he other day I saw a posting on Facebook showing a graph indicating deficit spending over the last 20 years implying the federal Conservative government (and Conservatives in general) were the worst economic managers. The clear implication was that huge deficit of 2009-10 was all Stephen Harper’s fault.
That’s something I can’t let slide, because as I have written in the past, the Liberals and NDP called mightily for deficit spending to come up with a whopping two per cent GDP expenditure on stimulus programs, and then would later blame the Conservatives for doing just that.
These were in the days of a minority government, during which time they could have caused the government to fall over this. So against their initial plans of austerity, the Conservatives came out and announced Canada’s Economic Action Plan.
Now after several years, the deficit has finally been shrunk to almost a rounding error. It was expected to disappear entirely this year (conveniently before the legislated October election date). But the precipitous drop in oil prices has thrown a monkey wrench in the works and now the federal budget has been delayed two months to contend with it. I don’t see how they can possibly eliminate it this year as billions are being wiped off capital plans and corporate ledgers in the oil patch, one of the biggest engines in the economy.
But, as you know, this deficit is all the Conservative’s fault. Except that it wasn’t. I knew this forgetfulness would happen. I wrote about it Nov. 28, 2008, stating, “The excuse to overthrow the government is the ‘lack of an economic stimulus package.’ At the moment I type this, there’s talk of a $30 billion package.
“There’s just one problem – where is that all money coming from? Thirty billion doesn’t just magically appear from under the mattress, at least in Canada.
“There can be only one answer – deficit. That means more debt.”
Then later in April, 2011, after the stimulus package came about, and the associated deficit ballooned, I wrote, “First up is the deficit. The Liberals have been slagging the Conservatives for running huge deficits over the past two years. That's rich.
“When the world was falling apart economically, the Conservatives had not planned on spending their way out of the recession. But the G20 globally and the opposition nationally stomped their feet and said everyone must spend two per cent of GDP as stimulus to get the economy moving again. There were threats of the government falling if they didn't go crazy with the cheque book.”
My friend who posted the graph didn’t believe me. I told her it was all in Hansard, the official transcripts of parliamentary debates. On April 24, 2009, Hansard recorded, “Hon. Jack Layton (Toronto—Danforth, NDP): Mr. Speaker, rather than take the economic crisis seriously, during the prime minister's visit to London, he had his picture taken with a soccer player and took tea with the Queen. But back here, he is beating the Mulroney record for poor economic performance. Nevertheless, as a percentage of the GDP, Canada is investing less to stimulate the economy than China, Germany, Australia, South Korea, South Africa, Russia or the United States. Why?”
And a couple days earlier, on April 22, “Mr. Michael Ignatieff (Leader of the Opposition, Lib.): Mr. Speaker, the Bank of Canada made it very clear that the economic crisis has worsened since January. Does the Prime Minister understand that the assumptions of his January budget no longer hold? Will he revise his own projections in respect of revenue and deficits? Will he bring forward additional measures to help the vulnerable and working Canadians?”
Let’s not forget, in the fall of 2008 and early 2009, they were referring to the recession as the worst since the fall of 1929. That’s not hyperbole, either. We are still as a nation, and some of us, individually, digging out from that massive debacle.
The Conservative government did go into massive deficits, but it did so at the behest of the opposition parties. The Conservatives have to own those deficits, but those who called for massive stimulus spending need to own up to their role in it too.
— Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected].
