|Make no mistake, Finance Minister Paul Martin's first formal budget in nearly two years is driven as much by public opinion, political ambition and diplomatic necessity as it is the urgent need to guide the country through unsettled times.By focusing on the costly consequences of Sept. 11, Martin is counting on a Canadian consensus that defence and security issues must be dealt with before the country returns to its enduring social priorities. In a message intended to register as clearly in Washington as on Bay Street, Martin tells Canadians what they expected to hear, and in the telling, strengthens his lead in the undeclared race to replace Prime Minister Jean Chrétien. Follow Martin's logic to the bottom line and find a cautious, defensive blueprint that offers little to critics or rivals. It spends on the military, policing, intelligence gathering, immigration and border infrastructure, but not at the expense of past promises to fund health care, education and tax cuts. It stimulates the faltering economy but not quite lavishly enough to send the country tumbling back into debt. It promises innovation and investment in broadband Internet technology but not in time to boost the prospects of industry minister and leadership rival Brian Tobin. To understand the subtlety and marketing of Martin's strategy consider one of the budget's big-ticket items: The $2.2 billion, five-year plan to make Canadians feel more secure when they fly. The bill for those measures will be handed to travellers as a $24 surcharge on a return air ticket. It is no coincidence that in-depth pre-budget polling by Ekos Research found that Canadians support increased security but not at the cost of other priorities. By imposing a user fee for travellers Martin is essentially raising taxes by more than $2 billion and indirectly protecting future funding for social programs. That determination to link budget proposals to public opinion is equally evident in the promise to make the border both more secure and open to the nearly $2 billion in daily two-way trade now threatened by U.S. anxiety. Martin's response is to frame the $1.2 billion Ottawa will spend in the context of economic security. Once again, that reflects polling that found Canadians favour stronger border controls even though they don't feel particularly threatened. They accept that U.S. confidence in Canada must be restored and that economic self-interest demands significant spending to grab Washington's attention. And the government is spending. By its own flattering figures, this budget and previous fiscal commitments provide a $26 billion stimulus. Martin is gambling on a strong recovery next year and is positioning himself to take considerable credit for that recovery by spending now. But security and stimulus come at a price. The surplus is history and after years of eroding the $547 billion national debt, the government will freeze debt reduction this year and dip deep into its contingency reserve for the foreseeable future. Still, the message Martin wants to deliver is that a government and a finance minister that built their reputations on prudence will continue to balance the budget. As Ekos president Frank Graves points out, that is essential for Martin and his ambition. "There is a rising reluctance to get back into debt," Graves says of taxpayers and voters. While this budget will be remembered primarily as a response to
U.S. terrorism concerns and economic threats to Canada, there are intriguing, sometimes important initiatives buried in the fine print. In a budget with a strictly limited horizon, the most courageous is the decision to trespass on provincial jurisdiction to support the infrastructure for cutting-edge university research. Canada lags far behind its research rivals and even the modest $693 million the government plans to spend is a step in the right direction. That said, it is far from the broad innovation strategy that consumed key Liberals and bureaucrats over the summer. Also left waiting is Tobin. After considerable hype over his $1 billion plan to connect the country with high-speed Internet access, Tobin won't get his first $35 million instalment until at least 2004. That's far enough beyond the expected leadership contest to stop the hungry industry minister from using the project to feed his prospects. Other rivals fared little better. Allan Rock will have to live with chump change for research and the $21 billion committed last year to restore health-care funding. The $160 million Heritage Minister Sheila Copps gets for, among other things, the CBC, isn't nearly enough to make her a serious contender. The only possible exception is de facto national security minister John Manley. A potential long-shot alternative for Martin's right-wing Liberal supporters, Manley gets most of what he wanted in the budget but it is spread across so many departments and issues that the triumph is muted. For the ninth time since the Liberals came to power, Martin has delivered a budget that marginalizes government critics as well as his own by carefully measuring opinion and then playing directly to public prejudices. Time will ultimately test the lasting wisdom of this budget but as a political document it, like its predecessors, is remarkably bulletproof.