Harper driven by libertarian ideology, not reality

Prime Minister Stephen Harper was quoted in the Globe and Mail on July 10, 2009, as saying, "You know, there's two schools in economics on this. One is that there are some good taxes and the other is that there are no good taxes. I'm in the latter category. I don't believe that any taxes are good taxes."

Four days later, on July 13, 2009, Globe and Mail columnist Jeffrey Simpson responded: "Only libertarian anarchists believe that all taxes are bad, and that society can get along without them... Presumably, there lurks inside the prime minister an anger about much of contemporary society that has been built by taxpayers' money, an anger contained by the political reality that the prime minister can't do much about this state of affairs."

By the end of the 2012-13 fiscal year, and assuming there are no further tax cuts in the upcoming federal budget, the Harper Conservatives will have reduced the cost of government by $220 billion, according to the Toronto Star. Canadian corporations have pocketed $60 billion in savings. Over the same period, Ottawa has run up a cumulative $169-billion deficit.

Taxes have been slashed. Government is smaller. And now, all the institutions and departments of government except for prisons and the military are on the firing line in the federal budget.

Dramatically downsizing Ottawa fulfils another Conservative goal -- turning the social safety net over to the provinces. The prime minister is a strict constitutional constructionist, determined to shrink back the federal government to its role circa Confederation in 1867.

The Conservatives pledged "open federalism" in their 2005 policy declaration. It promised restoration of "the constitutional balance between the federal and provincial and territorial governments," "strong provinces" and a limitation on the federal spending power, authorizing the provinces "to use the opting-out formula with full compensation... to opt out of a new or modified federal program in areas of shared or exclusive jurisdiction."

It also defined a narrow role for government. Its purpose is solely "to protect the lives and property of its citizens, ensure equality of opportunity, foster an environment where individuals and private initiative can prosper, ensure the security of our nation's borders and provide services to Canadians that cannot be provided more efficiently and effectively by individuals or the private sector."

The prime minister frequently refers to "identifying the core responsibilities of the federal government and leaving the rest to the provinces and the market."

The 2008 federal budget provided a handy compendium of what the Conservatives consider "core" responsibilities -- national defence, public security and the economic union. Period.

Absent is any reference to the pillars of the Canadian postwar state -- equalization, pensions, medicare and employment insurance.

Instead, Conservative "nation-building" amounts to an array of expensive "boutique" tax cuts like the Children's Art Tax Credit, alone projected to cost $100 million in 2011-12. The Frontier Centre for Public Policy reports that more than 70 per cent of these "boutique" tax credits for everything from hockey and dance lessons to tools go to the 25 per cent of taxpayers earning more than $50,000 annually.

The Conservatives' libertarian thrust reached its climax in a speech given by Minister of State for Small Business and Tourism Maxime Bernier to Toronto's Albany Club in 2010. He proposed turning Ottawa's $40 billion in social and health transfers to the provinces into tax points.

"Instead of sending money to the provinces, Ottawa would cut its taxes and let them use the fiscal room that has been vacated. Such a transfer of tax points to the provinces would allow them to fully assume their responsibilities without federal control," Bernier said. "The federal government today intervenes massively in provincial jurisdictions and in particular in health and education, two areas where it has no constitutional legitimacy whatsoever."

Since neither Bernier nor Harper nor any other member of the government has ever openly acknowledged the vast differences in fiscal capacity among the provinces, the Conservatives' "pay as you go and if you can't pay you don't go" philosophy means they are prepared to replace Canadian citizenship with 13 disparate and unequal levels of provincial "citizenship."

The Conservatives believe Canada cannot afford its public pensions. They commissioned Edward Whitehouse, an economist for the World Bank and the Organization for Economic Co-operation and Development to do a study. He reported that Canada "does not face major challenges of financial sustainability with its pensions" and "there is no pressing financial or fiscal need to increase pension ages in the foreseeable future." Nevertheless, the Conservatives persist they are too generous.

The forthcoming assault on pensions and Canada's social safety net is driven by Harper's libertarian "no tax is a good tax" ideology. Not reality.

Frances Russell is a Winnipeg

author and political commentator.

Republished from the Winnipeg Free Press print edition February 8, 2012 A11