Russil Wvong / History, politics, and the future / 2004 federal election

2004 Federal Election

by Russil Wvong

A mostly non-partisan voter's guide to the June 28, 2004 Canadian federal election, intended for people who don't have much time to follow political issues. I started thinking about this after reading about Chandler Powell in the Globe and Mail. Powell is a 23-year-old who has never voted, and hasn't decided if he's going to vote in this election.

I wrote most of this for the BlogsCanada E-Group weblog.

Table of contents:

1. Why should I vote?

2. How do I decide who to vote for?

3. How do the Conservative and Liberal platforms compare?

3.1. Overall budget
3.2. Ethics
3.3. Moral issues
3.4. Health care
3.5. Other social spending
3.6. Quebec
3.7. Military and foreign policy
3.8. The environment
3.9. Other issues


1. Why should I vote?

Because voting is one of the duties of being a Canadian citizen, like paying your taxes. You don't have to like it, you just have to do it.

If you don't vote, what difference does it make? It's a little like littering: if only one person does it, it doesn't make much difference, but when it's widespread, it makes a huge mess.

Politicians answer to collective public opinion, as expressed in elections. If the subset of people who decide to vote is not representative of the entire population--if richer people vote and poorer people don't, as in the US, or if older people vote and younger people don't, as in Canada--then politicians will be more concerned with the interests of the voters than with the interests of the non-voters (tax cuts over services, health care over education). The smaller the number of people who vote, the more distorted the process becomes. In the 2000 federal election, according to a study by Jon Pammett and Lawrence LeDuc, more than 80% of people over 65 voted; only 22% of people between 18 and 20 voted.

Moreover, in close races, your vote really does make a difference: a handful of votes can decide the result. Deputy Prime Minister Anne McLellan was elected in 1993 by a margin of only 11 votes. In the US, the 2000 race between George W. Bush and Al Gore was decided by 537 votes in Florida. The Canadian website attempts to predict the outcome of Canadian elections, riding by riding; in the 2004 federal election, as of June 19, more than 100 ridings (out of 308) are listed as "too close to call."

Lately there's been attempts to get younger people to vote by making politics "fun" or "cool." Personally, I'm skeptical. Politics will never be fun. It's too painful and boring: the same problems keep appearing over and over again. There's a lot of headaches in Canadian politics, chronic problems that can't be resolved one way or another. Keeping Quebec from separating, without alienating the rest of Canada, is one such problem. Balancing the budget, i.e. balancing our desire for more public services against our desire for lower taxes, is another.

We elect politicians to deal with these headaches, so at least we don't have to deal with them ourselves; but it's impossible to make them go away. Naturally, we don't like that--in ordinary life, we're more accustomed to problems that can be solved--so we're often angry at politicians, and dissatisfied with the whole process. Nevertheless, that's not a good reason not to vote. A good government can manage these headaches well enough to prevent them from exploding into full-blown crises. A bad government can aggravate the problems, or add new ones.

2. How do I decide who to vote for?

If you're a first-time voter, or a middle-of-the-road voter, how are you supposed to decide who to vote for?

One way, of course, is to read through the party platforms and compare them, as I've done for the Conservative and Liberal platforms in section 3. But if you don't have the time or interest to do that, I'd boil it down to two questions: (1) Which is more important to you, more public services (and therefore more spending) or lower taxes? (2) Who can keep the budget balanced?

  1. Do you want taxes and public services (health, education, welfare, etc.) to be about the same as they are now? In that case, vote for Martin and the Liberals. If you want higher taxes and more public services, vote for Layton and the NDP. If you want lower taxes and lower public spending, vote for Harper and the Conservatives.

    The key thing to remember is that it's impossible to have lower taxes and higher public spending at the same time. Public services are paid for by taxes, so the two have to be balanced. If you lower taxes, you eventually need to cut spending (that includes things like education and health). If you increase spending, you eventually need to raise taxes. It's possible to temporarily put off balancing the budget by borrowing the difference, but as we found out during the 1970s and 1980s, that just aggravates the problem, because you have to pay interest on the money you've borrowed; you become dependent on foreign investors to lend you money.

  2. Who can keep the budget balanced? Martin can, obviously, since he balanced the budget as Finance Minister during the 1990s. Is he the only one, or can Harper and Layton do it as well?

    Why is it so hard to keep the budget balanced? I think the reason is that it requires a peculiar combination of economic prudence and political risk-taking. Whenever the budget looks like it's getting out of balance, you need to raise taxes, cut spending, or both. In other words, you have to impose considerable pain on people. People get very angry when you do this, so you're risking your political future.

Taxes and spending aren't the only issue, of course, but the reason they're so important is that the government has to spend money to do anything.

Other issues:

I'm planning to vote Liberal, by the way. (I'm conservative in the sense that I don't like the risks involved in changing governments.) On the other hand, I think it's healthy that the Liberals are now facing a united conservative opposition; it's good to have a real alternative on hand, in case the Liberals self-destruct.

(My past voting record: I voted Conservative in 1993, Liberal in 1997 and 2000. Provincially I voted for the Conservatives in Alberta in 1993, the NDP in BC in 2001.)

3. How do the Conservative and Liberal platforms compare?

A comparison of the Conservative and Liberal platforms. These are the plans that each party would start from if they were to form the government.

This year we've got a clear choice between the two parties, particularly when it comes to the overall budget.

3.1. Overall budget

The Liberals and Conservatives are both using five-year projections. They look something like this:


43 billion Five-year surplus
-15 billion Contingency
-26-28 billion New spending
+12 billion Savings from program review
12-14 billion Balance


87 billion Five-year surplus
-44 billion Tax cuts
-24 billion New spending
+10 billion Savings from eliminating business subsidies
29 billion Balance before contingency
-15 billion Contingency
14 billion Balance after contingency

The Conservatives haven't explicitly allocated a contingency fund; in the numbers above I'm assuming they allocate $3 billion annually to contingency, as the Liberals have done.

Looking at the big picture, both parties are promising about the same amount of new spending (24 billion for the Conservatives, 26-28 billion for the Liberals). But the Conservatives are also promising 44 billion in tax cuts. (That doesn't include the future costs of the RLSP: RLSP savings won't be taxed when withdrawn.)

Where is the extra 44 billion going to come from? The Conservatives are planning to cut 10 billion in business subsidies, but their five-year surplus projection of $87 billion is based on the assumption that they can also cut roughly 40 billion in program spending over the next five years, or 8 billion a year.

Can they do this? The federal government currently spends roughly 36 billion annually in interest on the debt (3% of GDP), and 140 billion on program expenses (12% of GDP, down from 16% in 1993-1994). Program expenses are in turn divided roughly into half: 70 billion consists of transfers to the elderly, EI, and transfers to the provinces (for health care, education, social services), which are pretty much untouchable; and 70 billion on direct program spending.

What does direct program spending consist of? From the 2004 budget: "Direct program expenses consist of subsidies and other transfers (such as assistance to farmers, students and Aboriginal peoples and for international and regional development), payments to Crown corporations and the operating expenses for departments and agencies, including National Defence."

Military spending is about 12 billion annually, so that leaves about 60 billion in other direct program spending from which to cut about 8 billion a year, on top of the 10 billion over five years (2 billion a year) in business subsidies which will be cut. That's roughly a 15% cut across the board.

I'm not sure there's any easy cuts left. The Mulroney government cut program spending (but was unable to get rid of the deficit because interest on the debt kept rising). Martin cut transfers to the provinces by 25%, but he also cut federal spending by roughly 20%.

I don't want to say that cutting another 15% can't be done, but it seems to me that by promising 44 billion in tax cuts before doing the painful work of cutting spending, the Conservatives are counting their chickens before they hatch.

I don't like governments which provide tax cuts first (the easy part) and say they'll balance the budget later (the hard part), like Reagan in the US, Harris in Ontario, Campbell in BC, George W. Bush in the US. I think a real fiscal conservative would make sure the budget was balanced before cutting taxes, as Chretien and Martin did, or as Klein did in Alberta, or Romanow did in Saskatchewan.

Also, we may be running surpluses now, but we're not really out of the woods yet: we've still got a 500 billion dollar debt to pay off (40% of GDP, down from 70% in the mid-1990s), and we've got a big surge in health-care costs coming down the road--no more than 10 years from now--as the baby boomers age. We really need to get the debt down to 20% of GDP by then.

The Globe and Mail (a generally business-friendly paper) has discussed this issue quite a bit:

"The Conservatives' magic new surplus," June 7, 2004, p. A18. Editorial questioning the Conservative budget plan.

Bruce Little, "Parties' budgets play fun with figures," June 10, 2004, p. B1. Analyzes both the Liberal and Conservative budget plans.

Heather Scoffield, "Think tanks cast doubt on Tory platform's math," June 18, 2004, p. B6. The C. D. Howe Institute and the Bank of Nova Scotia both say that if the Conservatives cut taxes and boost health-care spending, they'll need to cut spending significantly elsewhere.

3.2. Ethics

The Liberals are clearly on the defensive here. More free votes; an Ethics Commissioner who reports to Parliament instead of the Prime Minister; an investigation of the sponsorship program; whistle-blower legislation; tightening financial controls.

The Conservative plan: have the Auditor General review all federal spending; an Ethics Commissioner appointed by Parliament (not just reporting to Parliament); fixed election dates; an elected Senate; all votes except the budget to be free votes; prevent parties from bypassing the candidate nomination process.

The Conservatives are also promising to end corporate and union political donations entirely (the Chretien government already limited them to $1000--"long overdue," say the Conservatives). But the platform also says:

We will revise election financing legislation to allow individual Canadians and organizations freedom of expression during election campaigns.

If I'm interpreting this correctly, corporations (and unions) would then be free to spend as much money as they wanted on political advertising. This seems like a bad decision to me, assuming you don't want special interests to have undue influence on the political process.

The Conservatives would also provide an option on your tax return that would let you decide which party should receive public money (if I understand correctly, the Chretien reforms base public funding of parties on past election results). The interesting thing is that it wouldn't be added to your tax bill. In effect, there'd be a pool of money that would be directed to the parties based on people's selections: if 50% of the people check party X, 50% of the money goes to party X.

The Globe and Mail argues that electing Senators has some major pitfalls: "The folly of rushing into Senate elections," p. A18. Elected senators may be appointed without constitutional changes, but there's no provision for getting rid of Senators. This can easily lead to deadlock between the House of Commons and the Senate.

3.3. Moral issues

While the Conservatives attack the Liberals for "waste, mismanagement, and corruption," the Liberals are trying to attack the Conservatives over their supposed extremism on social and moral issues: to what extent would a Conservative government try to impose social conservatism? The Liberals have gotten some ammunition from statements by Conservative MPs and candidates.

The part of the Conservative platform that appears to be most relevant is the following plank on gay marriage:

The Conservative Party believes that Parliament, not unelected judges, should have the final say on contentious social issues like the definition of marriage. We do not support the current reference case, which will ask the Supreme Court to rule on the constitutionality of same-sex marriage legislation before it has been debated by Parliament. Since the definition of marriage had never been questioned until recent years, the Parliament of Canada has never passed legislation defining marriage.

A Conservative government led by Stephen Harper will withdraw the current marriage reference case before the Supreme Court and hold a free vote in Parliament on the definition of marriage.

In other words, it'd be up to the MPs.

The platform doesn't say this, but the Reform Party position on moral issues, such as abortion or gay marriage, was that Reform MPs would consult with their constituents to determine if there was a consensus. If there was, they would vote according to the consensus of their constituents, even if they personally disagreed. If there was no such consensus, they would vote according to their personal conscience. (See Tom Flanagan's Waiting for the Wave.)

Stephen Harper's political strategy is based on moderate conservatism, rather than extremism, so I'm not too worried about this issue myself (although I can understand why other people might be). Flanagan quotes a 1989 memo by Harper:

As an alternative Harper proposed that the Reform Party could and should become "a modern Canadian version of the Thatcher-Reagan phenomenon." It should seek its core supporters in the private-sector middle class of Canada's urban areas, offering these voters a market-oriented ideology. Building on that economic base, it "should tailor its broader, 'social' agenda to gain a sizable chunk of the urban working class and rural sector 'swing' vote, without alienating its urban private sector middle-class 'core.' The key is to emphasize moderate, conservative social values consistent with the traditional family, the market economy, and patriotism."

One other potentially controversial issue is immigration, but the Conservative platform doesn't include any mentions of restriction on immigration (unlike Reform's 1994 Ottawa Assembly). The Conservative platform says, "The Conservative Party recognizes Canadian society has been built by successive waves of immigration from all sectors of the globe, and that immigration tremendously enriches our economy and national life" and "A Conservative government led by Stephen Harper will ensure speedier recognition of foreign credentials and prior work experience."

3.4. Health care

The Liberals would spend an additional $8 billion on health care: $4 billion targeted at reducing waiting times, $2 billion on home care (including prescription drug costs), $2 billion to the provinces.

The Conservatives would spend an additional $13 billion on health care, or half of their new spending: $10.2 billion in additional transfers to the provinces (with less involvement by the federal government), $2.8 billion on catastrophic coverage for prescription drugs.

In addition, both parties would expand the caregiver tax credit: the Liberals have allocated 1 billion, the Conservatives 0.5 billion. Curiously, although both platforms say that they would double the credit, they give different amounts: 10,000 in the Liberal platform, 7,000 in the Conservative platform.

Both platforms talk about the need for reform. From the Liberal platform:

There is broad consensus on what is needed to reform health care in Canada. Genuine, beneficial reform requires new approaches to primary health care (for instance, better access to doctors, nurses and clinics, no matter the time of day), home care, a reduction in waiting times and coverage for prescription drugs in situations where expenses are catastrophic to personal or family finances.

These changes need to be complemented by long-term improvement in the overall health of Canadians through better lifestyle habits and the reduction of poverty.

Finally, reform requires transparent, publicly-available information about health outcomes and costs so that Canadians can hold their governments accountable for the health care system's performance.

Clearly, reform depends on a lot more than dollars. Nevertheless, governments will need to spend more in the years ahead to achieve Canadians' health care goals.

3.5. Other social spending

The Liberal platform allocates 5 billion for national daycare, 1.5 billion for an increase in GIS (to keep up with wages), 1-1.5 billion for affordable housing.

The national daycare program hasn't gotten much discussion in the campaign, which is too bad, because it looks interesting. The Liberals are presenting it as an investment in early-childhood education, not just daycare. From the platform:

The case is compelling for investing in high-quality early learning and care available to every child. Studies conducted in Canada and throughout the world conclude that good child care and early learning contribute immensely to the healthy growth of children, as well as to their physical, emotional, social, linguistic and intellectual development. Simply put, it gives kids the best possible start in life.

Accessible and affordable child care and early learning are also smart investments in our economy. To begin with, these investments respond to the reality of modern life: that both parents want to, and often need to participate more fully in the paid labour force while knowing that their children are thriving in a caring, stimulating environment. Investments in child care and early learning are also smart because they help to level the playing field for those disadvantaged by birth or background, and because they set our youngest on the path to lifelong achievement.

Sounds good, but I'm thinking, wouldn't it be better if parents could provide this kind of early development? I'm reminded of a friend's joke that in the interests of equality, children ought to be taken away from their parents at birth and raised in state-run creches. (At least, I think he was joking.)

On the other hand, from talking to other parents of young children, getting good-quality daycare is definitely a big problem. It's difficult to raise a family on a single income. In Vancouver, the problem isn't high taxes, it's the incredibly high housing prices.

So this could be a pretty good idea. Not sure.

3.6. Quebec

Neither platform says anything explicit about Quebec.

Chretien brought in the Clarity Act in 2000, to prevent Quebec from seceding in the future if there's a 50% + 1 majority on a vague or confusing question. Basically, if a future referendum succeeds, Parliament will decide within the next 30 days whether (a) there was a clear majority and (b) there was a clear question. The Clarity Act was very popular outside Quebec, unpopular inside Quebec; neither Martin nor Harper are planning to revisit the Clarity Act, as far as I know.

One idea underlying the Conservative platform is that the federal government should give the provinces more freedom of action, which would appeal to Quebecers (both federalists and nationalists). However, the Conservatives under Harper are also more likely to take a confrontational stance over the rights of Quebec anglophones; see Tom Flanagan's comments about the "Party of English Canada" strategy in Waiting for the Wave.

A detailed discussion of relations between Quebec and the rest of Canada is too complicated to get into here. For a good discussion, see John Richards' paper "Language matters," which argues that Quebec ought to be given explicit jurisdiction over language.

3.7. Military and foreign policy

My limited knowledge of military spending issues comes from reading Bruce Rolston's weblog. According to Rolston, we basically have three choices, corresponding to how much we're willing to spending.

Supporting the status quo--"a medium-weight sustainable brigade-sized infantry force for UN/NATO deployment, plus a sustainable frigate squadron and a modern jet fighter squadron"--would cost $18 billion. Current spending is about 12 billion a year (there was a 0.8 billion increase in the 2003 budget). So there's a considerable gap here. Just supporting the status quo would take an additional $5 billion annually, $15 billion over five years.

Bruce suggests that Canada could have a reasonably flexible Land Force-dominant military for $15 billion annually, by focusing on an infantry brigade, and having the navy and air force focus on transport capability. The CF-18 squadron and frigate squadron would have to go. This would require an additional $2 billion a year, or $10 billion over five years.

For $12 billion or so? "Well, it wouldn't be pretty. But I think you could still do something with it." There'd be a small cadre of regular soldiers, mostly as support for a larger number of reservists.

From looking at the Liberal and Conservative plans, neither is talking about closing the gap by dropping capabilities (in particular the CF-18 squadron and frigate squadron), nor are they allocating enough additional money even to support the Land Force-dominant concept ($10 billion), let alone the status quo ($15 billion). The Liberals are allocating 2.5-3 billion, the Conservatives are allocating 7 billion.

I'd be very interested to see Bruce's comments on the Liberal and Conservative platforms, but unfortunately he hasn't posted anything during the election campaign.

Of course, Canadian military capabilities are only one part of Canadian foreign policy. Both the Liberals and Conservatives are planning to review Canadian foreign policy. For some background on Canadian foreign policy, see Louis St. Laurent's 1947 Gray Lecture, The Foundations of Canadian Policy in Foreign Affairs.

3.8. The environment

The Liberal platform includes a wind power initiative with a target of 4000 MW. Cost would be $400 million, from money already allocated for Kyoto.

The Conservative platform: withdraw from the "increasingly irrelevant" Kyoto Protocol, work out some kind of longer-term strategy, cap pollutants.

The Conservative platform includes the following point: "Support spending $4 billion over ten years to clean up contaminated sites such as the Sydney tar ponds." This seems somewhat misleading: this is money previously allocated by the Liberals, not additional money.

3.9. Other issues

The Conservatives would allocate an additional $3.5 billion for infrastructure spending.

The Liberals would transfer $4-5 billion to the cities, and allocate an additional $2 billion for "regional, rural, and industrial development."

The Liberal platform concludes with a laundry list of accomplishments since 1993. It doesn't really convey how the Liberals wrestled with two major crises, for the most part successfully: the $40 billion deficit and the 1995 Quebec referendum.


Edward Greenspon and Anthony Wilson-Smith, Double Vision: The Inside Story of the Liberals in Power (1996). A blow-by-blow account of how the Chretien government handled two major crises: the February 1995 budget and the "near-death experience" of the October 1995 referendum in Quebec. I'd forgotten how close Canada was to the brink. Federal and provincial debt were close to 100% of GDP; interest on the federal debt was consuming 34% of revenue; unemployment was 11.2%; the deficit was $40 billion; foreign investors were very close to deciding that Canada was no longer a good credit risk, as happened to Mexico in 1994, which would have triggered a huge financial crisis. People were wondering if Canada was going to survive. A good account of what it's actually like to govern: a combination of chronic headaches and crisis management.

Tom Flanagan, Waiting for the Wave: The Reform Party and Preston Manning (1995). Describes how Preston Manning launched a new political party and led it to a major breakthrough in 1993, with 52 seats. Stephen Harper played a major role in Reform policy and political strategy, and Flanagan discusses and analyzes the differences between Manning's and Harper's views. Flanagan is now a senior advisor to Harper's campaign.

I haven't read Jack Layton's book Speaking Out: Ideas That Work for Canadians (2004), but it got a good review from the Globe and Mail.

If you want to find out what your riding is, who the candidates are, and where you're supposed to vote, see the Elections Canada website.

If you want to look at the websites for the candidates in your riding, see the BlogsCanada candidate sites list.

If you want to see what other people have to say about the prospects of the candidates in your riding, see the website.

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$Date: 2004/06/23 15:57:07 $