Martin works that old political magic again

With the public fixated on whether Ottawa could balance its budget, nobody was keeping track of spending, or how much the government was taking out of the economy with tax measures set in the deficit years.

The finance minister has used a variation of that stealth technique in his seventh and possibly final budget.

Despite all that has been written and voiced about this government turning on the spending taps, and despite all the rhetoric from the Liberals themselves about renewing the universal social contract, spending in this budget was really very modest.

In the fiscal year that will end Mar. 31, 2000, spending initiatives will total $4.4 billion. For the upcoming year — the one this budget was all about — new spending will be just $1.9 billion. But tax cuts for the coming year will be $3.5 billion.

This year’s budget is almost a complete flip of last year’s. As Newfoundland Premier Brian Tobin put it Monday night: ‘‘This is a tax budget, not a spending budget.’’

Even what little spending there was was carefully targeted to things that have been long starved for cash. Canadians who have driven over potholes in the TransCanada Highway system, or witnessed the aging state of infrastructure in towns or cities, will not begrudge the provinces and municipalities $100 million in the coming year for civic improvements.

Nor will anyone begrudge $700 million to the environment over four years given the state of federal finances.

The title, ‘‘Our Children, Our Future’’ might look cute in describing the child tax benefit but Martin is more concerned with the Liberals’ future after a scandal at Human Resources Development Canada that has dragged on almost two months. Appeasement of Bay Street and the high-tech community over brain drain is more important right now.

Some $2.5 billion for health transfers to the provinces might look impressive on the surface, but not over five years as it says in the fine print. Just before this government started its current mandate in 1997, two opposition parties were betting their election fortunes on the tax cut issue. Yet Paul Martin felt secure enough to stand in the Commons on Budget Day and boldly declare Canadians didn’t want their taxes cut.

Canadians likely did want tax cuts — along with a decent education for their kids and propermedical care. They just didn’t believe tax cuts were possible at that time and Ottawa didn’t feel pressured as a result.

In the years that followed Martin took a so-called ‘‘balanced approach’’ to condition us tothink incrementally about tax cuts. And now he has surprised us with the elimination of bracket creep with the reinstatement of indexation and the full extinction of the 5% surtax on high-income earners.

The opposition will have a hard time poking holes in this budget. Had the prime minister not insisted he is staying on last summer, one would think this is an election budget.

As with all of Martin’s previous budgets, this is more a political document — like the U.S. state of the union address — than a fiscal outline.