NOW WHAT? REFLECTIONS ON A REVOLUTION IN PROGRESS
The Dr. Harold Walker Siebens Lecture
by Preston Manning MP
to The Fraser Institute Annual General Meeting
Round Table Luncheon
Calgary, Alberta
May 23, 2001
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Contacts:
Ron Wood
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Suzanne Walters
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INTRODUCTION
I wish to begin by thanking the Fraser Institute for the opportunity to speak to you today, and for inviting me to become a Senior Fellow of the Institute when I "retire" from Parliament at the end of the year.
I almost said, when I "escape" from Parliament, but that would imply that Parliament was some sort of institution for the criminally inclined, which would of course be grossly unfair …. to institutions for the criminally inclined …. so I must choose my words carefully.
I also want to thank the friends and supporters of the Institute for helping to provide so much of the intellectual foundation required to advance and defend such concepts as private property, fiscal responsibility, freedom of enterprise, freer trade, and market based solutions to public policy challenges.
Your work is of particular importance to those of us who are trying to advance such concepts in the political arena.
Once we get caught up in the hurly burly of that arena, as Henry Kissinger observed, we use up our initial supply of intellectual capital very quickly, with little time or opportunity to replenish it.
Our political life is therefore enhanced by the work of institutions like the Fraser Institute which devote themselves to generating that intellectual capital, and make it available to practicing politicians of all parties and persuasions.
I am also reminded that concepts such as economic and social entrepreneurship affect our country for the better when they are lifted off the pages of studies and reports and become embodied in the lives and actions of real people.
Harold Walter Siebens, whom many in this room will remember, was an individual who embodied and practiced many of the ideals that the Fraser Institute stands for, and I am honoured to give this lecture today in his memory.
A REVOLUTION IN PROGRESS
But now, a few thoughts on "the revolution in progress."
The concept of revolution is the overthrow of one set of ideas or rulers by another, and it is true to say that a revolution has been going on in Canada and indeed through out the world over the past two decades.
In most countries, the idea that governments could manage and direct resources and economies better than properly functioning markets has been discredited.
And market based approaches to the creation and distribution of wealth have replaced approaches that rely on the intervention or protection of the state, throughout much of the world including almost all the old bastions of communism and socialism.
In Canada, at the national level, a significant milestone in that revolution was the abandonment of protectionism as a national policy by the Conservative government of Brian Mulroney, and the negotiation of the free trade agreement (since expanded) with the United States.
(Who says I've never had anything nice to say about Brian Mulroney?)
In most countries, the idea that governments could consistently live beyond their means, and finance ever increasing deficits and debts through ever increasing taxation, has also been largely discredited.
And what I would call the Fraser Institute Creed of Fiscal Responsibility in Government is being adopted by more and more governments, at all levels, regardless of political stripe.
That creed may be summarized in twelve words: "Control your costs, balance your books, reduce your taxes, reduce your debts."
In 1993, it was that creed which inspired the Reform Party's "Zero in Three" campaign — a plan to reduce the federal deficit to zero in three years. That campaign helped us break through on the national stage in the 1993 federal election, and forced the Liberals to rethink their approach to government finances.
It is that creed which has been most successfully practiced at the provincial level in Canada by Ralph Klein in Alberta and Mike Harris in Ontario.
The so-called Klein revolution has helped to make Alberta one of the strongest — if not THE strongest — provincial economies in the country, attracting investment and stimulating job creation at record levels.
Mike Harris's Common Sense Revolution is accomplishing the same thing in Ontario.
In 1993, when I first went to Ottawa as an MP, I met Mike Harris and Tony Clement when they were just starting out to sell the Common Sense Revolution to Ontario voters.
In those days, they would be lucky if they could get 200 people out to a fundraiser in Ottawa — the bastion of big government spending. But just last Thursday, Sandra and I attended a Mike Harris fundraiser in Ottawa attended by over 1000 people. Common sense economics can be politically as well as fiscally successful.
How wonderful that provincial governments across the country are now COMPETING WITH EACH OTHER to see who can reduce debt and taxes the fastest.
There's a constructive fiscal revolution in progress. And it's a great thing to see.
"BEYOND THE REVOLUTION"
I have a friend in the United States who says we Canadians don't know how to market great ideas profitably.
He says, when we have a great idea — like "The Revolution" — we put it all into one book and try to peddle it as a single package.
He says that what the Yankee entrepreneur would do is divide the basic idea into three parts, and get three books out of it, and three times the profit.
So you would have "Toward the Revolution." Then you would have "The Revolution." And then you would have "Beyond the Revolution."
We have reflected briefly upon a revolution in progress. Let's reflect for a moment on the question "Now What?" — What are the next steps, provincially, nationally, and internationally?
CARRYING ON THE REVOLUTION ON THE PROVINCIAL FRONT
On the provincial front in Canada, we have still not achieved genuine free trade across provincial boundaries, and there are still some provinces where the warm and stimulating winds of the fiscal revolution have not yet penetrated.
British Columbia, that great province which ought to be the wealthiest in Canada on a per capita basis, has not yet controlled its costs, balanced its books, reduced its taxes, or reduced its debts. And the province's economy has suffered as a result.
But as you all know, a week ago today that province took a giant step forward toward these goals by replacing the NDP government with that of Gordon Campbell. The revolution in British Columbia is just beginning, but it has begun.
Sometime within the next eighteen months, there is a good chance that the people of Saskatchewan will take a similar step by replacing the NDP government there with a more fiscally responsible government headed by my former House of Commons colleague, Elwin Hermanson. The revolution has not yet begun in Saskatchewan, but it is on the horizon.
When that happens, and if Manitoba eventually follows suit, I can no longer use the reply which my father used to give years ago when asked, "Did Alberta have a secret economic growth strategy?"
"Yes," he would say, "the election of socialist governments in Manitoba, Saskatchewan, and British Columbia."
But there is another dimension to expanding the conservative revolution which is particularly relevant to Alberta and Ontario.
Suppose a provincial government gets its spending under control, its books balanced, its debt down, and its taxes down — steps which Alberta has already taken and which Ontario is getting close to completing — what then?
As the old Peggy Lee song goes, "Is that all there is, my friends? Is that all there is?"
The answer to that question is NO. There is still work to be done, but work of a different kind.
When Adam Smith wrote The Wealth of Nations, he set out the principles that should guide governments in nurturing a wealth producing, market based economy.
But Adam Smith also wrote another book entitled On Moral Sentiments in which he asks this question:
"To what PURPOSE is all the toil and bustle of the world? What is the END of avarice and ambition, of the pursuit of wealth, of power, and pre-eminence?"
He then answered that question by saying that the purpose and end of wealth creation was not wealth for its own sake, but the "fortune" and "happiness" of others.
In Adam Smith's words: "How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the FORTUNE OF OTHERS, and render THEIR HAPPINESS necessary to him, though he derives nothing from it, except the pleasure of seeing it."
So it is in our day, that many of the ends to which the wealth of productive societies is directed both by markets and by governments, are social ends.
The two largest spending areas of all provincial governments in Canada are health care and education. These are services of immense importance to all Canadians — to all of us here.
But to date, in Canada these services have largely been provided through huge public-sector monopolies, with all the inefficiencies and restrictions of consumer choice that monopoly entails.
"Carrying on the revolution" requires us to help governments and the public address the role of private sector resources and market place mechanisms in the provision of more and better educational and health care services to Canadians.
With respect to health care, the real issue here is NOT — as the Prime Minister implied during the federal election campaign — WHETHER private resources have a role to play in Canadian health care. At present, of the $90 billion per year that Canadians spend on health care services, $30 billion per year are purchased from private insurers and suppliers.
The issue therefore is NOT whether Canadians want public or private health care services, but how to harness BOTH public and private resources to the objective of quality health care for all Canadians regardless of ability to pay, and how to maintain the proper BALANCE between them.
A similar issue exists with respect to the role of private resources, and the creation of more freedom of choice, in the educational field, a subject which the Ontario government began to address in its recent budget.
I suggest that "carrying on the revolution" for the Fraser Institute and conservative oriented provincial governments means bringing private capital and market mechanisms more effectively to bear on the provision of health and educational services for Canadians, and doing so with the same vigour and determination that has been used to address and resolve the deficit issue.
CARRYING ON THE REVOLUTION ON THE NATIONAL FRONT
What does "carrying on the revolution" mean on the national front?
There is no question that increasing numbers of Canadians, as early as 1984, wanted federal spending to be controlled, the federal deficit to be eliminated, and federal debt and taxes to be reduced.
That's what many Canadians voted for in the 1984 federal election. And that's what later led to much of the disillusionment with the Mulroney Conservatives, when, after nine years in office, that fiscal agenda had not been achieved.
In 1993, Reform offered its Zero in Three program to eliminate the deficit, but our opponents and many of the commentators said this solution was "too extreme."
Pierre Trudeau once said that Canadians are "extreme moderates," so any program labelled as "extreme" faces an up hill struggle.
In the federal election of 1993, therefore, Canadian voters elected Liberals to form the government and elected fiscal reformers in opposition.
The Canadian genius for moderation manifested itself by handing over the management of the needed fiscal revolution at the federal level to people who did not believe in it, thereby insuring that the revolution would not be carried to extremes.
In the federal Parliament, it was left to fiscal reformers, in opposition, to drive the fiscal agenda from the back of the bus.
This is a peculiarly Canadian way of getting things done — sort of. It invokes the question, why did the Canadian cross the road? The answer of course is to get to the middle. And this was the "middle way," which very easily becomes the "muddle way."
What then is the status of the fiscal revolution at the national level? The federal budget has at least been balanced, but mainly by increasing taxes rather than by controlling costs.
The initial steps toward federal debt reduction are only now being taken. And the $3.4 billion increase in federal spending confirmed in the Finance Minister's recent Economic Statement jeopardizes both the balancing of the budget and the delivery of real federal tax relief to Canadians.
I particularly want to stress this latter point: The federal government has loudly proclaimed in its last two budgets, and again in last week's Economic Statement, that it is delivering substantive tax relief to Canadians.
But at the street level, when Mr. Martin's claims are presented, the vast majority of Canadians say "What are you talking about? — What federal tax relief?"
I recently asked the national pollster POLLARA to include the following question on a national public opinion survey conducted in the first week in May.
The question: "Personally, have you noticed a reduction in the amount of federal taxes taken from your paycheque or not?"
The survey found that 76% of respondents had NOT noticed any reduction in federal taxes taken from their paycheques. On the prairies, the number was even higher than the national average, at 83%.
The survey (which can be viewed at www.prestonmanning.ca) found that those most likely to have noticed some federal tax relief were in households with incomes in excess of $100,000.
But among lower and middle income households, the households which Mr. Martin claims to have been targeting for federal tax relief, 73% to 77% report NO noticeable reduction in their federal taxes.
The reasons why Mr. Martin's promised tax relief is not registering with so many Canadians are twofold: First, the tax reductions themselves in many cases have been miniscule. And secondly, they are often offset by increases in other federal deductions, such as the hikes to Canada Pension Plan premiums.
And so at the federal level, the national debt to GDP level is still over 50%. The projected $3.4 billion increase in federal spending threatens to unbalance the budget. And until Canadians start getting REAL federal tax relief — tax relief that actually registers on their paycheques and in their bank accounts — the stimulative effect of Mr. Martin's tax relief announcements will be negligible.
In short, the fiscal revolution at the national level remains incomplete. There remains much work to be done, by the Fraser Institute, by interest groups committed to tax relief, and by fiscal reformers in the 37th Parliament.
TOWARD DEMOCRATIC CONSERVATISM
It is not appropriate for me to comment at this time on the particular steps that I think need to be taken to create a principled, united conservative alternative to the federal Liberals at the national level.
I have done a lot of work on this subject in the past, and will have more to say about it once I am out of Parliament and operating in a less partisan environment.
But let me say today that one of the great tasks facing conservative thinkers and activists at the outset of the 21st century is to debate and decide what adjectives should be attached to the great noun "conservative" in order to make conservatism relevant, understandable, and attractive to larger and larger numbers of Canadians.
Nobody in Canada has done more to help define and explain fiscal and economic conservatism than the Fraser Institute. And as I have said, there remains much work to be done to advance fiscal and economic conservatism on both the provincial and federal fronts, and we should pursue that task with vigour.
But in this country, to be able to address the challenges of national unity and national governance it is also necessary to have a constitutional vision.
Much work needs to be done to define and communicate a "constitutional conservatism" capable of addressing these issues — a constitutional conservatism that challenges concentrations of monopoly power in the political market place in the same way that free market conservatives challenge monopoly power in the economic market place.
In my view, there is also an important place for social conservatives in the conservative coalition of the future, particularly as champions of law and order and the role of families in society.
But both fiscal and social conservatives will need to work out and accept some agreed-upon rules for reconciling conflicts between them concerning the proper role of the state in the Canada of the future, if they intend to work together to bring that Canada about.
When I visit high schools as I frequently do, and ask the next generation of Canadians what kind of Canada they want to live in, it will not surprise you to know that over 50% of the answers I receive are expressed in terms of "environmental conservation."
"We want to live in a country," these young people tell me, "where there is clean air, clean water, clean soil, biological diversity, sustainable forests….." and so on.
The words "conservation" and "conservative" come from the same root, but for conservatism to be made relevant to the next generation, environmental conservation will have to occupy a much more prominent place in the conservative creed than it has heretofore.
And finally, if I have a favourite adjective that I would like to play a more prominent role in defining and modifying the conservatism of the future, it would be the adjective "democratic."
Agreeing to the simple rules of democracy — respect for everyone's opinion in debate, but resolving issues by democratic votes at the end of the day — is for me the best way to reconcile the differences between fiscal and social conservatives in any conservative coalition.
And on the international front, as you all know, there is a major debate shaping up as to what sort of governance structures should be established internationally to deal with the environmental and social issues which attend globalization and the international expansion of free trade.
This was as much the focus of debate at the recent Summit of the Americas at Quebec City, as were the economic policies necessary to advance the creation of the Free Trade Area of the Americas.
It would be a huge mistake for the champions of free markets and free trade to vacate the field on this issue, and leave it to the opponents of free markets and free trade to define that governance structure.
The so called international "democracy deficit," the constitutional and governance arrangements for any Free Trade Area of the Americas, and the form and powers of any future Congress of the Americas should be thoroughly addressed by democratic conservatives in Canada if we want to see free market and free trade policies succeed internationally as well as at home.
CONCLUSION
I look forward to working with you — and our friends and colleagues across the country — in carrying on the revolution which your efforts have thus far so nobly advanced.
To me that means carving the words of our fiscal responsibility creed — control your costs, balance your books, reduce your debts, reduce your taxes — into the governing statutes and cabinet table of EVERY government in Canada, including the federal government.
To me, it means paying more than lip service to the concept of sustainable development, and making environmental conservation as much a part of the conservative creed as the conservation of freedom or law and order.
And to me, "carrying on the revolution" also means finding the keys to uniting economic, social, constitutional, environmental, and democratic conservatives to advance these values, internationally as well as domestically, in the exciting months and years that lie ahead.
Thank you.
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