Liberal Tory Same Old Story

Former Conservative Garth Turner’s decision to join the Liberal caucus is one of several recent news items that highlight the extensive similarity between these two parties on economic policy.

1.) In response to the Conservative proposal to require that all interest savings from debt repayment be devoted to tax cuts, the former Liberal Finance Minister says, “The fact of the matter is if they follow this formula, they will reduce taxes by a lesser amount than we were doing” (Ottawa Citizen, Feb. 7, A4). The fiscal policy of both parties has been to hold federal spending at 1950s levels (relative to GDP) in order to devote almost all surplus dollars to debt repayment and tax cuts. The only debate appears to be about whose tax cut are bigger.

2.) In the latest issue of Maclean’s, Paul Wells accurately summarizes the Liberal-Conservative approach to climate change: “Under the Liberals, Canada led the world only in the size of the margin by which it spectacularly blew its Kyoto targets. This does not let the Conservatives off the hook. It was a bit rich for Baird to perch his capacious noggin on top of his pristine emerald cravat and announce that unlike the Liberals, his government was taking ‘real action here in Canada, real action to reduce greenhouse gases.’ To date, that real action has consisted of (a) cancelling Liberal programs announced by Stéphane Dion in 2005; (b) wasting a year checking the political winds; (c) reintroducing the Liberal programs under new names.”

3.) On his blog, Wells points out the hypocrisy of the Liberals criticizing the Conservatives for going ahead with the Liberal plan to sell off public buildings. However, this Liberal-Conservative initiative should be criticized. Since the federal government already contracts out the operation and maintenance of many public buildings, it is not clear what could be gained through privatization. The government raises capital by borrowing at very low interest rates. Private companies do so through a combination of borrowing at higher interest rates and even costlier equity financing. In general, it is clearly cheaper for the federal government to own buildings than to rent private ones.

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