One of the primary motivators for me is the damage I fear the Conservatives will do to the economy. I would say I'm slightly right of centre for economics. I favour incentives for corporations and economic stimulus over government funded jobs. But I very strongly believe that too far right or too far left can cause devastating effects for a national economy. We are quite far right with economic policy now, there is no need to go further. A Harper majority would have the power to irreversibly destroy our nation as we know it. I cannot say for sure he would do it, but his past statements and actions strongly suggest that he would. Below is a piece I wrote for a friend who wanted help convincing a relative that Conservatives were not the right choice. To my knowledge, I state fact, and attempted to avoid partisanship. I don't think I succeeded with the latter aspect. Any thoughts, critiques or links to relevant and credible references would be appreciated.
Harper`s Economy, Or: How I Learned to Stop Worrying and Love the Deficit
In 1993 Canada was crippled by a 43 billion dollar deficit aggravated during Conservative rule. The Liberals, with Paul Martin as finance minister, gained power in that year and ran deficits for four further years, before spending cuts, economic growth and inflation helped to create a surplus. The Liberals then ran eight consecutive surpluses paying down over 76 billion dollars of debt. In 2000, the Liberals reduced corporate taxes from 28% to 21%. In 2004 they injected billions into health and implemented a 10 year agreement for 6% increases in transfers of money to the provinces to rescue the health care system. What is important here, is that throughout this a surplus was maintained and debt reduction continued. In 2004, the Liberals fell to a minority government over the Adscam scandal under which millions of dollars of government contracts were either awarded inappropriately, or inflated. The total value of the program was 100 million dollars over 8 years.
In 2006 a leak over the decision to tax income trusts likely cost the Liberals the election. The Conservatives promised not to change the taxation of income trusts, but reneged resulting in the almost complete annihilation of the income trust structure in Canada by 2011. The Conservatives implemented tax cuts for corporations, decreasing the corporate tax rate from 21% to 15% between 2008 and 2012 at a rate of 1.5% per year. Additionally the GST was reduced from 7% to 5%, resulting in a government revenue decrease of 12-15 billion dollars. In Paul Martin's words, "they removed our margin of error".
In the Conservative budgets, a surplus was maintained until 2008 when a deficit of 1.1 billion was run. It is important to realize that a deficit position was realized within 2 years despite the lack of a financial crisis. In 2009, the deficit grew to $54 billion. The counter point here is that much of this $54 billion dollars is due to the stimulus package. Prevailing opinion suggests stimulus was the correct response. What one should be aware of is the fact that in the fall of 2008, Harper and Flaherty did not recognize that we were in a recession, they maintained that it would be at worst, a technical recession (ie 1-2 quarters of GDP contraction). They emphasized the position that the government would not go into deficit for a stimulus package. They were right, in some sense. The government went into deficit without implementing a stimulus. In order for a stimulus to be brought forward, the opposition stepped up and threatened to bring the government down unless something was done. This resulted in the 'Economic Action Plan' which the Conservatives trumpet as their great economic policy. A policy forced on them by the opposition. Harper now claimed during the debate that all along they planned a stimulus based on the discussion at the 2008 G20 meeting. No one can contradict him except the record of statements made in the house of commons concurrently with the meeting which very strongly indicate the government position against stimulus. This makes his lie convenient since he has such a strong record of making false statements to the house that most people would not be surprised by a total contradiction.
Subsequently, the economic action plan was implemented. Criticisms over the inadequate speed of the program were leveled. During the stimulus period, Canada's economic report card from the IMF dropped from a B to a C, though Canada's ranking rose from 10th place to 9th place among the G20. These are hardly the stellar performance reviews which Harper claims when he says we have the best stimulus and economy in the world. Furthermore, as a heavily resource based economy, Canada has seen a boost from China's powerful recovery. This boost is significant, and not reflective of any competence in Ottawa. Australia is a similar economy but outperforms us on most indicators despite being hit by unprecedented floods. In 2009, Canada hosted the G20 and G8 meetings for the cost of 1 billion dollars. Previously, Canada has hosted equivalent meetings for under 300 million dollars. G8 expenses totaling 50 million dollars are now under investigation for improper awarding of contracts.
Canada now faces a structural deficit which must be eliminated. If the stimulus was really the cause, the deficit would evaporate as the stimulus programs ended. This is not the case, and we now face cuts. Some of the primary differences between the conservative platform and the liberal platform are the facts that the Liberal provide a credible, if perhaps a bit optimistic, source of money for their additional social programs via freezing corporate taxes at 18%. Additionally, no promises are made for future expenditures so as the economy recovers, additional revenues may be applied to the debt. Conversely, the Conservatives have promised corporate tax cuts, and jails in the immediate future. Then they have a whole bevy of spending promised as soon as we are in a surplus position: including tax cuts which help upper middle class and wealthy Canadians preferentially and the infamous jets. Thus they have no credible way of reducing the deficit now*, no credible way of financing their jails and tax cuts and only 'trust me' as the plan to improve things over the next 5 years. The Liberal plan therefore leaves open the ability to deal with future demographics problems, while the Conservative plan ensures that we've already spent money we do not have as well as money we will not have. This piece is written contrasting the two most recently governing parties economic performance. But the other two major opposition parties should not be left out. In my opinion all three major alternative parties have more credible fiscal plans than the Conservatives and I would put my support behind any of the three before Harper. I, unfortunately, have no track records for the Green party or NDP to discuss to support this view.
Do not vote for commercials and revisionist history. Just because someone says they're good with the economy is no reason to believe them.
*Sorry but "We can totally shave off 4 billion a year just be making things efficient" does not cut it. If that was your mandate, then you are terrible at it because you've already had 5 years to do it and accomplished about 1 billion in savings. Furthermore, as a microcosm study, the National Research Council mandates have changed, scientific budgets have been reduced. Efficiency in the Conservative mind may not reflect the opinion of the Canadian people who, I would like to believe, would like to see well funded fundamental science programs they can be proud of. Cuts may be needed, but only someone who feels the pain that a funding cut causes should be in the position to do it.
Australia is perhaps the most comparable country to us as far as areal size, population and economic base. Not only are they doing much better economically, they also recently decided not to buy F-35 fighters and instead got Super Hornets as a more prudent option.