Harper and Canadian Banks

Post Reply New Topic

NOTE: All personal plurals here refer to Canadians.

If Stephen Harper was elected Prime Minister in 2000 (let's say he became leader of the Alliance Party much earlier and merged it with the Progressive Conservatives a lot earlier as well) with an overwhelming majority government (lets say 295 MPs) and he and his mixture of civil servant resenting, petro-plutocracy loving, not-so-secretely Christian nationalist buddies had their way and removed the "burden" of Canada's world class financial oversight, what would have been the results be?

Would the financial system of Canada be in the hole, credit frozen right now, with unemployment at extremely high rates? Or would the Oil Sands (which some claim is a bubble) have sufficiently propped us up during the global downturn?

Well, had Harper succeeded in the 2000 election then we would have been in a truly dire state, because hell would have frozen over... but on to the more serious question at hand.

For some insight into likely events, you should look to the British Columbia experience. Gordon Campbell was elected in 2001, with a solid majority, and an economic platform that looks a great deal like what a Harper platform would have looked like. With that in mind, I have a few thoughts about where we would be:

1) GST would still be at 7%, but the lowest income tax bracket would be down in the 13% range. Rather than Chrétien and Martin's reductions of the first bracket from 17% to 15% from 2000 to 2006, we probably would have seen another 2 percentage points between 2000 and 2010. The GST reduction was, from start to finish, good politics and bad economic policy. By 2006, Harper could not merely parrot Martin's fiscal policy approach, so he was convinced to work on the GST, knowing full well that it was a retrograde step.

2) Bank regulation would likely be little changed. The Department of Finance is a fortress among government departments (and that's saying something, given the policy silos that exist in Ottawa) and would not have stood idly by as the government flirted with financial sector deregulation. The Department got Martin to stop bank mergers in the 90's, and they would have done the same had Harper sought to move in that direction in the 00's.

3) We might have made some progress on a national securities regulator. The flies in the ointment have always been Québec and Alberta, but with a solid majority, Harper would be able to bank on his Alberta seats and would not be compelled to be quite so bipolar when it comes to Québec. This was one are where Martin's hands were and where Harper's hands are tied poltically. Current proposals are, frankly, too little, too late.

4) Same sex marriage would have been held up another year to eighteen months, waiting for the Supremes to affirm the BC and Ontario Courts' of Appeal judgements. Even with a solid majority, Harper would not use section 33--that would be the kiss of death for a Conservative administration.

At the end of the day, the world would have looked little different today. Notwithstanding the vitriolic partisanship that passes for public policy discussion in this country, the truth of the matter is that there is little to choose between the Liberals and the Conservatives when it comes to economic policy, and not much more when it comes to social policy.

Short sight topic

Unfortunately I do not know enough about this topic, but I do know there are checks and balances in how the Canadain government works and that any Canadian PM does not have the powers of his/her counterpart in the US. For these reasons I do not think the situation would have changed much had Harper been PM or had a majority government in 2000.

No. Harper was an economist prior to being a politician. He was unlikely to loose the constraints.

I'm not so sure - freshwater economists have advocated some crazy stuff over the years (I'm not quite sure what school he subscribed to, but I bet it was freshwater economics).

Furthermore, his party wanted to remove the oversight.

I tend to agree that the senior civil service would have rejected some of the more outlandish oversight elimination ideas.

My understanding is that he was, ahem, pretty conservative. In the fiscal sense.

But people act differently when they come into power, dont they?

Seconded. And thankful for it every day.

The Canadian Prime Minister has some of the most broadly sweeping powers of any Head of Government in any parliamentary democracy in the world:

Executive authority is fully vested in Cabinet, who are appointed or dismissed at the pleasure of the Crown (in other words, on the Prime Minister's say-so). Further, Cabinet does not work by, "show-of-hands," but by consensus. When the boss says, "I want this," or, "I don't want that," consensus tends to come around quickly.

This means that the vast panoply of federal appointments (including all Senators and all s. 96 judges) is within the Prime Minister's personal discretion. There are no Senate confirmations to worry about up here.

Legislative authority is vested in Parliament, which effectively means the House of Commons. A Prime Minister with a working majority, or who faces an Opposition who are not prepared to bring down the Government, can draft legislation as he sees fit, and enforce party discipline to see it passed. The Senate can, of course, demur, but that is rare--only four pieces of public legislation were rejected by the Senate in 1990's, and none since.

The Prime Minister is the only person who can tender advice to the Crown. If the Prime Minister doesn't like a particular private member's bill, and it somehow miraculously makes it through the House and the Senate, the Prime Minister can simply decline to advise that it be proclaimed in force, effectively neutering it.

This means that budgetary authority is within the Prime Minister's control. No "money bill" can be introduced in the Senate, and none can be presented in the House except by a Minister of the Crown. There is no opportunity for individual MPs to put pork-barrel riders on legislation. There is no need for a "line item veto" up here, because nothing can wind up in the budget in the first place unless it has Cabinet's (and hence the Prime Minister's) approval.

There are only few real contraints on a Prime Minister's power:

1) Caucus. This is the big one. As Jim Hacker says in Yes, Prime Minister, "The public can't vote against me for four years, the backbenchers can vote against me tonight!" Managing caucus is an essential skill for Prime Ministers (Mulroney was probably the master.) Caucus revolt (or the threat of one) has brought down many Canadian heads of government. However, Canadian Prime Ministers have been traditionally more secure than their British or Australian counterparts from internal caucus revolt. It took Paul Martin and the threat of revolt to bring down Chrétien; Thatcher fell with no figure to rally her caucus opponents.

2) The Opposition (in a minority Parliament). While theoretically a major obstacle to a Prime Minister, in truth it takes a great deal for the Opposition to block the Government. Only once in the last four years has there been a credible threat to the Prime Minister from the Opposition--one which the Prime Minister engineered himself.

3) The Bench. To the extent that the Prime Minister is acting pursuant to a legislative mandate, the jurisdiction of the courts to exercise judicial review is a real and meaningful constraint upon the Prime Minister. However, the exercise of Royal Prerogative is not reviewable, and provides a great deal of scope in the Prime Minister's activity.

4) The electorate. Eventually, a Prime Minister's record is accountable at the ballot box. This is the day of reckoning that can exercise ultimate authority over a Prime Minister's tenure, but that can still leave up to 5 years for mischief.

5) The Crown. This is the nuclear option, but at the end of the day, it is the last barrier between a dictatorial Prime Minister and unconstitutional actions.

In addition, the public service, the provinces and the media can present limitations on the Prime Minister's freedom to manouever, but these constraints are somewhat limited.

The Public Service properly sees its role as delivering the Government's agenda, and will usually only stand against the, "political will," with the, "bureaucratic won't," where the Government's policy is illegal, unconstitutional or dangerous.

In areas touching on provincial jurisdiction (such as health, social assistance, infrastructure and higher education), the federal spending power may run headlong into provincial resistance, but the only province to successfully impede a Prime Minister on an ongoing basis has been Québec.

The media has no power to stand in the Prime Minister's way, but does have the power to shape public opinion, which can trigger caucus displeasure.

Nice post visagrunt.

Quebecs impedance is the exercise of will, something other provinces seem unwilling to exert. Of the provinces, only Ontario also has the population to do this alone. British Columbia and Alberta would have to team up, possibly with the other prairie provinces.

I'd actually like to see it happen more often. I also dont mind this string of minority governments.

Bold Restraints topic

Exactly.

How interesting to see the Australian PM fall to a caucus revolt.

Yeah, the "Bloc Québécois" is there mostly to see that the interests of Quebec aren't deterred. We are even today being demonized by some government individuals who want to rally public opinion by using us a a scapegoat (Like Mr. Harper did without much subtlety during the last time a coalition between the minority parties was suggested, which included the Bloc).

It seems to me that Alberta might be the next within the english-speaking provinces to try and speak up louder than its neighboring fellows. Ontario would do well to watch its back, and possibly ally with BC, since they are some of the economic powerhouses of the country (at least, last i checked =.=).

Is or is not the goal of the Bloc to separate Quebec from Canada? Yes/no please.

That being said I am completely in agreement that the generation of the separatist movement was the fault of the federal government. You WERE scapegoated 90+ years ago. This article opened my eyes years ago. http://www.canadiancoalitionforhealthfr ... sent5.html



For someone who comments on this sort of topic regularly, you seem remarkably resistant to collecting facts. BC has long voted heavily for conservative parties(federally) along the lines of the other western provinces. Your idea of symbiosis between Ontario and British Columbia is due to ignorance of the facts and a stereotypical view of their politics.

You can see a chart right here. You will note that BCs voting pattern is much closer to Alberta than Ontario. http://www.cyberpresse.ca/actualites/el ... resultats/

Furthermore, I dont know when you last checked, but it is Ontario, Quebec and then Alberta that are the primary economic powerhouses. BC is fourth. http://en.wikipedia.org/wiki/List_of_Ca ... ic_product . I'm inclined to think you have never checked, as neither Alberta Nor BC has ever exceeded Quebec.

Lastly, "Ontario should watch its back". Really.

In 2000, there were 2 conservative seats in Ontario. 2004 saw 24, 2006 recorded 40, and as of 2008 there are 51. Do you see a trend?

BC only has 36 seats, so far more conservatives were elected in Ontario. You know? That non conservative place? In fact, Alberta elected 27 conservatives, barely more than half of Ontarios contribution. It is through the large contribution of Ontario that we have a conservative minority government, and they easily could have made it a majority. In fact, if the trend continues they will.

So you suggest that BC and Ontario team up? phil777, it looks like they already have but I doubt you like it.

You really didnt know all that stuff?

Fuzzy,

I think you are taking a rather simplistic view of things.

Certainly there are questions surrounding the federal spending power, but the realpolitik of the Canadian federation is not going to go away anytime soon. And given the alternatives, the prospect of losing the federal spending power should be terrifying to governments in Edmonton, Toronto, Québec and Victoria.

The same constitution that calls into question the federal direct taxation authority also provides mobility rights that cannot be abrogated. Every Canadian is free to pull up stakes and move to any province. The day that the so-called "have nots" lose equalization payments is the day that people start planning their retirements in Calgary, in Newmarket and in Kelowna, leaving those provincial governments holding the bag for health care.

Equalization payments are your province's guarantee that you will not be faced with a demographic shift beyond your economy's capacity to support it.

But, of course, feel free to preach your decentralization mantra.

I find Albertan whinning about equalization payments particularly egregious since their province received them for quite a few years before oil was discovered.

If the tar sands bubble ever bursts, it'll be poetic justice to see ho quickly the provincialists change their tune on equalization.