The nation's capital appears to have fared fairly well in last week's federal budget, with any job losses arising from the new Services Canada initiative certain to be overshadowed by the billions of dollars that were thrown at the military.

While the local technology sector is generally perceived to be made up of telecom equipment makers, software companies and IT services firms, it is the defence contractors that continued to sail along on an even keel even through the darkest days of the tech slump. The U.S. war on terrorism and the Bush administration's emphasis on homeland security has clearly kept the sector busy over the past few years and provided a boost to local firms such as Vanguard Response and Med-Eng.

With the Liberals now promising the largest funding increase for the military in two decades – almost $13 billion over five years, the local defence and security sector is certain to benefit. Perhaps the bold claim by OCRI's Jeffrey Dale of a local high-tech workforce of 100,000 in three years isn't so bold after all.

Even the local construction and real estate industries should benefit with the new emphasis on moving civil servants to suburban office markets and the apparent lifting of the moratorium on new building projects. That raises the hope that work will now proceed on the proposed $250-million Bank Street Parliamentary Building, the $150-million Federal Courthouse on Wellington Street and a $25-million project for a portrait gallery on Wellington Street. And let's not forget the talk a year ago of a 600-spot underground parking garage proposed for the area of Sparks and Metcalfe streets.

The idea of relocating and expanding federal offices in the loose (and cheap) Kanata office market has been floating around for months. In November, the OBJ reported how critics of the idea spoke out about how unfeasible it was to have Gatineau civil servants cross the river and commute to Kanata everyday (despite the fact that many Kanata residents commute downtown and work in Gatineau).

The focus on the suburban office market spelled out in the Liberal budget last week is an opportunity not to be missed by the City of Ottawa. An east-west link is the most important part of any light rail transit system for the nation's capital. Mayor Bob Chiarelli must take advantage of this federal bone and lobby hard to ensure the federal government will help pay for the transit system improvements needed to move its workers quickly and efficiently to Kanata from Gatineau and other points east. This is much more important than a southward extension of the O-Train in the direction of Leitrim Road.

'Barrel of a gun'

Despite this string of crumbs for Ottawa, let's not forget that this was a quick and dirty budget of a humbled minority government desperate to hold on to power. Critics emphasize how too little was offered to ensure healthy economic growth over the long-term, not to mention that many of these Liberal promises will only be delivered if the Liberals are still in two or three years down the road.

In the short-term, however, it appears the Prime Minister Martin's minority government will survive.

Over the past few days, the media has described the budget as "conservative" and "bullet proof". It was the former chairman of the People's Republic of China Mao Zedong who once said, "All political power comes from the barrel of a gun."

While he was speaking literally, that axiom is applicable here at least in a figurative sense. Faced with the threat of a non-confidence vote that would force an election and given the Conservatives another shot a forming a government, the Liberals have been forced to compromise. Say what you will of the Liberals and their track record of the past decade, this is clearly a different government than it was under Jean Chretien. It's naïve to think that political change can be accomplished by any means other than the threat of losing power. The threat of a political death has forced the Liberals to adapt and at least begin to take some action to become more accountable. Over the long-term, a minority government that is forced to compromise and cater to a broad variety of interests may better serve Canadians than a government formed with a strong majority mandate.

If Canada's economy improves under this "scattergun" budget and the Liberals continue to hold onto their minority mandate, we may begin to see the kind of well-defined reform needed to address the quality of life, healthcare and competitive issues that are facing the country today.