Roughly halfway through what is the longest election campaign in modern history (after the early elections of 1867 and 1872) the news that the Canadian political landscape is largely deadlocked will come as little surprise to politically observant Canadians. In some sense this stalemate reflects Canadian political dysfunctionality, mired in zero-sum, hyper-partisan inertia — each party trying to stake out some distinctive political turf. Meanwhile, literal and figurative fires blaze and the emperor in Ottawa fiddles in the face of the conflagration.
With the electoral tide seemingly running in spinning eddies, is there anything that can usefully be observed in the political currents?
The Conservative pulse: Flatlined
Perhaps the most consequential feature on the electoral landscape is that even long before the election was called on August 2, the Harper Conservatives have been flat-lined at 10 per cent less than the level of support they received in the 2011 federal election (39.6 per cent). In the last three months the level of support of the Conservative party has gyrated wildly between 30.9 per cent and 26.9 per cent — in other words, not at all. They have unremittingly been in second, or even third, place in the polls.
Even with the vagaries of the first-past-the-post electoral system and how riding-by-riding splits between parties might play out, this is far below what would be required to form a majority government, or probably a minority government, or possibly any government at all. The current CBC Poll Tracker seat projections (as of September 17, 2015) put the Conservatives and the NDP at a tie, each with 114 seats each, well short of the 170 seats required to win a majority government. These numbers will, of course, oscillate as successive polls come in, but majority territory is on no party’s horizon at the moment.
Furthermore, second choice polling by a number of pollsters over the past months has shown that the Conservatives are the second choice of only a very small fraction of other Canadians, most recently (September 4, 2015 by Ekos) 5.9 per cent, far below that of the NDP (19.5 percent), the Liberals (17.1 per cent), and the Green party (9.6 per cent). This means that the theoretical party ceiling of the Harper Conservatives is on the order of 35.4 per cent, still below what would be required for a majority government, even with the gerrymandering of the Conservatives’ Unfair Elections Act. In other words, even if the 70 per cent of Canadians who emphatically support ABC (Anybody But the Conservatives) remain maximally electorally fragmented, and even if every single voter who ever considered voting Conservative does so, it is hard to envision a road back to governance for Stephen Harper.
A constitutional foray
After an election, the incumbent prime minister (in this case Stephen Harper) always has the first opportunity to try and form a government that would command the confidence of the House of Commons, no matter how few seats their party has won. Normally, no prime minister whose party does not have the largest number of seats in the House of Commons attempts to do this, and instead resigns — but if they thought it possible to cobble together a coalition, they certainly could try, although such a scenario seems untenable in the case of Stephen Harper.
In such a case the Governor General (at the moment, His Excellency, the Right Honourable David Johnson) by precedent — they are not actually required to do so — then approaches the leader of the party that has the largest number of representatives in the House of Commons (in this case, presumably Tom Mulcair or Justin Trudeau) with an offer to try and form a government that would command the confidence of the House. If they can do so they are appointed Prime Minister (PM) by the Governor General and the PM then appoints the rest of the cabinet.
Since (in my estimation) no scenario offers Stephen Harper the possibility of a majority government, the best he could hope to achieve, if everything worked in his favour, would be a minority government (of variable fragility).
As soon as Parliament is convened a Throne Speech must be delivered at which point any party could move non-confidence.
Would the government fall?
It is hard to imagine a political scenario in which it would be in any opposition party’s political interest to prop up a Conservative minority. No matter what the political situation, with 70 per cent of Canadians wanting “Anybody But Harper,” the political blowback of supporting the Harper Conservatives for yet another mandate would appear to be prohibitive. Therefor, it is difficult to imagine that the government would not fall.
If a government falls on a motion of non-confidence, the Governor General has two options: 1) dissolve Parliament and call a new election; or 2) ask another political leader (by convention, the one whose party has the second largest number of seats) if they think they could form a government that would command the confidence of the House, i.e., either Tom Mulcair or Justin Trudeau.
What would happen next?
No matter what the rhetoric during the election campaign, and no matter how uncomfortable it might be for both parties, there would be enormous pressure on both the NDP and Liberals to cobble together a mutually acceptable platform (either under the aegis of a coalition government or as a minority) to allow a government to form. Not only would one election immediately followed by another be highly unpalatable to the vast majority of Canadians, but both Liberals and NDP would presumably have greatly depleted war chests, making going to the polls again a highly unattractive option.
At this point, all crystal ball gazing must cease since the number of possible scenarios grows to astronomical proportions. What is salient from our perspective is that it is difficult to envision any possible scenario under which a Harper Conservative government would survive.
Anybody But Harper
Over the past three months the NDP has held a steady, if at times very thin, lead in the polls. Although the margin of error of most polls has meant that all parties have effectively been in what could be understood as a statistical tie, the week-after-week leading trend line of the NDP does seem to be noteworthy. Nonetheless, the three main parties continue be close to one another (the Green party has hovered at circa 6 per cent over this same time period). Except for a brief window in late August when the NDP appeared to surge to 37.4 per cent, leaving the Conservatives at 28.1 and the Liberals at 25.9 per cent, no one has broken from the peloton.
This situation could, of course, continue to E-day on October 19, potentially leading to a Parliament closely split into three factions. Or someone could break from the pack. In all likelihood the fraction of Canadian voters that Frank Graves at Ekos Research has called the “promiscuous progressives” would be key to any breakout. These are people of generally progressive inclinations who are not, however, wedded to any political party. They are much less interested in nuanced partisan positions than they generally support progressive ideas. They are strongly opposed to the Harper Conservatives, and their principal political objective is electing a Canadian government that is not Conservative.
Polling analysis by Innovative (from August 28, 2015) indicates that some 15 per cent of the Canadian electorate is politically balanced between the Liberals and NDP and could swing in either direction depending on which party is judged to be in the best position to defeat the Harper Conservatives (and there may be smaller fractions balanced between the NDP and Green party and the Green party and the Liberals that are apt to swing accordingly in order to secure this objective).
Could the balance swing?
That’s the proverbial $64,000 question. An unanticipated event (for example, the appearance of Jack Layton in 2011 on the Quebec television show Tout le monde en parle somehow caused a ripple of political support for the NDP that soon turned into a tsunami) could similarly sweep across the electoral landscape in 2015. Such apparently stochastic events are impossible to predict. Nothing appears to be tipping the balance at the moment and the structure of the campaign to date seems to be following a rather small-c conservative arc.
The Harper Conservatives have barricaded themselves inside their hermetically sealed election campaign with carefully vetted and pre-screened audiences, minimal interaction with media, few national debates (and even those they have participated in are on the margins of the media universe; the so-called “consortium debates” organized in past years by the CBC, CTV, Radio Canada, and Global appear unlikely to happen as a result of Stephen Harper’s decision to boycott them), and virtually all Conservative candidates, backbenchers, and even cabinet ministers have been told to zip their lips and stay out of the limelight. The Conservative campaign communicates with Canadians almost exclusively through carefully managed media sound bites reflecting highly politically massaged talking points, and through attack ads. It is a completely degraded political conversation, bereft or reason and meaningful accountability.
At the other end of the spectrum, Elizabeth May is running an open, community-level election campaign, high on straight-talking and honest interaction, but low on visibility since she has, in large measure been excluded from debates and ignored by mainstream media.
For May the challenges are altogether different, since no one (including May herself) imagines that the Green party could form government after October 19. Her challenge is to try and improve the seat count of her party (Poll Tracker currently forecasts only one seat for the Greens) and to avoid the squeeze play of being in fourth position. Where 70 per cent of Canadians want (in many cases, fervently) Anybody But the Conservatives, even the Liberals and NDP may be squeezed below their level of intrinsic support by a strategic rush to the other party. For the Greens this problem is compounded ten-fold. In the face of this, the most important element of the Green strategy may simply be to maintain enough visibility to forestall the squeeze play, an objective that being excluded from national debates like the Globe and Mail and Munk debates makes all the more difficult [N.B. The Greens have filed a formal complaint against the Aurea Foundation, the organizers of the Munk debate, alleging that May’s exclusion violates the Income Tax Act requiring charities to be scrupulously non-partisan].
NDP and Liberals trading economic places?
Meanwhile, back at the ranch, the Liberals and the NDP are both sparring to be the presumptive heirs of the ABC mantle. Readers can judge for themselves the soundness of their respective platforms. I will comment, in passing, on one feature of the current rivalry, namely that the Liberals and the NDP appear to have exchanged positions on some economic policies. Counter-intuitively, it is Justin Trudeau who is proposing an increase in the personal income taxes of the richest Canadians, and is promising to run modest (on the order of $10 billion a year) budget deficits for the first three years of a Liberal mandate in order to stimulate infrastructure development. Thomas Mulcair, on the other hand, is promising no personal income tax increases and is vowing to run a balanced budget in year one of an NDP mandate. Astute observers of the Canadian political landscape might be excused for displaying some perplexity in regard to these positions.
Now, not everything is always as it seems in the Alice Through the Looking Glass world of politics, and the Canadian Centre for Policy Alternatives has done a careful analysis of the Liberal tax reform proposals (See: Liberal election platform shifts the chips for the rich, takes a pass on the middle class). Although cancelling the Conservative’s income splitting measures and reversing the Tax Free Savings Account increases are bona fide good proposals, the increased taxation on the wealthiest “5 per cent” (those earning in excess of $200,000) — not so much. Why? This increase of taxation on the wealthiest “5 per cent” (from 29 to 33 per cent) is counterbalanced by an income tax decrease (from 22 to 20.5 per cent) for the next richest 15 per cent. As David McDonald, senior economist with the Canadian Centre for Policy Alternatives concludes:
“Under the Liberal proposal, the richest 5 per cent effectively pay for a reduction in taxes for the next richest 15 per cent with little change for any other families.”
So, in terms of substantively addressing income inequality, this is smoke and mirrors that redistributes cash amongst the wealthiest upper two deciles, but does little for most of the middle class and nothing for the working class.
However, it could be construed as smart politics since increasing taxation on the very wealthiest makes for excellent talking points (so long as one doesn’t scratch beneath the surface) and it leaves the NDP politically flat-footed with NDP leader Thomas Mulcair promising no personal tax increases for anyone — including the wealthiest Canadians.
Given both the Occupy movement’s dialectic of the one percent versus the ninety-nine percent (in actual fact it is at the 0.1 per cent where the major division lies), and the sweeping empirically-based insights of Thomas Piketty’s Capitalism in the Twenty-first Century (see: Thomas Piketty: Economics transfigured) it might have been politically astute for the NDP, a party deeply rooted in the struggle against economic inequality, to signal its understanding of, and solidarity with, this political movement and economic analysis by proposing a tax increase for wealthy Canadians.
On the other hand Mulcair’s proposal to increase the corporate income tax rate from the current 15 per cent, to 17 per cent is certainly a progressive idea (both Trudeau and Harper promise no increase in corporate taxation). This rate was 50 per cent in Canada up until 1971 before neoliberal tax-reduction/evasion took hold globally with a vengeance, and even as high as 38 per cent as recently as 2005. Under the Harper Conservatives this race to the bottom has accelerated even further [See: Corporate Income Tax Rate Database: Canada and the Provinces, 1960-2005]. All of this vast transfusion of cash to corporations has not “trickled down” to anyone, nor has it lead to increased investment in the Canadian economy. Such extreme largess to corporations have resulted in three things:
1) Increased shareholder dividends;
2) Enormously inflated salaries, stock options, and other rewards of dubious merit to corporate CEOs; and
3) Huge reservoirs of so-called “dead-money.”
According to Statistics Canada (See: Corporate Canada is sitting on $680 billion, 85 per cent of Canadians say raise corporate taxes) Canadian corporations are now sitting on in excess of $680 billion of such “dead-money” — cash that plays no role in the Canadian economy. Successive Canadian governments gave it away and corporations laughed all the way to the bank with it.
As Ira Basen of CBC News has instructively pointed out, given that the federal corporate tax rate in the United States is (and has been since 1993) 35 per cent — more than twice what it is in Canada — Mulcair’s very modest proposal (which he estimates will bring in an additional $3.7 billion a year in extra revenue) would appear to be, if anything, too modest by half — and certainly not the so-called “job-killer” that the Conservatives and Liberals claim it would be (the Conservatives allege that 250,000 jobs would be lost; the Liberals more modestly claim 200,000).
It is simply inconceivable that businesses would flee south to avoid such an exceedingly modest tax increase given that federal corporate taxation in the USA would still be more than double what it is in Canada.
However, what if the playing field were actually leveled?
A level corporate playing field
If each percentage point of corporate tax increase brings in $1.85 billion to the Canadian treasury, imagine what increasing corporate tax to the same level as the USA — 35 per cent — would bring in? A twenty per cent increase would result in $37 billion more funds — a tidy sum with which to address income inequality, the infrastructure deficit, a national daycare program, a national pharmacare program, assistance to aboriginal communities, and investments in renewable energy. Leveling (or some approximation thereto) the corporate playing field between Canada and the United States doesn’t sound like that radical a notion, does it? And with these additional funds in the federal treasury the budget could certainly be readily balanced, could it not? But, I digress ….
Deficits: The neoliberal bête noir
This brings us to the second point of divergence between Liberal and NDP economic policy proposals. No sane person would argue that budget deficits, per se, are good things. The issue is rather, when it may be constructive to make strategic investments (i.e., when need is great, opportunity is present, and financing terms are conducive) so as to achieve socially and economically desirable goals — whether this entails a deficit or not.
Likewise, when conditions warrant, surpluses are also a desirable objective so as to pay down debt and/or salt something away for the proverbial rainy day. Therefore, surpluses should not be an automatic trigger to initiate tax cuts. A rational view of economics entails an understanding that there will inevitably be ebbs and flows, and a fixation with balancing the budget is not responsible stewardship — neither of an economy, nor a society as a whole. Obsession with budget deficits is a neoliberal bête noir, assimilated lock, stock, and barrel by the Harper Conservatives.
Bearing all of this in mind, a deficit of $10 billion (which is what Justin Trudeau has proposed) is only 3% of the Canadian federal budget (circa $290.3 billion) — not insignificant, but also not imprudently large. More importantly, by far and away the more important economic metric to pay attention to is debt to GDP ratio, and that is currently on the order of 86.5. It is, of course, always desirable to see it fall (it was 66.5 in 2008 before the global financial meltdown), and indeed it has fallen slightly since 2013 when it was 88.1 (and substantially since 1996 when it was 101.7). Nevertheless, at the present level it is certainly sustainable.
At the moment, interest rates are at extremely low levels (0.5 per cent overnight lending rate at the Bank of Canada), even less than the inflation rate (1.5 per cent in June, 2015). What this means is that governments can essentially borrow money for free since inflation devours whatever interest accumulates. Justin Trudeau is certainly correct in arguing that if ever there was a sound time for investing in infrastructure (or anything else that is worthwhile, for that matter) it is when interest rates are phenomenally low — such as now.
If a government can accomplish all the principle objectives on its political plate without running a deficit (for example by leveling the corporate income tax rate; see above), then so much the better. But to rule out borrowing may needlessly limit one’s options.
Specifics aside, an obsession with the deficit bogeyman is the hallmark of the austerity agenda as it has been practiced in the neoliberal era. In the context of the present federal election, focusing on avoiding deficits is to allow the neoliberal-Harper Conservative austerity agenda to dictate the terms of the conversation — a bad proposition. Budget deficits have a deservedly bad name at times when interest rates are high since borrowing money commits a government to spending ever more of its budget servicing debt and less on program spending. But when interest rates are at a historic nadir (and below the inflation rate) borrowing money is a wholly different proposition.
Now it certainly true that Tommy Douglas, founder of the Co-operative Commonwealth Federation (CCF), the predecessor of the NDP, ran 17 consecutive balanced budgets (between 1944 and 1961) as premier of Saskatchewan — while introducing Medicare — a very remarkable achievement. But in 2015, after a decade of crippling austerity imposed by the Harper Conservatives that has cut not just to the bone, but into the bone of the Canadian social, environmental, and economic fabric, perhaps (I posit) one ought to take advantage of low interest rates, invest in the country, and decisively signal an end to austerity? In any event, by explicitly embracing the concept of a strategic deficit, Trudeau has occupied potentially important political ground.
However, this actually plays out (whether a government’s budget is actually balanced or not, and what promised money actually gets spent, or does not, and what for, is subject to enormous potential economic and political gerrymandering and spin, something the Harper Conservatives have honed to icy perfection) this is at the very least a shrewd political move.
The Leap Manifesto: A great leap forward?
It remains to be seen whether anything will break the current political logjam. The last decade of the Harper Conservatives’ rule in Canada has been ruinous. The proper response to this social, economic, environmental, and political cataclysm should be to turn from such charlatan politics and embrace a vision that is its opposite.
This is the aim of the authors of The Leap Manifesto which calls “for a Canada based on caring for each other and the planet, moving swiftly to a post-carbon future, upholding Indigenous rights, and pursuing economic justice for all.” The fifteen “demands” of the manifesto — initiated by a sweeping who’s who of progressive Canadians and Canadian organizations — are a watershed document in Canadian social, political, and environmental history and I urge all Canadians to read the document and consider supporting it (more on this in a future article). It has been astutely released in the course of this election campaign since this manifesto is what all Canadian politicians should be turning their attention to.
The last decade has been an anathema in Canadian history. It is becoming ever clearer that current political thinking and electoral structures are completely inadequate to deal with the many pressing social, environmental, political, electoral, economic, and infrastructure issues that demand urgent, informed, and politically nimble action. We simply cannot delay, obfuscate, and fail to come to grips with these issues any longer. The health of our communities, the health of our economy, and the health of our environment all demand that we embrace fact, evidence, reason, knowledge, science, compassion, and all the better angels of our humanity.
We have to demand of our politicians and political structures that they urgently and unequivocally address these pressing issues. And if they are not prepared to act, we must create better leaders and better structures that will. There is simply no time to waste.