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Think the Liberals manage tax dollars wisely? Is the earth flat?

By Walter Robinson
web posted March 24, 2003

Whenever a federal Cabinet Minister is challenged on federal spending levels -- especially after the recent federal budget -- they usually refer to their speaking points about reducing the $42 billion deficit of 1993 and restoring international confidence in the financial management and administration capacity of the Canadian government. This is a fiction that deserves to be corrected, especially after a disastrous decade of federal mismanagement.

First up the $42 billion deficit was vanquished through a variety of factors. Canada experienced unparalleled economic growth from 1994 to 2000 fueled by tax-cutting regimes in power in Alberta and Ontario. And the benefits of free-trade came home to roost during this same period. This happened independently of government budget measures.

For its part, the Chretien government slashed transfers to the provinces, kept payroll taxes way too high -- punishing workers and employers -- and profited from bracket creep revenues from 1993 to 2000. This over-taxation -- combined with record economic growth -- vanquished the deficit and produced fiscal surpluses.

It is an urban legend that the federal government slashed its own spending in order to balance the federal budget. This "heavy lifting" was borne by the provinces and by Canadian taxpayers.

Turning to the day-to-day stewardship of our tax dollars, the evidence is even more compelling (or should one say damaging?) to categorically refute any spurious claims of effective financial management. In 1994, the Chretien government cancelled the Airbus and Pearson Airport modernization contracts … at a cost of $500 million in penalties for each contract cancellation.

In 1995, the federal government persecuted a former Prime Minister in the Airbus witch hunt that ultimately cost taxpayers $2 million. Over its entire mandate the government has also spent untold millions defending unconstitutional gag laws in seeking to silence Canadian citizens from speaking out during election campaigns.

Since 1994, the federal government has failed to track down over $1 billion of fraudulently obtained GST credits. And in the last eight years, the Auditor General has noted that Ottawa has stashed $7.5 billion in arm-length "slush fund" foundations outside the authority and scrutiny of Parliament.

In the late ‘90s Ottawa also fired the Chief Actuary (Bernard Dussault) of the CPP for daring to do his job and question the assumptions underlying the future financial viability of the CPP. His unjust dismissal cost us a cool $364,000.

In 1999, the AG also found that $1.8 billion in native funding was unaccounted for. Then there was the home heating rebate fiasco in 2000 with $350 million in cheques sent to prison inmates, ineligible seniors, 4,000 non-residents and over 7,500 dead people.

The 2000 HRDC billion dollar boondoggle is now legendary. Just last year Canadians learned that the Technology Partnerships Canada (TPC) program will lend out over $6.4billion through to 2020 but officials estimate -- at best -- they will recoup a mere $2 billion of these corporate welfare loans.

Recent scandals include the $1.6 million GroupAction photocopying fiasco and other sponsorship improprieties that have spawned multiple police investigations. And then there's the $1 billion gun registry waste. Those who choose to believe the myth of exemplary fiscal management by the federal government should open their wallets: Chances are inside you'll find a lifetime membership card for the flat earth society.

Walter Robinson is the federal director of the Canadian Taxpayers Federation.

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