One thing can be counted on in the federal election campaign: The Liberals will paint Stephen Harper’s Conservatives as reckless tax-cutters who threaten to destroy the very fabric of the nation.
I’ve got no quibble with that assessment. (Neither, apparently, does former Conservative leader Joe Clark, who says a Harper government would be “dangerous.”)
My quibble is with the notion that the Liberals, by contrast, can be counted on to save the very fabric of the nation.
Trying to position themselves as guardians of Canada’s social programs, the Liberals are shining the spotlight on Harper’s rash fiscal policies. Last week, Finance Minister Ralph Goodale accused Harper of proposing “ruthless” tax cuts that, Goodale said, would lead to deep cuts in government programs.
But if Goodale thinks Harper is “ruthless,” one can only imagine what he must think of his boss, Paul Martin, whose 1995 and ’96 budgets pretty much introduced this country to ruthless assaults on government programs.
Packaging Martin as the protector of our social programs certainly requires some creative reworking of the record. As federal finance minister, Martin was a muscular slasher of spending on government programs — even more muscular than the notorious fiscal conservative Alberta Premier Ralph Klein.
That’s not my assessment. I’m deferring here to the judgment of no less an authority on right-wing budget-slashing than Michael Walker, executive director of the Fraser Institute, the ultimate proponent of fiscal fundamentalism.
In an opinion piece in The Globe and Mail‘s Report on Business in March 1996, Walker praised Martin for “some of the most aggressive fiscal action in the country’s history.”
Explaining that the Fraser Institute uses the “Klein” as a measure of fiscal restraint, Walker insisted Martin’s 1996 budget “outKleins Klein.”
Hailing it as a “turning point in Canadian fiscal history,” Walker noted enthusiastically that Martin’s deep spending cuts were exactly the same size as those proposed by the Fraser Institute. Small world, isn’t it?
Walker was right. Martin’s cuts reduced federal spending from 16 to 12 per cent of GDP, taking us back to levels not seen in this country since the 1940s, before we had medicare. In March, 2000, the Fraser Institute saluted Martin’s ongoing restraint, awarding him a perfect score on its annual spending restraint index.
But the most revealing moment — the real test of how Martin ranked on the Klein-ometer — came in October, 2000. The deep cuts of the mid-’90s had been carried out in the name of deficit reduction. Many have argued the deficit could have been eliminated through less brutal action, although at a slower pace. In any event, by 2000 the deficit was long gone; Ottawa was awash in surpluses.
Furthermore, Martin enjoyed a legendary stature across the nation for slaying the deficit — something Brian Mulroney’s Conservatives had failed to do during two terms in office.
With this enormous credibility, Martin could have moved the country in whatever financial direction he wanted. Hell, he could have nationalized the banks and gotten away with it! He certainly could have launched a program of rebuilding the country’s social programs and infrastructure — something polls have long suggested Canadians very much want.
Just as Richard Nixon had been able to go to Communist China because no one could ever accuse him of being soft on communism, Martin could have rebuilt Canada’s social programs because no one could ever accuse him of being soft on deficits.
But rather than boldly seizing the moment and becoming the champion of social programs he now claims to be, Martin once again cocked his ear to the advice coming from Michael Walker and the business community. In his October, 2000 budget, Martin delivered a five-year plan for $100 billion in tax cuts. (The Fraser Institute was pleased, but called for still deeper tax cuts.)
It’s worth noting there’d been no popular outcry for tax cuts. “Tax rage” was largely coming from the National Post and from rich, older men. This was illustrated by a publication, carried in the Post, called The Wealthy Boomer, which consisted of little more than articles about tax rage — and ads for Viagra. (Reading it, I couldn’t help wonder: Does tax rage cause erectile dysfunction, or is it the other way around?)
Martin’s $100 billion tax cut package included a new tax cut for capital gains. Popular with the rich, the gratuitous new measure overturned 30 years of sensible tax policy, first set out in the 1967 Carter Royal Commission on Taxation, which called for all income to be treated the same.
But apparently we can now count on the darling of the Fraser Institute to protect our social programs — at least what’s left of them.
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