Say what you like about the Tories: they don’t do things by halves. When they spend, they spend. When they go into debt, they do it $100 billion at a time. And when they decide to finish off what remains of conservatism in Canada—as a movement, as a philosophy—they go out with a bang.
We can safely say that the strategy of “incrementalism,” at least, is a thing of the past. With this week’s historic budget, the Conservatives’ already headlong retreat from principle has become a rout—a great final leap into the void. Understand: there will be no going back from this, for the party or for the country. Whatever the budget’s soothing talk of “temporary” this and “extraordinary” that, and for all its well-mannered charts showing spending obediently returning to its pen, deficits meekly subsiding, multi-billion-dollar “investments” repaid in full, we are in fact headed somewhere we have never been before. We are on course toward a massive and permanent increase in the size and scope of government: record spending, sky-high borrowing, and—ultimately, inevitably—higher taxes. And all this before the first of the baby boomers have had a chance to retire.
Whether it will prove the country’s undoing, and not just conservatives’, will depend upon events. In its simplest terms, the budget is a “stimulus package” that spills money every which way: $12 billion over two years for infrastructure; almost $8 billion meant to kick-start housing and construction; billions more in forestry, auto and manufacturing aid. The much feared broad-based income tax cuts amounted to lifting the income threshold for the middle and lower brackets. If everything the budget foretells comes to pass, we might not come out of it too badly. A $34-billion deficit next year, after all, is barely two per cent of GDP, and even four years and $85 billion worth of deficits, if the budget’s projections hold, would barely budge our debt-to-GDP ratio. But if they do not—if the economy fails to recover on cue; if inflation spikes when it does, and interest rates soon after; if all those billions in new spending, once in place, do not prove so easy to trim back; if the assets the government acquires with all of its borrowed money do not turn out to be worth what they cost—then we will head into the approaching demographic storm loaded down to the gunwales. It’s a monumental, even reckless gamble.
And whatever its likely consequences for the debt, its effect has already been to ratchet up expectations, to tilt the political landscape toward greater and greater interventionism, to change the very language in which we discuss these things. Again, this is unlikely to be easily reversed. Among the consequences of the end of conservatism will be to make it difficult, if not impossible, to muster a constituency even for restraining the growth of government, let alone rolling it back. When the “right” is defined as $34-billion deficits, record spending, and bailouts for everything in sight—when every other party is to the left of that—people lose the ability to think in any other way. They forget there was ever a contrary view.
Conservatives, then, should think hard about whether they can afford to support this government any longer. Its sole contribution at this point is to limit debate, to rule out of bounds any serious discussion of alternatives, since “even” a Conservative government now believes in an all-pervasive, ever-expanding state. The Conservative experiment—the whole enterprise of “uniting the right” in which conservatives have invested much of the past decade—has reached a dead end. They have not succeeded in replacing the Liberals. They have only succeeded in becoming them. Perhaps, some conservatives will conclude, it would be better if this government were defeated—if the party were to lose power, that it might find itself.
Start with matters that require no prediction, with the fiscal facts on the ground. The coming fiscal year, according to the budget’s own numbers, will see the largest annual increase in spending (with one arguable exception) since at least the Second World War. The $22 billion the Harper government will pile on top of program spending this year, adjusted for inflation and population growth, amounts to an increase of more than 10.1 per cent. That’s a larger rise, in real dollars per citizen, than anything the Trudeau governments ever mustered, even in the heady days of the early 1970s, when they were putting in place the institutions of the modern welfare state. (Its only possible rival is 2005, when spending increased by a similar amount—though its abrupt decline the following year suggests this was as much an accounting achievement as anything else.) For the record, it’s more even than in the infamous first budget of Bob Rae’s Ontario government.
No government in our history has spent this much, this fast. Before this budget, no government had spent more than about $6,000 per citizen, in 2008 dollars—no, not even in the depths of the 1982 recession. This budget blasts through that ceiling, all the way to $6,500, and stays there: four years from now, after the recession is presumably a memory, the government will still be spending nearly $6,400 per capita. At the start of this decade, it was spending just $4,800. Somehow the federal government is now finding ways to spend a third more inflation-adjusted dollars on each of its citizens.
Two points are worth noting about this latest explosion in what was already a supernova of spending. One is the sheer aimlessness of it. Supposedly the government’s dilemma was how to balance short-term “stimulus” with the need to improve the economy’s productive capacity in the long run—a contradiction to begin with, since the kind of spending that can be shovelled out the door in time to claim credit for the recovery is unlikely to be subject to especially searching scrutiny, such as would ensure these funds were put to their highest and best use. But the laundry list of spending in this budget shows scant evidence of any thinking at all.
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