Who Will Lead Canada's Economic Recovery?

Written by David Frum on Saturday March 26, 2011

Canada faces one question: Who should be trusted to manage the economic recovery? Those who want government to spend more or those who want government to tax less?

Every Canadian election is built upon a question. Should the sponsorship scandal be punished? (2006) Shall Canada have free trade with the Americans? (1988) Bilingualism across Canada, yes or no? (1968)

With an election expected any instant, here is the question for 2011: Who should be trusted to manage the economic recovery -the people who want government to spend more or the people who want government to tax less?

Up til now, the Harper government's mission has been the management of economic hardship. Elected in February 2006, the government had to contend with the meltdown of the US subprime mortgage market in the summer of 2007, the global financial crisis of October 2008 and then the severe recession that followed the crisis.

Canada suffered less from the recession than any other major industrial economy. Yet even Canada had to contend with rising unemployment and slower growth. As always happens in recessions, revenues to the federal government dipped, and spending rose.

Prime Minister Stephen Harper also inherited a major military commitment in Afghanistan: Canada's costliest war since Korea.

Now, the Canadian commitment to Afghanistan is coming to an end. The economy is recovering. Revenues will rise, spending can decline. Or not.

The "or not" is key. The question Canadians must now decide: What to do with the extra money the government will soon have available?

Mr. Harper has made clear his preferences: Balance the budget, restrain further spending growth, hold the line on taxes while defending the tax relief already in place on GST and corporate taxes.

The opposition parties have signaled their preferences, too: Higher taxes (the Liberals would cancel corporate income tax relief); more spending (Liberals want more subsidies to favored energy industries, higher pensions, and extra homecare spending); and higher tolerance for deficits (the Liberals promise to "find" savings but only "in partnership with the public service.")

So those are the choices, and the next four years will be the time in which the choices must be made.

It's especially important that the choices be made by a majority government.

Minority governments are vulnerable to blackmail. The Harper governments in particular have been vulnerable to blackmail by the NDP and the Bloc Quebecois. Every Canadian has paid the price of that blackmail in the form of benefits extracted by the NDP and the BQ to favored constituencies.

As the economy recovers, as revenues flow faster to government, the demands from NDP and BQ constituencies will become more ravenous.

It's helpful to think of the NDP and the BQ not as political parties, but as publicly funded lobbying firms.

Political parties exist to compete via elections for the right to govern.

The NDP and the BQ will never govern. What the NDP and the BQ seek at election time is to gain more clout to extract benefits from the parties that do govern. Unfortunately, the NDP and BQ have succeeded all too well these past five years -to the advantage of their narrow constituencies, but at the cost of all Canadians.

It's sometimes said that minority governments are "more responsive." Nice phrase, but ask: "Responsive to whom?" And the answer is: "Responsive to small, fringe parties with narrow, particular agendas."

Canada needs a program to transition back to full employment, balanced budgets and an economy led by private-sector investment, not government stimulus.

The Conservatives are committed. The more secure their majority, the more effective that commitment will be. The Liberals are not so sure. Under Michael Ignatieff, the Liberals want some of everything.

The BQ and the NDP actively oppose the measures Canada needs to sustain the financial and economic stability that has made Canada the envy of the developed world through these hard years of recession.

The only thing more dangerous than a Liberal with a surplus to spend is a Liberal with a New Democratic or BQ colleague to help spend it.

In the coming good times, Canada more urgently than ever needs a prudent, careful, responsible Conservative government with a solid majority behind it for restrained spending, balanced budgets and lower taxes.

Originally published in the National Post.