Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors
Nick Fillmore

GET UPDATES FROM Nick Fillmore
 

Flaherty's Legacy: The Good, The Bad & The Very Ugly

Posted: 04/15/2014 5:47 pm

Jim Flaherty
CP

The unexpected, shocking death of Jim Flaherty, the Conservative Party of Canada's only finance minister until his retirement less than a month ago, has resulted in hundreds of tributes for his commitment to public life and praise from those in business and conservative circles who approved of his financial and economic policies.

Flaherty, who was only 64, was devoted to his family and one of the most popular Members of Parliament. And while his life achievements and humanity should be praised, it also needs to be said that during his time in the federal government his policies severely discriminated against the vast majority of Canadians.

Flaherty had control of Canada's purse strings during a period that led to a situation where, by 2012, the 86 wealthiest residents held the same amount of wealth as the bottom 11.4-million Canadians combined. Lagging wages have led many Canadians to take on record-high debt as they try to keep up with increasing costs.

In fairness, it's impossible to assess Flaherty's legacy as finance minister without factoring in that Prime Minister Stephen Harper kept him on a short leash. Harper, a rabid neoliberal, no doubt put forward a number of the Conservatives' most anti-social policies. The two argued, but it's safe to say that Flaherty lost more battles than he won.

With apologies to Clint Eastwood, the Flaherty/Harper contributions to the economic life of the country can be broken into three main areas: The Good, The Bad, and The Ugly.

First, the good

While he personally didn't approve of the measure, Flaherty's early 2009 budget opened Ottawa's coffers with a $40-billion stimulus package to prop up Canada's economy. Writers Scott Clark and Peter DeVries point out that, a year earlier, Flaherty made the biggest mistake ever made by a finance minister in denying that Canada was going into a recession.

After implementing policies that led to a slight housing market bubble, Flaherty took measures to rein in rapidly increasing prices. He publicly took on banks that were exercising irresponsible lending practices and made it harder for low-income people to take on mortgages.

Flaherty was also instrumental in the introduction of the Registered Disability Savings Plan, which helps Canadians with disabilities and their families save for the future. Reporters point out that Flaherty was emotional during a 2011 announcement of a government review of the program. His son John suffers a learning disability and has participated in the Special Olympics.

To his credit, during his last days in office, Flaherty publicly opposed a Conservative election promise -- income splitting. Strongly promoted by Harper, this would allow one spouse to transfer part of their income to a lower-earning partner, greatly benefiting the wealthy.

Now, the bad

Families that need adequate housing may be left out in the cold if the Conservatives' funding pattern continues the way it's going. As NDP MP Mike Sullivan said in the House of Commons, the contribution to affordable housing was $3.6 billion in 2010. It has fallen to $2 billion, and will fall further to $1.8 billion by 2016. This amounts to a 52 per cent cut reduction over six years, when there's more need than ever for affordable housing.

In 2013, Flaherty/Harper were responsible for implementing changes to employment insurance benefits program that have made the lives of many Canadians more difficult. Recipients face tougher rules, such as having to drive several miles to take what is likely to be a low-paying job if there are no jobs in their own community. In 1996, the maximum weekly benefit was $604, while today's average benefit is just $335 per week.

The Flaherty/Harper highly-publicized plan to have a balanced budget by 2015 is an exercise in manipulation and, frankly, dishonesty. The Conservatives could be swimming in money now, and could have had a balanced budget earlier, if they had acted differently. They cut the Goods and Services Tax twice, removing a staggering $14 billion annually from government revenues. They lowered corporate income taxes, losing an average of $6 billion in annual revenue, and continue to cut income taxes, costing $3 billion more.

Not to mention that in 2013, someone in the government lost $3.1 billion from the anti-terror funding program. It disappeared into thin air.

Lastly, the ugly

Deep austerity that has amounted to an assault on the poor is at the centre of Flaherty/Harper economic policies. The austerity program translates into less income, decreased services, and reduced health care for many of Canada's most vulnerable people. It appears that more than 3.5-million Canadians are currently struggling. 

Flaherty/Harper removed billions of dollars from the government's kitty that could have been used to pay for much-needed programs. Instead they gave it to corporations in the form of tax breaks. In the last quarter of 2013, Canada's corporate cash hoard, or "dead money," as it was called by former Bank of Canada head Mark Carney, was $626 billion. That's not a typo: $626 billion! As a result, our total corporate tax rate is significantly lower than any of the other G8 developed countries. With many Canadians in need, there's no evidence that this lower rate helps attract more businesses.

Unless new taxes are put in place, the federal government under Flaherty will have destroyed the ability of future governments to fund important programs cut by the Conservatives. The two biggest revenue losses are the $14 billion in GST revenues and the corporate tax breaks of $6 billion annually.

Under Flaherty/Harper, the government severely cut funds for health care, removing transfers of some $36 billion to the provinces over 10 years. Now the future of the country's united health care system is in question.

As so often happens with prominent people when they pass, Jim Flaherty is receiving tremendous praise from colleagues, much of the public and mainstream media. But if we are going to pay tribute to a man who passes, it's important not to examine his legacy uncritically.

ALSO ON HUFFPOST:

Loading Slideshow...
  • Jim Flaherty with his wife(left) after giving his speech at the Provincial Progressive Conservative Party Leadership Convention, held at the Metro Toronto Convention Centre. Mar. 22, 2002 Photo by Louie Palu/The Globe and Mail

  • Jim Flaherty posing with the Stanley Cup while on the campaign trail for the provincial PC leadership at the Hockey Hall of Fame. Feb. 26, 2002 Photo by Louie Palu/The Globe and Mail

  • Ontario Progressive Conservative leadership candidate, Jim Flaherty, on Feb. 27, 2002 Photo by Tibor Kolley / The Globe and Mail

  • At the Ontario Progressive Conservative Leadership debate, Chris Stockwell looks on as Jim Flaherty, left, gets some last minute touch-up to his make-up. Picture taken on Feb.27, 2002. Photo by Tibor Kolley

  • Jim Flaherty becomes new Ontario finance minister, after Ernie Eves resigned from the post. New cabinet members were sworn in today, February 8, 2001, at Queen's Park. Photo by Patti Gower / The Globe and Mail.

  • Jim Flaherty becomes new Ontario finance minister, after Ernie Eves resigned from the post. New cabinet members were sworn in today, February 8, 2001, at Queen's Park. Photo by Patti Gower / The Globe and Mail.

  • Sunday. Mar.18/07. Federal Finance Minister Jim Flaherty will deliver the budget in Ottawa tomorrow.During a pre-budget photo op, he purchased a pair of Canadian-made skates for his son John (16) at Blades Custom Skate Care Inc. in Whitby, Ont. The skates are CCM Reebok 9K pump skates. The total price including all taxes was $456.00. Before the photo op he was scrummed by the media. Pictures taken on Mar.15/ 2007 Photo by Tibor Kolley

  • Canadian Finance minister Jim Flaherty smiles as he takes part in a conference during a meeting of the Group of eight (G8) Finance in Lecce on June 12, 2009. World powers launched a project on the sidelines of G8 talks to develop vaccines against pneumococcal diseases as part of a new market-based mechanism for the developing world. AFP PHOTO / ALBERTO PIZZOLI (Photo credit should read ALBERTO PIZZOLI/AFP/Getty Images)

  • Finance Minister Jim Flaherty tables the federal budget in the House of Commons on Parliament Hill in Ottawa Thursday March 4, 2010. THE CANADIAN PRESS/Adrian Wyld

  • Canadian Finance Minister Jim Flaherty shows a green shoe as he shops in Ottawa on March 28, 2012 for a new pair of shoes as part of the tradition of budget day. The tradition holds that Ministers of Finance purchase or wear new shoes when the budget is delivered. AFP PHOTO/ROGERIO BARBOSA (Photo credit should read ROGERIO BARBOSA/AFP/Getty Images)

  • Canada's Finance Minister Jim Flaherty successfully exits an igloo outside the Nunavut legislature in Iqaluit, Canada during a break in proceedings at the G7 Finance Ministers Meeting, February 6, 2010. Moments earlier Minister Flaherty dislodged a large piece of snow from the entry way of another smaller igloo as he attempted to exit. AFP PHOTO/ GEOFF ROBINS (Photo credit should read GEOFF ROBINS/AFP/Getty Images)

  • Federal Finance Minister Jim Flaherty speaks to reporters at the Port of Montreal, Monday, September 27, 2010. Flaherty insists the government will be "fair and reasonable" in assisting stimulus projects that are supposed to be complete by the end of March. THE CANADIAN PRESS/Ryan Remiorz

  • Hanoi, VIET NAM: Canadian Finance Minister Jim Flaherty (R) meets with his Vietnamese counterpart Vu Van Ninh during a bilateral meeting on the sidelines of the APEC finances ministers' meeting held in Hanoi 07 September 2006. Pacific Rim finance ministers will this week push for renewed talks to free up global trade and pledge steps against terrorist financing, according to a draft of a joint statement. AFP PHOTO/HOANG DINH Nam AFP PHOTO/HOANG DINH Nam (Photo credit should read HOANG DINH NAM/AFP/Getty Images)

  • France's Minister of the Economy, Industry and Employment Christine Lagarde (L), Canada's Minister of Finance, Jim Flaherty (C) and US Treasury Secretary Timothy Geithner attend the final press conference for the G7 Finance Ministers Meeting in Iqaluit, Canada, February 6, 2010. AFP PHOTO/ GEOFF ROBINS (Photo credit should read GEOFF ROBINS/AFP/Getty Images)

  • From left: Canadian Finance Minister Jim Flaherty and British Chancellor of the Exchequer Alistair Darling watch as US President George W. Bush delivers a statement with G7 finance ministers and heads of international financial institutions October 11, 2008 in the Rose Garden of the White House in Washington, DC. AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)

  • Minister of Finance Jim Flaherty poses for a photo following an interview in Ottawa on Monday, Dec. 21, 2009. THE CANADIAN PRESS/Pawel Dwulit

  • Minister of Finance Jim Flaherty and Prime Minister Stephen Harper enter the House of Commons on budget day on Parliament Hill in Ottawa on Tuesday, February 11, 2014. THE CANADIAN PRESS/Patrick Doyle

  • Finance Minister Jim Flaherty appears during a news conference at the House of Commons on Parliament Hill in Ottawa, Ontario, on Monday, May 14, 2012. (AP Photo/The Canadian Press, Sean Kilpatrick)

  • Finance Minister Jim Flaherty holds the last penny struck in Canada at the Royal Canadian Mint in Winnipeg, Manitoba, Friday, May 4, 2012. Flaherty announced in the March budget that the coin would no longer be produced because the cost of making it is more than it's worth. He has estimated that the government will save $11 million a year. Ian Bennett, president and CEO of the Royal Canadian Mint, smiles at left. (AP Photo/The Canadian Press, John Woods)

  • Finance Minister Jim Flaherty holds the last penny struck in Canada at the Royal Canadian Mint in Winnipeg, Manitoba, Friday, May 4, 2012. Flaherty announced in the March budget that the coin would no longer be produced because the cost of making it is more than it's worth. He has estimated that the government will save $11 million a year. (AP Photo/The Canadian Press, John Woods)

  • Canadian Finance Minister Jim Flaherty arrives for a G-20 dinner, during the Spring Meetings of the World Bank Group and the International Monetary Fund Thursday, April 18, 2013 in Washington. (AP Photo/Alex Brandon)

  • Finance Minister Jim Flaherty, left, and Toronto Mayor Rob Ford, right look on as Prime Minister Stephen Harper announces funding for new subways in Toronto, Sunday, September 22, 2013. THE CANADIAN PRESS/Mark Blinch

  • A emotional Minister of Finance Jim Flaherty listens to a speaker during an announcement in Ottawa, ON Friday October 21, 2011. (CP)

  • Minister of Finance Jim Flaherty responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on Monday, March 3, 2014. THE CANADIAN PRESS/Sean Kilpatrick

  • The photo from the last tweet from Jim Flaherty's account.


 

Follow Nick Fillmore on Twitter: www.twitter.com/NickFillmore

FOLLOW CANADA POLITICS