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January 28, 2004

As John Hamm, Premier of Nova Scotia correctly pointed out yesterday on Don Newman's program Politics, there is little to indicate that there will not be a federal surplus that exceeds the $2 billion figure.

The budget is expected to be delivered towards the end of February, or early in March, and therefore it is reasonable to conclude that the full extent of the Government's fiscal plans are not entirely defined.  Nonetheless, there is no doubt that at this point Mr. Goodale has more than enough information in front of him to determine a relatively accurate range that the surplus will constitute.

Fiscal caution is admirable, and in fact, Paul Martin can attribute his political reputation as a sound financial manager on employing this very approach in his nine years as Canada's Minister of Finance.  Fiscal caution used to ease out of previous commitments, however, is a dangerous political game.

To earn the trust that Mr. Martin is hoping to establish with both Canadian cities and the provinces, he will need to come through on the early promises he and his government have made to their provincial and municipal counterparts.  Otherwise, the cooperative federalism that the Prime Minister is trying to entrench for the future could become merely another footnote from the Liberal leadership campaign trail.

Comments? jonathan@tdhstrategies.com