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'Til debt do us part

The Federal budget survived its first round in the House of Commons as Bloc Quebecois sub-amendment was rejected, while Ignatieff…

By Faiza Zia Khan , in The big bailout: Media coverage of the financial meltdown , on January 30, 2009 Tags: , , , , , , ,

The Federal budget survived its first round in the House of Commons as Bloc Quebecois sub-amendment was rejected, while Ignatieff wanted to sleep on it and deliver his verdict today. The media portrayed mixed reaction from groups, individuals, economists and businesses.

Tories struggled to remain in power by calling it an action plan for “extraordinary” times, while the budget overwhelmed Canadians with a massive debt load to finance a stimulus spending spree and tax breaks designed to cruise through the recession.

But where is the money promised coming from?

The 2009 Canadian budget is chock-full of government spending and rather light on the side of tax cuts, but the truth is that domestic fiscal stimulus can only ease the pain of the global recession and credit crisis. This budget is palliative by necessity, but that is better than nothing.” said Sherry Cooper, Chief Economist at BMO Capital Markets.

I believe the silent question on every Canadians mind is how will the cash be delivered ? Most approved the direction in which the budget is leading Canada towards but wondered about ways it will be handled.

Flaherty announced there will be $12 billion for “shovel ready” projects across the country, but municipalities will have to contribute $9 billion to cash in on the funding, which will be made available through Public Works Canada.

Vancouver Mayor Gregor Robertson was “disappointed there wasn’t more money for new social housing units and transportation.” He praised Prime Minister Stephen Harper’s initiative for giving a boost to infrastructure projects.

“We look forward to seeing those infrastructure dollars flow to Vancouver this year,” Robertson said.

Robertson said the city currently has around $120 million available for bridge, water and sewer upgrades in the next year.

Tories are already being accused of not using $8 billion in unspent funding accumulated on the federal books.

In my opinion this is a clear indication the Conservatives make grand spending announcements but don’t follow through with the cash.

“It gets to the point of being tragic,” said Jack Layton, NDP leader “that the Prime Minister will make promises that he has no intention of keeping. Can the Prime Minister tell us which of the promises that he made in yesterday’s budget … he plans on breaking in the months to come?”

Harper’s credibility may be quizzed but I can see where Ignatieff is headed with his approach. He is treading a thin line. The Liberal Leader did not want to bring things to a head now. At this juncture, Canadians don’t want an election and they are not eager on a coalition option. Mr. Ignatieff needs time to establish himself as leader and to reorganize and refinance the party.

Ignatieff will deliver his verdict for the Federal budget on Jan 30.