William Watson: Liberals try to convince us the Stephen Harper years were rife with plagues and hellfire
Those were awful times, weren’t they, the Conservative years under Stephen Harper? The gruel we all had to eat, made from dried leaves and cardboard, the living in snowbanks, the walking to school 10 miles every day, uphill each way.
Give me a break! Mr. Harper was not the cheeriest of politicians. He had, in abundance, what used to be thought of as Canadian reserve. But he and his times weren’t exactly drawn from Dickens.
That’s not what you’d think from reading the Liberal platform, however. “This election,” it says in big print right at the start, “we all have a choice. We can keep moving forward and build on the progress we’ve made, or we can go back to the hurtful cuts of the Conservative years.”
“The hurtful cuts of the Conservative years.” Do they mean maybe the Conservative years, 1930-35, of R.B. Bennett? Because the Conservative years of Stephen J. Harper saw federal spending go from $190.7 billion in fiscal year 2006-7 to $273.6 billion in 2015-16. That’s an increase of almost $83 billion on a base of $191 billion, which is 43 per cent.
Mind you, prices rose over those years. The Bank of Canada inflation calculator shows a 17-per-cent increase from 2006 to 2016. So in real terms spending growth was more like 26 per cent. Population also rose in the Harper years. Yes, despite the plagues and hellfire it grew by about 11 per cent. So, taking both inflation and population growth into account, real per capita spending over the Harper years rose by about 15 per cent.
It’s true there were cuts in some areas. The Harper Conservatives had their pet peeves, just as the Liberals had theirs. Think subsidies for activist lawyers, on the one hand, and Canada’s roving ambassador for religion, on the other. Each government mercilessly axed its peeves, as governments do. But if real per capita spending was rising by 15 per cent over 10 years — roughly 1.5 per cent per year — there was no net cutting going on. In that respect, the Harper Conservatives were just like all other more-or-less centrist Canadian governments, which is almost always the flavour of government Canada gets.
(Harper) and his times weren’t exactly drawn from Dickens
In another respect, of course, they were quite different. The federal surplus for fiscal year 2005-6, at the very end of which Harper took over, was $13.2 billion. He ran surpluses for two more years but then in 2009-10 he broke the bank and posted a deficit of $56.4 billion, which in nominal terms was and remains an all-time record. “The hurtful cuts of the Conservative years” is a funny way to describe the guy who ran the biggest nominal deficit, peacetime and wartime, in Canadian history.
Why did Harper do that? For the perfectly understandable reason that in the fall of 2008 a major financial crash in the U.S. and other places threatened to deflate the world economy, Canada’s obviously included. As part of a co-ordinated international response, though they likely would have done it without multilateral pressure, Harper and his finance minister, the late Jim Flaherty, applied orthodox Keynesian countercyclical fiscal policy.
But, fiscal conservatives that they were, they also said they were doing so strictly on a temporary basis. And they were true to their word. Within five years the $56-billion deficit was down to $0.6 billion — basically gone, as Harper and Flaherty had said it would be. That did involve “cuts.” Program expenditures actually fell in one year, which is more or less unheard of in Ottawa. But that “cut” of roughly $5 billion came after an increase of $32 billion the previous year, so it doesn’t really count.
What we observed post-Crash from the Harper government was purposeful rapid expansion of the deficit to deal with an economic emergency, followed by purposeful, adult control over spending to make sure the deficit did promptly come to heel.
Compare that to the fiscal record following 2015. A new government said it would run a modest deficit — $10 billion — to deal with what turned out to be a slight economic slowdown in the summer of 2015 but would then return to budgetary balance after the “emergency” was over. Once in office, however, it increased the deficit to well beyond $10 billion and it has now decided its fiscal anchor will be, not budget balance, but the debt-to-GDP ratio, which its election platform shows falling very slowly, from 30.9 per cent next fiscal year to 30.2 per cent in 2023-24.
Justin Trudeau said over the weekend that the Conservatives want to balance the budget “on the backs” of social services. Never mind that social services don’t have backs. I can’t speak for Scheer Conservatives but traditional conservatives believe that if a generation wants public services, it should pay for them, and not put off financing them onto the backs of their children.
It’s funny that Trudeau could be so solicitous of future generations when talking to Greta Thunberg in Montreal on Friday but then on Sunday slag them fiscally with his platform’s embrace of permanent deficits. But that’s what we’ve grown used to from him: Funny ways.