Tories Lead on BQ to Support Budget

Tories Lead on BQ to Support Budget

Over a few days next week, Finance Minister Jim Flaherty plans to sit down for meetings with the LIBERAL, NDP and the Bloc Québécois finance critics - private chats that could be pivotal in determining how long the Conservative government survives. Flaherty must coax at least one of the three opposition parties into voting for the politically sensitive budget he is now drafting, or Stephen HARPER's minority will fall over it. The Liberals? Hard to imagine them playing ball, with Stéphane DION working to establish his image as a prime-minister-in-waiting. The NDP? Maybe, but it would be awkward for Jack LAYTON to back the tax-cutting plan Flaherty is expected to table next month. That leaves the Bloc, who, after all, surprised many by voting for last year's budget, allowing Harper to clear his first major hurdle in the House.

If it happens again, the Tories' reliance on the Bloc at such key moments might begin to look like a pattern, an impression neither side will be eager to promote. Harper can't afford to be seen as too cozy with the separatists. Bloc Leader Gilles DUCEPPE, for his part, must avoid backing the Conservatives so regularly that he helps Harper build credentials as a good PM for Quebecers. Despite these drawbacks, though, the tactical reasons for Harper and Duceppe to find ways to work together in a minority House are impossible to ignore - compelling enough, in fact, that government insiders tend to put more weight on the Tory relationship with the Bloc than, say, the Conservatives' widely discussed recent attempts to find common ground with the NDP on climate change policy.

The chances of the Bloc supporting a second Tory budget depend mainly on how Flaherty handles the so-called fiscal imbalance issue. The notion that the status quo is somehow skewed to give Ottawa too much money and the provinces too little is, not surprisingly, widely shared by provincial governments. But in Quebec the theory has hardened into an orthodoxy accepted by all the main political players and much of the intelligentsia. (Never mind that some leading economists dispute the whole premise, arguing that the provinces have as much flexibility as Ottawa to raise taxes or trim spending to improve their own balance sheets.)

Christian Bourque, vice-president of research with the Montreal polling firm Léger Marketing, says the upshot of this Quebec consensus is that just about any reasonable Flaherty offer to ease the perceived imbalance would be hard for the Bloc to turn down. "Quebecers don't want to see the Bloc as always the guys saying, 'No,' " he says. "So if there's anything in the budget that can be spun positively by the Prime Minister, and the Bloc is able to say, 'Well, we can agree with this,' that might be good for both parties."

If Bourque is right, the Bloc will have little choice but to accept, even if grudgingly, whatever Flaherty puts on the table. Still, the sovereigntists are striking a tough bargaining stance. Pierre Paquette, a former top Quebec union leader who is now the Bloc's finance critic, says Quebec needs $3.9 billion a year more in federal transfers, including boosts for post-secondary education, health, child care, and equalization - the transfers meant to allow poorer provinces to offer services comparable to richer ones. Paquette says it doesn't have to come all in one year - the Bloc helpfully suggests ramping up transfers over three years - but he stresses that the funds must be specifically for these programs. Money earmarked for short-term projects, like infrastructure, doesn't count. "It's not just a question of money," Paquette says. "It's the principle. The government could announce a lot of money, but not to correct the fiscal imbalance. That wouldn't be good enough for us."

The prospect of Flaherty coming up with anywhere near the $3.9 billion the Bloc is seeking for Quebec alone is remote. He suggested last fall he expected to be able to afford only $3.5 billion in new spending and tax cuts in total for 2007-08. Other provinces are clamouring for their piece of the action, and Flaherty has also signalled he wants to introduce sizable tax cuts. There is also talk of major hikes in military spending over the next few years. And looming large over any multi-year spending blueprint is the Tory promise to fulfill their centrepiece 2006 election pledge by cutting the GST by another point by 2011, a move which would deny Ottawa about $6 billion a year.

All these pressures point to the Bloc having to accept far less than the massive cash injection they are demanding. The political case for taking what they can get, and loudly claiming credit, is clear. Bourque says the Bloc and the Tories share a need to portray Dion as the isolated, ineffective, third-choice leader in his home province. But any bid to marginalize him is looking harder as polls confirm the new Liberal leader's solid approval ratings in Quebec, an embrace that caught Tories and Bloquistes off guard. "Mr. Dion will be a fierce enemy," Bourque says. "For the Tories, that means it is fix the fiscal imbalance or lose. For the Bloc, they can't say no to any new money from Ottawa."

It wouldn't be the first time Tory and Bloc interests in the House aligned on a contentious issue. In September, with the government in danger of falling over its softwood lumber pact with the U.S., the Bloc suddenly swallowed its objections and voted in favour of the deal. Duceppe claimed the high ground, saying he was putting a Quebec consensus above partisanship. "The industry, the unions, the regions, the municipalities and chambers of commerce are asking us to do exactly what we're doing now," he said. "We're not playing politics on the backs of those people." Then in November, when Harper tabled his surprise motion in the House to recognize the Québécois as a nation within a united Canada, Duceppe surprised many by falling in line with the federalist parties on the vote. That allowed Harper to boast, "If I can get the support even of the Bloc for the unity of Canada, I'm a happy man."

Of course, he didn't quite manage that. The Bloc stands for breaking up the country. So Harper's preferred ally in Quebec is Premier Jean CHAREST, and it is Charest who stands to benefit most from any Tory fiscal imbalance package - assuming there's enough cash to fuel a continued resurgence of his Quebec Liberals, as they head into a widely expected spring election against a slumping PARTI QUÉBÉCOIS. If the Bloc chose to reject whatever Flaherty offers, they might strengthen their PQ cousins in a campaign against Charest. But that would mean giving up bragging rights for having pressed Harper and Flaherty to pay up.

Paquette said the PQ's problems won't dictate the Bloc's position. He said the fiscal imbalance should be seen as a Canada-wide issue, affecting all provinces, and not in terms of Quebec's unique internal division. "For us, this is not a question of sovereignty or federalism," he said. "I think we want to vote to resolve this problem." Sounds like Flaherty might find he has a willing partner across the table - again. And what looked last year like a few isolated cases of Tory and Bloc needs intersecting in the House could begin to appear, intriguingly, like a more consistent convergence of interests.

Maclean's February 19, 2007