Fiscally Responsible? The Tories will run deficits

The Conservative platform is already more expensive than the Liberals' or NDP's. It's based on the rosiest of economic forecasts, drives up spending on big-ticket items such as health and defence, drives down revenues through tax cuts, conspicuously does not itemize where other spending will have to be cut, and doesn't even mention some of the promises party leader Stephen Harper has made on the campaign trail, such as repairing what he accepts is the "fiscal imbalance" between Ottawa and the provinces, the repairing of which would cost Ottawa billions.
--Jeffrey Simpson, The Globe and Mail, June 11, 2004

Canadians vote politicians out, not in.

Popular anger against the Liberal Party, fueled by scandals, broken Liberal promises at the provincial level, and widespread charges of arrogance and corruption, have transformed into a political windfall for the Conservative Party.

But before voting against the Liberals this coming election, take a few minutes to consider what you're voting for, and what alternatives exist.

The Conservative Party has played up the gun registry and sponsorship scandals, portraying itself as more fiscally responsible. However, the evidence is that the Conservatives will run large deficits if they stick to their campaign platform.

A new report by Ellen Russell and Sheila Block at the Canadian Centre for Policy Alternatives, entitled Can they pay for what they say?, has calculated the four-year cumulative surplus or deficit for each of the three main parties' campaign platforms. They conclude:

Despite some disagreement over whether $11.4 billion is too high, independent economists are more or less unanimous that the Conservatives will not be able to deliver balanced budgets.

The Conservative budget assumes that 2.9 percent annual growth in government spending will cover population growth and inflation, but this leaves no room for error. Most economists believe it is not a realistic growth rate, which means the government will have to run deficits or make spending cuts.

The Tories have also been vague about the expected costs of several initiatives, including its support of the US Ballistic Missile Defense program, which most Canadians oppose, and its pledge to "get tough" on crime via longer sentences. The price tag for building new prisons and warehousing more inmates for longer terms can escalate relentlessly, as American taxpayers have discovered to their chagrin.

But this is consistent with "big C" Conservative social policy, which is to run up big deficits through tax cuts, increases in defense and security spending, and high interest rates, only to use those deficits as an excuse to cut social programs.

The same policies have been used recently by the Bush administration in the United States, which turned a $236 billion surplus in 2000 into a $477 billion deficit in 2004, mainly through tax cuts and increases in military spending - exactly what the Harper Conservatives promise to do.

Recall that the last time a Conservative government was in Ottawa, it engineered a "made-in-Canada" recession that threw a million people out of work, produced $40+ billion dollar annual deficits, and decimated Canada's manufacturing sector.

The legacy of this policy fell on the Liberal government that was elected in 1993 and inherited a $30 billion dollar deficit. Instead of increasing social spending, as it had promised in its well-publicized "Red Book" platform, the new government felt it necessary to make sharp cuts to social programs to balance its budget, which it accomplished by fiscal year 1997/1998. The Liberal government has run surpluses every year since, and has used the surplus to pay down the lingering government debt.

The news media have treated this election as a race between the Liberals and the Conservatives, and have marginalized or completely ignored other parties. This is a shame, because Canadians might otherwise discover they're not stuck between a false alternative.

The NDP, for example, has a credible plan to balance budgets, increase social spending, and position Canada as a leader in a new economy where smart urban growth and energy efficiency will become increasingly valuable. This space is too short to examine the NDP platform in any detail, but it is worth examining, and independent economists have confirmed its calculations.

The NDP is also the only major party to price every campaign promise explicitly, and has even prioritized its campaign planks so that voters know which items will be delayed in the case of unexpected revenue shortages.

Another reason to make a principled rather than a vindictive vote lies in a bill Prime Minister Jean Chretien rushed through Parliament before retiring. Bill C-24 allows registered parties to receive $1.75 per vote per year in funding. That means a vote cast for a small but up-and-coming party like the Green Party of Canada will help to grant them the funding they need for a funding base. If the Green Party had run candidates in every riding for the 2000 election and received five percent of total votes, that would translate into $1.1 million dollars in annual funding.

Most Canadians agree that large majorities lead to arrogance and complacency. This election seems like an excellent time for us to elect a government that represents a diversity of goals and values. By broadening the terms of debate, Canada is better poised to respond to the challenges of a new century.

Ryan McGreal
June 11, 2004

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