Plenty has been written about federal budget which was handed down by the Conservative Government last week.  The reality is that’s only been four days, and yet the fallout, criticism and navel gazing has been rather muted.  The opposition played their role and provided reporters with negative sound bites but by all appearances their collective protests have had little impact.   Why is that?  Is it because they’re ineffective?  Do people not care?  I think the answer is that the Tories managed expectations extraordinarily well, and they provided everyone with a lesson in shaping the narrative. 

For over a year now the PM has stated, in no uncertain terms, that the government had to manage its affairs more efficiently.  Cuts were coming, and the only question was how much?  For over a year the press has been reporting that federal agencies would be required to cut 5% of their operating budget.  Your highest fixed overhead costs are salaries, therefore, job cuts were on the way.  The budget didn’t disappoint, just over 19,000 jobs will be made redundant.  That’s a fair bit of bloodletting but the reaction seems to be, “oh well, it had to be done”.  There’s no doubt that the government tapped into the mood of the electorate, pensions and salaries being too generous, but I am surprised at the lack of reaction.  You have to give the Tories credit for managing this message.  How do you criticize the Tories when they’ve been saying all along that they would do this?  How dare they keep their word?

That being said the Tories may step on a few land mines  over the budget.  Many of the 19,000 plus civil servant jobs to be cut are here in Ontario.  This won’t help an already beleaguered  Ontario economy.  Moreover, the Minister Finance has got into a war of words with his provincial Liberal counterpart, Dwight Duncan.  There’s no love lost between these two, and I guess all is fair in love and war.  But Ontario gave the Conservatives a majority, and Ontario’s vote will be critical to the Tories if they want another majority mandate.   If it wasn’t for the 905 and 416 area code voting for the Tories, we would have another minority government.  There’s little doubt that the Federal and Provincial Liberals will play this up.  It’s happening already.  The Federal Liberal talking points are that this was a Western Canadian based budget, and voters west of Ontario are the benefactors.  Political regional warfare?  You can count it.

Ontario aside, the most common theme in the press was that the budget wasn’t bold enough.  I guess there was an expectation that something draconian was on the way.  Once again, if you get in front of the message and position it effectively, people’s reaction is “it wasn’t really that bad”.  And if you push out certain things, like those under the age of 54 today will now have to wait until they’re 67 years old to receive Old Age Security, people will say I’ll worry about that later.  To deflect some of the criticism over contentious issues the government threw the voters a few bones in this budget.  Like cross boarder shopping.  This is especially helpful for those who lie through their teeth and do not declare everything.  You know who you are.  You’re the person who recites a silent prayer when you’re talking to the customs agent, asking the lord for help and begging your ever merciful god to ensure that you don’t get pulled into that special room and have your bags checked.  Good news!   Effective June 1st – if you’re out of the country between 24 to 48 hours, the exemption increases from $50 to $200.  Trips between two and seven days will see an increase in the tax exemption rise from $400 to $800.  That’s a lot of shoes! 

The highlight of this budget was saying farewell to the penny.  This annoying and useless coin is being taken out of circulation.  I had no idea that the removal of the penny will save the government $11 million annually.  The government is recommending that commercial transactions be rounded off to the nearest five cent interval.  This is a great start but there’s other currency we should take out of circulation, like the $50 and $100 bill.  If no one accepts them, why have them?  Just my two cents worth.

Until next time

Cheers.