Conventional wisdom suggests that Paul Martin was hurt by the recent provincial budget in Ontario, which so infamously broke several of the provincial Liberals' election promises. Let's think about this for a moment: Unlikely as it may seem, it's actually Stephen Harper who has borrowed the most from Dalton McGuinty's playbook.
The Liberals capitalized on a desire for change among Ontario voters. To cement his victory, Mr. McGuinty made promises in every direction: new spending for health care and other services, no tax increases and a balanced budget. In light of the huge deficit that everyone knew the outgoing Tories were leaving behind, these promises were transparently irreconcilable. No matter, so long as the truth wasn't out until the ballots were counted. Now the Liberals are paying for their opportunism.
Mr. Harper's Conservatives, similarly, are playing to the voters' desire for change, following the Ontario Liberal strategy: promise anything to anybody, at least until election day.
Like the Ontario Liberals, Mr. Harper makes fiscal promises in every direction. To be sure, Ottawa enjoys an underlying surplus that allows the competing parties to make some significant promises in this campaign. But only the Conservatives are promising everything: large tax cuts, lots of new spending and legislated debt repayment. Yes, Ottawa can afford some combination of new spending, tax cuts and/or debt repayment. But large amounts of all three? Not a chance.
Consider the bottom lines of the three parties' fiscal platforms (usefully summarized by the Canadian Centre for Policy Alternatives in its study, "Can They Pay For What They Say?"). Including previous commitments from the 2003 health accord and the 2004 budget, the Liberals are promising about $54-billion in new spending over five years — which can be financed from the existing revenue base with no tax increases, and still leave Ottawa with hefty surpluses. The NDP, meanwhile, promises $79-billion in new spending, offset partly by $16-billion in net new taxes; the rest is financed from existing taxes, leaving a balanced budget or small surpluses.
The Conservative platform is clearly the outlier in its rose-coloured assumptions. It promises $56-billion in new spending (much of it inherited from Liberal pre-election announcements), $44-billion in tax cuts and an unspecified amount of legislated debt repayment (the platform hints at $29-billion worth over five years). About the only token recognition that someone has to pay for all these goodies is the plan to eliminate $10-billion worth of unspecified business subsidies. Even if those savings were achieved, the Tories are still about $40-billion short.
This fiscal hole has gotten deeper as the campaign drags on, driven by the proclivity to keep promising anything to anybody until election day arrives. Voters want new federal funds for cities and public transit? Don't worry, says Conservative transport critic James Moore, we believe in that, too. The prospect of new auto plants is politically irresistible in vote-rich Ontario. Don't worry, says Mr. Harper: We'll honour all investments the Liberals seal. (So much for $10-billion in cancelled subsidies.) If the Tories followed through on all their spending and tax-cut promises, the inevitable result would be a slide back into the red.
That would confirm the new reality of fiscal politics in North America. It used to be thought (unfairly) that deficits were a disease of the left. Today they are clearly a disease of the right: Gordon Campbell, Ernie Eves and, now, Stephen Harper (not to mention George W. Bush, currently running the largest deficit in world history). It seems that modern-day deficits are less a reflection of where a government is heading, than how urgently it wants to get there.
The only alternative to deficit would be for an incoming Conservative government to abandon other big promises. It is abundantly clear that Mr. Harper's pledges of tax cuts, new spending and debt reduction have no more chance of adding up than did Mr. McGuinty's triad of equally incompatible promises. All we can do is guess which promises Mr. Harper will keep, and which he will break, if he becomes prime minister.
Jim Stanford is an economist with the Canadian Auto Workers union. Whatever you may think of how he spends his money, at least he pays his bills.
