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The first thing you have to say about the new federal budget is that it is a testament to the fine, upstanding Canadian character. The Liberals have bet their bottom dollar against tax cuts. That’s big.
This is an election budget, and it is dangerous times for a party haunted by a serious scandal and a new united right. It is a sure sign of a new time that the Liberals have chosen to face the upcoming election by distinguishing themselves so clearly from that long-standing – once almost invincible – neo-lib/conservative election gambit.
Sometimes to their credit and sometimes to their shame, the Liberals have made public opinion a pillar of our one-party-dominant Canadian democracy. So you’ve got to know that they would never have surrendered the tax-cut turf to the conservative competition without plenty of polling to show for it. Most of our fellow Canadians – seemingly even those shelling out fairly big tax bucks – just don’t buy that old “forget about community and let profit rule” ideology. They want the quality of life that includes the public’s health. That’s smart – and nice, too.
And for the Albertans who don’t agree, there’s a billion dollars for mad cow. And it sounds like Atlantic Canada is going to do pretty well with the new environmental funds coming from the Petro-Canada sell-off. Trust the Liberals to cover their bases.
But Paul Martin does have a vision of his own, and this is a very Paul Martin budget, above and beyond the way it plays to the public.
Minister of Finance Ralph Goodale heralded this one as the seventh consecutive balanced budget brought down by his party. But the others weren’t balanced budgets. Every one has had a significant “surprise” built-in surplus. This one is even more explicitly a surplus budget. Why?
It’s taken a while to become clear, but for Martin it’s all about the debt. Budget surpluses have quietly paid down Canada’s debt load, reducing the debt-to-GDP ratio to 42 per cent from 68 per cent in 1995. This week’s budget proclaimed a truly radical target of reducing the debt-to-GDP to 25 per cent within 10 years. This kind of ratio is so far in front of any other G7 country that, like it or not, you have to acknowledge that Martin is his own muse.
It’s particularly odd because there’s no real political capital to be made of this approach. In our current low-interest-rate environment, the debt is the main concern of almost no one in Canada. It plays well on the international scene but local right-wingers and corporate execs want to pay less taxes, not save the next generation from future interest obligations. Ordinary folks want more commitment to health care. But slyly, Paul Martin has once again used the magic of the hidden surplus to bring home a debt-reduction budget.
As it should, Jack Layton’s NDP will make much of the lost work on social advancement that Martin’s tight spending will cost the country. But Martin’s conservative passion should be given its due for certain unusual and laudable qualities. For one, he’s reversing a long history of robbing the next generation to pay for the excesses of the present. Instead, paying down the debt is actually transferring wealth from the present to future generations.
Debt reduction is also fair. It doesn’t really favour one class or another. I give this to Martin – debt reduction is not a big-business agenda. It is, in fact, good state-building. Shedding reliance on foreign lending will help maintain our sovereignty and low interest rates.
Finally, disasters do happen. We are in a period of climate change. The future is uncertain. We did face SARS, BSE, a huge power failure, hurricane Juan and disastrous forest fires, all in the last year. It isn’t too wild to believe we should budget for more unknown challenges.
We certainly need a strong voice for the NDP in the next government, but the budget shows that Martin’s conservatism is far ahead of what the new big-C conservatives have to offer.
alice@nowtoronto.com
