COLUMN

No new shoes, no new ideas

Roderick McQueen November 23 1981
COLUMN

No new shoes, no new ideas

Roderick McQueen November 23 1981

No new shoes, no new ideas

COLUMN

Roderick McQueen

He rose in the House of Commons, the centrepiece attraction in Ottawa, the world’s largest theme park. Allan MacEachen, the bagman from the Age of Aquarius, pointed his proud face toward the opposition benches, his nose like a ship’s prow, hair swept back as if he were sailing right through dire straits. In fact, he is close kin to Lt.-Cmdr. Pjotr Guzjin,whose Soviet submarine just spent 10 days stuck on a reef nine metres from Swedish shores. Like Guzjin, MacEachen can’t move the beached Canadian economy without help, he won’t say why he has arrived where he has, he can’t even explain how he got there. Unlike Guzjin, however, whose throat-slitting pantomime showed fear for his future,

MacEachen remains oblivious. Humility is but a trace element in his human chemistry.

Consider. Inflation and unemployment are at record levels. Consumer confidence is the lowest in 20 years. Interest rates, says West German Chancellor Helmut Schmidt, are the highest since the time of Christ. The auto industry, which employs one in seven, has seen three downward years. Housing starts and resales, after a wild and crazy spring, are skidding. Fishing on both coasts is a disaster, as are sawmill operations in New Brunswick, mines in Quebec, forestry in B.C. and agricultural equipment sales everywhere. The prairie grain harvest is the only bright spot in an economy that even staid Statistics Canada predicts will worsen. Through all the fog comes the reassuring bleat of government calling for restraint. Scoffs NDP MP Bob Rae, that’s “like the Boston Strangler telling you your scarf is too tight.” Recession in the U.S. has been confirmed. It has even been given a wondrous new name to muffle the meaning: growth cycle slowdown. Whatever it’s called, it’s coming to Canada this winter as surely as the phoney pneumatics of a touring Broadway musical. John Kenneth Galbraith strides the land calling for controls: Arthur Laffer (who barely reaches Galbraith’s shoulder in more ways than one) urges tax cuts and a

gold-backed dollar. In comparison to that spritely debate, MacEachen’s budget speech last week was so boring that had it been a fireside chat the fire would have gone out.

And who does MacEachen listen to? No one beyond his Ottawa cronies, it turns out, for the direction of this budget was set two months ago at the Keltic Lodge cabinet meeting in Cape Breton. The emphasis, cabinet agreed, would be on the traditional depressed economic areas. The attitude toward manufacturing: laissez-faire. Ontario, it concluded, can cope on its own. The country would

continue to rely on resource extraction; the bureaucracy encouraged to bring forward interventionist policies once the National Energy Program (NEP) is digested. As a result, although tax loopholes have been plugged, the haves will continue to savage the have-nots. Lessons will follow on how to be the richest in the lifeboat.

On the other hand, what can one budget do? Perhaps we should be as forgiving as Woody Allen in Annie Hall when he spoke of his analyst of 15 years: “I give him one more year, then I’m going to Lourdes.” After 37 budgets (or their equivalent) in 21 years, even the traditional new shoes once worn by finance ministers have been forgotten. The budgets of the 1950s and ’60s were balanced, tame affairs. In the ’70s, social programs grew, low income earners were protected, fairness sought through indexation. Since the Board of Economic Development was created in 1978, the federal government has been paying more attention to business, a rightward

swing that occurred far ahead of the growth in U.S. conservatism. Even so, the fight between business and government continues. Business looks upon the Ottawa bureaucracy as just so many beavers that get into the mainstream and dam up the works. Bureaucrats, for their part, listen to business and hear the sound of dinosaurs mating. Last year’s budget saw this nod to free enterprise coupled with a belated nationalism in the NEP. Now, with the Bank of Canada keeping the growth in the money supply so tight that it runs below targets, comes the logical extension: shift the costs of government. Even with its swelling revenues from oil, Ottawa intends to stick the provinces with more bills.

This shift neatly replaces a failed long-term Liberal goal: income redistribution. It also demonstrates the differences among the three parties. The NDP promises to invest in the future, the Conservatives want to buy back the past, the Liberals see themselves as saviors of the present. As Mackenzie King says of his wartime Canada in the £new play Rexyh “Without I us Liberals it would be a ^ shambles.” Invincibility, l it seems, is hereditary.

The country is in a shambles today, a shambles that will continue because what this budget confirms is that we are in a time of parenthesis. A time between the eras of high-spending social programs and a more balanced approach to growth. It is a yeasty period as Canada rides out world recession sheltered behind still-low energy prices, cushioned by social programs less subject to cutbacks than in the U.S. The country had long awaited an oil price deal and a constitutional accord. They are both, more or less, in place now. Interest rates, once a symptom, are the new disease. While those rates have tumbled in the past two weeks, the relief comes too late to stave off recession. Producers and consumers were ready for a boost that could have softened the bad times. A country hunkering down for winter has not been cheered because MacEachen has decided there is little to do but wait for bounce in the U.S. economy. His view, regrettably, is this: when nothing works, do nothing.