OTTAWA — Former finance minister Ralph Goodale gave an impassioned defence of the Liberals’ economic record Tuesday after recent attacks by the Harper Conservatives suggested that the party would plunge Canada back into spiralling deficits like those of the 1970s.
He kept the door open, however, to a new Trudeau government’s running future deficits.
Speaking at a Canada 2020 event, Goodale, Canada’s finance minister from 2003 to 2006, said current Finance Minister Joe Oliver’s recent “remarkably bitter” comments about Pierre Elliott Trudeau’s economic record ignored the Conservatives’ own history.
“[Oliver] forgot the OPEC oil crisis of that decade. He forgot [Progressive Conservative prime minister] John Diefenbaker's six consecutive deficits a decade earlier. He forgot that only one Conservative prime minister in the entire 20th century actually managed to balance a budget. That was Robert Borden, the year was 1912, and it lasted for just one year,” Goodale told the Liberal-friendly crowd, many of whom have been waiting months to hear a similar speech.
“More importantly, Mr. Oliver forgot that more than two-thirds of all the federal debt outstanding in Canada today can be attributed to the deficits accumulated by Brian Mulroney and Stephen Harper,” Goodale said. “Mr. Harper alone has added $4,400 in new Harper-debt for every man, woman and child in Canada.”
Compare that, he said, with the Liberal record.
Goodale said when the Liberals came to power in 1993 after defeating Brian Mulroney, they inherited a $40 billion annual deficit and a debt ratio that was 70 per cent of GDP. “Just serving that debt was sucking up fully one-third of all government revenues.”
Within three years, Goodale said, the Liberals had eliminated the deficit, ushered in a decade of surplus budgets, paid down the debt and slashed the debt-ratio in half, cut taxes and safeguarded the banking system. He also said the Liberals had increased transfers to the provinces, although he glanced over the part where the Grits first slashed them.
Times were great, Goodale suggested. The economy was growing, millions of new jobs were created.
Fast forward to 2006, he said, when Prime Minister Stephen Harper inherited a $13 billion annual surplus. In less than three years, the country is back on the verge of deficits once again, Goodale said. “That was before — not because of — the recession, which arrived in the latter part of 2008.
“The recession made it worse, but it was Stephen Harper who made us vulnerable in the first place.”
Oliver’s spokeswoman Melissa Lantsman told The Huffington Post Canada the Liberals wanted the federal government to incur an even larger deficit program during the 2008 recession.
“[That] would have meant we would still be coping with a deficit and massively greater debt,” she said.
Furthermore, she said, it was the Conservatives who restored long-term predictable funding to the provinces and territories with a “62 per cent increase over Mr. Goodale’s last budget” after the Liberals gutted transfer payments.
Nevertheless, in his speech, Goodale said the Tories’ economic growth record is the worst growth rate of any prime minister since R.B. Bennett during the Great Depression in the 1930s. He called it “Harper’s diminished decade.”
Job creation is weak, job quality is on the decline, median after-tax family income is largely flat, and household debt is at a record high, Goodale said.
The Conservatives, the Liberal deputy leader asserted, have no plan for growth and their only goal is tax breaks for the few — mostly wealthy Canadians.
The Liberals, he said, would scrap income splitting and invest in infrastructure, education and scientific research.
“There’s more to come,” he said. “The ideas I’ve offered this morning are just a beginning.”
Asked by The Huffington Post if the Liberals were leaving the door open to running a deficit, Goodale gave a cautious yes. The Liberals will study the numbers in the Tories’ budget next Tuesday, its economic assumptions – including the price of oil – and consult external economists, he said.
“Fiscal responsibility will be an absolute fundamental in how we put together our platform,” he said. “How will all the pieces work together? We’ll have to await the platform itself… [but] there will be no doubt about our fiscal credentials.”
Goodale called the Conservatives’ upcoming balanced-budget legislation a “gimmick” designed to “besmirch” the Liberals’ reputation. Oliver recently announced that the Tories will introduce legislation forcing future federal governments to post balanced budgets.
If the Tories run a campaign saying the Liberals don’t support a balanced budget, Goodale said, the Grits will be ready to fire back.
“The answer to that is very clear. Who has been in office for the last nine years? Who has delivered seven consecutive deficits? Who has saddled the country with $150 billion of new debt? It’s Stephen Harper. It’s entirely hypocritical for him now to say suddenly that we are going to have balanced-budget legislation. He would have been offside of his own legislation for five of the last seven years.”
The Liberals plan to trumpet their economic record with speeches by MPs Marc Garneau, Scott Brison, John McCallum and Grit candidate – and rumoured future finance minister – Bill Moreau across the country with speeches in Toronto, Montreal, Vancouver and Calgary in the days to come.
“As the election gets closer and closer, we get better at putting the message together,” Goodale told HuffPost.
“What we maybe take for granted, in terms of Liberal credentials about the economy, needs to be restated and rehighlighted, even though we think it’s obvious. It may not be obvious or so obvious to as many other people.”
Also on HuffPost