Bob Rae says he might have been too ambitious as the NDP premier of Ontario in the early 1990s, might have tried to do too much. He says again that he might have made mistakes. ("There are always things that you could improve on," he told columnist John Ibbitson in Saturday's Globe and Mail. "But don't beat yourself up over it.") Real regrets? Yes, he has a few -- too few to mention.
Were Mr. Rae far removed from high public office, he could be forgiven his delusions. As a candidate for the leadership of the Liberal Party, he can't.
He still doesn't get it. The question isn't whether Mr. Rae made mistakes. Of course he did. And the question isn't what his mistakes have done to him. It's what they did to others. The question is whether he has ever understood the harm he caused, and wept. The question is whether he has ever felt either contrite or penitent.
Mr. Rae took a shallow, two-quarter recession and turned it into an ugly, four-year Ontario recession that devastated thousands of lives. Lost jobs. Lost homes. Lost savings. Lost businesses. In the end, Mr. Rae's recession invited comparisons to the Great Depression. The number of people still working in the province at the end of 1994, for example, was less than the number working at the beginning of 1990 -- the only five-year period that this had happened since the 1930s. (Mr. Rae assumed office in October, 1990; he left in June, 1995.)
Although he gave bailouts to a few big companies, he ravaged small business, the province's most important source of new jobs. In the five years from 1985 through 1989, before Mr. Rae, 790,000 of the province's 900,000 net new jobs were in companies with fewer than 100 people. Even in the recession of 1981-84, when big companies dropped 130,000 workers, the number of people employed by small firms in Ontario grew by 193,000. During Mr. Rae's term, 100,000 people who worked for small businesses lost their jobs. When Mr. Rae shut down Ontario's energetic small businesses, the province idled.
People now excuse Mr. Rae by citing the Canadian dollar, high interest and "the recession," attributing Ontario's decline to recession in the United States. Yet no other jurisdiction experienced anything approaching the destruction that Ontario endured. U.S. gross domestic product, by the way, expanded 1.9 per cent in 1990. Not a boom year but definitely not a bust year, either. In 1991, Mr. Rae's first full year in office, U.S. GDP fell -- all of 0.2 per cent. In 1992, Mr. Rae's second full year, U.S. GDP grew 3.3 per cent.
You can't blame two slightly negative quarters in the United States for Mr. Rae's four years of deeply negative recession in Ontario -- for the record-high unemployment in 1992 and 1993, for the record-high budgets deficits for 1992, 1993, 1994 and 1995, for the record-high provincial debt, for the two downgrades in Ontario's credit rating (in 1991 and 1993). And you can't blame the rest of Canada, either.
You can isolate Ontario's performance with a "jobs index" that compares the Rae record with the U.S. record and the rest of Canada record. Give a base value of 100 to each of the three jurisdictions in 1989, the year before Mr. Rae took office. A 1-per-cent increase in jobs in 1990, in any jurisdiction, will produce a reading of 101; a 1-per-cent decrease will produce a reading of 99.
Here are the numbers for the first three Rae years. For 1990, U.S., 101; rest of Canada, 101; Ontario, 99.5. For 1991: U.S., 100; rest of Canada, 100; Ontario, 96. For 1992, U.S., 101; rest of Canada, 100; Ontario, 95.5. It didn't get any better. What do these numbers mean? If Ontario had grown at the same rate as the rest of Canada, and the United States, another quarter million people would have had jobs.
As bizarre as it now appears, Mr. Rae raised taxes in the midst of his own recession -- making it all much worse. With some help from his predecessor, Liberal premier David Peterson, Ontario raised personal income tax rates seven percentage points in six years. When Mr. Rae finished, Ontario had the highest marginal personal income tax rate (for incomes of $67,000 and higher) in North America.
Mr. Rae delivered good times for a privileged public sector. In 1990, the province had 850,000 public sector workers; in 1995, 950,000. Perhaps Mr. Rae assumed you can swap 100,000 jobs in small businesses for 100,000 jobs in the public sector -- and then pay them all higher salaries. You can't. As provincial revenue fell, Mr. Rae borrowed to pay the bills he himself had generated. Mr. Peterson borrowed $3-billion in 1990-91. Mr. Rae borrowed $10-billion in 1991-92; $12-billion in 1992-93; $11-billion in 1993-94; and $10-billion in 1994-95. Single-handedly, he tripled the province's debt.
Single-handedly, he held interest rates aloft -- indifferent to the Bank of Canada's efforts to control inflation, indifferent to the fact that a one-percentage-point drop in interest rates produces 25,000 jobs in Ontario.