The incoming federal government has the strongest mandate since the election of Brian Mulroney 31 years ago; as Jean Chrétien won elections that were contested by five parties that would have been cliff-hangers if the opposition had been as consolidated as it became after he was ousted by his own party; and Stephen Harper had a (thin) majority for only one term. And although the Liberals were not overly specific in their program, and as usual, a good deal of the election platform was a melange of hopefulness and unrigorous arithmetic, this government may be the first since the Mulroney era to have a comprehensive reform aptitude.
Brian Mulroney facilitated the fiscal prudence that followed him by reducing income taxes and instituting the Goods and Services Tax, which respects what people have earned and by taxing what they spend, creates a more voluntary system of revenue collection and encourages savings and investment. He put through Free Trade with the United States, which temporarily profoundly integrated Canada in the U.S. economy, but demonstrated that Canada could compete, and has been unambiguously successful. As China and India, countries with over 35 per cent of the world’s population, have pursued economic growth, the percentage of Canadian GDP represented by trade with the United States has appreciably declined. Mulroney tried hard to complete constitutional reform, secure Quebec’s adherence to it, and federalize the Senate and the federal courts. He was sand-bagged by Robert Bourassa’s imposition of the Notwithstanding Clause to circumvent the Supreme Court’s protection of bilingual signage in Quebec, but he did his best on an ambitious agenda. The Chrétien Liberals promised to repeal the GST and Free Trade but thought better of it; they could do whatever or as little as they wanted after Mulroney’s Progressive Conservatives disintegrated into the Reform Party, the Bloc Québécois, and the continuing Progressive Conservatives.
Apart from balancing the budget by retaining the GST and shovelling concurrent jurisdictions off on the provinces without vacating shared revenue areas to help pay for them, and passing the Clarity Act to require serious questions and majorities in provincial referenda on secession (after almost managing to lose the 1995 Quebec referendum), Chrétien cruised through his years with a minimalist program. His favourite hockey position is that of goaltender (as he doesn’t have to move around too much), and he allowed that that was his preferred method of governing also. Harper was fixated on shrinking the fiscal role of the federal government and that is what he did, chiefly by reducing what became the Harmonized Sales Tax by two points. Apart from Jason Kenney’s admirable clean-up of immigration policy, and Harper’s resurrection of the severe 7th century B.C. Athenian legislator Draco with antediluvian criminal statutes, that was the chief inspiration of the Harper government: an important but limited contribution. He was true to his conservative faith, but went to ingenious lengths to avoid consideration of constitutional reform, abortion, a defence budget that would make his purposeful foreign policy credible, or anything imaginative or even likely to broaden the basis of his support. His re-election tactic was to try to divide the opposition evenly between the Liberals and NDP and his answer to Senate reform was to leave vacancies unfilled: reform by asphyxiating the institution through superannuation.
Although Canada is one of the world’s 10 or so most important countries, the size of its population is unlikely to allow it to become one of the several most powerful countries in the world, and the best method for it to be influential, and for Canada to achieve the recognition Canadians aspire to for the country, is by becoming a successful laboratory for innovative legislation and social policy.
In this national interest, I modestly offer the incoming regime some suggestions. In fiscal and tax policy, it should reduce personal and corporate income taxes further, especially on modest incomes, and raise the HST on non-essential spending, which could be largely defined as food and other normal domestic products bought in stores rather than at restaurants and luxury goods dealers, clothing of average cost, up-to average residential expenses, and energy required for comfort at home and in gaining an income.
Canada is a naturally rich country that has been fiscally responsible for decades under both major parties and should lead the world back to hard and reliable currencies. The gold standard would be unwisely confining, but no currencies today have any value other than relatively to each other. Canada would be quickly followed if it adopted a mixed gold-oil-consumer basket yardstick of value and held to it.
As I have written here before, but not for a couple of years, I doubt if poverty can be dealt with further by extending traditional methods of taxing and spending. I suggest a modest wealth tax on high-net worth people that would not be collected but would be applied by the taxpayer to approved innovations designed by the taxpayer to reduce poverty. The tax would be reduced as defined poverty was reduced, and the ablest financial minds in the country would have a powerful incentive to assist in eliminating poverty. And instead of raising interest rates in inflationary times, there should be stand-by tax changes that would eliminate taxes on the proceeds of savings and investment and would raise taxes on the non-essential ingredients in calculation of the Consumer Price Index. Every one per cent rise in the interest rate raises inflation by half of one per cent. It pours gasoline on the fire until a bone-cracking recession is induced, a cure often worse than the ailment.
Our armed forces should be doubled in size; defence spending is (as economist Martin Feldstein and others — readers have inquired — have pointed out), the best form of economic stimulus. The Canadian fashion industry should design more elegant uniforms for our men and women in the forces. Canada must develop some self-defence and alliance-projection capacity and take the pride in our armed forces that they deserve and that a country requires to be taken seriously in the world.
We should get over our aversion to joint public-private sector activities. These contributed indispensably to the growth of Canada, from Jean Talon in the 17th century through Macdonald’s Canadian Pacific Railway, the Laurier-Sifton immigration policies, and C.D. Howe’s Trans-Canada Pipeline. Canada doesn’t have the capital markets to sustain an entirely private-sector approach to full economic maturation, and this is the fast-track out of an excessively branch-plant or subsidiary economy, and we should start with a serious ownership interest in the automobile industry and an enhanced presence in aerospace and defence production. We have the executives and the capital, but it requires non-controlling but facilitating government participation. Our aviation industry still has not recovered altogether from the cancellation of the Avro Arrow and our entire jet engine industry by John Diefenbaker in 1959. This week’s $1 billion investment in Bombardier by the Quebec government illustrates this point.
Philippe Couillard is the most unambiguous federalist elected premier of Quebec since Jean Lesage, if not Maurice Duplessis, (who was a decentralizer but vehemently anti-separatist-Lesage partially lost control of his party to Rene Levesque and the separatists). Now is the time to resume, but in parallel and sequential negotiations, not with all the provinces at once and not in public, the terms of Quebec’s adherence to the Constitution and of the satisfaction of the provinces generally with the federal character of the central government. As long as it is negotiated in camera and incrementally, there is no downside.
The president would also be the governor-general and would be chosen by direct election
My own proposal is for a more than ceremonious president, while retaining a prime minister answerable to Parliament, as France has, and retaining the monarch as ceremonious co-chief of state when physically present in this country. The president would also be the governor-general and would be chosen by direct election. The Senate should be based on a criterion of some sort of distinction, half chosen by the provinces and half by the federal government, by election or appointment as each jurisdiction wishes. One third should be of equal numbers of primarily French or English-speaking senators; one third of equal delegations from the five regions; and one third by provinces according to their population. There should be proportionate representation for native non-founding ethnic minorities. Senators would serve renewable five-year terms, two-year terms after the age of 75.
The outgoing government’s infamous crime bill should be repealed. We should stop sending non-violent people to prison and except in heinous fraud cases or incorrigible recidivism, they should instead contribute their work and live in freedom but in Spartan circumstances, with conjugal or equivalent weekends from time to time. The country’s productivity would be raised, huge government expenses would be saved, and the convicted employees would be bonded by the federal government. The Liberals should be careful not to plunge head-first into the deep end of eco-radicalism, become too nostalgic about peacekeeping, or drink the Kool Aid that induces excessive self-flagellation over the native people, who must be helped and respected, but not by a false national confession of attempted genocide, cultural or otherwise.
There is a great deal to be done; that’s why we have governments, not just to tax, regulate, and annoy us.
First published in the National Post.
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One Response
I read this in the National Post and was wondering whether you would publish it – Black seems to have gone insane. The article is utter drivel. Trudeau double the armed forces ? How detached from reality can you be.