Harper’s book is wrong about Mulroney
In the prologue to his book Right Here, Right Now, former prime minister Stephen Harper writes that his ultimate goal is “to bridge the divide between perception and reality, fact and fiction ...” Then, choosing fiction over fact, he falsely portrays former PM Brian Mulroney’s economic record, though careful never to mention him by name.
As a cabinet minister who served for nine years in the Mulroney government, I feel it is incumbent to correct the record.
“While generally aligned with (Ronald) Reagan and (Margaret) Thatcher during the Cold War, that government (Mr. Mulroney’s) turned out to be surprisingly tepid toward conservative economic reform. Its privatization and deregulation agendas were slow and wary. A timid approach to deficit reduction — limited spending restraint and modest tax increases — proved generally ineffectual.” So wrote Mr. Harper.
It would come as a major shock to president Ronald Reagan that the man he personally chose to give a eulogy at his funeral was only generally aligned with him. After all, it was president Reagan who said: “Brian Mulroney led Canada during a remarkable time, a time when conservative leaders dominated the free world. It was a closely knit circle; Brian Mulroney, Margaret Thatcher, Helmut Kohl, and a U.S. president named Reagan.”
To Mr. Harper’s claim that Mr. Mulroney’s government was “slow and wary” with respect to deregulation and privatization, the evidence is otherwise. The government I was part of privatized or dissolved 39 Crown Corporations such as Air Canada, Petro-Canada, enterprises and other holdings. Additionally, legislative and administrative action eliminated or consolidated 41 agencies, boards and commissions, thereby significantly reducing the size of government.
As for deregulation, there was nothing slow or wary in Mr. Mulroney’s actions. His government abolished the National Energy Program and the Foreign Review Investment Agency, and deregulated the energy, transportation and telecommunications sectors as part of an overall plan to structurally transform an economy that had become sloppy, inefficient and unproductive. Of course, the greatest transformation was Mr. Mulroney’s negotiation of the Canada-U.S. Free Trade Agreement and NAFTA.
Mr. Harper’s contention that the Mulroney government adopted a “timid approach” to spending restraint is absurd. Under Pierre Elliott Trudeau, program spending over the previous 15 years had increased by an average of 14 per cent per year. We reduced that number to just over four per cent per year.
In fact, according to the Fraser Institute, Mr. Mulroney recorded average annual per-person spending declines of -0.3 per cent, one of only two prime ministers in Canadian history to have done so. Mr. Harper was not the other one. Nothing ineffectual there.
Mr. Harper also charges that the Mulroney government was timid when it came to deficit reduction. The facts tell a different story. When Pierre Trudeau became prime minister in 1968, he inherited a budget surplus of $1 billion from former prime minister Lester Pearson. Mr. Trudeau left a $37.2-billion deficit ($89.15 billion in 2018 dollars).
When Mr. Mulroney was elected in 1984, we inherited Mr. Trudeau’s deficit, a whopping 8.7 per cent measured as a percentage of GDP, the largest deficit in Canadian history. Mr. Mulroney’s government reduced the deficit by 50 per cent, to 4.6 per cent of GDP. In effect, excluding debt-servicing costs, the government was being run in the black.
Mr. Mulroney’s refusal to cut health-care transfers to the provinces in the teeth of the recession of the early 1990s, cuts that Jean Chrétien, ably assisted by Preston Manning and Stephen Harper’s Reform Party, would later prove willing to make, caused the deficit to rise to 5.2 per cent of GDP by the time Mr. Mulroney left office in June of 1993. However, as a July 1993 Privy Council document stated: “While the deficit rose to 5.2 per cent of GDP … it will resume its downward trend to 4.5 per cent in 1993-94 and to 0.9 per cent in 1997-98 as the recovery gathers momentum and recent budgetary measures (namely the GST and FTA) take effect.” That is exactly what happened.
The effects of these initiatives were analyzed in a 2000 McGill University study. The authors determined that Mr. Mulroney’s government had the best economic record of any prime minister since the Second World War.
It seems to me that Mr. Harper is somewhat mixed up because timid, tepid, slow, wary and ineffectual are adjectives that more accurately describe his government’s record, not the record of the government in which I served.