Immediately following the Alberta NDP’s historic and exhilarating election victory, the spin masters and political pundits went into full action. Some said the NDP’s victory was little more than a protest vote against the Conservative’s 44-year reign. Others put it all down to NDP leader Rachel Notley’s charisma, claiming that whatever party she led would have won.
There’s no question Premier-elect Notley is politically savvy, charismatic, intelligent, appealing to ordinary Albertans and ran an excellent campaign with her team. But to attribute the Alberta’s NDP’s election victory to protest votes and to Premier Notley’s charisma is demeaning to Notley, her team and to the 603,000 Albertans who voted for the NDP.
Once you get past the hundreds of pages of budget documents, their carefully targeted baubles, the reactions, media commentary, the tweets and retweets, the promotional advertising and smoke and mirrors—if you’re still paying attention—there’s something basic underlying both federal and Ontario budgets neither admit to: the big squeeze on public spending is still on.
Austerity may be out of political fashion, but it’s clearly still in practice. They’ve just been doing it in slow-motion, hoping the public doesn’t notice.
Canada’s budget season really got underway in the last week of March, with the three provinces of Alberta, Quebec and New Brunswick tabling their budgets. These recent budgets all feature a return of austerity: not the type of immediate deep cuts they had warned about and that have hobbled European countries, but more of a slow neo-liberal bleed that will restructure their states and contribute to stagnant economic growth.
After a cold and bitter winter in Central and Eastern Canada and balmier weather in the west, temperatures across Canada are about to rise—and not just because spring is officially upon us. Budget season has started and it looks like it will soon get hot and stormy.
For the first time in memory Quebec will boast a number of years of balanced budgets while Alberta simultaneously runs deficits—but that’s not where the real dividing lines are.
Over 60,000 Quebec students started rotating strikes to protest spending cuts and austerity measures anticipated in the province’s budget tabled on Thursday and are planning another stormy spring with many actions against austerity. The Liberal government of Phillipe Couillard has already made its intentions quite clear. Its spending review commission proposed cuts of over $2 billion, primarily by slashing support to municipalities, agriculture, education, ambulance and childcare programs, where the government has already hiked rates. This is even though Quebec already has the lowest program spending per resident of all provinces.
Today the Fredericton Daily Gleaner published an op-ed I wrote about how the province doesn’t have a structural deficit, despite the government claiming it does. The commentary piece is behind a pay wall so I’ve copied it below.
Last month, CUPE New Brunswick also published a paper I wrote on this issue, Deficit Déjà Voodoo: is New Brunswick really headed off the fiscal cliff? It and a presentation I gave, another blog post and other background material are also available through this post.
Want to know a secret? There is no structural deficit
By Toby Sanger
The New Brunswick government is engaged in extensive province-wide consultations focused on finding $500 to $600 million in spending cuts or increased revenues to address what it claims is “a serious fiscal challenge.” It says this is necessary because the province has a “$400 million structural deficit” has “been spending beyond its means,” and additional funds are needed for other initiatives.
There’s just one big problem with this exercise: the province doesn’t have a “structural deficit”. It’s not that the emperor has no clothes: it’s that he’s hiding them and pleading poverty instead.
Shortly after being elected last October on a platform to boost growth and create jobs, the new Liberal government of Brian Gallant in New Brunswick embarked on another round of alarmism about the province’s deficit.
On short notice they started province-wide consultations on a “strategic program review” about addressing the province’s fiscal challenges, including about reducing and eliminating government programs. Their public material and sessions play up the fiscal challenges facing the province, say they will have to look at reducing and eliminating some government programs and asks what three things the government could stop doing to save money. No questions about what the government could do to grow the economy and create jobs, which is what they were elected to do.
This is extremely disturbing because the Gallant government resoundingly defeated the Conservative government of David Alward that had engaged in exactly the same type of deficit alarmism shortly after they were elected four years ago. In fact they had Don Drummond help them by preparing very pessimistic forecasts of the province’s fiscal situation. I thoroughly refuted Drummond’s pessimistic projections at that time, summarized in this Better Alternatives but it didn’t prevent the government from using Drummond’s pessimistic forecasts to justify significant cuts to program spending the following year. In fact, New Brunswick was the only province to cut program spending that year. And how did that turn out?
The upstart anti-austerity Syriza party didn’t just win this past week’s elections in Greece—it won big, coming just short of an absolute majority. Their victory overturned decades of rule by establishment parties of the left and right and provided inspiration to similar political movements across Europe. But instead of being a surprise, the question many ask is why did it take so long?
Syriza’s victory follows five years of punishing austerity implemented by the established parties and the so-called Troika following a “debt crisis”. But instead of improving Greece’s fiscal situation and economy, the deep spending cuts, privatization, wage suppression and other austerity measures made it much worse. The economy shrank by 30%, the unemployment rate tripled to over 25% (with youth jobless over 50%) and millions were forced into poverty. Despite cutting public spending by more than a fifth, Greece’s debt situation got worse, not better, with its debt/GDP ratio rising by almost 40 percent to 175% of the country’s GDP.
There should be no mincing words: people in Greece and other European countries were forced into economic depression and condemned to unnecessary misery by wrong-headed economic policies. Syriza aims to turn those around by increasing minimum wages, creating jobs, restoring collective bargaining and public services, reforming taxes, reducing the power of the oligarchy, reforming public administration and renegotiating the country’s debts. While some argue they will need to moderate their demands, others such as Nobel economist Paul Krugman say “they’re not radical enough.”