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Now that its Montreal convention is over, we know a little bit more about the Liberal Party’s economic program. One of its central planks is this: budget deficits are a good way to grow the economy and we should not be afraid to get further into debt.
In a video posted some days ago, Justin Trudeau explains that Canadian households are heavily indebted, just like provincial governments, while the federal government has considerably lowered its debt level compared with other developed countries since the 1990s. His conclusion? Ottawa is the only one with enough room to spend and rack up more debt. So, it has to “step up” and do the spending that others are not able to do.
At the Montreal convention, Liberal delegates heard Larry Summers, an American economist, explain that we need “unconventional support policies” — economic jargon for “spending without restraint.” According to him, accumulating more debt is okay when it serves to stimulate the economy.
Are we in a recession? Does the current situation justify sending our public finances back into the red?
One could almost believe we’re back in the 1970s, when the federal debt, until then relatively modest, exploded as Justin Trudeau’s father launched one new program after another, most of the time by intervening in provincial jurisdictions. We saw where that led us, in terms of public finance, but also with regard to federal-provincial relations.
Delegates at the Liberal convention discussed a whole set of “national strategies” on transportation, energy, mental health, children, water, pharmacare, youth jobs, science, and some more. This is the type of big spending, interventionist and centralizing federal government that the son is again proposing today.
They may claim to remain fiscally responsible, but Liberals are actually going down a very steep slippery slope as they adopt this kind of policies.
The burden of debt diminished considerably during the first three years of our government, from 34% to 28% of GDP. It went back up to 33% in the past couple of years due to measures taken to keep us out of the crisis. Our projections show that it should be scaled back to 25% of GDP by 2021.
This debt is not something abstract. Servicing the debt costs taxpayers about $30 billion every year. This is as much money as the GST brings into government coffers. The more we cut down the size of the debt, the fewer resources we will need to pay interest costs, and the more we will be able to afford to cut taxes.
Justin Trudeau and his American advisor still believe in the old Keynesian theory that says government can create wealth by spending more money.
In reality, every time the government takes an additional dollar in taxes out of someone’s pocket, that’s a dollar that this person will not be able to spend or invest. Government spending goes up, private spending goes down. There is no net effect. No wealth creation.
Government borrowing has the same effect. The private lenders who lend money to the government will have less money to lend to other private business people. Government borrowing and spending go up, private borrowing and spending go down. There is no net effect. No wealth creation.
It is like taking a bucket of water in the deep end of a swimming pool and emptying it in the shallow end.
It’s this kind of typical Trudeau policies that ruined our economy in the 1970s. This is not what Canada needs today.
To stimulate the economy, we need to give entrepreneurs the means to create wealth. We need to put in place the best possible conditions to allow the private sector to become more productive: by curtailing public spending, cutting taxes and signing free-trade agreements. Growth and progress depend on more economic freedom.
Blaming someone for your troubles is often easier than facing the truth about yourself, and the federal Conservatives are apparently no exception.
The Citizen reported this week that the Conservative party sent fundraising solicitations to supporters saying the media have somehow teamed up with the opposition to undermine the Conservative agenda — and the Tories need to fight back.
“Here’s the bad news — the Liberal fundraising machine is in overdrive, and we need to keep up,” party president John Walsh said in an email to the faithful.
“We can’t let the Liberal attacks and the media stop us from reaching our goal.”
Using the media as the bogeyman to raise money apparently works, and Walsh’s email echoes one sent in November by Justice Minister Peter MacKay to rouse the party’s base against Justin Trudeau’s stand on legalizing marijuana.
“We need your financial support so we can fight back against Trudeau and his allies in the media — who are still making excuses for his mistakes,” MacKay pleaded.
These follow several attacks on the media by assorted Conservatives, including former Conservative Senate leader Marjory LeBreton, who noted that Ottawa is “populated by Liberal elites and their media lickspittles tut-tutting about our government …”
The notion that the media are in cahoots with the Liberals to somehow thwart Conservatives may work as a fundraiser, but it is not borne out by the facts, considering that this same media overwhelmingly backed Stephen Harper and the Conservative party in every election since 2006. In the three successive elections that the Conservative party won — 2006, 2008 and 2011 — the major Canadian newspapers, with only one exception, endorsed the Conservative party.
The Calgary Herald, Harper’s hometown newspaper, no surprise, endorsed the Conservative party in all three elections, asking Canadians in 2011 to “return the Conservatives with a majority, because their record and their platform make them the best choice for the country by far.” The Vancouver Sun was similarly inclined, picking Harper in 2006 to “clean up Ottawa,” and tipping him in 2008 as the “choice for the rough road,” and giving him the thumbs up again in 2011. Other papers such as the Vancouver Province, Winnipeg Free Press and the Edmonton Journal also wrote editorials backing Harper. But these are western newspapers, and one would expect them to back the hometown boy. What about the central Canada newspapers?
Let’s start with the Citizen. In a 2006 editorial endorsing Harper, the paper noted that “the Conservative moment has arrived.” Two years later, the paper again endorsed Harper, saying that he offered “the steadiest hand and the clearest judgment.” In 2011, when many in the country were worried about giving Harper a majority, the Citizen had no qualms, arguing that Harper deserved that majority. In the three elections, the National Post, a stable mate of the Citizen, also endorsed Harper and the Conservatives, stating in a 2008 editorial that Harper was “the best choice for the country,” and declaring two years ago that he was “the clear choice in uncertain times.”
And the Globe and Mail? The paper endorsed Harper in 2006, and in the next election backed him again, saying he was “growing into the job,” and was the “best man for the job.” In 2011, the paper picked Harper once more, saying the Liberals had failed to show how the Conservative government had failed, and why they should be the alternative. It was the same with the Montreal Gazette, which called the Conservatives “our best bet,” in backing them in 2008, and then asked Canadians to give the party a “stable majority government” in the election that followed.
Of the major newspapers in the country, the only one to buck the trend and not back the Conservative party is the Toronto Star, which endorsed the Liberals in 2006, saying their program was “best for Canada,” and stayed the course in 2008. But in 2011, the paper shifted allegiance to the New Democrats, saying the Liberals had not made a “persuasive case” to be considered the alternative to the Conservative party.
The record shows that, far from ganging up against the Conservative government, it can be said that Canadian media are actually supportive of the party and its leader. How else would one explain their overwhelming endorsement of Harper and his party in three successive elections? Which brings us to the next question: If the Conservatives have enjoyed this kind of backing from the media, why have they turned on them?
One answer is that beating up on the media raises money. Another is that the party resents criticism, and the fact that journalists were instrumental in exposing much wrongdoing this year, makes them enemies. But here’s the thing: There is division of labour in a democracy. The government governs. Parliament makes laws. The courts ensure the laws and policies are fair and just. And the media stand on guard, keeping a watchful eye on the other branches so the people’s work is done, and hold politicians accountable as they should. That’s how a democracy works, and we all better get used to it.
Mohammed Adam is a member of the Citizen’s editorial board.
OTTAWA (Reuters) – Canadian Prime Minister Stephen Harper on Thursday brushed aside any suggestion he might step down in the next couple of years, saying he would seek a fourth term in the 2015 general election.
“It is interesting to read in the papers one day that I plan to retire, and the next day to read that I intend to trigger elections immediately,” he said in a television interview with the French-language TVA Nouvelles.
“The reality is there are elections on a fixed date in 2015. I intend to lead my party (into the next election), which is the only party which has serious policy on the number one priority of the population, which is the economy.”
Only four of Canada’s 22 prime ministers, including Pierre Trudeau, father of current Liberal leader Justin Trudeau, have won more than three mandates.
The speculation of Harper’s possible departure has mounted at the end a difficult year for him and his Conservative government.
It has been marked by criminal allegations extending into his office over a Senate expense scandal, and the Conservatives are polling at their lowest level since taking power in 2006, well behind the newly resurgent Liberals under Trudeau.
Harper has denied any knowledge of what police say was corruption by his then-chief of staff, who provided money from his personal funds to a Conservative senator to help pay back expenses determined to be inappropriate. The former chief of staff denies any wrongdoing.
But the affair has tarnished the reputation of Harper, who came to power pledging accountability and avoiding even the appearance of evil after Liberal wrongdoing. The Senate expense scandal overshadowed his government’s biggest accomplishment of the year, a major trade deal with the European Union.
Asked if he would use the Christmas holidays to reflect on his political future, Harper said flatly, “No.”
“My intention for this period is to determine the next steps for the government… We have finished the most productive year of any since we took power. I hope 2014 will be like that,” he said.
“There are a lot of challenges. There are a lot of opportunities for Canada but also a lot of threats, a lot of challenges, and we must ensure a prosperous future for our children.”
Harper said the government was in the process of making fundamental economic changes, for example, launching Canada’s biggest infrastructure plan, and transforming immigration as well as research and development to better serve economic needs.
Seven years ago, the Ontario Liberal government trumpeted its new law to curb urban sprawl as bold and visionary.
“People want to see action,” David Caplan, the province’s then infrastructure minister, said after announcing the province’s fully fleshed-out Places to Grow Act in 2006.
Acting in tandem with the Liberal plan to create a green belt, Places to Grow was designed to protect farmland in southern Ontario’s so-called Golden Horseshoe.
Unless something drastic was done, an earlier government study had warned, rampant urban development would result in an additional 1,000 square kilometres of mainly agricultural land — an area twice as big as the entire City of Toronto — being paved over by the year 2031.
Caplan called the new law Ontario’s “last chance to build the future we want.”
The Liberals were lionized for the new scheme by both press and public. The government even won a prestigious U.S. planning award.
But seven years later, it is as if nothing had ever happened.
A new study by the Neptis Foundation, an urban think tank, calculates that the amount of prime farmland slated for urban development by 2031 has in fact increased since the government uttered its first, dire warning.
That new total now stands at 1,071 square kilometres.
What happened? As the Star’s Susan Pigg reported this week, Neptis found that the Liberal government simply never bothered to implement its bold new law.
That law, Neptis writes in its just-released report, “has been undermined before it even had a chance to make an impact.”
At the heart of the Places to Grow Act was a requirement that municipalities in a belt running from Peterborough to Niagara Falls authorize fewer sprawling subdivisions.
Instead, most municipalities were expected to locate at least 40 per cent of any new residential development in areas that were already built up.
In practical terms, it was a requirement to concentrate on higher-density accommodation — from highrise apartment buildings to row housing.
New subdivisions wouldn’t be banned. But under the law, they had to be dense enough to support public transit.
Because the area covered by the law was so diverse (it includes both cities and cottage country), municipalities were allowed to seek exemptions.
The theory, apparently, was that while the government would grant exemptions that made sense, it wouldn’t allow the act to be subverted.
However, the reality, as Neptis researchers found, was quite different.
In effect, the Liberal government allowed every municipality that wanted to be exempted from the new standards to be exempted.
“There was very little justification given as to why exemptions were permitted,” report co-author Rian Allen told me.
“Those who asked for exemptions appeared to get them.”
This was particularly true of municipalities in the so-called outer ring of the Golden Horseshoe, in places like Simcoe County (near Barrie) and Wellington County (near Guelph).
All in all, more than half the municipalities in the outer ring have received exemptions from the density minimums.
And because those minimums are so low, even municipalities that meet provincial targets will remain subject to sprawl.
Allen points out that York Region, for instance, is expected to have only half of Toronto’s population by 2031 even though it occupies more than twice the space.
The province had predicted it would save 800 square kilometres of farmland from development. That goal won’t be met says Neptis.
That the Liberals undermined their own plan should, perhaps, come as no surprise. Land development is big business in Ontario.
Municipal governments pay a great deal of attention to developers. So do provincial political parties seeking financial contributions.
More to the point, many voters want to live in the sprawling subdivisions that these developers build.
Still, even for a government that has specialized in big talk and minimal action (nursing homes; poverty reduction), this is an astonishing failure.
Thomas Walkom’s column appears Wednesday, Thursday and Saturday.
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