Canadians had every right to be outraged by the federal government’s fall economic statement yesterday.
In the face of an economic slowdown that is already the most significant Canada has faced since 1981 and will almost certainly turn out to have been the most significant since the Depression of the 1930s, the government demonstrated stunningly small-minded, ideologically driven opportunism.
In this pathetic statement, the crisis looming over the heads of auto industry workers not to mention tens of thousands of Canadians whose livelihoods or pensions are threatened was used as a pretext for heading off in all directions on its favourite ideological hobbyhorses.
In the move that generated the most short-term heat, it took a big whack at its political opponents, cutting off direct public funding for political parties, a move calculated to cripple the Green Party and further weaken the Conservatives’ main opponent, the Liberals, who have experienced great difficulty in adapting to fundraising limits.
The government may think it has neutralized the storm of criticism with which this gambit was met by caving in on the political funding issue. It should think again. There was a lot more missing from the government’s statement than political integrity.
The statement took a strategic poke at women who have been fighting for pay equity, cutting the Human Rights Commission out of the process of determining pay equity, relocating the process to collective bargaining.
And just in case anyone missed the real message, the federal government announced a decree that it is not actually prepared to engage in collective bargaining with its employees, mandating by legislation pay increases for public servants over a four-year period and suspending their right to strike until 2011.
But of fundamental importance both to Canadians generally and to the economic observers who were hoping for a sign that the government was actually prepared to deal seriously with the economic meltdown, the government has rediscovered its allergy to deficits and straight talk about them. The statement revealed that the new, transformed Stephen Harper who went down to Lima, Peru last week preaching the need for governments to focus on the big picture, shed their ideological baggage and stimulate their economies was nothing more than a big bag of hot air.
We’re not going to join the worldwide effort to stimulate a return to economic growth; we’re going to sit on our hands.
The irony is breathtaking. Mr. Harper went to Lima preaching international cooperation, decrying beggar-thy-neighbour protection and hailing coordinated efforts to avert depression. Then he came home to deliver smug homilies about our fiscal rectitude and to declare, in effect, that Canada intends to be a spectator in the effort to rebuild a weakened world economy, riding free on the fiscal efforts of others.
The Harper government is not going to respond to the crisis that threatens our manufacturing sector. It’s going to wait until February, for its regular budget cycle.
The Harper government is not going to act to stimulate the economy in line with the actions of other leading industrial economies. It has gone back to the balanced budget mantra that was featured in the first sentence of every version of the government’s old, and now discredited, script.
It even turns out that Ontario’s old friend Jim Flaherty actually wasn’t joking when he talked about selling off federal government assets.
That’s back on the table, and slated to generate billions in revenue for Canada’s out-of-step government over the next five years. Flaherty can talk all he wants about not having a fire sale and ensuring that Canadian taxpayers get a fair deal, but any asset sale in these economic times is going to amount to a fire sale.
And if it’s the kind of fair deal Mr. Flaherty helped to give Ontarians during the reign of Mike Harris, Canadians should be very worried.
Ontarians know all about asset fire sales for Conservative political gain. The sale of Highway 407 patched up a big hole in the Harris government’s fiscal plan in the late-1990s, realized a fraction of its value, made its buyers rich and left Ontarians that use the road at the mercy of a corporation given carte blanche to charge the tolls that the market would bear.
Barak Obama hasn’t even taken office, and already he is more advanced in his plans to deal with the economic crisis than the Government of Canada.
The contrast between America’s Obama and Canada’s Harper couldn’t be starker, or more embarrassing to Mr. Harper, and it is certain to get even more so.
For all of Mr. Harper and Mr. Flaherty’s sanctimonious preaching about Canada’s economic fundamentals, Canada heads into this recession less prepared than at any time since the 1930s.
We are locked into a pre-scheduled series of corporate tax cuts that will act as a drag to Canada’s fiscal balances.
We have an unemployment insurance system that is a pale shadow of its former self, covering barely half of unemployed workers in Canada.
So Canadians will, for the first time in years, watch in envy as an activist and compassionate government south of the border pulls out the stops to respond to our shared economic crisis, while our government sits on the sidelines, reading from an outdated script, and looking more out of touch every day.
While Canadians should be worried now, it is Mr. Harper who should be worried for his future. Political developments in the United States affect the political mood in this country.
John F. Kennedy helped to defeat John Diefenbaker. And Stephen Harper is no Diefenbaker.
Economist Hugh Mackenzie is a research associate with the Canadian Centre for Policy Alternatives.