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A Progressive Alternative to the Harper Agenda

November 18, 2011

4-minute read

The Harper government is set to cut spending on public services and social programs in the name of deficit reduction, but implemented mainly to increase reliance on the market, to create new sources of profit for the private sector, and to finance future tax cuts. This ideological agenda will take place against the background of a sluggish economy, a very weak job market, rising inequality, and increased insecurity for the great majority of working families.

The Harper government agenda must be confronted by an equally coherent alternative which resonates with currently centrist voters.

Social democratic ideas can win majority political support because they are rooted in values, such as democracy and equality, which are shared by most Canadians, and inform policies which are in the interests of the great majority.

Here are five key social democratic propositions which can frame specific policies which attract broad support.

More – not less – public investment is needed to increase private sector productivity and future economic growth.

One of the major problems we face as a country is that economic growth is weakening due to population ageing and poor productivity performance just as we face major new social challenges such as a growing elderly population.

While the ideological right want to shrink the state, we need more rather than less public investment to build a strong economy. Even eminently mainstream economists have long recognized that public investment in basic infrastructure such as roads and airports is a key ingredient in private sector success, but the story is wider than that.

Take the example of child care and early learning programs. As leading economist Pierre Fortin has argued, the Quebec program has significantly boosted the labour force participation rate of women with young children to well above the level in other provinces, more than paying for itself in terms of increased incomes and tax revenues. And investments in this area will reduce future government spending by ensuring that disadvantaged children reach their full potential.

Or take the example of public transit. As cities and the Toronto Board of Trade point out, the national mass transit strategy spurned by the Conservatives would greatly reduce business costs due to traffic congestion; would encourage higher urban density and thus lower infrastructure costs; and would significantly reduce pollution and carbon emissions,

The key point is that the opposition should develop a major public investment program that would create badly-needed jobs now, and would also increase our future rate of economic growth. Since a larger economy results in higher government revenues, an intelligently designed public investment program would be largely self-financing.

Expanding public programs is a more equitable, and also a much more cost effective, way to provide the services we all need.

As we all should know, Canada already gets much better health outcomes at much lower overall cost than the United States because publicly funded primary and hospital care covers everyone and is less costly than private insurance.

Similarly, expanding the Canada Pension Plan is a better and more cost effective way to provide adequate retirement benefits for all workers than high fee RRSPs. or pooled pension plans run by the banks and insurance companies. The CPP delivers a fully indexed defined pension benefit at much lower cost than anything the private sector can provide.

A national pharmacare program would provide much more effective coverage at much lower total cost than the current mix of public and private insurance programs A home care program as part of the public health care system would provide better care at lower cost than the further development of a costly for profit system in which only the wealthy can afford the care that we all deserve in old age.

The key point is that public programs to meet many of our social needs are not just more fair, but also less costly than the alternative of market, for profit delivery.

To be sure, public programs are not costless and will have to be funded through higher taxes. This should be acknowledged, without pretending that everything we need can be paid for by taxing only the rich.

Expanding public programs is key to shoring up an equal opportunity, middle class society.

The false claim of the right that tax cuts make us all better off is open to attack because it is patently wrong. The fact of the matter is that all but the most affluent gain if we raise taxes in a fair way to pay for decent programs and services available to all.

Leaving it mainly to the market (in terms of pensions child care, health care, post secondary education) is fine for the well-off, but squeezes middle class families and shuts out the poor. Tax cuts which mainly go to the most affluent would be better directed to the maintenance and expansion of public services and social programs to which we all gain access as citizens.

These programs make up the core of an equal opportunity society, as opposed to the increasingly unequal society which has been created by relying more and more on the market. The claim of the right that equal opportunity can continue to exist even as income and wealth become more and more unequally distributed is false.

We need a strong and productive private sector as well.

Arguing that government is best at doing many things does not mean that we can ignore the creation of wealth. Canada needs a much more innovative and productive private sector. It is ironic, not to say tragic, that two decades and more of leave it all to the market economic policies have resulted in an expert consensus that Canada has a major private sector productivity problem.

A progressive government can help build a stronger private sector by investing more in education and skills, in research and development, and by supporting major private investment projects which add value to our natural resources and develop our capacities in emerging, knowledge and skills intensive sectors. The recent experience of Asia shows that economic success comes from building a genuine mixed economy where government plays a significant role. Funding to support private investment through institutions like public investment banks can be secured by scaling back corporate tax breaks which have failed to raise investment.

Unions shape an equal society

Social democrats (unlike Tony Blair’s New Labour) understand that strong unions are needed to bring a fair balance to the workplace and job market, to sustain a strong middle-class, and to limit the growth of the working poor. Increasing inequality of wages and incomes has to be countered by increasing the ability of workers to get a fair wage and to have a voice at work.

All of these propositions would, of course, be strongly contested by neo liberals and the Harper Conservatives. And that is just what we in Canada need and can get in the wake of the partisan realignment of the last election – a healthy democratic debate between the philosophical right and left over what policies are needed to build a democratic, inclusive and equal society.

This is a debate that social democrats need not be afraid of, a debate that we can win.


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