers. Eventually he will introduce a confidence measure with a poison pill, and the government will fall. The further in the future, the less likely the Governor General will look for a coalition. That leaves the only way to avoid an election in the next 18 months is the Lib/NDP coalition real soon now. But at what cost to the Liberals?

Three things could happen:

1. Liberals support the budget. I agree with Ms. Hébert, it looks like the very things the Liberals are calling for such as infrastructure, spending rather than tax cuts and some love for EI may be omitted from the budget. Instead I expect tax cuts, which I personally oppose (I prefer the CCPA plan). It would be very difficult to express confidence in a budget which proposes the opposite of your position, and also difficult to have people believe your confidence is sincere.

2. A coalition forms. The GG calls Iggy and asks if he can govern. If he refuses, an election is the only option left (see #3 below). If a coalition takes power, they'll face unrelenting criticsm of how their spending failed to create anything but a bigger deficit. The newly-jobless will soon wonder if maybe corporate tax cuts might have created more jobs. The Liberal spin could be "it was either this, or an election - the GG perfered the coalition, it was her call not mine".

3. An election is called, and it's blamed on the Liberals by the Conservatives (for defeating confidence - and that NO budget could've satisfied the power-hungry opposition) and the opposition (for not pushing the coalition). I can't find any polls for 2009 yet, but I wonder if Iggy as leader has changed the numbers much yet. I expect some anti-Dion votes to return, and possibly some soft Conservative votes to choose Mr. Iggy over Mr. Harper. I think the best Liberal spin on this would be "it was either a coalition or an election, confidence was not possible - it was the Conservatives who forced this election, and at the worst time".

3a. Liberal minority. Iggy seems to be doing better in Quebec, and the spending vs. tax cut battle could shift some Ontario power to the Liberals. They could probably govern with a minority better than the Conservatives. 'Nuff said.

3b. Conservative minority. Another waste of election money while the economy continues on its laissez-faire path. However, Conservatives would have to take the blame (or credit) for economic conditions - it would be hard to blame the opposition in this case (but they would anyway, for the interruption).

3c. Conservative majority. AHHHHHHHHHHHHHHHH! My minds eye is blind. Fortunately, I think this is least likely of #3.

I think #1 is least likely, but that's for Mr. Harper to decide. If he governs like he has a minority, he could introduce an acceptable budget. I won't hold my breath. What's in it for Mr. Harper? Another dysfunctional minority and less Liberal support than before (I hope). If he believes there is no solution for the economy and he'll take the blame for it anyway, he might as well try to get some things done that fit with his ideology and ignore the economy (but don't make it so obvious this time).

Of #2 and #3, it's too hard for me to say. But these are the choices for Mr. Iggy. If he thinks he can win a minority after considering the impact of triggering another election, that might be his best outcome - but the risks are #3b and #3c (ACK!). Otherwise, I expect #2.

(BTW, I just can't resist typing 'Iggy', and now I type 'Mr. Iggy'. The shorthand is literally irresistible)

CCPA Stimulus ideas

The Canadian Centre for Policy Alternatives has a pretty good report here (pdf). Runesmith has a good post on it.

An EI boost seems like a good idea, people aren't likely to just save that money if they're unemployed. Further, if more people keep their jobs than expected (say, due to other stimulus) there will be fewer EI applicants, right?

Similarly, help for poverty action, low income seniors and the working poor would be spent not saved. And those people would need help the most.

I really like the Pension Guarantee Fund idea. I expect anyone close to retirement might be pretty worried about their pension now, making an excuse to cut their spending. Further, if a pension fund fails it sends a BIG message about lack of confidence in the economy. It's the same situation for retirees with RRSPs, but I don't see how you could help boost RRSP value except through general recovery of equity values. Anyway, if someone does retire it potentially opens a job for a replacement.

Affordable, green housing and renovations for seniors would directly stimulate the construction industry to offset any decline due to residential mortgage difficulties. And I think there is an increase expected in the proportion of the population as seniors, so this would be a good time to invest ahead of that trend.

Even if infrastructure doesn't provide the stimulus we all hope for, it still makes sense to buy it while it's cheap. As well, there have likely been many technological advances (green and otherwise) since the last infrastructure build out that should be of advantage now, whether in cost, quantity or quality.

Tax cuts would only help those who're paying tax, which are the most likely to save any extra for a rainier day. Specifically I think past GST cuts weren't much of a stimulus; more of the same won't be any different.

Questions, suggestions for Iggy's tonw hall?

Or suggestions for me, like things to pay attention to, maybe for later blog fodder. I'll be attending his town hall on Thursday. Feel free to offer some comments below. I'm new to politics, I've never been to one of these. Mostly I want to listen to his reactions from others; I hope their ideas are better than mine. I've been spending my idle time over the holidays thinking about stimulus, and honestly I come up short. Another post, perhaps.

I don't expect to learn much that isn't already known. This wouldn't be much of an opportunity to announce anything new, I think.