by Rick Tone
Al Pope’s “Break out the rainy day funds” article in the Jan. 31 edition of the News misrepresented facts and took cheap shots at Federal Finance Minister Jim Flaherty.
Pope wrote that Flaherty “spent” $60 billion on “tax cuts” to corporations. Perhaps its a question of semantics, but are not cuts and spending opposites? Regardless, those cuts may have helped keep many businesses, small and large, in business and/or in Canada rather than closing or moving to lower-tax jurisdictions and taking jobs with them, in which case the damage to our economy may have been a great deal more than the $60 billion Flaherty supposedly “spent.”
Pope failed to mention that those cuts were encouraged and generally applauded by most businesses and economists. I also would have thought Flaherty deserved credit rather than derision for his intent to present a “stay the course” budget, especially given that the government is still running an annual deficit, which Pope took pains to criticize while at the same time seeming to criticize Flaherty for not spending more money. Go figure.
As for Flaherty’s supposed record setting deficit of $50 billion, Pope failed to mention the context. That deficit was created when the wheels fell off the world economy and unions, companies, the other political parties, economists, and provincial governments were all urging Flaherty to turn on the taps to counter the recession, save jobs and help the unemployed.
If anything, that deficit was created by broad consensus across Canada, not just by the Conservative government. It therefore seems to me rather unfair for those same parties who asked for the deficit spending to now attack the government for it while at the same time complaining about spending cuts to get back to a balanced budget.
When Pope asserted that Flaherty’s $50-billion deficit was “record setting,” he also forgot to compare deficits going back over the last several decades in constant dollars by applying the CPI index, or perhaps something less complicated like the price of gas when the Liberals under Trudeau were governing Canada. (It was 45 cents an imperial gallon then, or about 10 cents a litre compared to $1.40/litre now – 14 times more expensive today.)
Had he done so, Pope would have noticed that the largest deficit in Canadian history happened under the Trudeau Liberals. They had a $30 billion deficit, which, if we multiply by the increase in the cost of gas (or for that matter the cost of cars, food, housing or the average of many other products) Trudeau’s deficit would be well over $100 billion in today’s terms. Moreover, Trudeau spent all that money when our economy and the world economy was strong compared to the spectre of a 1930s-type depression and mass unemployment which Flaherty faced.
To draw meaningful conclusions, one has to be able to show how one set of numbers and facts measures up against some other set of numbers and facts or against some standard.
Sure, Canada’s national debt is now a record setting $600 billion, but that doesn’t look quite so bad when we consider that under the Liberals it was $580 billion and those were more valuable dollars back then.
Sure, Flaherty left Ontario with a $5.6 billion debt, but under Bob Rae of the NDP, Ontario’s debt soared to over $10 billion and those also were more valuable dollars. In fact, even compared to the recent Ontario Liberal governments of McGuinty and Wynn, Flaherty looks very good indeed.
How about Pope’s “38.2 per cent” jobless rate among Canadian adults? Where did that come from, given that the recent official rate was only 7.2 per cent unemployment? Did Pope include every retired senior, stay-at-home parent, baby and school kid (and perhaps a few moose) who are not even in the job market to arrive at his number?
I do agree that things are tough for a lot of Canadians, but that too has to have a context. Compared to the robust full employment economy we would like to see, we are well off the mark. Nevertheless, given that we are doing quite well compared to most other developed countries, accusing Flaherty of “running the Canadian economy with all the facility of a cheap con artist” was unfair to say the least.
In future I hope Pope will give full and fair context to his numbers. As it is, in my opinion the column at issue was well off any standard that would merit his best columnist award.
Rick Tone is a Whitehorse resident.