How Stephane Dion Lost the Election

There's been plenty of discussion already about the possibility that the Libs might drop into third place behind the NDP in the upcoming federal election - usually with some recognition that it would require some significant misstep by the Libs to fall out of their longstanding perch as one of the two default options. But Stephane Dion seems to have written exactly the script which could make that happen:

Stéphane Dion is lauding Liberal budget discipline, but refused this morning to categorically state that he would never allow the federal government to go into deficit if the economy slides.

"I will not speculate about how much an economy may go down. I just want to tell you that we need to have strong fiscal discipline. To never overcommit, to come with strong policies that are well-targeted, to never use the money of the taxpayers unwisely," he told reporters in London, Ont.

Asked twice more if he will commit to keeping Ottawa out of deficit even if the economy falls into deep recession, Mr. Dion refused to say the words.

Now, it's obvious enough that Dion's waffling serves to cut him off from the Chretien/Martin Libs' budgeting record, and that the Cons will be able to add even more undeserved heft to their arguments about fiscal management. But the broader ramifications for Dion go far beyond that.

As long as the Libs stood firm in support of balanced budgets (one of the motherhood and apple pie types of principles which typically finds support on all ends of the political spectrum), they could relatively easily brush aside ideologically-based criticisms by claiming their focus was merely on centrist management. But with Dion offering nothing more than platitudes when it comes to handling the budget, the Libs will be ripe for attack as to why they won't promise to keep Canada in the black.

After all, Jack Layton has emphasized his personal commitment to running balanced budgets - which will effectively position him closer to the perceived centre on budget management. Yet he'll also have an ideologically-friendly answer as to how he can promise to do so while Dion can't, since the New Democrats' plan to reverse massive corporate tax cuts makes for far more room to maneuver while allowing for needed social investments.

Likewise, Stephen Harper will also claim to intend to run balanced budgets, arguing that he can make the promise since his party plans to spend less than the Libs within a relatively similar tax structure. Which will make the natural clash for the rest of the campaign the one between the NDP and the Cons as to which priorities are most worth addressing within limited fiscal means.

In effect, Dion's muddled answer when it comes to balancing the budget only figures to make the Libs' everything-to-everyone strategy look far more like nothing-to-anyone. And that could easily be the decisive blow in what had already been a rough campaign for Dion and his party.

(By way of postscript, Dion could easily have evaded the question to his own benefit by noting that Jim Flaherty left Ontario with a hidden deficit, and he can't promise that Flaherty hasn't already done the same federally. But three strikes later, Dion doesn't figure to get another chance to deliver that hit.)