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Revealed: Stephen Harper is conservative. Really.

Moving the conservative agenda forward


 

Adrian Wyld/CP

A number of the Canadian commentariat have worked themselves into a lather saying that of the many bad things Stephen Harper’s Conservative government is, conservative isn’t among them. Or for some, of the many good things the Conservative government isn’t, conservative is among them.

Both groups are wrong. Profoundly wrong.

While not every move Harper makes is the most conservative possible, taken as a whole, Stephen Harper’s government is profoundly conservative. And so let’s bring up just a few of the ways in which the Conservative government has moved the conservative agenda forward. To make it fun let’s do so with the help of the masterful contemporary conservative humorist, P.J. O’Rourke.

Incrementalism

Let’s start with a key reason for the commentariat’s confusion, incrementalism (to use Tom Flanagan’s phrase). Or to quote O’Rourke, “Everybody wants to save the Earth, nobody wants to help Mom do the dishes.”

On the whole, the Harper government learned well one lesson of the ill-fated Martin government. That government never seemed to find a small problem they weren’t willing to turn into a big problem. And so Harper successfully campaigned against them saying, “if you have hundreds of priorities, you have no priorities.”

Harper, in contrast, focuses on small, incremental, doable policy. These policies don’t always reach a conservative destination but are, for the most part, important steps on the journey to that destination. And so conservatives celebrate the hundreds of ways in hundreds of days that small changes are made to immigration, grants and contributions, Employment Insurance, trade and so many others.

Incrementalism is inherently conservative because conservatives wish (to be trite) to conserve. Conservatives are skeptical of large, government imposed, social change. They abhor “strategies” and grand schemes. They prefer to do things incrementally.

Undoers

Doing makes better copy than undoing. And so a second source of the commentariat’s confusion is that conservatives are are, or should be, undoers. As O’Rourke says, “We are participants in an enormous non-march… to demand nothing, that is, except the one thing which no government in history has been able to do – leave us alone.”

Early on, Harper managed to undo some fairly big initiatives of his predecessors. Anyone who has been in government knows that inertia is probably the most powerful force. And hence undoing bad policy ought to be hailed as a victory, a step forward, a conservative coup.

And so conservatives celebrate Harper’s termination of the Kelowna Accord – that expensive, nebulous, expensive, open-ended, expensive, exclusionary, expensive, process laden and expensive deal concocted by the government of Paul Martin. The 2006 Conservative budget killed it. Dead. And Conservatives moved on to a number of modest, achievable, outcome-based (in a word, incremental) policy changes on the aboriginal front such as clean drinking water, education improvements and strengthened rights for women and girls on reserve.

Conservatives celebrate the death of Paul Martin’s underfunded national child-care plan. This undoing took a bit more work as the Martin government had signed agreements with each province to meet his election promise of spending $5 billion over five years that was touted to create 250,000 union run, government provided spaces for Canadian children. This was another grand scheme where the rhetoric vastly outstripped the reality. Which was part of the reason Liberals had promised to create such a program for 17 years but never actually got around to doing it until they felt boots to their bottoms. Again, Harper killed this, dead. He then diverted this money and much, much more into cash payments to all families with young children. More on that below.

Finally (this is a representative, not exhaustive, list), conservatives celebrate the death of the Kyoto Accord. Kyoto was a massive wealth transfer from first world countries – who had to meet strenuous emission targets – to second and third world countries who were largely exempt or had suffered economic slowdowns making their targets easily reachable. The US senate voted unanimously not to burden the US with Kyoto – something President Clinton (though perhaps not Al Gore) almost assuredly knew when he signed on. Chretien shrewdly signed on without even asking the provinces – who would have to bear much of any regulatory burden. The Chretien and Martin governments labored intensively to produce comprehensive plans to meet Kyoto targets, but alas, never put any of these comprehensive plans in place. Harper formally pulled from Kyoto and now has sensibly vowed that any Canadian plan would not be out of step with that of the Americans.

Tax and Social Policy

But enough about incrementalism and undoing. Have the Harper Conservatives actually done anything conservative?

Yes.

Let’s start with the big ones – tax and social policy. Liberals maximize the number of decisions government makes for people while conservatives maximize the amount of decisions people make for people. Or as O’Rourke puts it,

There is no virtue in compulsory government charity, and there is no virtue in advocating it. A politician who portrays himself as “caring” and “sensitive” because he wants to expand the government’s charitable programs is merely saying that he’s willing to try do good with other people’s money.  Well, who isn’t? And a voter who takes pride in supporting such programs is telling us that he’ll do good with his own money – if a gun is held to his head.

And so Conservatives celebrate that, rather create programs that only benefit families whose children are housed in unionized institutional childcare, the Harper government gave money to all families with children to do as they saw fit. To do so, the Conservatives killed a $5 billion dollar underfunded unionized institutional child care program and replaced it with a $13 billion dollar program giving cash to all parents with children.

It’s hard to understate the magnitude of the philosophical divide here. Instead of deciding what kind of family choices should be rewarded with government largesse, the Conservatives created the largest new social program since medicare that left those choices to families. And while part of this is doing good “with other people’s money,” most conservatives would argue (even if O’Rourke doesn’t) that society has an obligation to support and promote child-rearing. But (like O’Rourke) I would argue that the conservative way to do so is to provide that support with minimal interference in the choices families make.

Conservatives celebrate tax reductions as good economic and good social policy – it puts more money in the hands of individuals and families, rather than government. While some purist libertarians may object to the social meddling of some of these tax cuts, the following are all cuts enacted by the Harper Conservative government. Reducing the GST from 7 to 6 to 5; reduction of the lowest tax rate; increases to personal exemptions; introduction of the Child Tax Credit; introduction of the Canada Employment Credit; and the introduction of the Arts and Sports tax credit

The total tax take of the federal government has been reduced from 16.3 percent of GDP when Harper took office to 14.0 percent today. That’s a 14 percent reduction in total revenues as a percentage of the economy, or $42 billion more in Canadian’s pockets. That’s a hundred bucks a month for every man, woman and child in Canada.

Conservatives also celebrate moving Canada’s tax system closer to a consumption tax by celebrating Tax Free Savings Accounts that have exempted a larger portion of Canadians’ savings from tax. For the reality is that for all but the very highest of income earners, the TFSA along with RRSPs, RESPS, and RRIFs has, by exempting all their savings, turned the Canadian income tax into a consumption tax.

Foreign Policy

The other big one is foreign policy. For decades the Canadian government sought to be a middle power, a consensus builder and a follower. A sideshow in nearly all eyes but our own. The Harper Conservatives energetically turned the page on this approach. Harper took sides on the global stage openly, early and emphatically. Or as O’Rourke puts it, “This is the second wonderful thing about Zionism: it was right. Every other “ism” of the modern world was wrong about the nature of civilized man – Marxism, mesmerism, surrealism, pacifism, existentialism, nudism.”

And so conservatives celebrate the government’s hearty support for Israel on the international stage. They do so because Israel is a beacon of democracy and a functioning market economy surrounded by countries largely hostile to these things, on top of their hostility bred from varying degrees (from overtly hostile to aggressive) anti-Semitism. Conservative support for Israel has undoubtedly brought political dividends in a small number of ridings in Toronto, Winnipeg, Montreal and elsewhere. But there has also been a backlash among the much larger, albeit much less unified population that believes either this is the wrong side, or that we ought not to take any side.

Picking sides is much more difficult than straddling the fence. On China, the conservatives have been dancing a difficult dance. In the early days Conservatives’ nervousness about China was not overt, but not altogether hidden. More recently, Harper went to China and declared that Canada was “open for business”. When Chinese state oil companies took this as a signal that they should start purchasing Canadian private oil companies, the Harper government applied the brakes. There is a difference, the Conservatives said, between state-directed capital and private-directed capital. This brake on foreign state-owned enterprises has a very conservative root, namely that Canada hasn’t spent the last quarter century reducing Canadian state ownership only to have that replace by foreign state ownership. Conservatives prefer the latter and look skeptically upon the former.

Economic Stimulus

Some conservatives bemoan the Harper’s response to the global downturn. They point out that fiscal stimulus programs have a shoddy record of success, and in any event are hardly conservative. Or as O’Rourke puts it in a rare moment of wonkishness “In politics, as opposed to reality, everything is zero sum.” Better is his more un-wonkish statement that “Giving money and power to governments is like giving whiskey and car keys to teenage boys.”

Is there such a thing as a conservative stimulus plan? Following O’Rourke it would involve taking money from governments and giving it back to individuals – a tax cut. In economic terms it would be a tax cut that encourages spending. In terms of timing, it would occur at of just as the economy started to slide.

And so conservatives celebrate the brilliance of the GST reduction announced in the Conservative’s 2007 Fall Economic Statement and introduced in January 2008. (The National Bureau of Economic Research points to December 2007 – when the US went into recession – as the start of the Global meltdown.) That same economic statement also accelerated business tax reductions and cut the lowest personal income tax rate and increased personal exemptions – tax cuts that equaled the GST cut in magnitude. A massive, largely consumer-based tax cut announced as the global economy was teetering, and brought into force as it started to fall over the edge.

If there’s such a thing as a conservative fiscal stimulus plan, this was it.

Those who scream ‘Lucky!’ should recall Seneca who said, “Luck is what happens when preparation meets opportunity.” And what were the Conservatives preparing for in the fall of 2007? To quote the Economic Statement, “From a global perspective, we are living in a world of increasing uncertainty and economic turbulence.” Indeed. And in Budget 2008, when the global recession was coming into better view, the GST cut featured prominently in a section called “Tax Relief Will Support the Economy.”

And so with this massive and exceedingly well-timed fiscal stimulus in place, conservatives do not fault the Conservatives for hitting the pause button. The 2008 Fall Economic Statement was that pause button. It had a few other items and what happened next is the subject of much speculation and a fair amount of lore, but the essential outcome for present purposes was this: the opposition parties held a gun to the minority Conservative government’s head demanding, among other things, a large stimulus package in the forthcoming budget.

The Economic Action Plan was the result.

In the circumstances, how conservative was the EAP? The International Monetary Fund analyzed Global stimulus packages announced “After the 2008 Crisis” (hence they did not include the prescient tax cuts noted above). These IMF analyses show the following:

  • Canada’s overall fiscal expansion in 2008, 2009 and 2010 was below the G-20 average, and well below that in the United States, the United Kingdom, Germany, and Japan.
  • Discretionary fiscal expansion in those years was also below the G-20 average, and well below that of United States, the United Kingdom, Germany, Japan, and Australia.
  • Canada’s Economic Action Plan was heavily weighted to infrastructure and support for housing and construction (Home Renovation Tax Credit). Both were pulled back following the downturn. In contrast, other countries relied much more heavily on social service spending (especially the United States) that is much more difficult to pull back and hence produced much more serious structural deficits.
  • Canada continues to have one of the most, if not the most, healthy balance sheet in the world.

And so, with a gun ever at their heads urging them to do more, the Conservatives delivered one of the more conservative fiscal packages in the developed world. Not the most conservative conceivable, but almost certainly the most conservative possible in the circumstances.

Crime

Another conservative front that Conservatives have moved on is crime. While some conservatives of the libertarian bent cringe at some of these things, most conservatives believe that if you do the crime, you do the time. Or as O’Rourke puts it: “The second item in the liberal creed, after self-righteousness, is unaccountability. Liberals have invented whole college majors – psychology, sociology, women’s studies – to prove that nothing is anybody’s fault. No one is fond of taking responsibility for his actions.”

Conservatives celebrate registering sex offenders instead of duck hunters. Conservatives celebrate longer mandatory sentences instead of house arrest for serious crimes. Conservatives celebrate putting the rights of the victims ahead of the rights of criminals. Conservatives worry more about recidivism and restitution than rehabilitation. And on all these fronts and more, Conservatives have moved the goal posts one incremental, slogging piece of legislation at a time.

Federalism

A final area where conservatives laud Harper’s approach is in the area of federal-provincial relations. One path to the conservative goal of a smaller government is for government to stick to its knitting. Conservatives are policy modest, liberals, not so much. As O’Rourke says, “The principal feature of liberalism is sanctimoniousness. By loudly denouncing all bad things – war and hunger and date rape – liberals testify to their own terrific goodness. More important they promote themselves to membership in a self-selecting elite of those who care deeply about such things.”

Policy modesty has played itself out in the areas of health care and education. On both, Harper has, shall we say, erected firewalls between the federal government and the provinces. The previous occupants of 24 Sussex regularly got tangled in federal provincial snarls. They would host big dinner parties (sometimes overnighters!) where ten premiers would collectively beat them up. No more. Other than in the area of research and federal unconditional transfers, Ottawa does not dictate, preach or harass provinces on how they should run health or education. Ottawa is no longer the voice of sanctimoniousness and unhelpful intrusions into health and education. Today the Council of the Federation – a body of provincial and territorial governments sans the federal government – meets regularly to discuss these issues on their own. As they should.

And about those transfers.  When Stephen Harper became Prime Minister, there was much talk of the “fiscal imbalance” between provinces and the federal government – Ottawa had too much money and provinces had too much responsibility, particularly Quebec would say. The early budgets of the Conservative government claimed to “solve” the fiscal imbalance by substantially increasing unconditional transfers and then growing them at a rate much higher than inflation and population growth. Those budgets also touted the GST reduction as a tax point transfer – a source of revenue open to provincial governments in need. Since then, even Quebec separatists in power in Quebec rarely complain. Imbalance balanced. Problem solved. The magnitude of this victory is hard to understate.

Conclusion

The conservatism outlined here has been the substantive backdrop that, over the past decade, created the Conservative Party from its three predecessors; that held Paul Martin’s “Juggernaut” to a minority; that brought Harper to power; and that eventually delivered a strong, stable, national Conservative majority government. It is also a ready recipe for success to win majorities for the next decade… and beyond.

Having said all that, it seems fitting to conclude by Canadianizing O’Rourke,

The [Liberals] are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The [Conservatives] are the party that says government doesn’t work and then they get elected and prove it.

Ken Boessenkool is a Founding Partner at Kool Topp & Guy and has worked on all four of Stephen Harper’s federal election campaigns as Conservative leader.


 

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