The Globe and Mail
reported last week that British Liberal Democrats, Britain's
third-place centrist party, wants to solve the financial mess of
their government by importing the "policies of Jean Chretien's
Liberals in 1993—concepts that are completely unknown to British
voters."
"I believe Britain
must learn from the approach taken by the Liberal government in
Canada in the 1990s," Liberal Democrats Party Leader Nick Clegg
declared in London.
This is very
flattering, but I think the British Liberal Democrats don't have all
the details.
It is true that our
Canadian Liberals inherited a huge deficit, they say $40-billion,
from the previous Conservative government of Brian Mulroney and that
then minister of finance Paul Martin eliminated it. It is also true
that he had more than 10 years of federal surpluses, but the way he
accomplished his goal must be taken into consideration. Some of
these details probably didn't reach the other side of the ocean.
First, Martin was
the only minister of finance in Canada to cut funding for medicare
and education, downloading a huge part of the debt onto the
provincial governments. These provincial governments are still
today, after a decade, having difficulty digesting.
Second, the Liberal
government was able to rake in billions of dollars because of
financial reforms brought forward by the Conservative government of
Brian Mulroney and it fought against them when in opposition. The
GST was the major source of income for the government, and it was at
a time when the economy was booming around the world.
Third, in a healthy
economic environment, Canada could enjoy the outcome of the Free
Trade Agreement with our major partner, the United States. In fact,
the Liberals, after demonizing the Conservatives for two elections
specifically on these two issues, free trade and GST, ran their own
government by taking advantage of these two initiatives. In fact,
the Liberals became the most vocal promoter of free trade
initiatives around the world in the '90s and, still now, they are
against any proposal that take into consideration the reduction of
the GST.
Fourth, Martin was
using in his calculations of the surpluses, billions of dollars
coming directly from the pockets of Canadian workers through the
payments of the Employment Insurance premium. At the time they
reached a surplus of almost $40-billion piling up in the CRF
(Consolidate Revenue Fund); this was a practice that was openly
questioned in its constitutional legality even by Auditor General
Sheila Fraser in one of her reports.
The British Liberal
Democratic leader, according to The Globe and Mail last week, has
"pledged to follow the program-review process the Liberals used to
slash the size of Canada's public service during the 1990s,
including the nationwide public consultations." I don't remember the
consultations Martin had with the premiers about cutting the
transfer payments, but they should be very careful about the program
review process adopted by the Liberals.
I'm happy that
someone in Britain is looking at Canada and trying to import some of
our political and economic initiatives, but I hope they are aware of
the whole picture, before seeing if the same conditions can be
recreated in England. I would also hope that they will explain to
their local governments that they should be ready for a rough ride
in the years to come.
Furthermore, they
have to make sure there is no opposition in sight to challenge them.
Otherwise, they would be kicked out at the first opportunity. In
fact, the federal Liberals barely hung on to a majority in 1997
despite having no real opposition and the economy being in its
glory.
If one
or two of those conditions cannot be recreated, the implementation of
the Canadian Liberal policy in England would be like using the
Ottawa soccer team to defeat Manchester United.
