As the coronation of Paul Martin approaches, a political quiz going the rounds poses the question: is Paul Martin actually to the right of Brian Mulroney? There is some pretty compelling evidence suggesting the answer is yes, something that Paul Martin is not eager to acknowledge.

His speech to the Montreal Board of Trade last week on a new economic strategy for Canada seemed designed to be as ideologically neutral as possible. Prosperity, said Martin, will come from “transformative technologies which are going to be the real economic engines of years to come.”

As an important pronouncement of a new prime minister who says he wants “. . . to lead a new government with a renewed sense of purpose, a sharper focus and a clearer plan, a government unafraid to change and eager to turn the page and look to the future,” ( I’m not making this up) it’s difficult to see how this knowledge-industry stuff qualifies.

Martin sang this same tune for the last half of his mandate as finance minister. It didn’t help. The 1990s was the worst decade of the century (except for the 1930s) in terms of growth, productivity, productive investment, unemployment and standard of living. And it’s not looking much better today.

But back to the contest. Brian Mulroney’s record is painfully well-known; he’d have to be given a lot of points in any Canadian Idol of the Right championship just for negotiating the Canada-U.S. free-trade agreement and NAFTA.

No other initiative did so much to restructure the Canadian economy and democracy as these corporate bills of rights. They not only opened the door to the permanent loss of more than 276,000 industrial jobs, they placed severe restrictions on any new legislation regulating the behaviour of corporations and any new social programs that would compete with the private sector. Now factor in a 25 per cent cut in the federal government’s share of social spending, and the GST, which shifted $15-billion of taxes from corporations to individuals. Mulroney’s rightist record is hard to beat.

But Paul Martin was no slacker. His actions were all cast as deficit-fighting — and there is no question the deficit was important. But it also conveniently forced Martin to do what he wanted to do: radically reduce Ottawa’s social and economic role through a fundamental decentralization of the Canadian state.

In his 1995 budget, Martin put in place the plan for his entire reign as finance minister. Lost in the sheer size of the cuts was the action that he was most proud of: a redefinition of government. In his budget speech, Martin said true fiscal progress could only be achieved by the “redesign [of] the very role and structure of government itself . . . as far as we are concerned, it is this reform in the structure of government spending, in the very redefinition of government itself that is the main achievement of this budget . . .” No agonizing — just boasting.

“Relative to the size of our economy, program spending will be lower in 1996-97 than at any time since 1951,” said Martin. Brian Mulroney cut the federal contribution to social programs by 25 per cent over nine years. Paul Martin cut it a further 40 per cent in four years. Major points for Paul.

Martin’s mandate and power went far beyond that of any contemporary finance minister; his cuts reflected his conservative commitment to restructure government. The most significant change was the elimination of the core of nation-building legislation: the Canada Assistance Plan (CAP), which gave Ottawa influence over provincial social welfare schemes, and Established Program Funding, which targeted federal dollars to postsecondary education and health care.

More than any other programs, these represented a generation of federal leadership in social programs and the core of nation-building. Martin replaced them with the Canada Health and Social Transfer — a lump sum the provinces could spend as they pleased. In the point-race for the Canadian Idol of the Right crown, this is worth almost as much as free trade.

The other departments key to nation-building — natural resources, agriculture, the environment, regional and industrial development — saw huge and disproportionate cuts of 50 to 60 per cent. Canada’s economic policy? A singular commitment to an “aggressive trade strategy.” Part of that was a commitment to a “flexible labour” policy that went beyond even that of Brian Mulroney. Martin’s additional cuts to UI and his elimination of the CAP accompanied inflation targets producing unemployment levels of more than nine per cent for most of the decade. While workers in the United States saw a cumulative wage increase of 14 per cent in the 1990s, Canadian workers stood still. Business reaped the benefits. That contest was now a dead heat.

Then came Paul Martin’s big test. In 2000, with a five-year budget surplus of $193-billion, he gave out $100-billion in tax cuts; 77 per cent of the personal tax cuts went to the wealthiest eight per cent of Canadians.

Eat your heart out, Brian. Paul wins.

murray_dobbinBW

Murray Dobbin

Murray Dobbin was rabble.ca's Senior Contributing Editor. He was a journalist, broadcaster, author and social activist for over 40 years. A board member and researcher with the Canadian Centre for Policy...