Conservatives' Economic Failures

Ralph Goodale discusses the horrible fiscal management record of the Harper Government...

RALPH GOODALE’S REPORT
A commentary by the Member of Parliament for Wascana

December 3rd, 2012

HARPER’S BUDGET LEGISLATION IGNORES WHAT CANADIANS NEED

The Harper Conservatives will force another odious “Omnibus Budget Bill” through the House of Commons this week.

A lot of attention is focused on the anti-democratic nature of their “omnibus” process, forcing MPs to deal with 50 or more unrelated issues all at once in a single vote. It makes the vote totally meaningless.

But even worse, for all the verbiage in this budget legislation, the Conservatives are doing little of consequence to deliver what Canadians really need – i.e., more economic growth and less inequality.

Indeed, they’re moving in the opposite direction. Mr. Harper’s ideological obsession with austerity drives him to cut the federal government at every turn to make it as irrelevant as possible. And that risks weakening the economy by curtailing aggregate demand just when Canadian growth is already faltering.

Yes, the federal government must always demonstrate strong management and fiscal prudence. There is never an excuse for waste. But Canada does have a fiscal ace-in-the-hole for times like these, and that’s our federal debt-ratio.

That ratio compares the size of the federal debt to the economy overall. In the mid-1990’s, it had soared to a paralyzing 70%. In other words, the debt was equal to 70% of Canada’s GDP. Thanks to essential decisions by the Chretien/Martin governments, the federal debt-ratio was chopped below 35%. Best in the world!

That’s what gives Canada some fiscal flexibility today. Some of it should be utilized to invest in growth and combat inequality.

To start, the Harper Conservatives could stop escalating EI payroll taxes. They claim they don’t raise taxes, but that’s a lie. They are hiking payroll taxes by as much as $600-million every year, and that kills jobs.

Secondly, they could make federal tax credits for kids, caregivers and the disabled equally available to all Canadians. The way they’re structured right now, people below a certain income are ineligible. That’s perverse.

They could also focus on first-time jobs for young people struggling with unemployment rates at recession-like levels. They could help families cope with the high cost of post-secondary education. They could get serious about affordable housing. They could transfer the entire federal gas tax to local municipalities to help build community infrastructure.

There are many pro-active options, but the Harper government is content with mediocrity.



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