JLS (jlsjlsjls) wrote,
JLS
jlsjlsjls

:p

Bushwannabe & Co. strike again:

Harper's gang doesn't let facts get in the way of votes

JEFFREY SIMPSON

The Harper government's budget contained very few surprises, except one whopper. Having insisted that a "fiscal imbalance" exists between Ottawa and the provinces, the budget included a document, prepared by the Finance Department, that demonstrated no such thing. Anyone who had not heard of this "fiscal imbalance," namely most of the Canadian population, would have wondered what the fuss was about after reading the document.

Of course, the document asserted the existence of a problem.

But the actual analysis debunked the myth of the "fiscal imbalance." It's a wonder the message-control freaks in the Harper government ever signed off on it. If anything, the document gave wonderful ammunition to those who claim the whole "fiscal imbalance" idea is a put-up job by greedy provinces.

Start from two facts, well known to students of federalism, that the document outlines. Fact one: Canada's provincial, territorial and municipal governments have a larger share of total government revenues than their equivalents in other federations. Fact two: Canada, as a result, is already the world's most decentralized federation, fiscally speaking.

Yes, you might reply, but that decentralization is normal and healthy, given that provinces must administer and largely finance the big-ticket items of health care and education. To which, the Harper government's own document offers the reply: Sure, but after a reduction in federal transfers and equalization in the 1990s, federal transfers have been rising by an average of 8.7 per cent annually, compared to growth in federal revenues of 2.6 per cent. In 2006-2007, these transfers will total $61-billion.

But what about those federal surpluses? We hear lots about them from the proponents of the "fiscal imbalance." What we don't hear about is Ottawa's debt load. That debt was largely accumulated during the nightmare deficit years under prime ministers Pierre Trudeau and Brian Mulroney. Servicing it eats up a much larger share of federal revenues than debt servicing in provincial budgets.

The Harper budget document explains which taxes are available to each level of government. Answer: almost all of them. In addition, think of those resource royalties and gambling revenues that are reserved entirely for provinces. Thinking about those revenues sort of weakens the case for a "fiscal imbalance."

The inference is clear: If provinces need more revenues, go ahead and raise taxes. They've got all the constitutional power they need, and with the federal government cutting taxes, they've got fiscal room, too.

What's going on here is part of a pattern set early by the Harper government -- the making of political commitments in defiance of expert advice, including from within government departments.

Obviously the Finance Department wrote this document, because it believes, correctly, that no "fiscal imbalance" exists. The government's political operators slipped up for a change, since they didn't lather up the document with enough political spin, so the truth actually emerged.

But the Conservatives, trying to gain seats in Quebec (and to a lesser extent, elsewhere) are determined to find a "fiscal imbalance," even when their own advisers deny its existence. It's exactly what the Conservatives did with cutting the GST. Finance officials tried to explain that cutting consumption taxes was a poor idea, but politics trumped their objections.

Almost every expert in Canada, including those in the Justice Department, thinks mandatory minimum sentences won't work to deter crime. That's not stopping the Conservatives.

Virtually every single legal scholar in Canada insists the only way to stop same-sex marriage is not via a parliamentary law but by use of the notwithstanding clause. That's not stopping the Conservatives.

Every serious study of Canada's economic future believes that focusing on education, research, innovation and productivity is the only way forward, but the Conservatives aren't listening, because votes don't lie in that agenda.

As for the mythical "fiscal imbalance," maybe, just maybe, the Finance Department is making a little headway. After all, Finance Minister James Flaherty has taken to using a more neutral term, "fiscal balance." And the Harper government budget document at least doesn't discuss stupid non-remedies such as transferring tax points or pouring even more money into the maw of health care.

This isn't much by way of intellectual progress. But for a government apparently determined to spurn informed opinion on a range of issues, if that opinion gets in the way of securing votes, it's the only available encouraging sign. jsimpson@globeandmail.com
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