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Harper, Trudeau and Mulcair need to show some economic common sense

Bruce Anderson is the chairman of polling firm Abacus Data, a regular member of the At Issue panel on CBC's The National and a founding partner of i2 Ideas and Issues Advertising. He has done polls for Liberal and Conservative politicians but no longer does any partisan work. Other members of his family have worked for Conservative and Liberal politicians, and a daughter currently works for Liberal Leader Justin Trudeau. He writes a weekly digital column for The Globe and Mail.

There's been plenty of talk about the federal deficit on the election campaign trail this week. But what do Canadians really want? What's our preferred "fiscal policy"?

When it comes to tax dollars, we're looking for common sense.

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Spend what's necessary to provide services – without spending so much that our taxes become unaffordable. Prime the economic pump when things are sluggish. But only up to a point.

We don't like debt, but we don't freak out at adding a bit when necessary.

We do like balanced budgets, but we don't party in the streets when they happen.

A modest deficit, a little surplus, from one year to the next – we don't get too excited.

Stephen Harper's government has had a winding fiscal path and knows well how pragmatic most voters are.

The most ideologically conservative government in my lifetime, it nevertheless added to the national debt at a very brisk pace. Mr. Harper spent to stimulate the economy, setting aside his distaste for red ink. He knew the political risk was small: He could dispense money hither and yon, blaming the contraction caused by the rest of the world.

But when the economy recovered, the Conservatives found it tricky to kick the spending habit. Spending seemed politically lucrative, and they recognized that for most voters it didn't matter how quickly the budget was rebalanced, as long as it was reasonably soon. Interest costs were falling, and Tax Freedom Day was arriving earlier each year.

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Fast forward to the political and economic context today. What to make of the positions of the three main party leaders?

Curiously, Thomas Mulcair is coming off as the most doctrinaire fiscal conservative. He says an NDP government would live within its means. He laid this marker down back when it looked easy-peasy, when the commodities he thinks Canada relies too heavily on were sold at prices that generated tax revenues he could only wish were flowing today.

He did this to blunt attacks from opponents who want voters to believe an NDP government would bankrupt Canada. His hard fiscal line, politically sensible enough then, is less so now. Voters might start to wonder if his approach is artificially or implausibly rigid or if he is being honest about the choices he would make.

Justin Trudeau, surrounded by Liberals of varying hues, says his party knows how to do austerity but isn't afraid to stimulate the economy, even if some red ink results. It might be risky for one caricatured as a neophyte to say, "Vote for me and you'll get a deficit." But it might not be as risky as all that. The Liberal Leader is in line with where mainstream voters have been for a decade. And he knows that the other two main parties were in favour of stimulative deficits only a few short years ago.

For Stephen Harper, there's no easy choice. If he says he will stimulate the economy and go back into deficit, some will say he's admitting that the economy he spent a decade building is sputtering. Critics will argue that the pre-election orgy of cheque-writing was irresponsible because we'll end up borrowing the money we paid ourselves.

But if the PM says he won't consider a deficit to stimulate the economy, he runs a different risk. Our latest Abacus poll saw a sharp jump in economic anxiety this month. If the economic mood worsens further, voters may not demand more spending, but they will expect flexibility. Mr. Harper won his last two elections as an economic pragmatist, and abandoning that posture might make it harder, not easier, to win this one.

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This probably won't be an election that turns on the deficit. It almost never is.

But it likely will turn on who voters think makes the best economic sense. That's a test that is usually more about timing and circumstances than it is about ideology. We may not yet have heard the "final answers" from political leaders on this issue.

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About the Author
Bruce Anderson

Bruce Anderson is the chairman of polling firm Abacus Data, a regular member of the At Issue panel on CBC’s The National and a founding partner of i2 Ideas and Issues Advertising. He has done polls for Liberal and Conservative politicians but no longer does any partisan work. More

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