CD Howe Institute publishes book knocking NDP, labour, welfare

[Sid Shniad <shniad@xxxxxx>]

The Vancouver Sun				Thursday 15 January 1998

OPINION

Why the NDP shouldn't make welfare policy

The party's alliance with public sector unions blinds
it to fiscal realities, an SFU prof's new book argues.

	Barbara Yaffe

	If you've long suspected that Canada's social programs get created with
good intentions but are then miserably managed by government, you're
right.
	At least that's the view presented in a new C.D. Howe Institute book,
Retooling the Welfare State, by Simon Fraser University economist John
Richards.
	In a past life Richards was a New Democratic Party MLA in
Saskatchewan.
	Richards asserts that the NDP, under the leadership of Alexa
McDonough federally and Glen Clark in B.C., is an unworthy custodian of
the Canadian welfare state.
	When it comes to the NDP, "Saskatchewan is the one small candle
flickering in this gloom." Richards says; unlike other NDP organizations,
Roy Romanow's administration resists left-wing traditionalism and does not
engage in what he terms debt denial.
	Richards argues convincingly that most New Democrats have lost their
right to act as watchdogs over the welfare state because they've allied
themselves too closely with public sector unions which have a strong
incentive to keep government big and growing.
	New Democrats have also refused to accept the notion that in the late
'90s taxpayers have reached their limit and want governments to spend
judiciously.
	He scoffs at the federal NDP's platform in the '97 election campaign,
saying the party engaged in "fanciful arithmetic" that only 11 per cent of
the electorate endorsed.
	The party engaged in "a wildly optimistic econometric forecasting
exercise," based on 4.5-per-cent growth in Canada's GDP over the next
five years. (Growth could be as low as 2.3 per cent in 1998.)
	That said, Richards demurs from criticizing NDP leader McDonough,
describing her only as "an articulate Nova Scotian." However, he writes
that Atlantic Canadians embraced the NDP last June because theirs is a
"region whose citizens tenaciously cling to inefficient and fiscally untenable
features of the pre-1993 social policy status quo."
	B.C.'s NDP was no more realistic in its 1996 provincial election
campaign. Richards cites the Clark government's "deceptive bookkeeping."
	Clark's government "was caught in the conflict between the majority of
the electorate, who were insistent on fiscal restraint, and the expectations
of allied intrest groups, particularly public sector unions."
	Richards' view is: "One can admire the skill the B.C. NDP showed in
pulling off the deception, but its record offers little to anyone searching for
a stable basis of political support from which to conduct social policy."
	He says NDP "activists have yet to acknowledge the extent to which
they have rendered their party unfit to govern in the eyes of the great
majority of Canadians."
	He's right. New Democrats need to part company with the unions, to
tell Ken Georgetti, Buzz Hargrove and Bob White to go lobby elsewhere.
And they need to get real when it comes to curtailing taxation and
balancing budgets. The NDP could use more leaders like Allan Blakeney,
Ed Broadbent and Romanow; fewer like McDonough, Clark and Bob Rae.
	Richards also argues in his book that social policy too often has been
managed irresponsibly. In 1998 Canada's social programs aren't suffering
for a lack of money. Rather, "they have been short on rigourous
management and realistic policy analysis."
	Once created, these programs have taken on lives of their own,
occasionally killing initiative in various parts of the country. After all,
"individuals have a strong incentive to [have a] free ride on the collective
efforts of others."
	Even when programs over time and with changing circumstances
become counterproductive, they're inevitably protected by interest groups.
Richards mentions two examples:

- The unemployment insurance program for years simply kept people afloat
in the Atlantic region, letting them avoid making tough decisions to move
or retrain. (The TAGS program currently is doing the same.)

- Too-generous welfare benefits in Ontario and B.C. became better options
financially for unskilled, able-bodied people than low-wage employment.

	Left-leaning readers may be dubious about Richards' assessment. But
they should keep in mind the C.D. Howe Institute is an independent, non-
profit research organization. And Richards himself is a former NDP
politician who believes in a strong social safety net.
	Any accusation of an anti-welfare bias won't fly.