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Coquihalla-Okanagan MP and president of the Treasury Board, Stockwell Day. (Photo Adrian Nieoczym)
Stephen Harper’s appointment of Okanagan-Coquihalla MP Stockwell Day to president of the Treasury Board sends a message that his government is intent on returning to its fiscal conservative roots, according to a political scientist in Day’s old stomping grounds of Alberta.
But it’s also interesting to note, said Steve Patten, associate professor of political science at the University of Alberta, how policy decisions implemented when Day was Alberta’s treasurer contributed to that province’s current deficit woes.
“I think it’s [Day's appointment] a clear indication that the federal government is interested in getting very serious about cost cutting and restraint,” said Patten, noting there is a widespread belief that Harper didn’t really want to spend billions of dollars in economic stimulus but was forced into the move by the opposition parties’ threat to oust him with a coalition government, as well as pressure from other G20 countries wanting a coordinated response to the global recession.
“It wasn’t so much a change of heart as a move of necessity,” added Patten.
A mainstay of Harper’s cabinet, Day has overcome his disastrous turn as leader of the Canadian Alliance and developed a reputation as a “competent and hard working minister,” said Patten.
But his time at the Canadian Alliance helm from 2000 to 2001, on top of his stint as Alberta treasurer from 1997 to 2000, has also marked Day as someone who is both a social and fiscal conservative.
Putting Day in charge of the Treasury Board sends a message that people should expect the federal government to slash spending and avoid raising taxes, according to Patten.
The Liberals however, are trying to counter that message by pointing out how Day actually oversaw large spending increases during the time he was in charge of Alberta’s purse strings.
While that is true, Patten doesn’t think Day bears responsibility. “Spending went up but I think you can attribute that more to Ralph Klein and the way he ran his cabinet than the finance minister saying ‘hey, let’s raise spending in the next budget,’” he said.
Day took over as the province’s treasurer right after a period of severe government cuts when the Alberta economy was picking up. At the same time, the federal government was reducing transfers to the provinces for programs like health care which put pressure on provincial governments to pick up the shortfall.
What is more significant, according to Patten, is how Day spearheaded efforts to cut business taxes and introduce a flat tax rate, a move that reduced the amount of taxes collected from wealthy Albertans.
While that was all fine and dandy when oil and gas revenues were pouring in, leaving the government with large surpluses, it also created the conditions where once the economy cooled off, government revenues no longer covered the cost of government programs.
In other words, those tax policies left Alberta with a structural deficit. Last week the Alberta government said it expected its deficit to hit $4.3 billion by the end of this fiscal year.
“Right now we have quite a deficit in Alberta and the Alberta government is struggling to figure out how to eliminate that deficit, but many people say ‘hey, it’s not a spending problem it’s very much a a revenue problem, or a structural deficit,” said Patten. “[A structural deficit] means in the current context, a deficit is inevitable.”
That’s a significant point because parliamentary budget officer Kevin Page recently said the Canadian government could be facing a structural deficit of close to $19 billion at a time when the labour force is shrinking because of an aging population and there is little prospect of the economy returning to the boom times of a couple years ago. The Conservative government disagrees with Page’s analysis.
“It’s somewhat significant that days after rejecting Kevin Page’s message, Harper then appoints Stockwell Day because it could be argued that Stockwell Day played a role in creating a similar kind of situation in Alberta,” said Patten.
adrian@kelowna.com
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One Response to “Stockwell Day contributed to ’structural deficit’ in Alberta, political scientist says”
Tags: Conservative Party of Canada, stephen harper, stockwell day, structural deficit
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We are supposed to be surprised? Day will cut spending for
programs and at the same time will cut taxes for rich people. He is a hanger on of the old Reagan thought of
trickle down. That means rich people get whatever they want and the crumbs that fall off the table are for the
other folks. Business is always saying all these things
should pay their own way, yet when it comes to business
paying its fair share its somehow different. Day will only
end up helping the opposition if the economy tightens up
which I think it will. We are in for a rough ride for a
few more years.
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