It was a happy Jean Chrétien who returned to his office after delivering his first speech of the new Parliament, settled into the prime ministerial chair and told his staff it was “one of those days when it feels good to be in politics because you know you’re leaving something behind for the country.” Chrétien had just unveiled his big idea to mark the millennium: a roughly $ 1-billion endowment fund that will hand out thousands of academic scholarships every year to lower-income Canadians. He told the House of Commons about the sacrifices his own parents made to educate the huge Chrétien brood, and said he hoped the fund would do “for many thousands of young Canadians what my parents were able to do for me and my brothers and sisters.” Chrétien has always been happier turning a spade on new projects than cutting existing ones, and last week he signalled that he was putting the fun back into politics. ‘The struggle against the deficit was not undertaken,” he told the newly configured House, “so we could celebrate our accounting accomplishments.”
Instead, the Prime Minister pronounced that “wise and strategic investments” are in vogue again. New programs and promises of more federal money for old ones poured from last week’s speech from the throne opening the 36th Parliament—29 initiatives in all according to the Opposition Reform party, which still prefers to take a sharp pencil to government spending. Liberal MPs insisted they had no plans to return to the spendaholic habits of past federal governments and that the war against the deficit goes on. But Chrétien himself undermined that line by telling the House that the Liberals will balance the budget next year, well ahead of schedule. Time now to spend again, he said—although “investment” was the term he preferred to use. “All those spending programs were in the platform, we campaigned on them, and we were not about to disregard them now,” explained one Liberal official. “But setting a date to balance the budget was the key to helping this go down politically.”
As a manifesto, the throne speech had Chrétien’s thumbprints all over it. The spending initiatives massage some of the political bruises from the last election, especially the rebuff from voters in Atlantic Canada over first-term cuts, and respond to the Liberals’ ornery, 101-member Ontario caucus, which tends to like its politics in traditional Liberal style: sniff out a problem, get in there with some cash, and try to fix it. But above all, after four years of being seen to do little more than cut costs and hand power off to the provinces, Chrétien felt it was time to show Canadians that Ottawa is still relevant to their lives. ‘There are needs in the community that have not disappeared,” said Heritage Minister Sheila Copps, who chafed in the cabinet at the deficit-cutting mentality that dominated the government from 1993 to 1997. “We understand that people expect the national government to look after the vulnerable and the needy, and that’s one of the things we’re trying to do. That was certainly a strong message out of the election.” Even fiscally conservative ministers like Treasury Board President Marcel Massé sang the new line, smiling and noting how nice it was that the government could “revel in being Liberals once again.”
How this will wash with Finance Minister Paul Martin remains to be tested. Martin was not a fan of the 1997 Liberal election platform. He regarded its multitude of small spending projects as a downplaying of the government’s record of sound fiscal management. If the government has to spend, Martin prefers big-impact announcements, along the lines of
The confident Liberals have new money plans
Chrétiens millennium educational fund. And his finance department officials are nervous about setting target dates for eliminating the deficit, as Chrétien did last week. Only unexpectedly high surpluses in recent months overcame their reluctance to pin down a date for a balanced budget. “It would have horrified us five months ago,” said one Finance aide. “But the surpluses in the past three months have been so big that people are now more comfortable with the commitment.”
The political question now is what to do with the cash. Reform’s Preston Manning used his maiden speech as Opposition leader to warn that “prosperity through gov-
ernment spending is hopelessly out of date.” Manning wants a tax cut instead, and one of Martin’s advisers acknowledges that “only at its peril will a government find new ways to spend without giving people a tax cut somewhere down the line.”
Provincial governments, on the other hand, want to see Ottawa restore the money it has cut over the past four years from provincial health and education budgets. “We can’t have a situation where they’re trying to be the good guys, giving us new programs in health care, when existing ones are suffering from underfunding in many parts of British Columbia because of federal cuts,” B.C. Premier Glen Clark told Maclean’s last week during a swing through the north of his province. Privately, some provincial politicians are less polite about Ottawa’s new mood to spend. Mike Harris is “a small-c conservative who is petrified that the Liberals will start massively spending again,” said one confidant of the Ontario premier. “Chrétien has all the predictable Liberal inclinations,” said another close Harris adviser. “He declared victory on the deficit early when Ottawa still carries a big debt, and now he’s catering to his activist wing.”
That remains more an ideological argument than an economic one, since few of last week’s Liberal promises carried specific price tags. ‘The throne speech was very much a statement of the Prime Minister’s principles—as it should be—but now Martin will have his say,” noted one cabinet minister. The big fights on the details still lie ahead. Martin has told his cabinet colleagues that they will have to prove the worth of each program—“Just how consumer-friendly is it?” as one aide put it—before he antes up any new money. “And no one wants a return to the 1970s,” said a senior adviser to Chrétien.
The demands on any surplus are extensive. Not only did the throne speech promise increased spending on such programs as home care and aboriginal health, but the defence department is set to revive its multibillion-dollar pitch for new helicopters and submarines. Nor is Martin finished with the tough, unpalatable choices on the fiscal front. Last week, he announced that payments by workers and employers into the cash-hungry Canada Pension Plan will rise by 73 per cent over the next six years.
Clearly, though, this is a government that wants to reassert its presence after a period of retrenching and ceding political power to the provinces. The mantra of consultation with the provinces has not been dropped, of course. Ottawa will keep co-operating in order to “modernize Canadian federalism,” as Human Resources Minister Pierre Pettigrew put it last week. Accordingly, the speech from the throne was littered with words like “partnership,” “co-operation” and “collaboration.” Both Pettigrew and Health Minister Allan Rock are the front men for Ottawa’s desire to be seen dealing harmoniously with the provinces. ‘The government is firmly committed to working with our partners in the provinces to restore the health-care system to the quality Canadians deserve,” Rock told the House while dodging a question about why the country needs a new national pharmacare program when patients still face long waits for existing medical and surgical services.
But the days of giving away power to the provinces, of devolution by design, are likely over. “In terms of decentralization, the government of Canada has done what it promised to do,” Pettigrew told Maclean’s last week. Standing in the Commons’ lobby, he ticked off the record on devolution: agreements with the provinces on forestry, mining, social housing and manpower training. “But it is clear to me that the government of Canada wants to be present,” he said. ‘To be relevant—absolutely.” After years of austerity, having a bit of money to spend will make that task a lot easier.
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