Somewhere in the 7,123 words in last week’s Throne Speech — surely the longest and most incoherent in living memory — Stephen Harper had some odd things to say about Canada’s finances.
First, in a bit of extreme fiction, he claimed to have prepared the country to withstand the recession which began in late 2008. That certainly should have been the case, but wasn’t.
What Mr. Harper inherited from his Liberal predecessors in 2006 was a decade of balanced budgets, annual surpluses of 13-billion per year, declining debt, declining taxes, strong economic growth exceeding 3% annually, 3.5-million net new jobs, and the most robust fiscal situation in the western world.
But in less than three years, he squandered it.
He overspent by three-times the rate of inflation. He eliminated all the contingency reserves and prudence factors that had been built into federal budget-making to protect against adverse events. He sent the surplus up in smoke and put Canada back into deficit again BEFORE (not because of) any recession.
In fact, despite all the looming evidence of collapsing markets in the United States and the onset of American bank failures, Mr. Harper kept denying that a recession in Canada was even likely. He said troubles in other countries would be a good thing because we’d have “good buying opportunities”. Such an attitude was either incredibly naive or deliberately dishonest. Either way, he left Canadians unprepared and vulnerable.
And then in late 2008, after the recession hit, Mr. Harper’s response was again ridiculous. With the economy shrinking, he had no plan for new investments in jobs and growth. Until relentless public opinion forced him to reverse himself, he argued for more federal austerity, and predicted a string of six balanced budgets. It was a total fairy-tale and completely wrong.
Now, after six Harper deficits and $169-billion in new Conservative debt, he says he will set a “bold” debt-to-GDP target of 25% by the year 2021 (down from about 34% today), and he pledges to impose a federal “balanced budget” law.
Take that debt target with a grain of salt, because Mr. Harper made that same commitment six years ago. He was supposed to hit 25% by 2012. And he failed. In another flight of fancy, he also promised to eliminate Canada’s total “net debt” by 2021. He’s just not credible.
And as for a balanced budget law, remember this — in the past 17 years, the only federal politician to create deficits is Stephen Harper himself. Proposing a new law to make deficits “illegal” is a massive admission of Conservative failure and wrongdoing since 2006. He’s conceding he cannot be trusted.
Looking to the years immediately ahead, Mr. Harper’s rhetoric is once again all about austerity. He thinks he can hack-and-slash his way to prosperity. And again, he’s wrong. What Canada needs most — alongside strong, competent, honest governance — is a concrete plan for greater sustained economic growth, focused on the middle class.
But it’s not on Stephen Harper’s agenda. In every year since 2010, economic growth in Canada has been slower than the year before. No Prime Minister has done worse since the dismal days of R.B. Bennett.