This is the time of year when media people are moved to do the year-in-review thing. Some may even evoke Janus, the Roman god of two faces, one turned toward the past, the other looking to the future.
The pandemic has complicated that convention. The virus, as we have discovered, does not respect borders or political ideology. We can hardly expect it to pay attention to the Christian calendar. Because the COVID scourge is far from over, a retrospective on 2020 would be like a two-act play ending at intermission or a subject without a predicate.
But in the spirit of Janus, looking forward to the coming year will likely see a continuation of demands on governments to fix social problems exposed by the pandemic – chronic challenges such as adequate child care and long-term care, homelessness and poverty. At the same time, there will be other loud voices urging restraint, saying economic competitiveness and control of public debt run up during the pandemic should take priority.
In approaching the debate that will continue into next year it is worth looking back – not to 2020 but to 20 years earlier. Not only was 2000 celebrated as the start of a new millennium, it was a pivotal year for our federal state.
After deep spending cuts in the mid-1990s that made our social problems worse, the Chretien-Martin Liberal government found itself with growing surpluses. Those spending cuts, combined with lower interest charges and some economic growth had reduced the federal debt/GDP ratio from 66.6 per cent in 1996 to 47.0 per cent in 2000. The budgetary surplus for 2000-01 was a robust $19.8 billion.
Advocacy groups wanted to spend that and future surpluses on many of the same things the left continues to champion. Their demands were supported by the NDP, then as now the fourth party in the House of Commons
The 2000 wish list included national plans for child care, home care, pharmacare and disability supports, as well as a doubling of the child benefit and thousands of units of affordable non-profit housing. In those days, all parties supported balanced budgets but just to make sure social programs wouldn’t wreck the balance, the NDP also proposed to raise additional revenue through a millionaires tax on estates over $1 million and an excess profits tax on financial institutions. Sound familiar?
Alas, instead of directing all or most of the surplus to the kinds of things the pandemic has shown we still lack, the Liberals opted for a pre-election budget heavy on tax cuts. The signature cut was to the corporate taxation rate, to go from 28 to 21 per cent over five years (and lowered to the current 15 per cent rate by the Harper government). For wealthy individuals the tax-free portion on capital gains was increased from 25 to 50 per cent and the upper income surtax was removed.
Conventional wisdom at the time held that the Liberals were pushed into cutting taxes by the electoral threat posed by the Canadian Alliance, short-lived offspring of the Reform Party. The Alliance, backed by the corporate media, were promising even deeper tax cuts, a pledge the fulfillment of which would require six more years and another mutation into the Conservative Party of Canada to fulfill. But the party of Stephen Harper that came to power in 2006 was just adding to the trend set in 2000 – a national government with little ambition to improve social conditions and a revenue base depleted by tax cuts.
Recently rifling through some old documents in the basement turned up the NDP’s 2000 election campaign literature. The party’s slogan was “Think how much better Canada could be.” A quote from Leader Alexa McDonough framed the election as “about whether a historic opportunity to build for Canada’s future is seized or squandered.”
The pitch did not work very well at the time – the NDP lost seats in the election and saw its popular vote sink below 10 per cent. Two decades on it is hard to argue against the notion that the opportunity to build a better country was squandered. That we lacked the political will to do that building then, when the country was flush with cash, makes the task seem daunting in these times of growing deficits. But the strongest argument for continuing pursuit of a better Canada is the failed approach of the last 20 years.