Brian Lee Crowley - Special to the Sylvan Lake News
Having just been in Washington talking about how Canada broke the back of its deficit, balanced its books, and thrived as a result, I can officially say that Americans just don’t get it. And not only do they not get it, they don’t even understand what it is they don’t get.
I am used to a “can do” attitude on the part of Americans, a belief that if problems are faced honestly and squarely, no obstacle is insurmountable. But all I heard was a long list of things that “can’t be done” and an even longer list of reasons why Canada’s success cannot be replicated south of the border.
No matter how you alter or iron it, the defeatist suit just doesn’t look right on the American physique.
As former Prime Minister Paul Martin and former Alberta and Saskatchewan finance ministers Stockwell Day and Janice MacKinnon and I all told them, their problem appears to them insoluble because they are thinking about it the wrong way.
They think deficits are a sideshow, and what everybody cares about is taxes, social programs, defence spending and entitlements. As Martin so eloquently put it, Canadians came to understand that if they wanted to save health care, they had to cut everything, including health care, so that it could be put on a sustainable footing. And they had to do it when conditions, while bad, were not dire. You can’t wait because, eventually, the situation will worsen and the decisions as to what to cut will become more difficult.
Many Canadians do not realize the immense debt we owe to the generation of politicians in the 1990s: New Democrats in Saskatchewan, Tories in Alberta and Ontario, Liberals in Ottawa and British Columbia and others elsewhere who grasped the nettle of reform and got out and sold Canadians on the idea that the deficit was a danger to all they held dear, and that sacrifice was necessary to preserve and protect so much that they valued.
Defined as a national issue, the deficit therefore requires a national solution. Everyone contributed to the mess, and everyone will have to contribute to cleaning it up. In Canada, no programs were sacrosanct from spending cuts: not defence, nor transport subsidies nor social programs.
Some taxes went up, but reform had to fall most heavily on spending. Canadians learned when the GST was introduced that simply increasing revenue wouldn’t make the deficit go away, not least because politicians too often see new revenue as a reason to spend. Canada had a spending problem, not a revenue problem, and it required less spending to solve it.
All of the former finance ministers with me in Washington also agreed that it took a hard-nosed but thoughtful approach to cutting spending to win Canadians’ support. Every bit of spending was measured against objective yardsticks like protecting the central roles of government, value for money and affordability.
And of course a simple, objective, easy-to-understand target caught the public imagination and focused everyone’s efforts. Canada as a nation became obsessed with getting the deficit to zero. Every budget season Canadians looked to see what progress had been made. And virtually every government followed Martin’s advice: set a tough target for progress each year, but make very certain you meet that target. Every time you fall short you damage your credibility and give ground to doubt and despair.
One day American politicians will understand all this, and when they do, they’ll get the most important lesson of all: every government that grasped the nettle of reform didn’t merely defeat the deficit, but enjoyed tremendous public support and was handily re-elected. They dished out tough medicine, but did it on the promise of the right kind of hope and change: a hope that was neither vague nor rhetorical, and a change that was both practical and immediate.
Almost 20 years later, Canadians still owe those politicians from the ’90s a debt of gratitude.
Brian Lee Crowley is the managing director of the Macdonald-Laurier Institute.