The Liberals could have charted the path to freedom...

web posted October 1997

For years the Liberal Party has claimed the odious reputation of being chiefly responsible for overspending and the massive debt that Canada has burdened itself with for nearly three decades.

On September 23 Canada's governing party had a chance to reverse that image, or at least begin to change it for the better. It had the opportunity to announce that in a few years time, it would begin freeing the citizens of its country from an onerous debt.

For the first time in years the Throne Budget became more than a useless pomp and circumstance from another era, but actually provided a real indication of when Canadians would begin charting the course towards fiscal responsibility. Unfortunately for both Canadians and future generations of Canadians, what we got to see was the same old Liberal Party. Tax and spend, spend and tax.

Rather than begin paying off a debt which has spiraled out of control since the first deficit in 1968, the federal government announced that it would indeed balance the budget, but it refused to say when work on the debt and when any future tax breaks would come. With good reason.

The government announced in the throne speech that the deficit - which stood at $42-billion four years ago - will be wiped out sometime in the next 18 months, and that Finance Minister Paul Martin may soon give a more specific date for its elimination.

"...assuming current trends remain, the fiscal dividend will be a few billion dollars at first, hitting $5-billion in 2001 and then about $15-billion in 2005. then the numbers get truly staggering. ...even allowing for 3 per cent growth in program spending each year, Ottawa could be in a position in 15 years to reduce personal income taxes by 75 per cent or hike program spending 50 per cent."
-- Sunday Star, September 14, 1997

Instead of further progress, the Prime Minister started a spending spree. Days after Prime Minister Jean Chr�tien's Throne Speech, he revealed his $1-billion plan for a personal political legacy for the new millennium - a massive scholarship fund for students from poor families. The fund will be "another dividend" of the elimination of the federal deficit, and details will be provided after Finance Minister Paul Martin provides an update on Canada's fiscal situation in mid-October.

Chr�tien made his announcement in the Commons during his statement on the throne speech, just moments after vowing that "we will never, never again allow the finances of the country to get out of control."
Chr�tien made it clear he sees the fund as his personal political legacy. Bully for him.

The government is already committed, under a deal with the provinces, to $850-million in federal tax credits for poor families. It reiterated that it will eventually double that amount, but made no promises beyond working with the provinces to establish a timetable.
Similarly, a "children's agenda" promised in the Liberal platform for the June 2 election will be put together in collaboration with the provinces.


COMPAS poll regarding attitudes to tax cuts
September 27, 1997

  • 51 per cent of respondents want a tax cut
  • 28 per cent want a personal tax cut
  • 20 per cent believe that both personal and business taxes should be cut

Among the commitments are establishment of federal "centres of excellence" to conduct research on child development and an expansion of the current aboriginal head start program for kids on native reserves.

No price tags were attached to either program in the throne speech. But the campaign platform called for $20-million in spending on the research centres and $25-million on the head start initiative.
On the medicare front, the government will bring in legislation entrenching a campaign promise to stabilize health funding for the provinces at $12.5-billion a year. That means, in effect, forgoing a planned $6-billion in cuts that would have taken effect over the next few years.

And if all that wasn't enough, the government also announced a massive increase in Canada Pension Plan contributions to "save" the program, projected to go bankrupt in about twenty years without a massive infusion of funds. Children will be paying for adults for decades.

So within hours of promising a continued responsible approach, the federal government hammered Canadians with billions of dollars in new spending.

Instead of forging a path to a Canada with a smaller government and more money in the pockets of everyone, the Liberal government has once again thrown itself on the path of collectivism. Seemingly emboldened by the election of leftists in France and England this year, the Liberal government has once again occupied its traditional position of left of centre in the Canadian political scene.

The only losers are the Canadians who voted Liberal in June to reward them for their conservative fiscal approach, and who expected the work to continue.

But some of us weren't fooled by the vague talk of tax cuts. Some of us knew that the purse strings would come back out.

Once again, Canadians have received the government they deserved. Hopefully it won't cost them too dearly.

Thanks for reading,
Gord Gekko

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