Amid all the promises, how to avoid a deficit?

With Canada very probably in recession, again, the economy is the most urgent issue in this federal election. The big question for our leaders is whether they propose to get the budget in balance, given the decline in revenues — and if the answer is yes, then how?

“No” is a valid answer, too — deficits can be justified — but if you’re going to pile on more debt, you’d better have a better reason than having blown all your wiggle room because of your addiction to pork-barrelling. In the week before the prime minister called the election, his MPs announced nearly $4 billion in spending. Some of it was public infrastructure big enough to require federal support, but there were also plenty of handouts for select companies, a practice conservatives theoretically abhor, and many little drips here and there for pet projects that strain the definition of federal responsibility (curling-club renovations, for example).

Then there is the Conservative promise to spend $1.5 billion every year to subsidize home renovations. This is a puzzling decision, given that the housing industry is almost the only part of the Canadian economy that really doesn’t need any help. And in any case, it can’t be a stimulus measure, since it wouldn’t take effect until a couple of years into the next mandate, when (one hopes) we will be out of this recession. This may be a popular handout for those contemplating new kitchen counters, but it’s horrible economic policy.

Good economic management doesn’t mean the country never goes into recession. It doesn’t necessarily mean you never go into deficit. It does mean that the government spends public money wisely, getting the most bang for every buck, and thereby getting taxes down to the minimum necessary. Cutting efficient taxes while leaving less-efficient taxes in place is wasteful. Bringing in boutique, opt-in tax credits, rather than cutting the worst taxes across the board or targeting those in need, is wasteful. Spending public money to pick winners in the private sector is wasteful. Handing out cheques to parents regardless of income level is wasteful.

We’re going to hear many talking points about job creation and the middle class from all three major party leaders. None of that will matter very much. What does matter are the answers to these questions:

Are you going to continue the practice, established by both Liberal and Conservative governments, of wasting large amounts of public money on tax expenditures and subsidies?

How should Canada respond to the decline in manufacturing and in oil prices?

Will you eliminate tariffs to decrease the costs of goods in Canada?

What’s the best way to integrate carbon pricing across the country to make costs more predictable and regulation less onerous for business?

Do you favour a guaranteed minimum income to eliminate poverty in Canada?

What’s the appropriate level for corporate taxes?

These are the kinds of decisions governments can and do make to influence the economy. A government that uses public money to buy popularity will be a wasteful, graft-ridden government, one that cannot weather global economic storms without piling on dangerous levels of debt. All three of the parties vying to form the next government have shown, in various ways, that they have difficulty understanding that. It will be up to citizens to puncture their narratives and demand better answers to the difficult questions facing this country.

Government that uses public money to buy popularity will be … wasteful, graft-ridden.