Published in the Sun Media chain and QMI Agency

Politicians are everywhere right now: on your TV, at your shopping malls, at your doorsteps and in your wallets. Yet, the most expensive part of an election is not the $300 million spent on counting ballots, but the bidding war that politicians engage in to buy your vote.

Like singles at a nightclub, the party leaders each offer to buy voters a drink with the hope that they will pay attention. For those attractive enough to have several politicians interested in them (swing voters), the offers can become overwhelming, forcing one to choose between different, expensive campaign cocktails.

Unfortunately, politicians don’t always pay off their tab with cash. Since returning to deficit, federal politicians have borrowed $101.7 billion. With that borrowing figure set to reach $160 billion by the time it stops, voters can expect a nasty hangover.

Rather than fall for the politician promising to shower them with the most gifts, voters should demand that candidates show them a little respect. When the federal government alone is borrowing $81 million a day, it’s time for a cheaper date.

The Liberals have already laid out their plans, but they include hiking business taxes. While such a move is likely to damage Canada’s reputation as a hot spot to do business and hurt the fragile economic recovery, at least they are open about their intentions to do so. Despite their openness of intentions, most economists point out that an effective 3 per cent increase in business taxes does not translate into a 3 per cent increase in revenues, as firms become less productive.

While the Conservatives increased spending at a breakneck pace during their first four years (40 per cent), thus far, they have commendably shied away from major new spending promises during the campaign. Their promise to find $4 billion in savings and balance the budget a year ahead of schedule is a mild improvement over their now-dead budget. Nonetheless, promises that focus the discussion on tax cuts and the deficit – however timid and far down the road – is a welcome change from the ‘borrow and spend’ voters have seen to date.

As always, the NDP has promised a chicken in every pot and mustache on every smile. While some may consider it pointless for the NDP to have cost-out its platform since it will never form government, that notion needs to be put in the context of a potential coalition government to which it is open.

The Bloc Québécois’ platform is less a document summarizing spending in one ledger and revenue in another, so much as it is a hostage letter with a list of demands. In can best be summarized as, “give Quebec a briefcase of money and an unmarked plane with enough fuel to reach independence, or else Newfoundland gets it.”

So far, this campaign’s options have all proved to be costly with no party promising a return to pre-stimulus levels of spending and all opposition parties promising to raise taxes. Still, with all party platforms released, it is no longer a blind date.

With Canada staring down the hole of a $560 billion debt during this campaign, voters should look past the politicians promising to spend evermore on them. In this election, Canadians need a cheap date and tough love.

Derek Fildebrandt is the National Research Director and Acting Federal Director for the Canadian Taxpayers Federation

Speaking to fellow Liberals in Regina yesterday, the former PM and finance minister attacked the Tories for their lackluster deficit-elimination plan and the reliability of their numbers – numbers that have been wildly off-target in the past and are not corroborated by the Parliamentary Budget Officer.

Now we all remember then Prime Minister Martin attacking then Leader of the Opposition Stephen Harper for having a “hidden, right-wing agenda” with a plan to gut public spending, but history can be a sonofabitch. While campaigning on a promise to keep spending under control (although not actually reduce it), the federal Tories have increased program spending by 40% during their first four years in power, beginning long before a dollar of so-called “stimulus” spending went out the door.

By contrast, the Liberals campaigned in 1993 on promises of evermore public spending with little attention paid towards the burgeoning deficit, yet in 1995 Paul Martin tabled a deficit-elimination budget that significantly cut net federal spending, including transfers to the provinces. If that same budget were tabled today by Finance Minister Jim Flaherty, Paul Martin’s own Liberals would denounce it as a heartless, right-wing attack on all that is green and good, forged in the very fires of Mordor. For that matter, if the Liberals were to table that same budget today, all indications are that they Tories would attack them in kind.

So what is different from 1995? A good many things, but among them was  an opposition party (Reform) attacking the government from a position of credibility on the issue, and public opinion. At this time *shameless sales pitch alert*, the Canadian Taxpayers Federation (CTF) was touring the National Debt Clock across Canada attempting to do the impossible: make the national debt a priority public issue with voters. Along with other organizations, political parties and writers, public opinion was turned and the government was forced into action.

Today, the governing party brags about how much it is spending on dubious “stimulus” projects, while all three parties in opposition demand “more, more, more,” without any serrious plans of their own. Without any party in parliament credibly threatening the government on the issues of spending, debt and deficits, the role of groups outside of parliament are all the more important than they were in 1995.

For our part, the CTF has restored the National Debt Clock and is once again touring it from coast-to-coast. Governments must get the message: cut spending, balance the budget and stop the clock. They vaguely hear this message right now, but are unlikely to act unless public opinion demands that they do.

The National Debt Clock Tour costs $3.65/km. You can do your part by chipping in a few bucks to bring it a little closer to Ottawa and share a link to this page with your friends via email, Facebook and Twitter.

Should the political will exist, Ottawa can eliminate its deficit in two years without raising taxes, or even draconian cuts for that matter. Still reductions will be required, to the tune bringing spending levels to $18 billion below 2010-11 levels by 2012-13. That would return program spending to levels seen between 2008-09 and 2009-10. Not radical, but very different from the current course of perpetual deficits and increasing government that we are charted on.

The CTF’s Zero in Two: Deficit Action Plan details how this can be done while not raising taxes or rescinding scheduled future reductions:

• Eliminate corporate welfare, regional development agencies, bio-fuel subsidies, most arts and language subsidies and other select grants and contributions.

• Privatize Atomic Energy of Canada, Canada Post’s Purolator Courier and VIA Rail. Also, end taxpayer support for the CMHC. Also, end any financial support for Canada Post.
• Reduce most departmental budgets from 10-25% and freeze remaining budgets for two years.
• Reduce the Equalization Program by 10% annually over two years and assist recipient provinces in paying down respective debts in lieu of cash-transfers.
• Continue growth in Health and Social Transfers and National Defense spending at a reduced rate.
• Pass a Taxpayer Protection Act to ban future deficits and tax increases without an explicit mandate to do so given in an election or referendum.
• Pass a Debt Retirement Act with a schedule for making Canada a debt-free jurisdiction.
• Prevent a further EI payroll-tax hike by eliminating non-insurance based EI programs.
• Eliminate the Vote Tax – per vote subsidy.

cross-posted at taxpayer.com/blog

“I know what you’re thinking. ‘Did he spend $60 billion or only 50?’ Well, to tell you the truth, in all this excitement and stimulus I kind of lost track myself. But being as this is an overtaxed country with a half trillion dollars in debt already and growing, you’ve got to ask yourself one question: Do I feel lucky? Well, do ya, taxpayers?”

That’s not a direct quote from Clint Eastwood in Dirty Harry, but it’s close enough. The Canadian Taxpayers Federation (CTF) certainly doesn’t feel lucky about our prospects as a country if current spending continues unabated. While we already owe a massive sum to our bankers: $500 billion in accumulated debt, the new debt being added via the deficit announced in the last budget, will amount to more than $10,200 per taxpayer between now and 2014. That figure will continue to balloon as interest on the debt begins to compound. Canada is adding more debt right now than was added during both World Wars combined, even after adjusting for inflation. You can see our national debt rack up in real time at www.debtclock.ca.

For those not feeling so lucky, the CTF has produced a Zero in Three Deficit Action Plan to balance the budget in three years. This can be done through a combination of spending freezes, trimming of department budgets and where necessary, reductions. Politicians may excuse themselves from any spending cuts in claiming that a recovery in revenues will balance the budget, but quite simply, they’re wrong. Program spending has skyrocketed by more than 60 per cent in only six years – beginning long before so-call stimulus spending – and add to that the retirement of the baby boomers now beginning and Canada faces a structural deficit that will remain long after revenues recover.

The CTF’s plan would only reduce spending by 10 per cent, returning us to 2008 levels over three years finding a total of $35.8 billion in savings.  In addition to moderately trimming department budgets and accounting for already scheduled decreases in “stimulus,” the CTF plan would eliminate $5.5 billion in corporate welfare. This means turning off the taps to private corporations that subside on the taxpayer’s dime while at the same time resisting money-sucking schemes like Kyoto and Copenhagen that will create entire new bureaucracies and dependent faux-businesses.

Equalization eats up $14.8 billion every single year and has only served to make recipient provinces even poorer and more dependent. The CTF plan would convert this from a ‘federal welfare program’ to a program to help pay down provincial debts, and then reduce the amount provided by 10 per cent each year. That would provide cumulative savings of more than $1.4 billion every year while helping poorer provinces to become proudly self-sufficient again.

Since the creation of two new “regional development” agencies by the Harper government, every single area of the country now has a government agency designed to take money from one part of the country and redistribute it elsewhere. This nonsensical logic makes it low-hanging fruit for anyone serious about balancing the budget. Savings to the taxpayer: $1.2 billion every year.

Canada also has several crown corporations that eat up excessive amounts of money. While not all candidates made the list to be cut, those that did make the chopping block would save taxpayers at least $1.2 billion annually, not to mention one time reductions to our debt from the proceeds of selling them.

All told, there is an abundance of areas that the government can easily look to in order to get its finances under control. Even holding the line on spending – which it should have done when it come to power – won’t bring the books into black. Program spending was already at unsustainable levels when Prime Minister Harper came to power.

During the Trudeau and Mulroney years, the government books often showed the budget coming into balance without any cuts a few years down the road as revenues increased, yet they never did. The government today – with deficits on par with those prime ministers – is making precisely the same argument. They know, just as previous governments before, you can’t balance your budget by doing nothing.

The jig is up and we know what needs to be done, so come on Mr. Harper, make my day.

The only numbers to emerge thus far are limiting civil service wage increases to 1.5%. While a 1.5% increase in wages is certainly an accomplishment when compared with the government’s average 6% increase in total program spending since 2003, it will only be effective in any sense if it is accompanied by across-the-board freezes in programs that the government wishes to maintain, and significant cuts and even eliminations in other areas.

Those “other areas” might include phasing out the near $15 billion in annual equalization payments, or $5 billion in the low hanging fruit of corporate welfare (pre-bailouts) that the CTF has specifically identified in its Deficit Action Plan.

cross-posted at taxpayer.com

This is clear evidence that the Conservative government’s  fear of death over the outrage that would accompany any restraint in spending is unfounded.  Of courses there will be the usual yelping from clients of the welfare state about why they should be excluded from any such pruning, but far more Canadians support spending cuts than even support the Conservatives.

Of those 65% (or 46% if you include undecideds) there will be those who support cutting spending, so long as you cut in areas that do not directly affect them.  For example, seniors may support cuts to corporate welfare, but not to health-care.  An Executive at Bombardier or GM may have the opposite view while still supporting overall spending cuts.

The fact is that every one of us has our hands in the taxpayer grab-bag and we think that we are making off at someone else’s expenses. Its time for the Tories to show some real leadership and come forward with some of that same tough-love that helped to get the Liberals re-elected in the 1990s.  Being coy about slapping a few hands in the grab-bag didn’t help Mulroney in any case.

As yet, there has been no real plan put forward to get spending under control and balance the budget within the decade. That being said, the symbolism of Day moving to TB might be cause of cautious optimism.

Program spending has increased by more than 60% in the last 6 years beginning long before there was any drop in revenue, a bailout of General Motors, or threat of Stéphane Dion becoming prime minster with Monsieurs Layton and Duceppe at the ready.  In 2013 we will begin to feel the pinch of the baby boomers retiring and the double whammy of increased CPP, GIS and health-care costs on the one hand, and a shrinking tax base on the other.

Anyone who has crunched the numbers will see that there has been a massive and permanent growth in the size of government beyond the so-called ‘Economic Action’ plan over the last six years and that the pressures of demographics will means that even holding the line on spending will be entirely insufficient to balance the budget.

The Trudeau and Muloney governments made the same claim that balancing the budget can be done by getting spending “growth” under control and allowing revenue growth to take care of the rest.  We all know the history and how well that worked.

The Canadian Taxpayers Federation has released a detailed plan to make reasonable cuts in spending coupled with freezes that will actually get the budget back in black within three years.

Conservatives should make it known within their party that this situation has a strong smell of the 1970s and 80s, and Liberals and New Democrats should get credible on this issue and hold the government to account, as is their job.

Well, that’s a time warped excerpt of an article jointly penned by Stephen Harper and Tom Flanagan circa 1997, Our Benign Dictatorship (click for the non-time warped full text).  It is a startling observation in a very well written peice by the now prime minister and his mentor that provides a solid analysis of the political situation as it was then.

Times change of course and so do we.  Vindicating Prime Minister Harper’s claims, here is a graph showing how true his words really were.