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So much for spending restraint

By John Williamson
web posted July 21, 2008

The lazy, hazy days of summer are here and Conservative MPs are crisscrossing the country and showering it with money. According to news stories, the federal government has announced some $3-billion in spending priorities since Parliament recessed for the summer less than a month ago. That is roughly $100-million a day or more than $4-million every hour. Weren't the Conservatives elected to root out waste in government and spend tax dollars judiciously?

Conservative partisans will insist these funding announcements were made adhering to all the proper rules and guidelines. Of course, these would be the very same oversight measures they loudly protested in opposition when the then-governing Liberals of Jean Chrétien and Paul Martin spent wildly, hoping to buy votes. Another favourite Conservative talking point is Canadians are getting more value for their tax dollars because Ottawa is better managed today. Taxpayers therefore shouldn't fret over a few billion dollars in spending. But there is little evidence of this improved management. In fact, it is no contest between the Harper government's spending and that of Mr. Chrétien's government. The Grits exercised greater fiscal discipline.

Perhaps this judgment is unfair since Mr. Chrétien governed with a House of Commons majority and Stephen Harper does not. So how does the Prime Minister match up with Mr. Martin, another minority leader? Mr. Martin's fiscal recklessness grew the size of government by 14% over two years. This certainly qualifies him as a big spending Liberal. The Conservatives have controlled the government purse strings since early 2006. After their first two years, Ottawa had grown another 14.8%. This is higher than Mr. Martin's appalling record, making Mr. Harper a bigger spending Conservative.

Many Canadians were encouraged by the Conservative's apparent new direction shown in their third budget that limited spending growth to 3.4% this fiscal year. So much for that. It now appears bribing taxpayers with their own money remains a higher calling for them.

Of the $245-billion Ottawa collects annually in taxes an astounding $26-billion is allocated to grants, contributions and subsidy programs. According to the finance department, the government's total grant/subsidy budget accounts for just over 11 cents of each tax dollar spent. Even if government MPs argue this level of spending is necessary, it is not credible to assert politics does not influence who gets the cash. Canwest News Service discovered many of the recent announcements were targeted to regions where the Conservatives hope to pick up seats to gain a majority. Meanwhile, little money flows to ridings that loyally vote Tory or are reliable Liberal seats. For example, Ottawa confirmed that Quebec-based Bombardier will receive $350-million to build a plane with no confirmed buyers. (According to the Wall Street Journal, air carrier Lufthansa's letter of intent to purchase 60 of the small planes is nonbinding.) Nova Scotia, the lone Maritime battleground province, will receive an additional $867-million in energy royalties. Meanwhile, the Calgary Stampede was handed $432,300 to help Alberta visitors celebrate Quebec City's 400th anniversary.

Fuelling these expenditures is Ottawa's surplus, which comes from the taxes paid by Canadians. Some might believe the high taxes that generate budget surpluses are acceptable so long as lawmakers use those dollars to reduce debt. Yet, Canadians are more likely to witness horses flying than a government capable of exercising restraint while sitting atop a mountain of excess tax revenue. As a surplus increases during a fiscal year so do expenditures because politicians cannot resist spending irresponsibility in an attempt to win votes. Canadians do not yet know the size of this year's surplus, but it is a safe bet that tax receipts are running ahead of the budget's projections.

Unhappily, there is nowhere for voters to turn for reform. Opposition Liberals might decry today's spending levels but these protests cannot be given serious weight. The Liberals in government behave the same.

This summer's spending spree is another reason why taxes need to be cut. It is more evidence governments don't tax to collect the money it needs, instead politicians always find a way to spend revenue that is collected. Cut off the money and government officials will find it necessary to prioritize spending and make decisions about how best to use scarce tax dollars. This would be a laudable project for a government committed to taxpayers. ESR

 John Williamson is federal director of the Canadian Taxpayers Federation.


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