It always struck me as odd the way New Zealand — so small, so faraway, so seemingly irrelevant — was once widely touted in the Canadian media as offering an important lesson for Canada.

An influential CTV news documentary in 1993, for instance, told the story of how the cash-strapped government of New Zealand killed a newborn hippo at a local zoo in order to avoid the cost of expanding the hippo pen.

Oddly enough, the message of the CTV documentary wasn’t that hippo abuse is on the rise, but rather that debt-ridden New Zealand was taking the bold steps necessary to reduce out-of-control government spending, and that debt-ridden Canada should follow suit.

New Zealand has long since disappeared from Canadian politics, now that it no longer offers lessons in government restraint. Indeed, last month, the right-wing party that ruled New Zealand through the death-to-hippos era was soundly defeated in national elections — for the second time — by the Labour party, indicating that New Zealanders strongly repudiate the austerity regimen they lived through in the 1990s.

Canadians may soon be tempted to follow New Zealand’s lead once again. With large annual surpluses expected to accumulate in the federal treasury over the next two decades, there will be a real opportunity for Canadians to reverse the course of our own austerity regimen. We can be sure, however, that those shaping the debate here in Canada won’t consider what’s now going on in New Zealand to offer us any useful guidance. (Too small, too far away, too irrelevant.)

Business and its think tanks will likely try to prevent Canadians from grasping what The Conference Board of Canada spells out clearly in a new report — that the federal government’s surpluses will rise steadily and hugely over the next twenty years. Even with the already-announced tax cuts to be phased in, Ottawa’s surpluses will reach a massive $CDN85 billion-dollars a year, according to the conference board, a private research organization.

This is an incredible situation that is not widely appreciated outside business and political circles. It makes a mockery of the notion we can no longer afford things that we constantly tell pollsters we really want — like public health care and a strong public education system.

The simple truth is that we can afford these things — without going back into deficit — and much more, including properly funded public transit, housing and childcare programs. “[The numbers] are more dramatic than we ever cared to think about,” notes David Perry, senior researcher at the Canadian Tax Foundation, who describes the conference board projections as “realistic.”

Of course, one gets little sense of these possibilities from the public debate. Instead, we’re told we have no choice but to privatize our health-care system, cut back on “extras” like librarians, music teachers and swimming pools in our schools, load up university students with mountains of debt.

After a while, we resign ourselves to going without basic things — even toilets; at an all-day track meet for hundreds of public school children in Toronto last June, there were only two portable toilets, due to “cutbacks.” If this were Bolivia or Uganda, that would be understandable, but you can rent a lot of portable toilets with that surplus cash accumulating in Ottawa.

The ostensible reason for this ongoing austerity is that, despite the Ottawa surpluses, provincial governments remain financially strapped, and they are the ones responsible for running most social programs. (Provincial governments are mostly expected to run deficits over the next two decades, according to the conference board study, which was commissioned by the provinces.)

The obvious answer is that a federal-provincial deal must be worked out. Now, of course, that sounds like the end of the matter; the whole thing can be relegated to the black hole of contentious federal-provincial relations, never again to see the light of day. How could Prime Minister Jean Chrétien ever be persuaded to hand over money to someone other than a crony, or Alberta Premier Ralph Klein be trusted to spend it on something other than a tax cut? Might as well just kiss the idea of rebuilding social programs goodbye.

But I suspect the lack of progress toward a viable federal-provincial deal has something to do with the fact that it’s only social programs at stake here — and powerful business interests oppose serious reinvestment in social programs, preferring tax relief — particularly for themselves. How fortuitous, from the viewpoint of business, that the two levels of government never manage to overcome their squabbles and get this thing worked out!

One suspects governments would co-operate pretty quickly if something business wanted was at stake; then business wouldn’t tolerate ego-tripping turf wars on the part of the politicians it sponsors. Notice how the federal and provincial governments are co-operating, for instance, on developing a national securities commission, along the lines business wants.

Unfortunately, Ottawa and the provinces seem less willing to work together when the only people who might give them problems are those needing health care or bus service, students, single mothers, baby hippos and children who might want to use the toilet.

Linda McQuaig

Journalist and best-selling author Linda McQuaig has developed a reputation for challenging the establishment. As a reporter for The Globe and Mail, she won a National Newspaper Award in 1989...