The New World Order
A new world order is being forged by those who attack sacred cows, both at home and abroad.
Donald Trump won the U.S. presidency by questioning the wisdom of globalization, immigration, liberalized trade, and past foreign policy alliances. Brexit proponents did the same and Marie Le Pen is heading toward victory with her Frexit movement.
This is all messy and unsettling, but understandable.
Middle classes in all developed countries are angry and pushing back against trade policies that have transferred their jobs to rule-bending jurisdictions such as China, India, Mexico, and other developing countries.
Internal sacred cows are also under attack and Canada is not immune from this trend.
As Canada heads into another tax season, the country is demoralized by a $372 million giveaway by the federal Liberals to Bombardier to protect “thousands of middle-class jobs.” Quebec, propped up by decades of equalization subsidies from the rest of us, is forking over another $1.3 billion to the company.
But where are these jobs located? In Mexico or some other low labour cost jurisdiction where Bombardier manufactures?
This company specializes in government giveaways and has already received $2 billion, even though it is controlled by the Beaudoin-Bombardier family whose members live like royalty.
The company has also gotten another $11.5 billion in tax dollars from the Export Development Corporation to lend to Bombardier customers so they could buy its stuff.
There has never been sufficient auditing of all this, nor a cost benefit analysis.
At the same time, we learn of the coziness between Tory leader Rona Ambrose and billionaire Murray Edwards, whose energy company got millions from the Harper regime while she was in its cabinet.
These outrages provide the winning conditions for the likes of Trump and other populist leaders. Enter celebrity Tory candidate Kevin O’Leary who once aptly said “Bombardier is where[tax] money goes to die.”
This is not an endorsement for OLeary, but a call to arms for all Canadian candidates and voters.
The timing couldn’t be better. The U.S.-Canada relationship is about to be reset next week – but on Donald Trump’s terms. This means we have to be at the top of our game, governance wise, and we are certainly far from that.
For the first time, Canada’s prime minister has to meet the American President on his turf, not ours.
Fortunately, Ottawa and Washington have no quarrel trade-wise. The balance of trade is harmonious. We are one another’s most important customers, investors, and suppliers.
But Trump will be making some demands and Canada, quite frankly, had better start slaughtering some sacred cows. Here are a few:
Besides the Bombardier fiasco, Ottawa must stop squandering tax dollars in excessive subsidies to Quebec and Atlantic Canada without justification. Here are the facts: Finance Canada said “lifetime equalization payments” to provinces by 2016 totalled: Quebec $198 billion (50.5 per cent of the total); Manitoba $46 billion; Nova Scotia $44 billion; New Brunswick $43 billion; Newfoundland $25 billion; Ontario $17 billion; PEI $9 billion; Saskatchewan $8 billion; B.C. $3 billion and Alberta $92 million.
Government must trim the sails when it comes to its own employees. Canadian Federal of Independent Businesses says federal workers make 40 per cent more than private sector workers; provincial workers make 35 per cent and municipal workers 30 per cent more. There are 3.7 million of these workers. Unfair.
Canada must meet its 2 per cent of GDP NATO obligation. On an annual basis, this totals about as much as the Liberals’ current projected deficit of $30 billion. It is not affordable without dramatic restructuring.
Add to that, Canada will have to cut corporate taxes to match the anticipated American levels — Trump has said he’ll cut. That’s another $10 billion a year.
Canada must establish oil exports as a national priority because these support the economy. It is a matter of national interest to invoke the federal constitutional power to force pipelines to the Pacific as well as elsewhere if it makes economic sense.
Premiers must be shamed and punished for their profligacy. Liberal Premier Kathleen Wynne adds daily to a $313.9 billion provincial debt, and NDP Premier Rachel Notley new taxes and royalties impair Canada’s most important engine of growth, its oil exporters.
Voters should demand that provinces shed debt by privatizing their utilities, liquor stores, insurance outfits, and anything that is saleable.
Without interventions like these or others, the establishment will continue to ignore the global trend. This guarantees that the mood in Tim Hortons stores and arenas and beyond will get a lot uglier. And that could mean anything at the ballot box.
First published in National Post in February 10, 2017