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Tories tying up loose ends and doing damage control from last year's budget

OTTAWA - The federal Conservatives appear to be tying up loose ends — and doing some damage control — from last year's budget as they look ahead to deliver this year's austerity-driven fiscal blueprint.

From installing long-promised defibrillators in hockey arenas to extending an olive branch to small lending institutions and hospitals that were hit with tax hikes, the Tories are playing catch up, said Ian Lee, a professor at the Sprott School of Business at Ottawa's Carleton University.

"At the same time, it's little things that can also turn people away from them," he said.

When every vote counts, it's a bad idea to target non-profits like credit unions and caisses populaires, which are prominent in Western Canada and Quebec and fiercely supported by their members, he said.

Those small lenders got a big surprise in the last budget, which included a measure to have them pay the same tax rates as other corporations.

Finance Minister Jim Flaherty moved to reduce the sting over the changes Friday by announcing some temporary transitional support, including extended deposit insurance.

"I see it as both cleaning up loose ends, but also it's a little bit political in the sense that they're trying to reduce the anger of those people who were affected," Lee said.

Flaherty was also doing some damage control over a budget measure that ended a special tax break on hospital parking charges where the lot was run by a non-profit partner. At the time, the government said it wanted to ensure consistent tax treatment.

But hospitals complained that it would reduce the money that supplements their annual health care funding, and on Friday, Flaherty promised to stop charging GST or HST on the parking fees.

"You don't want to be seen to be going after sick people or people caring for sick people: the families," Lee said.

"So I think that this is again sort of like those boutique tax credits, it's going to make people feel that the government's noticing and looking after them, so there's probably a little bit of politics in it as well."

The Tories are also trying to lock down a deal to get their marquee job training program off the ground.

They touted the Canada Job Grant in last year's budget — as well as October's throne speech — and have spent millions of dollars advertising it, all without reaching an agreement with the provinces and territories.

Provincial governments slammed the proposal, saying it would divert millions of federal dollars from programs the provinces already run, while asking them to pony up another $300 million.

Even though the existing labour-market agreement expires in March, Employment Minister Jason Kenney only sat down with his provincial and territorial counterparts in November to talk about the plan. Facing a wall of resistance, he offered a compromise at Christmas which the provinces have yet to accept.

Though the program is a good one, Kenney was perhaps overconfident in thinking the provinces and territories would acquiesce, Lee said.

"Then he realized that you can't bluff your way through, you can't use braggadocio to get the deal, to force the deal through, because there was such serious resistance from the provinces and pretty monolithic," he said.

"I think he thought he was going to be able to bull it through, brute it through, and then it didn't happen. So then he belatedly came to the table with some compromises."

There's also been little movement a new $14.4-billion Building Canada infrastructure fund announced in the last budget, which is set to start this year. Municipal leaders voiced concerns in December that they could lose out on infrastructure projects for the upcoming summer because of confusion around the new funding.

The Canadian Press


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