Voters have veto on pension policy
MONTREAL— Stephen Harper has either become an exceptionally fearless politician or else he has already put an expiry date on his leadership that does not extend beyond the current mandate. Or maybe the Prime Minister is simply bored with the dumbed-down challenges of majority rule and he is looking to make life more interesting for himself by levelling the playing field for a divided opposition in time for the next election.
What is certain is that in over a little more than a month, Harper has set the Conservatives up to make a pitch for re-election in 2015 with the opposition bases fully loaded.
If he sticks to the course he has charted, his party will go in the next campaign with reduced medicare funding and cuts to future pension benefits looming.
That’s a combination that would normally daunt a governing party. Medicare is the ultimate Canadian sacred cow and the aging baby boomers that make up the largest and most assiduous segment of the electorate are increasingly coming to rely on the health-care system.
At a time when job security has become a mirage for many workers and when fixed pension benefits may be on the way out, it is easy for the average voter to imagine a future as a fixed-income senior dependent on the government to keep above the poverty line.
Either issue is guaranteed to stir passions on the campaign trail and, at this point, both can be expected to loom large in the 2015 election.
For in spite of opposition claims that Harper is about to use his majority to shrink the country’s social safety net, the fact is that voters will have a veto in whether some of the contentious measures put forward by the Conservatives actually go ahead.
By presenting the provinces with a funding formula for health care that is a fait accompli, the government has almost certainly succeeded in taking the issue off the federal-provincial table for its ongoing mandate. But the same is not true of the next campaign. Under Harper’s plan, provincial transfers for health care would continue to increase by 6 per cent a year until 2015-16. It is only after that year that their growth would be adjusted downwards, to better mirror the actual rate of growth of the economy. The prospect of the first reduction in the rate of federal spending on health care in almost two decades would normally be enough to propel the opposition parties to the medicare barricades in the next election. The fact that Alberta — a province where neither the NDP or the Liberals have much to lose — is the main winner of the new funding formula stands to act as an extra opposition incentive. Turning to pension reform, after a full week of fiery debate, government intentions remain unclear. But the dots already connect to measures that will not kick in until after the 2015 election. Whatever the specific changes the Conservatives have in mind, they are not part of their shortterm deficit reduction strategy. Since the Prime Minister revealed his intentions in Davos, the gov- ernment has hammered the message that current and soon-to-be retirees will not be impacted.
Looking to 2015, it could be that Harper is counting on a division of the opposition vote to again facilitate a Conservative victory.
Or perhaps the Prime Minister is calculating that he can turn the tables on his opponents by forcing them to come clean on the tradeoffs they would make to maintain the current rate of growth of medicare and pension spending.
After all, there is no lack of expert advice to support the Conservative assertion that a responsible government should aggressively pursue the dual objectives of pension reform and controlled health-care funding.
But then being on the right side of the public policy debate did precious little for the Mulroney Tories at the time of the introduction of the GST.
Indeed, if economists and pundits could sway voters, Harper, who campaigned in 2006 on a promise of GST cuts that most of them denounced, might not be prime minister. Chantal Hébert is a national affairs writer. Her column appears Tuesday, Thursday and Saturday.