How Ottawa spends, 2009-2010: Economic upheaval and political dysfunction

This is the thirtieth volume in the series How Ottawa Spends. It is arguable that never in these years have Canadians faced such serious economic upheaval and political dysfunction as the current climate. The dramatic and seemingly sudden changes in the economy occurred simultaneously with a political drama - one that was largely disassociated from the real and pressing economic challenge. Early Harper budgets delivered lower taxes for all Canadians partly through highly targeted but politically noticeable small tax breaks on textbooks for students, tools for apprentices in skilled trades, and public transit costs. The needs of the beleaguered average Canadian and the "swing voter in the swing constituencies" of an already strategized "next" election were a key part of Conservative agenda-setting. In the 2007 budget alone there were twenty-nine separate tax reductions and federal spending was projected to increase by $10 billion, including a 5.7 percent increase in program spending. A small surplus of $3.3 billion was planned, almost all of which would go to debt reduction. As Harper savoured his 14 October 2008 re-election with a strengthened minority government, although without his desired majority, he and his minister of Finance already knew that his surpluses were likely gone in the face of the crashing financial sector and a looming recession. Future deficits were firmly back on the agenda