Tory stalwarts, you’ve been had
Has missed a golden opportunity to live up to fiscal expectations of their most ardent supporters
OTTAWA – So now we know. If the matter was ever in any doubt, it is no longer. You fiscal conservatives who have hung on all this time, while the Harper Conservatives ran up spending to levels no previous government had ever dreamt of – you who stood by the party through the years of minority government while it discarded every principle it had ever held and every commitment it had ever made – you who swallowed all of this in the belief that, one day, the Conservatives would win their long-sought majority, and all your compromises would prove to have been worthwhile: you, ladies and gentlemen, have been had.
Understand: this is as good as it gets. This was the legacy budget, the vision statement, the one where the Conservatives, with the assurance of four years in power, finally stopped pretending to be what they were not, and showed us what they were. After all, it had to be. If they were ever going to do anything of any consequence, they had to do it early, to give themselves time to recover from any pol- itical damage. They had to do it now, while the opposition parties were still getting up to speed. This was their one shot – anything later would run into preparations for the next election.
This, then, is the summit of Conservative ambition, the terminus of Tory radicalism: a budget that commits the government to do everything it had ever done, only at fractionally less cost. And I do mean fractionally.
Indeed, the budget is at pains at several points to spell out just how marginal the changes really are. The $5 billion to be cut out of departmental budgets, it boasts, is “less than two per cent” of program spending. To be sure, adjust for inflation and population growth, take into account previously announced savings, and this implies a 12-per-cent reduction in real spending by fiscal 2017.
But a 12-per-cent reduction from what? From the all-time, never-before-seen record the Tories set in 2010, when they jacked up spending by $37 billion in a single year.
Be under no illusion: the five years of “austerity” on which we are embarked will be, after inflation, adjusting for population growth, the five biggest spending years in the history of the country – other than the last three.
All that the Tories are proposing to do is to roll back some of the increased spending that they themselves introduced. The public service from which the Tories pledge to trim 19,000 employees is the same one to which they added more than 30,000.
In the years to come, as in all previous, there will be the same hundreds of pages in the Public Accounts listing all the thousands and thousands of businesses, interest groups, activist organizations and the like on the receiving end of handouts – and that’s only the ones over $100,000. The Finance department, likewise, will issue the same list of “tax expenditures” it does every year: tens of billions of dollars worth of special tax breaks for favoured interests that distort investment decisions and reward the lobbyists. The regional development slush funds will carry on more or less as before, the Crown corporations – Via Rail, the CBC, all the gang – will eat up nearly as much public subsidy as ever.
Look: It’s not a disaster. We are not going to go bankrupt. We are in nothing like the same fiscal straits as we were in 1995, as the government points out – indeed, barring an economic downturn the deficit could be as good as gone by next year. So, if fiscal necessity were the only impetus, the government would have little reason to cut spending more than it has. If, on the other hand, you start by asking what government should and should not be doing, then we are no further ahead after this budget than we were before. Given the opportunity to do more, it did less. Two points of context should be added, however. First, it would not be fair to look at this budget in isolation. Indeed, thin as it is, it makes a point of dwelling on some of the government’s broader economic initiatives, some of which are quite sig- nificant: the many free-trade treaties it has signed or is negotiating; the deep cuts in corporate tax rates; the modest opening of the telecommunications industry to foreign investment; the streamlining of regulation, and so on. Add it up, and the tilt of policy is towards freer markets.
And second, the budget makes some important progress toward the longerterm objective of reining in the costs of programs for the elderly. There had been much speculation before the budget of whether the age of eligibility for Old Age Security would be raised, gradually, to 67 from 65, or whether workers would be given the option of retiring later in exchange for higher benefits. In fact, the budget does both. No figures are attached, but the savings – OAS is the single most expensive program in the federal budget – are potentially enormous. The other potential sleeper: a proposal to require public employees to pay more of the cost of their own pensions, eventually to match employer contributions 50/50, as workers in the private sector typically do. Again, no figures are attached, but again, the savings over time are likely to run into the tens of billions.
So we are at least headed in the right direction: that’s progress, I suppose. If an opportunity for reform has been missed in the short run, the longer-term picture is a little brighter. Hallelujah! Incrementalism at last!