A Surprise Surplus? How Do We Know Harper & Co. Didn’t Cook The Books?

A Commentary by Doug Draper with apologies for the length of this post but this issue is vitally important to how we Canadians vote this October for our future

It wasn’t all that many days ago – around this past September 10^th or so – that we were hearing how Stephen Harper’s federal election campaign was sliding down a sink hole of its own making, leaving the Conservative leader and his party scrambling to shake up its campaign team and get the public’s focus away from Syrian refugees, Senate scandals, recession worries and party candidates that mock disabled people and sneak a pee in someone’s coffee cup.

Surrounded by party supporters, a re-charged Stephen Harper pulls a surprise surplus out of the hat

Then all at once, this past Monday, September 14^th, we have images of Harper, looking re-energized and beaming from ear to ear, with a sea of party faithful waving newly minted ‘Protect Our Economy’ signs. All this while he is announcing – surprise, surprise – a report from Canada’s Finance Department shows the country came out of the 2014-15 fiscal year not with a deficit, but a $1.9 billion surplus.

Really? And how just in the nick of time this surprise surplus is for Harper & Co., with only five weeks left before Canadians go to the polls and a mere three days before a September 17^th televised leaders debate where the state of the country’s economy is billed to be the focus of discussion.

Excuse me if I’m not so surprised by this. I’ve been around long enough to say that I’ve seen this picture before.

What I do find surprising is the reaction to this news by NDP Leader Tom Mulcair, who’s been cast by so many as the seasoned, smart contender in this federal election compared to what Conservatives, in particular, have cast for the better part of two years now as the ‘all too inexperienced and unready’ Liberal Leader Justin Trudeau.

Yet here we have the seemingly no gravitas Trudeau showing right-minded reluctance to offer too many details on how he’d balance the country’s books, saying he would first want to see “how much of a mess” Harper has left them in. Then we have Mulcair, running around the country making wonderful promises about investing more in seniors ‘pensions and all these other social programs – all while promising not to raise taxes (except for a small increase in corporate taxes) and balancing the books during the first full year he is in office.

No wonder Muclair joined Harper in applauding this sudden surplus and calling it “good news.” In the very near term, the mid-election arrival of Harper’s surplus – to the extent people believe there actually is one – could very well be good news for Mulcair if it means fewer critics dogging him with questions about how he’s going to keep all his promises without raising taxes or plunging the country further into debt.

Mulcair released a report this September 16^th that apparently goes some way to cost his promises and show how he will fulfill them while at the same time keeping the books in the black. Of course, any or all of the costs and timelines in this report could go flying out the window depending on what shape the next government actually finds the books in.

On that score, Mulcair may do well to consider what happened to Ontario’s NDP when it was running in a snap election the then governing provincial Liberals called in 1990.

During that election, Bob Rae, who was the Ontario NDP Leader at the time, was doing much the same as Mulcair. He was going around making a lot of wonderful promises about expanding and improving service for people at the same time then Liberal Premier David Peterson and his treasury minister Bob Nixon were assuring him and everyone else in Ontario that the province’s books were in great shape.

When, to many political pundits’ surprise, Rae’s NDP swept to government and finally got their hands on the book, they found out they had been cooked to a point where Rae and his newly appointed ministers were doing everything short of looking under seat cushions for change to pay for their promises. The unexpected shortfall of money combined with a recession and strategies for dealing with it that angered core NDP supporters cooked the Rae government to a point where it was swept out of power less than five years later.

So rather than applauding Harper’s surprise surplus, why would Mulcair or anyone else throw caution to the wind and not wonder if the books have been cooked here.

In this September 16^th’s Globe and Mail, under a headline reading; “Don’t be fooled by the (surprise!) budget surplus,” longtime political columnist Jeffrey Simpson writes – “Canadians are witnessing a shell game in the phony election debate around whether we have a federal budgetary deficit or surplus. …”

“This surplus,” continues Simpson, “was described in some quarters as a surprise, which it was clearly not. Those in the know understood that Prime Minister Stephen Harper had instructed his finance minister, Jim Flaherty, to present a budget in February, 2014, that would make it look as if fiscal 2014-15 would end in a deficit of $2.9-billion.”

“Mr. Flaherty remonstrated that he could easily show a balanced budget for 2014-15, even a surplus. No, instructed his boss, always thinking politically. It would be better to save the news – the surprise! – until the fall of 2015, that is during an election.

In other words,” adds Simpson, “the government understood long ago that the 2014-15 budget would not show a deficit, but it arranged to delay the news to maximize its political impact, which, as we see from recent media coverage, has happened.”

By the way, this surplus Harper & Co. are celebrating is a culmination of a decade of their government cutting tens-of-millions of dollars from health care, and many millions more cut from services for assisting veterans, protecting the environment, postal services and on and on and on.

Just this past spring, Harper’s current finance minister Joe Oliver did some book cooking to make the last budget Harper tabled before this election look better. One of the more disturbing moves was to raid the country’s contingency fund – the money set aside for national emergencies like major floods, droughts, wildfires or other disasters that ravage whole communities or sectors of the economy – by shifting two thirds of the money in it or $2 billion dollars over to the revenue side to help balance the budget.

The Harper government gutted the contingency fund to a point where this summer representatives for the Canadian Firefighters Association were calling people across the country asking them for a donation so more firefighters could be flown out to Alberta and British Columbia to beat down wildfires out there.

I received one of those calls and I flatly said no. I tried to explain to the nice guy on the other end of the phone that I have paid taxes for years so there would be a contingency fund there for emergencies like this – not for the government to raid it to make their budget look good, then have someone cold calling me at home asking for another handout because the money is no longer there. As I was trying to say that the Firefighters Association should go back to the federal government and demand that the emergency money be put back, the guy decided he wasn’t going to get anywhere with me around making a donation and hung up.

Sorry, but I’ve got zero patience for government leaders who haven’t got the courage to cover service costs by raising income taxes, which is at least a progressive form of taxation based on an income earner’s ability to pay and which the new Premier of Alberta, Rachel Notley, is the only federal or provincial leader in decades in Canada who is brave enough to come out and say that she is preparing to raise income taxes rather than cover the cost of services by hiking sales taxes and user fees which hit low-income people the hardest.

And I certainly don’t believe any caring person in this country should applaud a “surplus” that may very well be a product of smoking mirrors and of books that have been cooked just in time to keep blind ones among us buying Harper’s baloney that he is the only leader capable of growing Canada’s economy.

Why would anyone who believes in Canada that, for more than half a century, has built health care and other services with an eye to improving peoples’ lives see those services starved so that (after years of running deficits and cutting taxes and leaving tax loopholes in place for the five or 10 per cent) so that Harper can announce a surplus weeks before we go to the polls.

This surprise surplus ploy is one more reason why Canadians of all ages should go to the polls in unprecedented numbers this October 19^th and give Harper and every parrot in his caucus the boot.

And just as an afterthought, if Harper put back the $2 billion his government robbed from Canada’s contingency fund to make his spring budget look better, he’d have no surplus to brag about.

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