Is an accomplishment still an accomplishment if you have to promise you will never, ever do it again? Federal Liberals are saddled with that question today, given John McCallum’s sharp repudiation of his party’s record on fiscal responsibility.
Since the late 1990s, the Liberal Party has hung their vaunted fiscal credibility on one thing: having eliminated the $42 billion deficit left to them by the Mulroney-era Conservatives. No matter what criticism they faced, Liberals could (and continue to) boast that they brought Canada’s fiscal house in order; and for that, we should be grateful.
But as accomplishments go, slaying the deficit the way Jean Chretien and Paul Martin went about it, is roughly equivalent to boasting of having put a man on the moon -- with no way of getting him down.
That’s certainly the way provincial premiers remember it. They (including Today's Bob Rae) remember the federal Liberals unilaterally hacking $25 billion out of transfers for health care, education and welfare beginning with the 1995 budget. Cutting these transfers had catastrophic impacts for provincial budgets which were still struggling from the recession of the early 1990s. The response in many provinces was to reluctantly pass Chretien and Martin's cuts along to hospitals, universities, colleges, and municipalities, who in turn passed the cuts along to patients, students and taxpayers through tuition fee hikes, hallway medicine, co-payment fees, municipal downloading, property tax hikes, and increased homelessness.
Happy to have enjoyed the parade, but ignorant of the mountain of tickertape in their wake, it has been the consequences of their having “slayed the deficit” which Liberals have steadfastly refused to acknowledge.
That is until now. By finally denouncing their having savaged provincial transfers as “a mistake,” Liberals are a decade later, a bit closer to finally recognizing that the way they “brought Canada’s fiscal house in order” was a hollow accomplishment.
As for their promise to never cut provincial funding again? It should sound familiar. Try page 80 of the Liberal Platform that preceded the 1995 budget.