Wednesday, September 09, 2020

Erin O'Toole and the Big Fat Tory Lie

At least Canada's conservatives are consistent. When they're out of power they all promise to get Canada's financial house in order if and when they again hold the reins of power.

Today it's Erin O'Toole's turn to spread the lie.  An O'Toole government, he says, would eliminate Canada's federal deficit within 10 years.

So how would the giant O'Toole balance the books? Two ideas - massive increases in immigration and doubling down on Canada's fossil energy resources.
Mr. O’Toole’s platform called for ending the federal carbon tax and reversing two Liberal bills: C-48, banning oil tankers off the northern B.C. coast, and C-69, which changed the review process for large projects. The two bills were strongly opposed by Canada’s energy sector.

Last month, Mr. O’Toole posted a photo of himself jogging with his son while wearing a black T-shirt that expressed his love for Canadian oil and gas. Alberta Premier Jason Kenney often wears shirts with the same message.
Ten years to balance the books? How about three years, huh?
“What I think we need to do is get [to] balance over a decade or so,” Mr. O’Toole said in reference to the deficit. “We’re going to come up with a plan that shows there is no bogeyman with the Conservatives, that we’re going to try and get back to a balanced budget in two or three years or something like that.

“We know this [pandemic] has been a shock, but we also know that economic growth is as important as controlling spending. And our caucus, we’re going to talk about that."  
The opposition leader sounds about as delusional as Chuckles, the guy he just replaced.

When it comes to fiscal prudence the Tories have a lengthy and hard-earned record and that record is lousy.

This brings to mind a speech given by Tory hack, Joe Oliver, in 2015 where Oliver couldn't wait to take shots at the other Trudeau, Pierre. iPolitics neatly reduced Oliver, and conservatives, to smoking ashes.
On April 8, Finance Minister Joe Oliver stood up before the Economic Club in Toronto and delivered what can only be described as one of the greatest “fantasy economics” speeches in decades. 
It was a message from a parallel universe — one in which the Harper government delivered ‘sound economic management’ through the recession (it didn’t), the economy recovered its pre-recession growth pattern (it hasn’t) and Ottawa is delivering tax relief for the average Canadian household (it isn’t). Stranger still, it’s a parallel universe where Pierre Trudeau is still around, haunting us.
Oliver conveniently overlooked the economic upheaval of the Trudeau era including recessions and near runaway inflation that resulted in the imposition of wage and price controls. If Pierre Trudeau is to be faulted with recklessness it was in his 'cooperative federalism' initiative whereby many provincial programme costs would be shared equally between the feds and the provinces. The prospect of 50 cent dollars sent many premiers on spending binges like drunken sailors on port call.
...In fact, the fiscal record of Trudeau Senior actually looks pretty good when compared to that of Brian Mulroney. Under Trudeau, the average annual deficit was 2.9 per cent of GDP between 1969-70 and 1979-80; under Mulroney the average annual deficit was 6.7 per cent of GDP between 1983-84 and 1994-95. 
Between 1983-84 and 1994-95, program spending under Mulroney fell from 18.4 per cent of GDP to 15.7 per cent, while the revenue share actually rose from 15.6 per cent to 16.6 per cent. This weak performance, along with rising interest rates, resulted in the debt burden dramatically increasing from 37.5 per cent in 1983-84 to 66.6 per cent in 1994-95.
...In 1984, the Conservative government actually published a document — ‘Agenda for Economic Renewal’ — which stated that, without major action to cut program spending and/or raise taxes, the federal debt burden would double by the end of the decade. Which is exactly what happened.
So what about the Liberals? Oliver is hardly going to give any credit to Jean Chretien and Paul Martin for getting the federal government out of the worst fiscal crisis it had ever faced. 
According to Oliver, the Liberals balanced the budget “by hiking taxes, cutting vital programs and slashing billions in transfer payments.”
True enough but when the Liberals were returned to government, the federal government was teetering on insolvency - thanks to Mulroney.
But with debt as a percentage of GDP at a post-Second World War high and with ever-increasing interest rates due to a lack of confidence in financial markets, everything had to be put on the table. Once the federal government achieved a balanced budget, that interest rate risk premium quickly disappeared and all levels of government benefited from lower borrowing costs. The Liberals then introduced a 10-year plan which put the major transfers to the provinces on a sustainable and growing track. 
In 1994-95, the federal deficit was 4.7 per cent of GDP. By 1997-98 the deficit had been eliminated and the federal government ran surpluses for the next nine years. The federal debt was actually reduced by $90 billion; the debt burden fell from 66.6 per cent in 1994-95 to 31.4 per cent in 2006-07.
Enter the fiscal genius, Stephen Harper.
How does this compare to the Harper government’s fiscal record? In 2006-07, the Conservatives inherited a surplus of $13.8 billion — which they turned into a deficit of $5.8 billion within two years. 
And they were in deficit each and every year. In 2009-10, the deficit reached its peak of 3.5 per cent of GDP. They are desperate now to show a surplus in 2015-16 — one surplus in nine years. Since Harper was elected, the federal debt increased by over $150 billion, wiping out the reduction in federal debt achieved under Chretien and Martin. Not much to boast about there.
Jobs, jobs, jobs.
At the end of 2014, the unemployment rate was higher than at the end of 2008. The labour force participation rate was lower than in 2008. The employment rate (the percentage of the adult population employed) was lower than at the end of 2008. The youth unemployment rate was higher than at the end of 2008. The share of total employment made up of full-time jobs was less than in 2008 — and the quality of jobs had sunk to its lowest level in a quarter of a century.
Numbers don’t lie, but people do. It’s one thing to spin your failures as successes — it’s another thing entirely to try to present a decade of fiscal failure as one long triumph. The journalists going into the budget lockup will have their work cut out for them, trying to separate the Harper government’s fiscal fantasies from the true record of the past ten years.
The Tories are like their Republican cousins. They're like Trump. They endlessly proclaim their fiscal prudence and economic prowess but that's not what they deliver once in office.  They're lousy managers, devoid of vision and discipline. There's no reason, no reason whatsoever to imagine Erin O'Toole would be one bit better than Mulroney or Harper. No reason whatsoever.


Anonymous said...

Every word true.

If you know it, I know it, and a large number of interested political junkies know it, then how come your average citizen doesn't? Because they don't, and so every new Con leader repeats the BS about their being fiscally responsible, and not a murmur is raised by any media or group of citizens about it being full-on BS.

Kenney ran on it in Alberta, Ford ran on it in Ontario, the Tories in Blighty used it to cudgel the UK into "austerity" when Cameron became PM in 2010 and doubled down on neoliberalism. When Cons get into power, they hand out money to the rich and then, "feeling" the fiscal cold draft of their giveaways of public funds, they embark on austerity and social program cutbacks to "balance" the books, finding other ways to spend new public money on their friends and t justify raising the deficit.

It happens time after time. Nobody much except the small politically literate non-Con cadre raises an eyebrow. They all possess defective memories, if they have memories at all. I'm beginning to think people in general are so incredibly and monumentally stupid, they deserve what they get. It's like trying to convince internet doubters or Trump followers with facts versus lies -- you might as well talk to a blank wall. And so the Cons thrive with yet another repeat of the same tired story. No wonder carny barkers, snake-oil salesmen and sociopaths thrive generation after generation, because there's one born every minute.


zoombats said...

We should also take note of this quote on todays C.B.C. News online

"Through respect, professionalism and the pursuit of excellence, we will show all Canadians that we are a government in waiting," he said (O'Toole). "Together we will form an engaged, ethical and compassionate Conservative government."

Give me a break!

thwap said...

At the end of Martin's career as finance minister, Linda McQuaig wrote that economic growth alone would have brought us to the same place fiscally, albeit 2-3 years later.

Make of that what you will.

But when I think of how the bulk of the debt was caused by the Bank of Canada engineering recessions through high interest rates (in order to fight inflation); and how our politicians deliberately reduced their revenues year after year with tax cuts for corporations and the wealthy (to create jobs that never materialized), and found billions year after year for wars and fossil fuels subsidies (for foreign corporations that were already enjoying some of the lowest royalty fees on Earth), ... well, it makes me cross.

The Disaffected Lib said...

BM, it's been really difficult for me, at this stage of my life, to accept how easily duped the public can be and how often. Tories swallow Tory lies. Liberals are almost - not quite but almost - as willing to look the other way. Again and again, a minority of us elect these two parties to government on the strength of shameless, outright lies packaged as a campaign platform leaving the majority, three out of five, to just watch this farce unfold.

We often criticize young people for political apathy but, given what's offered them, why would they be drawn to politics? Isn't that the story of governance in the 21st century - government that refuses to look to the horizon to see what awaits today's young people when we're safely gone having cheated them out of their future?

The Disaffected Lib said...

I think that's where "SS/DD" comes from, doesn't it Zoombats? My old bones are getting too weary for this crap.

The Disaffected Lib said...

Thwap - don't get "cross." My late grandmother often said she was cross and it didn't do her a damned bit of good.

Linda McQuaig writes many things, some more persuasive than others. I think I'll pass on that one.

rumleyfips said...

Curious, I looked ay the Old Fool's plan for self-sufficiency (it didn't take long; there is no real plan ) . O'Tool says his plan is just like Trump's ' America first '. O boy.

The Disaffected Lib said...

Trump's "America first" policy was based on exploiting the enormity of the US economy to bring other nations to their knees. He acted with perceived impunity.

Canada would have a tough time replicating that. Then again it's O'Toole, a guy who thinks Wexit is still a thing. Not ready for prime time.

Northern PoV said...

Good post and many good comments ...

"They all possess defective memories"

I call it wilful ignorance ... in this case, supported by "branding" and media acquiescence. (Harper's frankenstein monster got the blue label, CDNs alternate from the red brand)


And with this new "10 years" schtick, CONs have essentially abandoned the deficit hawk position. Everyone loves Quantitative Easing now. But they'll still get media coverage as the 'fiscally responsible; alternative.

The Disaffected Lib said...

I just don't see much substance there, NPoV. O'Toole seems to be reading from a script he doesn't understand.

Purple library guy said...

Conservatives always talk fiscal responsibility, but what they do in office is cut revenue, partly to give their buddies goodies, but partly with the deliberate intent of creating deficits so they will have a better excuse to cut social programs. They hate social programs not because they cost money, but because they make low-wage workers less desperate and harder to bully.

That said, on that one quote I very reluctantly feel I must be fair to O'Toole. When he said "We’re going to come up with a plan that shows there is no bogeyman with the Conservatives, that we’re going to try and get back to a balanced budget in two or three years or something like that." I think it's just a sort of spoken-word bad grammar thing--his intent was to say that the Conservatives would not be bogeymen who would try to balance the budget in two or three years--that he acknowledged that would be a stupid thing to try to do and he wanted people not to be scared that he would try such a thing. That goes with his further point about economic growth. It's actually pretty sane-sounding stuff, for a Conservative.

And while he's lying in a way (if elected, he undoubtedly would break out the austerity), he's also telling the truth because of course austerity pretty much never causes budgets to balance so no, there's no threat a Conservative government would balance the budget. It's just that the things the deficit went to funding would be completely worthless and counterproductive, as opposed to under the Liberals where there are some decent things to go with all the worthless counterproductive ones [cough]pipelines[/cough].

Anonymous said...

Just another Conservative with a hole in its head.