Monday, March 19, 2007

Greyed Expectations

Reports say there will be increases in equalization to the provinces in the budget later today. Finance Minister Jim Flaherty says provinces will see it as a fair resolution to the fiscal imbalance problem, but not all provinces will be happy with it. Hmm, who could that be? The vibe is that the anticipated 50% inclusion of non-renewables will be part of the new principled long-term equalization formula. There are eight "have-not", sometimes seven, BC and/or SK could be "have" provinces again, so the money has to get split. Quebec gets over $5 billion in equalization each year, and may get the biggest share. The budget has some general tax cuts, and an incentive for hybrid car purchasers, but the bump in overall money for the provinces, the government hopes, will take the sting out of the broken promise he made on equalizaton.

The $1 billion he gave to Sasketchewan farmers might have smoothed over the expected budget news for many in SK, but not necessarily Lorne Calvert. Jack Layton has said a few days ago he supported the view that non-renewables should not be part of the new formula. Dion has not said much about this. There doesn't appear much anxiousness for an election. It won't be surprising if all parties support this budget, but the real proof will be in recipe of the pudding.

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