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Reality Check

Gentlemen, start the revolution � very, very slowly By Robert Sheppard, CBC.ca Reality Check Team | January 24, 2006 | More Reality Check

Stephen Harper on election night.  
Will a Stephen Harper government be much different from what Canadians have come to expect? After all, he's edged much closer – hasn't he? – to the squishy centre. His stated positions on some of the biggest issues of the day like health care (no two-tier, no waiting lists), Quebec (flexible federalism) and Iraq (not our war) are not fundamentally different from the man he dumped from the prime minister's chair.

Had the Conservatives won the majority they so obviously coveted, we would be talking today of the Harper revolution that is to come, a heady brew of tax cuts and, to some degree at least, U.S.-style social conservatism. Abortion debates (can he really keep them off the agenda?). Same-sex marriage. Raising the legal age for teenage sex. Activist judges. More jails. All of these, save abortion, flow directly from the official platform.

And all may yet come to pass. Though with no natural allies in the House of Commons – the Bloc, the NDP and the Liberals are all predominantly left of center – achieving the Harper agenda in full will now require much more parliamentary finesse, and for sure another go at the ballot box. Think of the next, say, two years then as a revolution with training wheels, a time for a new Conservative government to show its competence, highlight the wedge issues that will mark it from its competitors and, importantly, set in motion the tax cuts that will tie Ottawa's hands.

It will also be a period of course for Harper to negotiate his way around the big elephants in his path: a Quebec election probably next year (with perhaps a sovereignty referendum on its heels), a likely backlash over the Conservatives' no-Kyoto plans and, very soon, election-year politics in the U.S. which invariably mean a surge in that country's protectionist instincts.

Still, it is probably naive to see a Harper government as business-as-usual, albeit with a right-of-centre face. Canadian public opinion has shifted his way on some of the more sensitive issues of the day. A slight majority now is uncomfortable with the notion of same-sex marriage; a similarly slight majority also sees nothing much wrong with private health clinics being paid out of the public purse. But Canadians may not have cottoned to the fact that the sheer weight of Harper's spending promises as well as the nature of the proposed Conservative tax cuts should bring a sea change to the way Ottawa goes about its business.

Simply put, Ottawa's reach will shrink. Following the austerity moves introduced by Jean Chr étien and Paul Martin in the mid-1990s, the federal government has found itself in recent years restored to the kind of fiscal glory not seen in decades. This more muscular Ottawa, with eight consecutive surpluses under its belt, was paying down debt, offering modest tax relief and tossing money like penny candy at health care, university research and day care, the first big new social program to be initiated in quite some time. All this will change in Stephen Harper's town.

Size of government

Ottawa will get smaller not just because of the costly agenda Harper is advancing. Though that is part of it. By our calculation here at Reality Check, the Conservatives are promising $51.8 billion in tax cuts and credits over the next five years, and a further $22.9 billion in spending.

» Reality Check: Promises, the final tally

The total, $75 billion in commitments, exceeds what the Liberals say is in the kitty for this next five-year period. The Tories offer a different accounting and claim there are savings to be made by greater cost control. But this disagreement is almost beside the point.

Remember, there is a second shoe to fall in the Conservative plan to cut the GST – a second one percentage point cut in four years that will reduce Ottawa's revenues by a further roughly $6 billion a year. Couple that with an ongoing child-care subsidy ($1,200 a year for each child under six – that's almost $2 billion a year directly to parents to spend as they see fit). Add a potentially costly capital gains tax break and a huge new outlay in defence spending (ships, big planes and 13,000 more soldiers) that will take a few years to kick in. The Conservatives are building in a new series of revenue constraints and fixed expenditures that will limit Ottawa's ability to manoeuvre.

Factor in the promised health transfers to the provinces and the money that goes out to seniors for old age security and related programs – big budgetary items that are growing faster than revenues and GDP – and you have a recipe for further contraction. And if Harper goes through with his national unity plan to address the so-called fiscal imbalance in federal-provincial finances, by offering up a negotiated share of federal tax revenue to the provinces, that will leave Ottawa a much, much paler shadow of its former self.

Enter the provinces

Harper's offer to fix the fiscal imbalance was never costed in his party's campaign platform, the one supposedly vetted by a Conference Board of Canada economist. But it is not some entirely vague offer. He floated the idea in a mid-December speech in Quebec City, where it was immediately seized upon by the Jean Charest government. Then on Jan. 12, in the middle of the campaign, Harper wrote Alberta Premier Ralph Klein, head of the premiers' and territorial leaders' Council of the Federation. If he became prime minister, Harper said, he would invite the group to a sit-down in early 2006 to discuss augmenting federal contributions to a host shared-cost programs including post-secondary education, skills training, national highways funding and infrastructure.

The letter never received much press attention at the time. But in it, Harper offered to make the issue of fiscal imbalance "a major priority of our government" and said: "We are committed to restoring balance to the fiscal relationship between the federal government and the provincial and territorial governments through a number of means, including such possibilities as increasing transfer payments to the provinces, reducing federal taxation in order to leave more tax room to the provinces and transferring tax points to the provinces to ensure a fair distribution of new revenues." These are the kinds of initiatives that would take billions annually from the federal treasury and further reduce Ottawa's reach.

» Reality Check: Should Harper be giving away Ottawa's money?

The Harper agenda

Tip-toeing to power, Harper never imbued his agenda with revolutionary fervour, like Mike Harris' 1995 Common Sense Revolution in Ontario. But like Harris, Harper's plan seems largely based on shrinking government by returning revenues to taxpayers – "Canadians are asking, 'Where's my surplus?'," the Conservative leader intoned regularly on the campaign trail. And like Harris, Harper will almost certainly be routinely dogged by groups angered over the change in priorities at their expense.

At a minimum, that list would include gays (same-sex marriage), environmentalists (Kyoto), child-care advocates (upset at the loss of direct subsidies to day-care centres) and native leaders (wondering what's to become of the money promised in the highly touted Kelowna accord). With these groups at least the honeymoon could be short.

» Reality Check

Harper's legislative priorities at this point seem pretty clear. Same-sex marriage is being moved to the back burner. He clearly wants time to assess the level of parliamentary support for any resolution supporting the traditional version of marriage, and to let emotions cool. Social reformers will have to be content with the new government's proposed crime package which, among other things, will raise the legal age for consensual sex from 14 to 16 while lowering, to 14, the age at which teen gunmen can be tried as adults.

Tax measures such as the first GST cut, the child-care subsidy and the transit tax credit will almost certainly be part of the Tory's first budget. Opposition MPs may grumble at the giveaways but they will almost certainly not dare to defeat a new government so soon after an election.

And there will be a huge raft of so-called accountability measures, everything from new electoral financing laws to Gomery-related initiatives to strengthen parliamentary oversight. Opposition parties coming to power invariably bring in new campaign financing laws or rules to govern insiders and lobbyists. The Mulroney government did that, so did Chrétien. A new twist this time out is a little noticed proposal in the Conservative campaign platform that calls for Tory MPs to be allowed free votes on everything but budgetary matters. A big change from the party discipline that has underlined parliamentary democracy from time immemorial, such a move would undoubtedly focus considerable daily attention, wanted or otherwise, on the Conservative caucus. And so add to the drama of change.

No easy ride

Minority parliaments are always a delicate balancing act. Some can be used as a springboard to a majority –think Diefenbaker in 1957 or David Peterson in Ontario in 1987. Others, Joe Clark's 1979 minority being the prime example, don't always get that chance to shine. This one may be a little different. The Conservative agenda is so different from the other parties in so many key areas – the big tax cuts, the pull back on Kyoto, the cancellation of funds to organized day care – that there seems to be no natural parliamentary ally with whom to forge any kind of informal coalition. The NDP likes to imagine itself in that role. But with only 29 seats to add to the Conservatives 124, this still falls short of a natural majority. The plain fact is that the Conservatives will have to have Liberal or Bloc support to pass any of its budgetary plans. But this is not as crazy as it first sounds.

Many Harper initiatives – changing direction on Kyoto for example – can be carried out without parliamentary approval. And the Bloc, though grumbly, may well be disposed to keep the Conservatives in power in order to have a Calgarian in the prime minister's chair when the next Quebec referendum comes into view.

The Liberals are also going to be in a prolonged leadership race, which should help keep the Harper government from being challenged too strongly in Parliament. But the key to his longevity may well be the provinces. If he can keep them happy, by giving away Ottawa's money, that will go a long way to making him look at least as if he is governing successfully. They may be the real allies he needs to stay in office, and to make Ottawa a much less bossy beast than it's been these last many years.

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