The message got lost

Canada's international economic success is overshadowed by the pension debate

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by L. IAN MacDONALD
The Gazette, Wednesday, February 1, 2012

In a speech to the World Economic Forum in Davos last week, Stephen Harper took a bit of a victory lap for Canada having come through the deep recession and global financial crisis in solid shape.

He noted that Canada is ranked by Forbes magazine as the best place in the world to invest and create jobs, thanks to a 15 per cent business tax, the lowest in the G7. He also pointed out that the World Economic Forum has ranked Canada's banking system the strongest in the world for the last four years. Meanwhile, our debt to gross domestic product ratio is by far the lowest in the G7. And the Canadian economy is one of only two in the G7, the other being Germany, to have regained all the jobs lost in the Great Recession of 2008-09, the steepest and scariest downturn since the 1930s.

As unaccustomed as Canadians might be to thinking of themselves as rock stars at international economics conferences, that's very much the case with Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney, recently named head of the Financial Stability Board, a global mandate.

Harper isn't known for stirring rhetoric. But he raised his game a couple of notches at Davos. "The wealth of western economies is no more inevitable than the poverty of emerging ones," he declared in the kind of rhetorical flourish that Ted Sorensen used to write for John F. Kennedy.

"Is it the case," Harper asked, "that in the developed world too many of us have, in fact, become complacent about our prosperity, taking our wealth as a given, assuming it is somehow in the natural order of things, leaving us instead to focus on our services and entitlements?"

Take that, Italy and Greece. Speaking of entitlements, the prime minister ventured into dangerous waters when he declared: "Our demographics also constitute a threat to the social programs and services that Canadians cherish."

While noting that the "Canada Pension Plan is fully funded, actuarially sound and does not need to be changed," he added: "For those elements of the system that are not funded, we will make the necessary changes to ensure sustainability for the next generation while not affecting current recipients."

Did he mention Old Age Security by name? Nope. He didn't have to. The opposition parties, seniors groups, antipoverty advocates and the like decoded the speech for him. And they had some help from Harper's own communications team, who put out some talking points on the rising cost of OAS as "unsustainable on its current course."

From talking points to bullet points, the PM's office noted that the number of Canadians over 65 will virtually double from 4.7 million to 9.3 million in the next years, and that the cost of OAS will triple from $36 billion in 2010 to $108 billion per year in 2030. Meanwhile, there will be only two taxpayers per senior in 2030, down from four in 2010.

Flash forward to the House of Commons on Monday, and the first Question Period since the six-week holiday recess. The opposition parties had a free seniors pass. There must have been 30 references to seniors, sometimes two and three in the same sentence.

Liberal leader Bob Rae accused Harper of practising "the politics of deceit and abandonment."

New Democratic Party front-bencher Peter Julian warned that if Harper "continues like that it will be 'Goodbye Charlie Brown' for sure." This was a reference to the time in 1985 when Brian Mulroney was confronted on Parliament Hill over pensions by a Liberal activist named Solange Denis.

It's hard to have a grownup conversation about entitlements, especially for low-income Canadians who depend on the Canada Pension Plan and Old Age Supplement, some of whom also need the Guaranteed Income Supplement. This just in: Flaherty increased the GIS in last spring's budget, and the opposition parties preferred to defeat the government on a contempt of Parliament motion before it ever came to a vote.

The Canadian media travelling with Harper pounced on the references to entitlements. And in the subsequent sound and fury, truly one signifying nothing, the message of strong Canadian economic fundamentals got lost.

 
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