Is Jean Charest the Future?

By Gord Gekko
web posted April 1997

What do you do when your party was decimated in the last election, is the butt of every political joke, and has little credibility among even your own members?

If you are Jean Charest, you try to pretend to be a Klein/Harris fiscal conservative.

Charest released his election platform last month, grandly titled Let the Future Begin. A hodge-podge of promises, the plan stresses:

  • One million jobs during his first mandate.
  • Another one million jobs by 2005.
  • A 10 per cent reduction in personal income tax rates.
  • A reduction in the small business tax rate from 12 per cent to eight per cent.
  • A reduction in the corporate tax rate from 28 per cent to 24 per cent.
  • Reduce EI payroll taxes by nearly $5 billion, taking the rate from the current $2.90 per $100 of payroll down to $2.20 effective January 1998.
  • Tax cuts in a second Tory term with another 10 per cent cut in personal income taxes and a flat tax. The new tax system would call for 15 per cent on the first $29 590, and 25 per cent on the rest.

Not surprisingly the entire platform has attracted the critical attention of such luminaries as the Toronto Star’s financial editor who states that "A dollar of tax cuts does not yield a dollar of tax revenues from additional economic growth, as the disastrous U.S. experiment with Reaganomics showed during the 1980s. U.S. government debt soared."

Of course, that moron conveniently forgets that debt soared because Reagan allowed the Congress to spend as much as it could in turn for tax cuts. The cuts themselves helped create 96-months of uninterrupted economic growth and an explosion in revenues.

But this article isn’t a defense of the Reagan record, that having been done so well by others before me, but a piece that hopes to answer the question, Is Jean Charest the Future?

To answer that question, perhaps we should take a closer look at the election platform. Note: this is not an exhaustive look at the platform, but a quick look at things that caught my eye.

The Good Stuff – Stuff that’s not so bad if I could clean it up a bit…

A federal party calling for cuts to income tax is always a positive sign. The Progressive Conservatives are not the first to that particular party, Reform has been promising cuts for years. Like fiscally-conservatives Republicans in the United States, Charest seems to pin his hopes not on the tax cuts, but instead the future flat tax they would introduce in their second term.

The math behind the flat tax is fairly old, so I won’t bore you with how much money you would save under the proposal. What I will say is that the flat tax does begin the journey to the end of personal taxation, even if Charest and his kind don’t think it is.

Giving workers more democratic power by requiring secret ballots in votes on union representation and decisions; Requiring that unions make their audited accounts publicly available. p. 11

As it stands now, if where you work is union controlled, then you are forced to join the union. It only makes sense that secret ballots are required. It makes even more sense to require them to open their books to the public. Let’s follow that money.

We believe that free internal trade can be negotiated cooperatively with the provinces. However, we are prepared to take tough and effective steps to ensure that these barriers are broken down. The damage caused by trade barriers is too serious to allow political manipulation or special interests to delay action. p. 8

As Charest points out, it is often easier to for Canada to business with Cuba or Chile then it is for two provinces to do business. Like the Inter-State Commerce Act in the United States, government regulation and provincial jockeying has created a situation free trade between provinces is difficult. Do you know why there are so many breweries in Canada? Because the federal government says that each company must have a brewery in each province if it wishes to sell in that province. If Charest is serious about reducing barriers to internal trade then he must eliminate all federal barriers immediately.

In total, we have identified $12 billion in cost savings. These spending reductions, phased in over 3 years, will make it possible to support our tax cuts and increased health care funding, while still meeting our deficit elimination and debt repayment targets.

There is no more archaic relic of the old way of government than the Department of Public Works and Government Services. It will be eliminated entirely in the course of our restructuring initiatives. Essential elements will be spun off to ministries which offer similar services, and important central and common services will be coordinated by Treasury Board. Remaining services will be outsourced to the private sector. In this restructuring of the central services of the federal government, we plan to reduce spending by roughly $1.4 billion, much of it on services better provided by the private sector. We also recognize that many programs and services provided by the federal government are duplicated by the provinces and create overlap and waste. Areas like Agriculture and Agri-Food, Transport and Natural Resources are where much of the overlap occurs. In order to streamline the services, we will disentangle the federal government from many of these areas, freeing up wasted tax dollars. The Departments of Agriculture and Agri-Food, Natural Resources, Fisheries and Oceans and Environment will be merged into a Department of Sustainable Development which will oversee many of the functions which the four previous departments controlled. By streamlining these services we will save taxpayers nearly $1.1 billion. By creating a Department of Sustainable Development, we are making a commitment to future generations of Canadians and to the world that we will manage our resources in a responsible manner.

We believe it is time once and for all for Canada to come to grips with the centuries-old questions surrounding our Aboriginal people. We believe the issue is about more than money, it is about dignity, self-reliance and the right to self-government. As Canada’s Aboriginal people become more responsible for their own affairs, their dependency upon the federal government will decline. Over the course of a Charest government much of what the Department of Indian and Northern Affairs does will cease to be required and as a consequence the Department will cease to exist. In direct contrast with the current government, we believe funding in this area should fall at least proportionately with reductions in other areas of public spending. Accordingly, the reforms we propose will see substantial reductions in direct federal funding over the period of our plan. P.17

While we have our differences, Henry David Thoreau can agree on at least one thing, "That government is best when it governs not at all."

Of course, I suspect that Henry David Thoreau and Jean Charest’s idea of streamlining government are rather different.

Charest’s vision of government is not one that sees it simply as a vehicle to safeguard people’s rights by using its monopoly of force in very limited ways, but rather one that is little different from the Liberal Party.

Charest’s election platform is permeated with references to safeguarding what are traditionally Liberal sacred cows, such as health care and education. Charest’s plan calls for increased spending, in contrast to the Liberals who have actually slowed down some spending.

Be that as it may, it is a positive step for Charest to call for the merging of government ministries and operations, one that is long overdue.

Today, the Government of Canada owns in excess of $40 billion in real estate. As might be expected, the government currently manages these assets through various departments and agencies (including CMHC and Public Works and Government Services). The Canada Lands Company was created to dispose of federal real estate assets. Its failure to generate significant sales revenue for the government is directly attributable to the lack of leadership shown by the Minister of Public Works and Government Services and the bureaucracy of the CMHC. As an early part of our restructuring initiative, all remaining federal real estate assets will be transferred to the Canada Lands Company which will report to the Minister of Finance. Our goal will be to sell at least $3 billion worth of surplus real estate over the course of our first term. p. 18

Just $3-billion? Considering the way that the federal government mismanages property my hometown alone, there must be much more than $3-billion that can be sold over five years.

While a little disappointing, it is a positive measure. The government should not be allowed any surplus land. Ever.

Make it the LAW that politicians have to balance the budget; Pass legislation that forces governments to meet their budgets, except in cases of wartime or economic crisis; and Pass legislation to cut the pay of the Prime Minister and Cabinet Ministers if they break the deficit ban. p. 19

This one falls under the "I Wish" category. Imagine if politicians had to actually practice financial restraint?

Of course, Charest throws that away as soon as he allows wartime or economic crisis as a mitigating factor. While wartime is a fairly obvious problem, what exactly is an economic crisis? Is it recessions like the one we experienced in the early 1980s? Or is it worse? By allowing economic crisis as a factor, Charest merely opens the door to some colossal social and economic engineering at a time when we can least afford it.

Finally, if you believe that a pay cut for the Prime Minister or cabinet ministers can ever pass, you are in la-la land.

Guaranteeing that the increased value of sheltered funds will never be taxed while they remain in RRSPs; Immediately increasing the allowable foreign content of RRSPs from the current limit of 20 per cent to 50 per cent and moving to zero restrictions by the year 2001. We will also remove the foreign content rules on other retirement investments so that all retirees will be able to grow their investments as they choose. p. 22

If Charest were brighter, he would dismantle the Canada Pension Plan and let people manage their own retirement strategies. That said, Charest does well by removing ridiculous foreign content restrictions. Watch out for those Mexican stocks!

Prevention

We will strengthen the laws against stalking and harassment (which often lead to serious assaults), allow courts to impose treatment or therapy and supervision of offenders beyond the period of sentencing, support and expand any programs shown to help teach young people to be good citizens and to lower youth crime, give judges more flexibility in using alternative sentencing for first-time, non-violent offenses, and develop rehabilitation programs for young offenders that put the emphasis on basic education and social skills, personal responsibility and community service.

Policing

We will provide more community policing in areas patrolled exclusively by the RCMP, increase the resources dedicated to helping all Canadian police forces share information and work together, and work with the provinces to ensure that police forces benefit directly from the sale of criminal assets seized by the courts.

Victims’ Rights

We will introduce legislation to create a Victims’ Bill of Rights that will give victims of crime more information and more involvement in their cases. It will include mandatory testing for sexually-transmitted diseases on criminals convicted of serious sexual assault and informing their victims of the results.

Sentencing

We will make it easier for multiple murderers and serial pedophiles to be kept behind bars for life, and set substantial minimum sentences for crimes against children. Section 745 of the Criminal Code, the "faint hope" provision that allows those convicted of first degree murder to seek parole, will be abolished. We will enable the courts to impose post release mandatory supervision for certain types of crimes.

Young Offenders

We will lower the age of application of the Young Offenders Act from 12 to 10, give judges more power to impose mandatory treatment or therapy on troubled youths, make it easier to transfer serious violent crime cases involving young offenders to adult courts, and enact a Parental Responsibility Act to make the parents of young offenders financially responsible for the criminal acts of their children. p. 35

This is one of the few areas I don’t mind government intervention, not a surprise since I believe that protecting the rights of citizens is one of the few responsibilities that governments legitimately have.

Criminals must be punished. Period. Honest citizens should never have to worry about the rights of a violent criminal being considered paramount. If you ignore the rights of your fellow Canadians, don’t expect your rights to be considered.

Of course, Charest doesn’t share my thoughts on justice, but it is good to see the Progressive Conservative Party remember one of its core values.

Gun Control

Canada needs gun control legislation that ensures that criminal use of firearms is prevented and punished, one that ensures safe firearm training, usage, storage and transportation. It does not need a law that treats law-abiding gun owners as criminals. We will repeal the Firearms Act (Bill C-68). Mandatory penalties on those convicted of using a firearm in the commission of a crime will be increased. p. 36

Notice to leftists: Citizens have a right to own firearms.

Those who use weapons in the commission of a crime should be punished harshly. Those who own and use them responsibly should be left alone. Keep your PC views in your own home.

The Spooky Stuff – Stuff that Reminds Me of what Charest Really Is…

Requiring banks to publish detailed records on a regional basis, reporting on the amount of deposit capital taken from Canadian communities and the amount of small business loans made in those same communities. This will enable Canadians to compare the performance and commitment of their financial institutions to the creation of loan capital for new and small businesses", p. 11

I have a friend who really hates banks. On many issues he’s a bit of a conservative, but when it comes to banks…get out of his way. Not even he has ever called for what Charest wants.

Deposit capital taken from Canadian communities? Pretty scary to imagine that a private business would be required to jump through the hoops of any crank that wants to know why a dollar more was removed than put back in.

Notice to Mr. Charest: Banks are private businesses. You’ve got enough inane regulations on the industry without adding demagogic ones.

The Canada Pension Plan (CPP) is a fundamental part of the Canadian social safety net, an obligation that government must honour. We also believe that there are sound ways of returning the CPP to financial viability and protecting the investment Canadians have already made in this plan. p. 20

Charest sounds like my mother. We often debate CPP and why it’s so immoral, or at least that’s what I believe. CPP only returns to "financial viability" when my generation is raped with a doubling of CPP contributions as Mr. Paul Martin did recently.

Dump CPP and let people adequately prepare for retirement with programs that actually work. No one ever lost money in the stock market over a twenty-year period and RRSPs offer great yield. CPP offers the opportunity to live in poverty for whatever remains of your life. Wow, what a deal.

And it is immoral to live off the backs of anyone else. Period. Save your feel-goodisms.

Restore the level of the cash portion of federal funding for health care and education to $12.5 billion, raising it from the $11.1 billion planned under the current government; and ensure future funding growth. p. 25

Now this is the Charest I know. This is the one that acts like a conservative, but is really a pink-Tory.

Even the Liberal government realized that spending cuts were necessary.

Initiate a comprehensive review of all government agencies, boards and commissions (ABCs). We will eliminate those that do not accomplish their goals, merge ABCs with similar mandates, reduce the compensation for appointees to these bodies to encourage greater volunteerism, and look for ways to replace many of these bodies with other, less costly forms of oversight. To ensure that our reforms will give us the highest value/lowest cost government services system possible, a Jean Charest government will introduce performance bonuses for public servants to reward results-oriented management; and p. 45

Charest wants more money for public servants? The civil service proves that cuts are a good thing. Here’s performance bonus from Gord: a pink slip.

Within six months of taking office, initiating a review of all government regulations, with the goal of reducing and eliminating red tape; Including in every new regulation a so-called "sunset clause", which sets a time limit for the regulation to be in effect. When the time expires, the regulation must be reviewed to see how well it has worked, whether it is still necessary, and if it should be revoked, amended or reconfirmed; p. 46

Charest makes the mistake of even allowing the possibility for new regulations. What he, and others like him, should realize is that the market will police itself more effectively than government ever can. If Charest wanted to reduce and eliminate red tape, he wouldn’t allow the possibility of more of the same.

The Verdict

In the 1950s and 60s the term Butskellism was used in the United Kingdom, first by The Economist in February 1954 when it referred to Mr. Butskell in one of its pieces. It was a compound of the names of British Conservative politician R. A. Butler and Labour leader Hugh Gaitskell. It was used imply the great degree of similarity between the policies of the two parties.

I should like to coin a new term for Canadians to use. Henceforth, in the pages of this journal, and whoever else wishes to use it, Mr. Charestien will refer to the degree of similarity between Jean Charest and Liberal leader Jean Chretien.

It is fitting that this new term be used in light of the election platform released by the Progressive Conservatives. It is at once a call for the return to a small "c" conservatism, one that attempts appeal to the left with its social caring, and a move to right with it’s fiscally conservative tax cuts and partial de-regulation.

While Sinatra once sang for "all or nothing at all", Charestien provides both at the same time.

What I mean by that is that Charestien wants his cake and eat it too, something impossible both in philosophy and real life. Charestien expects to unleash an economy with tax cuts and what would turn out to be only a little de-regulation while riding social programs on its back.

It is a sorry thing to see a Liberal government that often times sounds more conservative than the Progressive Conservatives, but with Charestien, that’s what you have.

Is Jean Charest the Future? Hardly.




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