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Liberals want answers

by DavidAkin on Mon 15 Dec 2008 10:41 AM EST | Permanent Link | Cosmos

Liberal MP Scott Brison brought this letter to his meeting in Toronto this morning with Finance Minister Jim Flaherty:

December 12, 2008

The Honourable James M. Flaherty, P.C., M.P.
Minister of Finance
607 Confederation Building
House of Commons
Ottawa, Ontario K1A 0A6

Dear Honourable Minister,

Canada is facing an unprecedented economic downturn and our foremost duty as parliamentarians is therefore to demonstrate to Canadians that we recognize the challenges they face and are prepared to provide solutions to mitigate the impacts of the economic hardship.

The Liberal Caucus recognizes the need to work cooperatively with all Members of Parliament but success requires both a sufficient level of trust and a shared vision on how best to achieve the desired result.

If the Liberal Party is to be actively involved in the budget process, the first thing the Liberal Caucus and all Canadians need to know is the true state of the government's books. Meaningful discussion and input requires honest budgetary numbers. The government's recent Economic and Fiscal Statement has presented many questions for which we need answers in order to proceed further.

Few economists believe the numbers in the Statement. In particular, growth forecasts are already much worse than when the document was written. Accordingly, we would like to see updated economic forecasts and their implications for the fiscal plan as well as a detailed reconciliation of national and public accounts projections.

We would also like to see substantially more detail on the government's plan to generate savings of $10.1 billion over five years from the Strategic Review exercise and the Corporate Asset Reviews. We do not consider it fiscally prudent or credible to break generally accepted accounting principles and book asset sales before the sales have occurred. We also question the logic of selling government assets in a buyers' market.

With these concerns in mind, we require a detailed plan of which non-financial assets the government plans to sell and at what price. If this information is not available, we request that you remove the Corporate Asset Management Review from the Government of Canada's fiscal framework.

In addition, we would like you to provide us with the information requested of your Deputy Minister by the Parliamentary Budget Officer on December 1, 2008 and December 3, 2008. We also request a full briefing from senior Finance Canada officials at which the Parliamentary Budget Officer would be allowed to attend.

The Liberal Caucus supports the implementation of an economic stimulus package over the next two years that would make sensible investments in infrastructure, key industries (like manufacturing, forestry and automotive), housing, and skills training. If we are to enter into greater detail on this issue, we need to know more about the scale and composition of the fiscal stimulus you are preparing for Budget 2009. More specifically, what scale of economic stimulus are you considering, and over what timeframe? And what specific measures are you considering in terms of new infrastructure investment, modifications to employment insurance and new tax measures?

We look forward to receiving the requested information by Friday, December 19, 2008. Upon receipt of the above, we will be able to consider what we believe are the best options for Canada at this time.

economy, scott brison, jim flaherty

Posted to:

Politics

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Re: Liberals want answers

by Snow on Mon 15 Dec 2008 12:12 PM EST | Profile | Permanent Link

In other words - same old school yard bully tactics-do what I want or I will take my ball and go home.

Grow up Liberals, it is the lives of everyday Canadians you are playing chicken with this time-not your Liberal cronies who are entitled to their entitlements as is the party's moto and mission statement

Re: Liberals want answers

by Sean Calder on Mon 15 Dec 2008 01:07 PM EST | Profile | Permanent Link

Few economists believe the numbers in the Statement.

Sweeping statements like this make is very difficult for me to strangle my inner-partisan. I have to suspect the "economists" that he refers to as possibly being their own economists who obviously have partisan motives of their own.

Setting that aside for the moment, Minister Flaherty and his people should grit their teeth and comply. Mr. Brison and his people need to tone down the language they are using. I know the Liberals think they have the government over a barrel, but it only looks that way. If they want to have a serious chance at participating in this budget, they too need to be a little more concilliatory in their correspondence.

Re: Re: Liberals want answers

by DavidAkin on Mon 15 Dec 2008 01:26 PM EST | Profile | Permanent Link

Regardless of your partisan leanings, the "economists" the Liberals refer to are largely independent and generally well-regarded. Here's just two:
1. The Parliamentary Budget Officer, Kevin Page, appointed to the position by the Conservatives themselves with a mandate to provide an independent assessment of budgetary assumptions. He finds there is not enough evidence to support some of conclusions in the EFS.
2. The U.S.-based Centre for Spatial Economics is one of the official forecasters used by our federal Finance Dept as they work through various forecasts. In a post-EFS report, the Centre said the EFS would actually extend the recession and heighten the risk of deflation.

And, dismiss him if you want simply because he's a Liberal, but Liberal MP John McCallum was an academic economist and a former chief economist for Canada's largest bank.

Re: Re: Re: Liberals want answers

by Sean Calder on Mon 15 Dec 2008 03:10 PM EST | Profile | Permanent Link

I stand corrected on the sources themselves (Thanks for that David), but I would have preferred that they cite these credible economists in their correspondence. My inner-partisan (and often my outer as well) often flares up when someone, anyone, says "Because I say so, it's the truth. Trust me." I need something more in those circumstances.

The point that I was trying to make there was that when they simply "throw it out there" that "no so-and-sos agree with this" or any of a hundred other generalizations that any politician of any stripe uses, I wouldn't be being honest with myself if I didn't ask "And just who and how many DID you consult with, and were they only your own?".

A very FINE example of how not asking those questions can lead to misinformation, or at least a misrepresentation of all the facts is what is coming out of the Climate Change conferences and the number of Scientists who are finally being allowed to come forth with their findings: http://epw.senate.gov/public/index.cfm?FuseAction=Minority.Blogs&ContentRecord_id=2674e64f-802a-23ad-490b-bd9faf4dcdb7&Issue_id=

I am, also, aware of Mr. McCallum's history and his role as a chief economist, and I'm certain he knows a whole lot more about economics than I do. That, however, doesn't necessarily make him correct when he speaks on economic issues, as there will be numerous varying opinions within his own field, and the fact that he IS a politician sitting with a political party should obviously tag him with some measure of partisan positioning whenever he speaks. Truly told, he probably wouldn't be doing his duty to his party if he didn't present things favorably to their direction of thinking. But when people DON'T ask "Who are you getting your information from?" and "How far afield did you go to get it?", we are doing ourselves a disservice by allowing politicians an area of carte-blanche where scruitiny should be the rule.

Re: Liberals want answers

by jad on Mon 15 Dec 2008 04:54 PM EST | Profile | Permanent Link

"Few economists believe the numbers in the Statement. In particular, growth forecasts are already much worse than when the document was written"

I have a problem with this statement because it essentially says that the entire Department of Finance, together with the Minister, the Cabinet and the Prime Minister are lying in their teeth. And the only justification is that "few economists believe the numbers". It's subjective at best, and inflammatory at worst, and there is simply no basis provided for it. Mr. Page seems to have his own axe to grind, since he has also managed to tick off the Speakers of BOTH Houses, and John McCallum may be the smartest economist on the planet, but no-one can deny his partisanship. These are pretty strong charges, so let's have lists of economists to back them up, please. Also, as everyone acknowledges, the situtation is very volatile. So what may have been true last week, in terms of forecasting, may no no longer hold water. Let's please acknowledge this instead of trying to make political points. It might get people closer together.

"We do not consider it fiscally prudent or credible to break generally accepted accounting principles and book asset sales before the sales have occurred. "

This is a complete red herring, that Mr. Brison seems to have thought up all by himself. Since when does a fiscal forecast indicate "booking" of the sales of financial assets. A forecast is essentially an estimate, and as such, it contains generalizations , not specific details. This seriously weakens Brison's whole argument, since it indicates he doesn't know what he is talking about in accounting terms. A little knowledge, etc. etc.

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