When it comes to meeting our Kyoto targets, Paul Martin’s resolve has all the firmness of ice cream left too long in the sun. Yet Martin’s resolve couldn’t be firmer when it comes to meeting his government’s debt-reduction target.

One could conclude that debt reduction is simply more important — although nothing could be farther from the truth. Meeting our Kyoto targets has far-reaching consequences for life on Earth, while meeting our debt-reduction target is, well, of virtually no consequence. Some economists think we’d be better off if we didn’t meet it.

In the past seven years, Ottawa has taken a staggering $61 billion from federal budget surpluses and put the money towards debt reduction.

We’re told this is responsible, that it will reduce interest costs for future generations. But it’s about as responsible as parents paying down the mortgage on the family home — even though that means there’s no money now to pay for their kids’ education, and one or two of them may have to go without food or even live on the street. Martin vows to reduce our debt to 25 per cent of our GDP. Why 25 per cent? Why not 19 per cent, 38 per cent or 41 per cent, where it currently stands? It’s an arbitrary number, says Dalhousie University’s Lars Osberg, former president of the Canadian Economics Association. A conference of economists meeting in Montreal in 2003 couldn’t even decide on what an ideal “debt-to-GDP ratio” might be, Osberg notes.

Yet this intense focus on a largely meaningless debt-reduction target — plus $100 billion in tax cuts announced in 2000 — has left little money for what polls consistently show Canadians want: social re-investment.

We’ve been encouraged to see social spending as an indulgence we can’t afford if we want to be competitive in the global economy.

The Scandinavian countries expose the silliness of this argument. Finland, Sweden and Denmark all have extremely generous social programs, yet they rank among the top five countries in the world in global competitiveness, as measured by the Geneva-based World Economic Forum. Finland’s currently number one.

This suggests that, far from being a drain on society’s resources, social programs actually increase a country’s competitiveness. This isn’t surprising. Wouldn’t we expect children to do better in school — and later become more productive workers — if they don’t go to school hungry and overwhelmed by poverty?

Social programs level the playing field, giving ordinary people opportunities otherwise available only to the rich. So it’s not surprising that ordinary people generally favour social spending, while the financial élite tends to prefer tax cuts and debt reduction.

Martin has traditionally sided with members of the élite, from whose ranks he comes. As finance minister in the 1990s, he thrilled them with his deep social spending cuts.

But last spring, finding himself staring at looming electoral defeat, Martin suddenly grasped the importance of social programs, promising lots of money to rebuild them.

This week’s budget will clarify whether Martin’s deathbed conversion to social re-investment has held, or whether the ever-active financial élite has managed to reclaim him.

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...