Wednesday, December 6, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy
      • Energy
      • Environment
    • Foreign Policy
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs
  • Projects
    • The Promised Land: The Israel-Hamas war and the future of the Jewish community in Canada
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • An Intellectual Property Strategy for Canada
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy
      • Energy
      • Environment
    • Foreign Policy
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs
  • Projects
    • The Promised Land: The Israel-Hamas war and the future of the Jewish community in Canada
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • An Intellectual Property Strategy for Canada
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy
    • Papers
    • Commentary
    • Columns
    • Books
    • Video
No Result
View All Result
Macdonald-Laurier Institute

MLI Commentary – Balancing budgets is good politics and good policy

September 7, 2011
in Commentary, Domestic Policy Program, Economic policy, Latest News, Releases
Reading Time: 2 mins read
A A

Balancing Budgets: Good Politics, Good Policy
Purposeful deficit reduction can result in electoral success

September 7, 2011, Ottawa, ON – Contrary to the conventional view that deficit-cutting governments court political unpopularity, history shows that vigorous action to balance the budget and keep it balanced is both good economics and good politics.

Yet, apparently inspired by the conventional wisdom, the current Conservative government is pursuing a weaker policy of balancing the budget by slowing growth in spending, hoping both that interest rates remain low, and that revenues rebound robustly. This slow, incremental action on deficit reduction is grounded in the view that more direct action to balance budgets sooner through spending cuts is a political loser. According to Jason Clemens, director of research of the Macdonald-Laurier Institute (MLI), historical evidence from both Canadian provincial governments as well as the federal government in the 1990s shows that this is not true. In his new MLI Commentary released today, Balancing Budgets: Good Politics, Good Policy, he discusses how purposeful action to eliminate budget deficits relying on spending reductions rather than tax increases can be a foundation for not only sound economic policy, but electoral success.

Clemens first uses the 1995 federal budget delivered by the Chrétien Liberals to show that resolute action to eliminate deficits can result in sound public finances and electoral success. This historic budget reduced federal program spending by almost 10 percent over three years. The result was three consecutive majority governments, a feat unmatched by any other prime minister since William Lyon Mackenzie King’s string of majority victories between 1935 and 1945.

Such success stories can also be found at the provincial level. Saskatchewan’s NDP government of Roy Romanow tackled the deficit in 1991-92 by reducing program spending by 10.2 percent over three years, reducing its public sector, and raising taxes. The result was a second majority government with 72 percent of the seats in 1995.

Other examples include Premiers Harris of Ontario and Klein of Alberta who both reduced spending in order to balance their budgets in the 1990s and both were rewarded with re-election. Premier Klein reduced program spending by over 21 percent and public sector employment by over 14 percent, achieving a balanced budget in just two years. The result, Premier Klein increased his majority in 1997 and 2011.

Premier Harris’ reductions in spending were less dramatic, but more contentious. Still, Harris achieved the first back-to-back majority government in Ontario since the late 1960s.

Clemens concludes, “The Canadian public, and more narrowly the Canadian electorate, understand both the short and long-term costs of running deficits, accumulating debt, and increasing interest costs. Canadian political culture now demands balanced budgets, fiscal prudence, and a path towards lower taxes. Such actions, when done deliberately and in accordance with a thoughtful plan, have led to electoral success at both the federal and provincial levels.”

Jason Clemens is the director of research and managing editor of the Macdonald-Laurier Institute. Prior to joining MLI, Mr. Clemens held a number of posts with both U.S. and Canadian think tanks over a 14-plus year period.

 

 

Share this:
Previous Post

The Macdonald-Laurier Institute Presents History Wars: Four Debates on Canada’s History

Next Post

MLI’s Brian Crowley discusses Canada’s prison reforms after the latest comments by Conrad Black in the Toronto Star

Related Posts

A summary of federal investments and program actions related to Indigenous water supplies
Commentary

A summary of federal investments and program actions related to Indigenous water supplies

December 5, 2023
Academic freedom is under attack in the Americas – overcoming silence and intimidation: Isaac Nahon-Serfaty for Inside Policy
Inside Policy

Academic freedom is under attack in the Americas – overcoming silence and intimidation: Isaac Nahon-Serfaty for Inside Policy

December 4, 2023
As Gaza demonstrates, Canada needs the tools to counter international kidnapping: Sarah Teich for Inside Policy
Inside Policy

As Gaza demonstrates, Canada needs the tools to counter international kidnapping: Sarah Teich for Inside Policy

December 1, 2023
Next Post

MLI's Brian Crowley discusses Canada's prison reforms after the latest comments by Conrad Black in the Toronto Star

Newsletter Signup

  Thank you for Signing Up
  Please correct the marked field(s) below.
Email Address  *
1,true,6,Contact Email,2
First Name *
1,true,1,First Name,2
Last Name *
1,true,1,Last Name,2
*
*Required Fields

Follow us on

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario, K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

  • Inside Policy Magazine
  • Annual Reports
  • Jobs
  • Privacy Policy

© 2023 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy
      • Energy
      • Environment
    • Foreign Policy
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs
  • Projects
    • The Promised Land: The Israel-Hamas war and the future of the Jewish community in Canada
    • The Great Energy Crisis
    • Centre for Advancing Canada’s Interests Abroad
    • Dragon at the Door
    • Canada and the Indo-Pacific Initiative
    • The Transatlantic Program
    • DisInfoWatch.org
    • Competition Policy in Canada
    • Speak for Ourselves
    • Justice Report Card
    • COVID Misery Index
      • Provincial COVID Misery Index
      • Beyond Lockdown
      • COVID and after: A mandate for recovery
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Past Projects
      • The Eavesdropping Dragon: Huawei
      • Talkin’ in the Free World with Mariam Memarsadeghi
      • An Intellectual Property Strategy for Canada
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
      • Straight Talk
      • Labour Market Report
      • Leading Economic Indicator
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy
    • Papers
    • Commentary
    • Columns
    • Books
    • Video

© 2023 Macdonald-Laurier Institute. All Rights reserved.