Todd Whitcombe makes a habit of blaming the Conservatives for Canada's debt, including his column of March 21.
Indeed, much of the media (Liberals too) would have you believe that the Conservatives are responsible for the debt and the country's largest ever deficit. Let's look at the history of Canada's debt over the past half century.
Except for Joe Clark's nine-month Progressive Conservative minority government that got defeated on its first budget, the Liberals were in power from April 22, 1963 to Sept. 17, 1984.
Since the Clark government never got a budget passed, it's fair to say the Liberals controlled the public purse for those 21 years.
Up to the fiscal year ended March 31, 1974, deficits remained below $11 billion in 2015 dollars. Then starting with the fiscal year ended March 31, 1976 (under Prime Minister Pierre Trudeau) the deficit started increasing greatly, peaking in fiscal year ended March 31, 1985 at $75.1 billion in 2015 dollars. Adjusted for inflation, that's the largest deficit in Canada's history.
While the Progressive Conservatives were in power on March 31, 1985, they had only been in power for six months, so really this deficit, a debt of almost $400 billion in 2015 dollars and rising interest costs was the Liberal legacy that the Progressive Conservatives inherited.
By March 31, 1988 under the Progressive Conservative watch we were in an operating surplus. If not for interest costs ($51.9 billion in 2015 dollars) there would have been a surplus.
In late 1993 the Liberals got back in power. Paul Martin, who had campaigned against the idea of deficit fighting, was Minister of Finance and when the senior staff at the Department of Finance explained the realities of Canada's fiscal position to him, he understood the seriousness, which included a debt nearing $700 billion in 2015 dollars, and a large deficit thanks to interest costs of about $60 billion in 2015 dollars. To his credit, he realized that more had to be done, and he didn't hesitate to do it. (The Liberals claimed that they had no idea how bad things were before coming into power, which seems strange, as conservative pundits had been sounding alarm bells for some time.) Credit also goes to Prime Minister Chretien for letting him do what had to be done to finish the job that the Progressive Conservatives started.
Finally, in 1998 we had a surplus, the first one since 1970.
When the Harper Conservatives got into power we had surpluses for the next couple of years until the 2008 recession came along. Both the NDP and the Liberal opposition pushed hard for massive government spending. The Conservatives, being a minority, did reluctantly undertake projects of an infrastructure nature to help spur the economy. This was not good enough for the opposition and we were treated to the spectacle of Paul Martin criticizing the Conservatives for not spending enough and in the next breath, for too much borrowing. The to-be-expected result was a deficit that reached
$60.6 billion in 2015 dollars and of course the Liberals and NDP howled at what they called Canada's largest deficit (which it wasn't, the Liberals had a prior deficit of $75.1 billion in 2015 dollars). Unlike the Liberals who had a habit of developing programs that would take on a life of their own, the Conservatives developed temporary projects that could be run under existing administrations and that would run their course then disappear, making it much easier to return to surplus.
So while it can't be denied that the Chretien government did what was necessary to get us into surplus, contrary to Dr. Whitcombe's assertions, the debt is a Liberal legacy.
When assessing a country's financial situation, it's customary to consider what is the debt as a percentage of the country's GDP. In 1975, national debt to GDP was under 20 per cent, so adding more debt was not a great problem as our total debt was affordable. Then it grew and by the time the Conservatives got in, it was over 40 per cent and growing out of control. As Dr. Whitcombe said fiscal momentum is difficult to deal with so it grew until it peaked at 67 per cent in 1996. Now it's a little over 30 per cent and in the affordable range again, as long as we keep it under control. Does the current Liberal government intend to do that?
Art Betke
Prince George
