Federal government earns overall grade of "D", according to Fraser Institute Report Card

Release Date: 23 October 1996

Vancouver, B.C. >>> The federal Liberal government's overall performance since 1993 has been rated ambiguous at best, according to a Fraser Institute review of the major policy actions undertaken by the Chretien government. The 80-page report concludes that much stronger measures need to be taken to deregulate the economy and reduce the burden of over-intrusive government.

The Federal Government in Action: A Report Card on the Chretien Government assigns an overall letter grade of "D", or a Conditional Pass. "In some instances it may have been more appropriate to label this document 'The Federal Government Inaction'," said Fazil Mihlar, policy analyst at The Fraser Institute and co-author of the report, "considering the government's aversion to creating an environment conducive to job creation in this country."

Mr. Mihlar argues that the report's 50 recommendations (attached) for reforming the role of government would go a long way towards achieving what the government proclaimed to be its highest priority: job creation.

The Federal Report Card bases its analysis and conclusions on factors necessary for an economically competitive environment. These include less government spending, lower taxes, fiscal balance, less government regulation, and decentralization of political authority. Below is a list of the policy areas examined and the grades assigned. (For a more detailed explanation of the graded policy areas, please refer to the main document.)

In some policy areas the Liberal record is very positive. The signing of NAFTA and the pursuit of freer international trading agreements will improve economic efficiency and welfare. By turning airports and ports over to local authorities and by privatizing CN and the Air Navigation System, the federal government has increased choice and competition in our transportation sectors. Efforts to reduce the federal deficit, while clearly insufficient, are also to be commended, as this is the first federal government in recent history to recognize the severity of our fiscal crisis and to reduce the size of the budget deficit.

Unfortunately the Liberal government's record in other policy areas leaves much to be desired. The burden of taxation remains high compared to our major trading partners, and Ottawa has failed to alleviate the tax burden faced by all Canadians. Intrusive labour and employment equity laws continue to impede the efficient functioning of the labour market, and the government's insistence on pursuing top-down, interventionist industrial policies will do little to enhance Canada's economic interests.

The authors also argue that the health and social policy reforms initiated by the federal government will not succeed in making our social safety net more effective and affordable. Canada's medical system, with its long waiting lines and rising costs, "will not serve the interests of Canadians until private market forces are introduced." According to the report, the federal government "does a disservice to all Canadians by lambasting any alternative to the outmoded Canadian medicare system as a retreat to American-style health care." If meaningful health reform is to take place, the Canada Health Act should be repealed, the authors conclude.

"There is still much to be done," said Mr. Mihlar. "If the Liberal government is as interested in fixing the economy as it claims to be, it must reduce the burden of government much faster. A program of fiscal retrenchment, tax reduction, deregulation, and constitutional decentralization would shore up the Liberal's near-failing performance to date."

Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver.

For further information contact:

Suzanne Walters, Director of Communications,
The Fraser Institute, (604) 714-4582,
Email suzannew@fraserinstitute.ca

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Last Modified: Wednesday, October 20, 1999.