I saw an interview with Stephen Harper. He argued some want to go back into deficit. He pointed out no matter how much stimulus money they spent, it wasn't enough. And in the 1990s the government had to make massive cuts to program spending that hurt, and massive tax hikes, to get out of deficit. So going back into deficit now would be a very bad idea.
Well... That's partially correct. Business becomes addicted to government handouts faster than crack. You don't want business to become dependant on taxpayer's money. And the Chrétien/Martin Liberals had to make massive cuts to spending in order to get out of deficit. But massive tax hikes? That was Mulroney's Conservatives: 1984-1993. Most of the massive tax hikes were in the 1980s. Liberals didn't increase taxes, they eliminated the deficit by cutting spending. Only through cuts. Of course they didn't cut Mulroney's massive tax hikes until
AFTER the deficit was slain.
When I was in high school in the late 1970s, and university in the early 1980s, voters were extremely concerned with the exponentially rising deficit. And I said deficit, not debt. They knew taxpayers would be required to pay all that debt. And it didn't matter if Liberals or Conservatives were elected, it was the same problem. Then in 1984 along came a businessman who sought the leadership of the Conservative party. He tried for the leadership before but failed. In 1984 he broke every rule he could get away with, bent any rule he couldn't outright break, and scammed his way to become leader of the Conservative party. Voters at the time did notice, but treated it as an internal party problem; not their problem. When the election came later that same year, he campaigned on a platform to:
eliminate the deficit, reduce the debt, and reduce taxes. This would be accomplished by cutting government spending, and reducing the number of individuals hired in the federal civil service. The voters responded by saying OUR SAVIOUR HAS ARRIVED! And gave him the largest majority ever in Canadian history. As a proportion of MPs in the House of Commons, a majority that large had occurred twice before, but the last was in the 1950s, a generation before, so people forgot a majority that large was possible. And the total number of MPs in the House had increased, so in terms of shear numbers of MPs it was the largest majority ever.
Voters hoped he would be honest since he wasn't a career politician. Unfortunately for Canadians, he proved to be the biggest liar of all. He increase government spending, and increased the number of individuals in the federal civil service. He increased the deficit, and more than tripled the debt.
My favourite science fiction author once quoted a scientist who said "Any opinion, no matter how expert, is only opinion unless it's expressed in numbers". So numbers. On election day 1984 the deficit was $38 billion, on election day 1993 it was $42 billion. On election day 1984 the debt was $135.6 billion. On election day 1993 it was $458.75 billion. (Source:
http://www.debtclock.ca/)
Today we have Stephen Harper. He claims to believe in cutting taxes, reducing spending, and reducing the size of government. But he drastically increased spending, increased the number of individuals in the federal civil service, ran us back into deficit, and increased the debt. Again numbers...
In the May 2006 budget, Jim Flaherty said the "status quo" surplus for fiscal year 2005/06 was $17.4 billion. That means that's what the surplus would have been if Conservatives hadn't messed with it. That budget promised to reduce the deficit to $8.0 billion; not by reducing taxes, but simply by increasing spending. Fiscal year end for the federal government is March 31st, so "fiscal year 2005/06" means April 1 2005 - March 31 2006. The election was January 23 2006, ministers sworn in February 6 2006, so the Conservatives were only in power for the last 2 months of that fiscal year. According to the Auditor General's report (and "actual" figures published in the 2007 budget), spending for the 2005/06 fiscal year was $175.2 billion. In the 2005 budget (last Liberal budget) spending for that year was $161.3 billion. That means Conservatives increase spending by $13.9 billion in the first 2 months alone. Canadians worked harder and paid more in taxes than anyone expected, so the surplus ended up at $13.2 billion. Not due to Conservative restraint, but because Canadians paid more taxes.
The last Liberal budget was 2005. That budget projected spending to the 2009/10 fiscal year. Let's compare to Conservative actual spending.
Year Liberal Conservative Increase
2005/06: $161.3B $175.2B $13.9B
2006/07: $169.5B $188.3B $18.8B
2007/08: $177.9B $199.5B $21.6B
2008/09: $185.8B $207.9B $22.1B
2009/10: $194.5B $244.8B $50.3B
The 2005 budget didn't project spending any further than that. So let's take spending for the 2005/06 fiscal year from the 2005 budget, apply inflation to this year, then compare to this year's budget. You can see from the above table that it was $161.3 billion. Using the inflation calculator from the Bank of Canada website to go from 2005 to 2015, that works out to $191.93 billion. But spending in this year's budget is $263.2 billion, or $71.27 billion more.
On March 17, 2011, the Parliamentary budget officer released a report. That date was important because on that date the debt equalled it's previous all-time high. Harper Conservatives had completely undone all the hard work the Chrétien/Martin Liberals had done to reduce the debt. That report also stated the number of federal civil servants was 14% greater than it was on election day 2006.
And the deficit means each day that passes increases the debt to a new all-time high. Joe Oliver promised a $1.4 billion surplus for this year, but the current Parliamentary Budget Officer stated it's more likely we will have a $1 billion deficit this year.
Conservatives claim they believe in reduce spending, but in reality they're spending like the proverbial drunken sailor.
Conservatives claim they reduced taxes. Liberals introduced a cut to personal income taxes in their November 2005 fiscal update. The lowest income bracket was cut from 15.5% to 15.0%. Conservatives and NDP voted against the fiscal update, that's what caused the election. Since the fiscal update was voted down, that tax cut didn't happen. A year later the Conservatives re-introduced that same tax cut, taking effect January 1 2007. So they cancelled a Liberal tax cut, then brought it back. That isn't a tax cut; we would have had that in 2006 if Liberals were elected. I've heard some people claim it doesn't count because the way they cancelled that tax cut, but I don't care what technically they pull. They cancelled a Liberal tax cut, then brought it back, then tried to take credit for it.
Personal income tax hasn't been cut since. Corporate tax has been. Liberals passed a law in 2005 to abolish corporate capital tax. The effective date was after election day 2006, so Conservatives have tried to take credit for it. But they didn't do it, Liberals did. Liberals also stated their intent to abolish corporate surtax. But they were in the process of getting rid of corporate capital tax; one at a time. Conservatives did get rid of it. But Conservatives didn't stop there. Corporate income tax was 21% on election day 2006. Today it's 15%. They cut corporate taxes, not taxes that you and I pay.
The lowest income bracket for personal income tax is 15%. Corporate income tax is now 15%. So a multi-billion dollar corporation now pays income tax at the same rate as an individual below the poverty line. Middle class Canadians pay more. That's just wrong.
Mulroney promised to reduce spending, reduce the federal civil service, and reduce taxes. He did the opposite. Harper is claiming to reduce spending, reduce the federal civil service, and reduce taxes. He hasn't increased personal taxes (yet) but hasn't cut them. Every other claim he has done the opposite. If interest rates start increasing like they did in the 1980s, you can bet Harper will increase personal taxes, not corporate. I don't see how Harper is any different than Mulroney.
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