Stephen Harper's "Happy Days" Fantasy

I will preface the following rant by first stating my personal political ideology. In short, I would consider myself fiscally conservative and socially progressive or liberal. In other words, I’m a voter without a party that I can passionately support. I have over the years voted for all federal political parties at one time or another. I first voted in 1989 when the main election issue was Free Trade with the United States and I supported Brian Mulroney. In 1993, when abolishing the GST was the central focus, I once again voted conservative. Free Trade and the GST are the single biggest reasons why our economy thrived and generated massive budget surpluses for most of the past 20 years, until Harper was elected. It is rare to see politicians implement programs that they know are important and beneficial despite the risk of being unpopular or not getting re-elected. Brian Mulroney did just that and more recently so did Dalton McGuinty. His harmonized sales tax in Ontario is not popular and McGuinty will likely not get re-elected as a result. It was the right thing to do. However, an exhaustive GST/HST rant will have to wait for another day.

I remained a small ‘c’ conservative up until the point when “conservative” started to mean the polar opposite of my social beliefs. The association with fundamentalist Christianity, anti-abortion protests, rich people complaining about social programs and taxes, racist comments, and economic policies catering only to “traditional” families with stay-at-home moms was all too much for me. It is an ideology based on two premises: protecting the wealthy and a longing for the nuclear family of the 1950’s. It’s not about a healthy and thriving economy and it is certainly not about lending a helping hand to the less fortunate.

A handful of the conservative party’s central policies will easily prove my point. First of all, cutting the GST from 7% to 5% was strictly a vote buying exercise. That is $12 billion dollars per year of lost revenue for the federal government at a time when it is once again running huge deficits. Every economist in the country will tell you that cutting consumption taxes has virtually no benefit to the macro economy. If stimulating the economy and creating jobs was the motivation then that $12B could have been used in many more effective ways such as cuts to EI premiums and corporate taxes or incentives for investment. The list of policies that could stimulate the economy is huge but cutting the GST does not make that list. The simple reason is because retailers often close the price gap, eating into that 2% after-tax price reduction but more importantly because the evidence is clear that a 1% or 2% decline in the total cost of some goods will not motivate consumers to shop more. Ask yourself, have you been going to the malls more often and spending more as a result of the GST cut? Not likely. At the end of the day, it is just a $12B gift to taxpayers, a true vote buying program if there ever was one. If a gift is what you wanted well give yourself a pat on the back; however, I want a lot more bang than that for $12B per year.

Next we have the fitness tax credit. This will cost $500 million per year and it will arguably not result in a single person being healthier. Think about this, if you have a child and you currently cannot afford to send them to a summer camp or join a sports team will you suddenly be able to afford it if you now get a very small percentage of it back as a tax credit in a years time. NO! The people that are in a position to benefit from this tax credit are likely already spending thousands per year on summer camps and sports teams. So in other words, rich families get money back for what they are already doing and poor families still can’t afford to enroll. Not a single child will be more active as a result of this $500 million program. If curbing child obesity was truly the motivation then the $500 million would have been spent on recreational facilities in low income areas or granted to organizations that work directly with that specific health issue. But NO, that was not the point. It was just another vote buying program with little or no tangible benefit.

Lastly we have income splitting. The taxable income of one spouse can be transferred to the other in order to pay less overall income tax as a family. When implemented, this program is expected to cost $5 billion per year and benefit only one small segment of society, high-income earners married to stay-at-home parents who have young children. So what is the benefit of this program to the overall economy or jobs or healthcare or childcare or poverty or anything else? Zip…. Nada…. Nothing. It is just another vote buying scheme. It is not an economic policy but rather a social engineering program intended to incent woman to stay at home and take care of their children. The program can be summed up in one efficient sentence. If you adhere to Harper’s 1950-esque utopia of the working man and stay-at-home mom with a litter of children then you get a big fat cheque.

So when you boil it all down, you begin to see that the conservative party is not truly fiscally conservative given their vote buying and high deficits but rather they are socially conservative based on their nuclear family incentives. Now that Harper’s majority will have unfettered power we will see them socially creep further to the right. They have a vision for how society should be constructed and will aggressively but covertly push that ideology while disguising it as economic policy. The Harper government won a majority last night based largely on a perception that they will be steady and safe stewards of the economy when in reality they have cut government revenue recklessly and have nothing to show for it but massive deficits. Economic decisions should be based on benefits to the macro economy; while social decisions should be based on the collective desires of the nation on what they consider a just society. Unfortunately, Harper’s economic policy is based on vote buying and his social policy is inspired by re-runs of Happy Days.

Sad times indeed.