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Fiscal con game lives on while poor suffer

By Les Whittington      

The anti-deficit fixation is a perennial smokescreen that has been a powerful rhetorical weapon of right-wing economic policy hegemony going back decades.

Conservative Leader Andrew Scheer has been suggesting to supporters that budget deficits, and the resulting accumulated debt, are a tax on future generations. The Hill Times photograph by Andrew Meade
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OTTAWA—In the next nine months, we’ll be hearing a lot about the current federal government’s budget deficit and alleged wasteful spending.

So far, the deficit issue appears to pass for most of what the Conservatives would call a campaign platform, with leader Andrew Scheer suggesting, like United States President Donald Trump, that he alone can bring the federal government’s books back into balance.

Scheer’s party has even come up with a new wrinkle on this one, suggesting that budget deficits, and the resulting accumulated debt, are a “tax” on future generations. When making this sort of argument, people usually call it a “burden” on future generations.

But since the Conservatives are going to run a campaign arguing that Liberal taxes—particularly the carbon levy meant to fight climate change—are making life unaffordable for average Canadians, linking the deficit specifically to future taxes fits comfortably into Scheer’s hoped-for narrative.

Leaving aside the fact that Stephen Harper’s governments ran budget shortfalls nearly every year, the anti-deficit fixation is a perennial smokescreen that has been a powerful rhetorical weapon of right-wing economic policy hegemony going back decades.

With its appeal to mom-and-pop values of frugal family budgeting, the argument against governments spending more than they collect in taxes has long been used to fuel anti-government cynicism and has given several generations of politicians cover to systematically tear down the funding and services meant to help the non-rich with their social and economic problems.

This long-term conservative scenario, turbocharged by the likes of Margaret Thatcher and Ronald Reagan, has of course been spectacularly successful on a global basis.

Oxfam, the British-based consortium of charitable organizations, cites statistics showing that in wealthy countries between 1970 and 2013, the average top rate of personal income tax plummeted from 62 per cent to 38 per cent. In developing countries, the average top rate is 28 per cent. And in some countries, the poor pay a larger proportion of their income in taxes than high-income earners.

And tax-cutting on behalf of the rich has, as we know, played a major role in the international phenomenon of out-of-control inequality.

According to the recent Oxfam report, the richest 26 people globally now own as much as the poorest half of the world population. In Canada, Oxfam said, billionaires have seen their assets rise by $20-billion over the past year alone. Meanwhile, the 4.5 per cent of Canada’s wealth held by the poorest half of the population hasn’t grown.

In fact, the situation for millions here is getting worse with the rise of interest rates. A recent poll indicates nearly half of Canadians are $200 or less away each month from going broke.

Worse, some five million people, including hundreds of thousands of children, are estimated to be living below the poverty line in Canada, with food insecurity being a daily reality for most of them.

Between April 2017 and March 2018, for instance, Ontario’s food banks helped 227,321 households, inclusive of 501,590 adults, children, and seniors, according to the Ontario Association of Food Banks. And nationally, the number of people using food banks every year is in the one-million range.

Prime Minister Justin Trudeau’s government took steps to address these problems somewhat by shifting more fiscal resources to support families. And tax measures to help people make the transition from welfare to full-time employment without ending up worse off financially are receiving much-needed (though still inadequate) improvements.

But, outrageously, the related issues of poverty and the ballooning income gap continue to be largely ignored in political discourse. Rather, our political debates are dominated by pro-business ideology and the long-discredited trickle-down theory of wealth creation that has propped up right-wing economic policy in the West for most of its half-century ascendancy.

Instead of talking about reducing government spending and cutting taxes, Canadian leaders should be talking about the urgent need to provide better support and hope for those at the bottom of the income scale—such as through better health care, more educational opportunities, housing options to get people permanently off the streets, food banks that can be used more than once a month, daycare that gives people an opportunity to join the workforce, and so on.

The solutions have been exhaustingly studied. The issue is whether Canadians have the will to demand a better life and a better country for all—or whether voters will continue to be distracted by leaders generating imaginary fear of government deficits, encouraging worship of wealth, and quietly assuring people it’s okay to think selfishly of your needs before those of others.

We’ll see what the federal parties really stand for between now and October’s election.

Les Whittington is an Ottawa journalist and a regular contributor to The Hill Times.

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