Remember the poor

  • October 30, 2008
{mosimage}Where is Paul Martin Jr. when you need him? Oh yes, we threw him out of office in 2006. Yet while he had his problems as prime minister, his track record as finance minister still gives heft to his economic advice, especially in these turbulent times.

Martin has kept a low profile since resigning as leader of the Liberal party. But he was in the news in late October with the release of his political memoirs, Hell or High Water. In it, he mused about the current economic crisis. He may have been boasting a bit, talking about how his government pulled federal finances out of deep deficits and put the government’s house in order. But he earned his bragging rights and one of his points was well worth remembering.
It was the current federal government of Prime Minister Stephen Harper that reduced the goods and services tax by two percentage points, relinquishing some $12 billion in federal revenue as a result. Virtually all economists agree that this is a poor way of injecting life into the economy; meanwhile, the federal government has billions of dollars less to help it now that it faces deficits and reduced revenue.

“Nothing could be more unfair than making our children, already saddled with debt service costs that are properly ours, suffer tax increases in the future to pay for the tax cuts we enjoy today,” Martin writes. “Again, I fear that is precisely what the Harper government has done.”

The reason this should be of concern to Christians is that when times are tough, it is usually the poorest and most vulnerable who suffer disproportionately. Individual charity is, of course, vitally important, but in democratic societies such as ours we turn to governments to provide a social safety net that will ensure all citizens can lead lives of dignity.

Recently government leaders have been warning Canadians of looming deficits and the need for fiscal restraint. Already important public sectors such as health and education are bracing for less money from governments, which will translate into fewer resources to meet the need.

Federal Finance Minister Jim Flaherty so far appears to be suggesting that running a short-term deficit is better policy than cutting back on important government services to stay in the black. “We will not reduce the level of social transfers and health transfers to the provinces,” he told CBC News.

It’s worth wondering whether Flaherty wishes he could revisit his decision to cut the GST. He could put that money to better use today.

Still, Flaherty’s statement is of some comfort. While recognizing that governments have to resist the temptation to let deficits become a habit, as they did in the 1970s, ’80s and early ’90s, at a time when many poorer Canadians are struggling with unemployment and high debts, their priority should be keeping those most in need from falling victim to the economic crisis.

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