If we categorize the past fortnight as Christmas for tax-and-spend Liberals, then John Manley played his part as finance Grinch to a tee. He emerged from Wednesday's cabinet meeting to inform us that he warned his colleagues to abandon their recipes of cooking up a batch of sugar plum fairy spending programs. The fiscal ingredients (read: A burgeoning surplus) required for such a baking spree are not available.

While this less than humble scribe is now well accustomed to the usual mid-summer government trial balloons floating through the air, the scope of this summer's offering was set to rival the Gatineau hot air balloon festival for space and colour in the sky. From twinning the Trans-Canada highway to doubling maternity leave to resurrecting the broadband boondoggle to dropping billions into railway expansion, this summer's list was excessively bold and costly.

Of course Mr. Manley's words of caution and prudence were most welcome, yet other troubling dynamics remain which could imperil our fiscal future.

To start, the Prime Minister is still fighting for his political life as the Liberal party civil war continues unabated with more MPs calling for Jean Chretien to pack it in as Paul Martin criss-crosses the country speaking and duffing his way into the hearts of rank-and-file grits.

Out of Wednesday's cabinet meeting we also learned that Mr. Chretien diluted Mr. Manley's workload by spreading some important (read: Spending) duties among other ministers.

Transport Minister David Colllenette - a fierce Chretien loyalist - assumes responsibility for five agencies including the out-of-control and using s first-class mail letter monopoly to subsidize a variety of competitive enterprises, Canada Post. Meanwhile, Industry Minister Allan Rock - also a Chretien supporter by virtue of his own leadership ambitions and distant second place standing behind Paul Martin - takes over responsibility for the $2 billion Strategic Infrastructure Foundation.

This will further elevate Mr. Rock's profile in addition to his present duties as Industry Minister which already let him hop-scotch around the country to stroke corporate welfare cheques under the guise of "innovation."

Look for these two men to announce many initiatives over the coming months, quite possibly in joint news conferences with the Prime Minister. And don't be surprised if the PMO employs their classic 5-Cs approach in these announcements: Chretien, children, computers, compassion and last but certainly not least, cameras … as in TV cameras for the evening newscasts.

(Think I'm being cynical? Perhaps. Although if you must label me, I prefer the moniker of sarcastic realist.)

It is axiomatic that the federal government lacks anything even remotely resembling an agenda. To fill this void, the bureaucracy under the direction of new Privy Council boss Alex Himelfarb is crafting an "inclusive" social policy template for the Prime Minister should he wish to prorogue parliament (bet on September 13th) and bring in a Throne Speech (bet on mid-October) later this fall.

However, a return to 1970s style big government solutions for every problem (real or imagined) is not what Canada needs. Instead, Canadians deserve a mix of government activity in its core sectors, fiscal creativity in others and sheer retrenchment from other spheres of activity.

So let's be constructive and offer up our own Back to Basics: ABCDEFG agenda for the government to implement.

A - Abolish the capital tax. Taxing plant and equipment assets is punitive, stifles innovation and retards economic growth. We need to catch up and surpass the Americans and Europeans in modernizing our production facilities and workplaces, not penalize firms through perverse capital taxes. This measure would constitute a genuine effort to kickstart the "innovation" agenda as opposed to recycling the broadband boondoggle scheme.

B - Basic standard of living. The feds must transform the basic personal exemption (BPE) into a basic standard of living credit (BSLC) and lay out a three-year plan to raise this amount to $10,000 en-route to $15,000 over six years. A minimum wage job in Canada comes with a gross salary of $15K; taxing anything below this just condemns people to perpetual serfdom. And similar to ending bracket creep (a national fight that yours truly championed from 1997 to 2000), this tax relief measure would benefit all Canadians but help low- and middle-incomes most notably and immediately.

C - Corporate Welfare: End it now! Wind up industrial subsidy programs and regional development initiatives and replace them with equivalent business tax reductions in the neighbourhood of $4 billion. It's time for government to stop picking corporate winners and losers - again under the guise of innovation - and let the market decide.

D - Debt Reduction: Devise a schedule and enshrine it in law so we can aim to completely reduce the $547 billion debt over the next 30 to 40 years. Canada still blows $39 billion annually (23 cents of every tax dollar) in debt interest payments alone. It's time to accept responsibility for this mess and stop perpetuating the fiscal crime of intergenerational tax evasion against our kids.

E - End EI and CPP employer overpayments. As employees move between jobs, a whole new set of payroll taxes are paid by workers and employers. While workers can recoup this money at tax time, employers cannot and it costs them an estimated $750 million annually. This is money that could be better spent on equipment upgrades, raising salaries and/or hiring more workers.

F - Forces and Family. Start to repair the damage sustained due to 30 years of willful and shameless plundering of our armed forces. Minister Manley should challenge Defence Minister McCallum to see who can read the latest commons Defence committee report first; it's chalk full of realistic recommendations.

And if Ottawa really wants to help out families, it should dust off the 1966 Royal Commission on Taxation (aka: The Carter Commission) recommendations and make the family the basic unit of taxation thereby eliminating the discriminatory taxation discrepancy between single income and dual income families.

G - Gas taxes for cities. The feds should adopt the CTF's Municipal Roadway Trust formula to devote $2.2 billion in gas taxes each year for the next three years (and renewable after that) to roadway and infrastructure development in Canada's cities.

Oh and Mr. Chretien, you're welcome.