To understand conventional wisdom in Canada, and how quickly it changes in politics, consider this. Four years ago this month, the federal Liberals’ Atlantic caucus members held a meeting to plan election strategy. One invited guest speaker was Donald Savoie, a respected academic with good Liberal connections. Savoie told them that, by necessity, the era of buying votes with public money was over, and the time for cutting spending had to begin. Unless that happened immediately across Canada, Savoie said, governments—and their ability to finance public programs—faced ruin. In the wake of that dramatic conclusion, Senator Allan MacEachen, the most powerful Maritimer in caucus, was asked to pose the first question. “Now that we’ve heard from the good professor,” he said scathingly, “let’s talk politics.” Savoie and his conclusions were dismissed.
Forty-eight months later, MacEachen has retired—and the vision of politics he represented appears to have disappeared with him.
Today, all federal and provincial governments are cutting spending, and on the issue of a balanced budget, the only question is when— rather than whether—that goal is desirable.
At the federal level, program spending will be $103.5 billion in the next fiscal year—$16.5 billion less than it was five years ago. On a provincial level, Canada has three governments—the Parti Québécois in Quebec and the New Democratic Party in Saskatchewan and British Columbia—that still consider themselves to be “social-democratic” and left of centre. Of those, Saskatchewan has already balanced its budget—and last month cut sales taxes in its budget. Last week, Quebec and British Columbia both tabled budgets that included spending cuts and promises to balance their budgets by the turn of the century.
So it seems that in the 1990s, the most effective politicians are those who promise that, if elected, they will do even less than their predecessors. In the coming federal election campaign, the Liberals will focus on the fact that spending cuts, and the efficacy with which they were implemented, form the biggest success of their term in office. To the right of the Liberals, the Reform party and born-again Progressive Conservatives will argue that the Liberals have cut the size of government too little, and too slowly. While the Liberals have already cut 45,000 jobs out of the federal public service, the Tories and Reformers promise more reductions. Even the Bloc Québécois will tread lightly on the issue of a balanced budget because that is one of the goals for Quebec of the sovereignty movement’s leader, Premier Lucien Bouchard. Only the tiny federal NDP is likely to echo the traditional argument that there are times when governments should spend and do more.
As with all stampedes, the size and speed of the thundering herd
towards the right will produce some casualties. One is reality. Politicians abhor a vacuum, which means that the Liberals will not campaign simply on a promise to continue the same policies they have followed for the past four years. Instead, both the Tories and Reform promise immediate tax cuts, and the Liberals are flirting with the idea of promising cuts at a later date. This, despite the fact that while the annual deficit is about to be eliminated, the debt—the amount that the federal government has overspent over the years—now stands at over $600 billion. In other words, although the Liberals have run up $100 billion in new debt over the past four years, all three parties suggest that federal finances are now so healthy that they can withstand a significant loss of revenue.
Another problem is that the supposed New Age politics of the 1990s is often, upon closer examination, nothing more than old-style campaigning with cosmetic surgery. The decision by various Canadian governments to cut spending was inevitably accompanied by hand-wringing declarations about the crushing debt that today’s taxpayers will leave their children as a result of extravagant social programs. But cutting taxes now simply ensures that today’s generation will enjoy a new benefit—higher take-home pay—while still passing on the same debt to its children.
Most politicians still prefer yesterday’s rhetoric to today’s reality. “Direct government job creation clearly cannot solve Canada’s unemployment problem,” notes Finance Minister Paul Martin in his latest budget. Despite that, the Liberals, Reform and Tories all suggest they can provide the necessary antidotes to an unemployment rate that hovers stubbornly at about 10 per cent. But in an era of reduced spending on programs, decentralization of some powers to the provinces, and reduced transfer payments to those same provinces, that is a promise that, arguably, no federal party has the power to keep.
And even on a less substantive level, none of the parties has taken the obvious steps available to it. In the United States, for example, Labor Secretary Robert Reich convened a jobs summit of political, labor and business leaders last year to discuss new proposals and solutions. Bouchard held a similar summit in Quebec. At the very least, such meetings offer an opportunity for sometime foes to sit down together to discuss issues on which they share similar goals. But that hasn’t happened on a national scale yet—because no one has offered the opportunity for discussion.
Can governments still create jobs? Does it make sense to reduce taxes? Many voters want to believe that the answer to both those questions is yes. Hence, the related promises by all parties. That means the campaign to come will be all too conventional—and all too lacking in wisdom.
To keep up with the Tories and Reformers, the Liberals are flirting with the idea of promising to cut taxes—later
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