Published on May 11, 2016

Ten days ago, I gave a speech on politics and the evolution of government in the 20th century before approximately 50 people at an event organized by my colleague Jacques Gourde, MP for Lotbinière-Chutes-de-la-Chaudière, in Saint-Narcisse (Quebec). Here is an adapted version of my speech, which you can also watch (in French) on these video clips. — 6 September 2010

Why are governments always getting bigger?

By Maxime Bernier
Saint-Narcisse
August 27, 2010

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You know, there are many things to do on a Friday evening apart from coming here and listening to Jacques (Gourde) and me talking about politics. Yes, Jacques and I are politicians – it’s not the ideal job nowadays! We’re involved in politics, we talk about politics.

But we are not naive. We know that many of you see politicians as people who don’t always tell the truth, who make nice promises that they do not always keep. That’s why people have become cynical and disenchanted towards some politicians.

They have good reasons for that. Politicians tend to exaggerate their own merits and denigrate their opponents. They claim that they can solve everything with a new regulation, a new law or a new program.

I’m trying to do politics differently, to say things as they are, to not make promises and to do my best to represent the people of the Beauce and of Quebec in Ottawa.

People realize that from one government to the other, from a decade to the other, we get the impression that things are not that different, and even that they are getting worse.

That’s why I’m not going to make a typical political speech this evening, but rather a speech about the problems of today’s politics. Politics is a lot more interesting when you reach out to people’s intellect instead of their emotions or their partisanship.

So, let’s discuss a crucial problem of contemporary politics: why is it that so many people have the impression that things are getting worse, or at any rate are not getting better, despite economic growth and the advantages of modern life? Is it a false impression?

If we look at certain general historical trends, I think we can conclude that this impression is indeed justified.

The main trend that we observe is that governments are constantly getting bigger. A bigger government means a government that taxes more, spends more, gets deeper into debt, and regulates more. It’s a government which intervenes in all aspects of our lives, all the while curtailing our freedom to act.

This happened all over the world during the 20th century. The scope, size and powers of government have grown tremendously.

Take for example public spending as a proportion of gross domestic product, that is, the portion of the overall economy controlled by governments. In the main countries of the western world, it has gone from around 10% a century ago to beyond 40% today.

This means that almost half of all economic activity is controlled by the state. Half of your salaries are going away in taxes. So you work almost six months per year to fund spending by federal, provincial and municipal governments.

But these gigantic sums are not even enough to pay for all the programs and interventions of governments. They still have to borrow billions of dollars every year to make up for their deficits.

Some of you may have young children, or are planning to have one. Well, you should know that when they are born, Canadian baby already owe many tens of thousands of dollars, which they will have to reimburse in one way or another in the course of their life. Perhaps this is why they start crying as soon as they arrive in this world!

The size of public spending and the taxes that are collected to fund it only explain one aspect of the growth of the state. We must also take into account the increase in the number of laws and regulation.

Some years ago, the Montreal Economic Institute calculated that each year, the Quebec government added 8000 new pages of laws and regulation in its books, while the federal government added 2000. Very few rules are ever abolished, even when they become obsolete, while a variety of new rules are constantly being created. Our society has never been so thoroughly regulated.

I don’t want to demoralize anyone, but think for example about all the papers that you need to obtain and everything you have to pay in order to be able to drive a car, from the driver’s license to taxes on gasoline, and not forgetting the parking tickets and other fines.

Or think about all the red tape that is involved in owning a hunting rifle. The gun registry is a bureaucratic monster that has cost a thousand times more than it was supposed to, and because of it every hunter is treated like a potential criminal.

You can barely do anything nowadays without having to ask a bureaucrat for some permission. You want to drive a rowboat or an ATV? Better be patient while you try to obtain all the necessary authorisations and learn all the rules that apply. Although there may be thousands of pages of obscure regulation or anything and everything, you won’t be able to claim that you did not know them before a judge if you are caught violating one of them. Ignorance of the law is no defence.

Governments too often treat us like irresponsible children and act as if they know better than we do what is good for us. From their perspective, this justifies all the measures they adopt to hold our hands and tell us what to do. And also to pick our pockets.

Did you know for example that there is a law in Quebec and in other provinces which imposes a minimum price on the beer that you buy at the store? That’s right, beer could be cheaper, but the government is afraid that you may drink too much of it if you pay less than some arbitrary amount for it. So the Liquor Board determines a “minimum retail price for beer so that it does not encourage irresponsible consumption.”

That’s not a joke, this is how the law is written. The government believes that you won’t be able to control yourself and to drink beer in a responsible manner if the price of beer is too low. And it’s a nice coincidence because that also happens to bring more taxes in government coffers.

Governments are trying to control everything we do to protect us from all the imaginable dangers and risks of life. But who will protect us against governments?

The state also controls whole sectors of the economy, such as health care and education. Sectors which seem to be in a permanent state of crisis and always have funding problems. Still, every year, their budgets increase faster than the overall economy. How is that possible?

Former US president Ronald Reagan explained it best when he said that big interventionist governments tend to see things as follows: if it moves, tax it; if it keeps moving, regulate it; and if it stops moving, subsidize it!

What we need to ask is why are governments always getting bigger? Does everyone really wish to have these giant governments? Is this what people vote for?

Economists have tried to explain this dynamic. Their research shows how particular groups have a strong interest in getting organized to put pressure on politicians.

These special interest groups want subsidies, trade protection, more generous social programs, a fiscal or legal privilege, regulation that favours them and keeps out competition. Any favour they get from the government can potentially bring them huge benefits.

Of course, in the end, it’s you, the citizens, who will have to pay for these favours. But in your case, the amount you have to pay for each measure is not significant enough to justify getting organized to oppose it. You don’t have time to go to meetings and demonstrate in the street to oppose a particular program that will cost you ten dollars, even if ten dollars here and ten dollars there add up to hundreds and thousands of dollars. You have to work and take care of your family. But the small group of people who get 100 million dollars have a huge interest in getting organized.

It’s very hard for politicians to say no to these lobbies because they have the means to hijack debates, quickly mobilize support and fuel controversies in the media. On the other hand, nobody hears what you, the silent majority, have to say even if you are the ones paying the bill.

So, there is a fundamental imbalance in political debates. On one side, you have concentrated benefits to special interest groups who have a strong incentive to do their lobbying; on the other side, you have dispersed costs that fall on society at large.

Within governments, civil servants too are trying to get higher salaries and other perks. Bureaucrats are not saints who dedicate their lives to the common good. They also have their own personal interests to advance.

Civil servants have a very large influence on political decisions because they are the ones who control the information and the day to day agenda of politicians. I got first-hand experience of this as minister of Industry. I had to fight civil servants in my own department to achieve my goal of deregulating a section of the telecom sector, in order to foster more competition and offer more choice and better prices to consumers.

If special interest groups and civil servants want a more interventionist government and if politicians agree to this, then voters will get a bigger government, whether they like it or not.

That’s how government grows and grows. That’s how we become less and less free. And more and more dependent on government.

What can we do – what can you do – to reverse this trend? First it’s essential to understand that the main rift in politics is the one that separates those who want a bigger government, more programs, more control, more taxes and regulation from those who want individuals to be free and responsible for their own actions.

If you belong to this second group, you can do something: ask your governments to get out of your way. Demand more freedom from your Members of Parliament. Ask them to treat you like responsible adults. Discuss these issues with your family, your friends and your neighbours.

The more people there will be who understand and share these ideas, the easier it will be to create a counterweight to the lobbies that we constantly see in the media asking for more government intervention, and for a bigger chunk of your salary. It might also move politicians to finally take into account the interests of the silent majority, your interests.

To conclude, it’s true that politics can be boring. Political debates often sink to the level of petty squabbling. But by not paying attention to politics, you make it easier for politicians to determine for you how you live your life and spend your money. In the end, it’s up to you to decide if we shall have a freer, more responsible and more prosperous society.

Published on May 11, 2016

10 September 2010

For the past two days, I have received several demands to clarify my position on the project to build a new arena in Quebec City, which would get 100% of its funding from governments. I expressed my main reservations about it yesterday in an interview with a Beauce radio station (the daily paper Le Soleil published a summary of what I said in an article this morning).

As many people have told me, I can’t travel the country and make speeches about individuals and governments being responsible, about living within our means and reducing government intervention, while refusing to take a clear stand on an issue where these principles squarely come into play.

The hard reality is that we have just been through a global economic crisis – which remains very preoccupying and is likely not over – and governments in both Quebec City and Ottawa are heavily indebted. Our government has just posted a huge $56-billion deficit and the priority is to get back to a balanced budget through reductions in our own programs, and avoid by all means getting involved in risky financial ventures.

I was not at all impressed by the Ernst & Young study, which concluded that the project would be “profitable” – but only on the assumption that governments provide full funding for the construction as well as the repairs and renovations that will be necessary over the next 40 years. That’s a deceptive way of putting it. The conclusion should rather be that the project is simply not profitable and will constitute a financial burden for taxpayers for decades to come, even in the best scenario. That’s why not a single private player has been found to invest in it.

Finally, one of the arguments we’ve heard most often in Quebec City in support of public funding is that “Montreal got such and such investment,” “Toronto benefitted for this program,” or “Vancouver got that amount of money.” Since our governments have been throwing money in all directions for decades, there is obviously no way to refute such arguments.

But the fact that we are caught in this unending spiral of spending and debt accumulation is precisely what has brought us in today’s intolerable situation. It is the same dynamic which pits Canadians against one another in the hope of getting a share of the big pile of money which constitutes the public treasury.

We can see the usual pattern already. If Quebec City gets the $175 million that it is asking from Ottawa to build its arena, other cities and regions of the country will want the same treatment, using fairness as an excuse. At the end of the day, we may be forced to spend several times that amount of money in order to treat everyone fairly.

As the great French economist Frédéric Bastiat wrote, “Government is the great fiction through which everybody endeavours to live at the expense of everybody else.” When such large amounts are in play, it is impossible to calculate exactly who has received how much. We would need to go beyond a single file and take into account all public spending items, going as far back as possible.

That’s what Quebec separatists like to do. They keep telling us that Quebec has been on the losing side of the financial equation and that Ottawa has systematically been favouring Ontario for more than a century. Meanwhile, people in the rest of the country believe that Quebec is the spoiled child of the federation. Each region can point towards many examples to nurture its frustrations. It is a pointless debate which can only divide our country.

This dynamic has to stop one way or another. We cannot continue in this way to pass on to our children the bills for all the projects that we cannot afford to pay ourselves. We cannot continue to distribute ever larger amounts of money to please everyone and buy social peace, while refusing to face the consequences. We cannot ask governments to manage our money in a responsible manner while at the same time demanding that they devote some more money to an irresponsible venture that will benefit us.

I too share the dream of again seeing a professional hockey team come back to play in our region and I sincerely hope that a way will be found to make this dream come true. But dreaming does not make the hard financial reality go away. It’s nice to have dreams, but when you use borrowed money to achieve them and act as if money grows on trees, you may have a brutal awakening. For all these reasons, I cannot in good conscience support this project.

Published on May 11, 2016

I delivered a speech today at Toronto’s Albany Club on federalism and the need to put an end to federal intrusions into areas of provincial jurisdictions. This is the original text of the speech. — 13 October 2010

Restoring our Federal Union
By Maxime Bernier, MP for Beauce

The Albany Club, Toronto
October 13, 2010

(Words of thanks.)

It is a great honour for me to be invited to speak here today, at such a prestigious venue.

When I told a friend I was coming here, he said: Oh, this is the club of the Toronto Tory establishment. And I thought: Wow! They still have a Conservative establishment in Toronto?

In Montreal, we certainly have a very old Liberal establishment, and a strong PQ establishment. But the Conservative establishment must have disappeared about 100 years ago. Mind you, we don’t have an NDP establishment either, so I guess that’s one plus for Montreal!

wilfridlaurier In any case, it is very fitting that this club has existed since 1882 and counts Sir John A. Macdonald as one of its founding members, since my talk will take us back to the Fathers of Confederation. So I hope I am not going to offend anyone by starting with a quote from a political opponent of Sir. John A.
Wilfrid Laurier was another of our greatest prime ministers. He was a classical liberal, not a liberal in the modern sense. He was a supporter of individual freedom, free trade and free markets. I think if he were alive today, he would probably be a Conservative!

In a speech before the Quebec Legislative Assembly in 1871, Laurier said:

If the federal system is to avoid becoming a hollow concept, if it is to produce the results called for, the legislatures must be independent, not just in the law, but also in fact. The local legislature must especially be completely sheltered from control by the federal legislature.

If in any way the federal legislature exercises the slightest control over the local legislature, then the reality is no longer a federal union, but rather a legislative union in federal form.

Now, it’s obvious that what Laurier feared has unfortunately come true. Ottawa exercises a lot more than “the slightest control” over local legislatures. The federal government today intervenes massively in provincial jurisdictions, and in particular in health and education, two areas where it has no constitutional legitimacy whatsoever.

This is not what the Fathers of Confederation had intended. The objective of the 1867 Act was not to subordinate provincial governments to a central authority. But rather to have sovereign provinces within the limits of their powers, dealing with local matters that directly affected citizens; and a sovereign federal government within the limits of its own powers, dealing with matters of general national interest.

The Privy Council in London, Canada’s highest court of appeal at the time, indicated in 1937 that these were “water-tight compartments,” essential to Canada’s original structure as a federal state.

During the 20th century however, this fundamental principle was gradually pushed to the wayside. That century witnessed the rise of communism and fascism, two totalitarian collectivist ideologies. In a milder form, collectivism was also a very fashionable idea in democratic countries. We saw everywhere the growth of the state, the rise of central planning, of command-and-control Keynesianism and of government interventionism. No advanced country escaped this trend.

In Canada, government activism grew both in Ottawa and in the provincial capitals. Predictably, federal planners decided that to make central planning more efficient, Ottawa had to have its say on all kinds of social issues, despite the fact that these matters were the responsibility of the provinces in our Constitution.

At first, it was done in the proper manner – by amending the Constitution. This is why after the Privy Council ruling in 1937 which said that Ottawa had no authority to establish an unemployment insurance program, the BNA Act was amended to allow it. In 1951, old age pensions were established in the same way.

However, several other programs, from family allowances to grants to universities and hospital insurance were set up which clearly did not respect the constitutional division of powers. Some of these programs are direct transfers to individuals and tax measures. While others, such as the health and social transfer programs, are money sent by Ottawa to the provinces, to the tune of nearly 40 billion dollars today.

This intrusion into provincial jurisdiction was accomplished by the so-called federal spending power.

No constitutional provision to legitimize this federal spending power was ever adopted. The Supreme Court of Canada has never explicitly recognized this power either. The federal government was certainly aware that the power to spend in areas of provincial jurisdiction does not exist in the Constitution, because it has twice attempted to constitutionalize it. First in 1987, in the Meech Lake Accord, and again, in 1992, in the Charlottetown Agreement. Both these attempts failed.

These constitutional amendments would have left intact the existing intrusions. And they would have allowed new federal programs in areas of provincial jurisdiction to be set up if a majority of the provinces consented to it, with an opting- out clause providing compensation only if a province offered a similar program.

This however, would still be a clear violation of the intent of the Fathers of Confederation and of the basic principles of our federal system.

I believe that our goal should not be to enshrine the current violations of the Constitution, nor to set up a process that would allow further federal encroachment into provincial jurisdictions. We should be going much further than that.

Why not take a principled stance? Isn’t this what we Conservatives should be doing when confronted with such matters?

Clearly, our goal should be to bring back the balanced federalism envisioned by the Founders. It should be to restore our federal union, as Wilfrid Laurier and most people understood it back then.

This would be done by putting an end to all federal intrusion into areas of provincial jurisdiction. Instead of sending money to the provinces, Ottawa would cut its taxes and let them use the fiscal room that has been vacated. Such a transfer of tax points to the provinces would allow them to fully assume their responsibilities, without federal control.

This proposal is in no way original of course. It has been the position defended by successive Quebec governments for several decades, regardless of the political status they favoured for Quebec.

More recently, two of the greatest conservative statesmen of our generation, Preston Manning and Mike Harris, made the same proposal in their series Canada Strong and Free, published by the Fraser Institute and the Montreal Economic Institute. The Fraser Institute also published other studies in recent years on this topic. If we want to solve this problem once and for all, we have to keep putting this issue on the agenda and discussing it.

Since the Séguin Commission, set up a decade ago by the Quebec government, the debate has focused mainly on the fiscal imbalance, the discrepancy between the fiscal resources of the federal government and the growing financial responsibilities of the provinces. This problem was solved in large part by our government when we increased the social and health transfers to provinces in our 2007 budget. But this has not solved the legislative imbalance, which is the heart of the matter.

As we saw two months ago during the premiers’ meeting in Winnipeg, the provinces have already started to pressure Ottawa to increase health transfers when the ten-year health agreement expires in 2014. If transfers do not increase as fast as provinces want them to, you can be sure that the debate over the fiscal imbalance will be back in the news three years from now.

This is a recipe for permanent discord. The provinces act like special interest groups who would rather get money from the central government than increase their own taxes. But at the end of the day, the money comes from the pocket of the same taxpayer.

It also guarantees confusion and a lack of accountability. Despite the existence of the Canada Health Act, it is provincial governments that are mainly responsible for managing the health care system. But the debate over federal funding makes it difficult for the average citizen to see who is responsible for what.

Why do we have waiting lines for surgery, overcrowded emergency rooms and not enough family doctors? Is it because of bad provincial management or because of insufficient federal funding? Each level of government can blame the other to score political points.

There would no longer be any ambiguity if each province stopped depending on federal transfers and raised the amount of money necessary to manage its own programs.

Freed from federal conditions and unable to shift the blame to another government, provinces would also be more inclined to experiment. Especially in finding better ways to deliver health care services.

The genius of federalism is that we can try more than one type of solution to solve public policy problems. If one province finds a better way, others will copy its good policy. It allows provinces to deal with their own specific challenges and needs. It’s also easier to find out what doesn’t work. Just like in a free market, ideas compete with each other and the best ones emerge in the competition.

On the contrary, a one-size-fits-all solution imposed on everyone from the centre precludes experimentation, kills innovation and makes it awfully difficult to extricate oneself from failed policies.

Now, it’s obvious that today’s central planners, those who believe in top-down decision-making by the central government, will not like what I am saying.

Our Liberal opponents constantly come up with new ideas to intrude on provincial matters. Not content with the existing intrusions, they would like a national childcare program, a national pharmacare program, a national home-care program, and what have you! They fall for anything big, centralized, bureaucratic and costly.

As Conservatives, on the contrary, we should be defending the principle of subsidiarity, which is inherent in our Constitution.

This means that issues should be handled by the smallest or lowest-level competent authority, the one closest to the people. This way, each province, each region, each community, develops according to its citizens’ preferences. It allows unique or different particularities to be expressed. And it prevents conflicts.

Also, the central government would probably be more efficient at managing its own important files if it stopped meddling into provincial affairs.

All these arguments are not only relevant for Quebecers, but for all Canadians. As a federalist Quebecer though, I am acutely aware of this issue, for obvious reasons.

For half a century, Quebecers have been offered two extreme choices: a centralized type of federalism or separation from the rest of Canada. None of these extremes have the support of a majority of Quebecers.

In fact, it has been a truism for over a generation that there is only one constitutional position that could rally a large majority of Quebecers: a more autonomous Quebec within a united Canada. Essentially, what they want is our country as it should be if we simply followed the constitutional arrangement that was agreed to in 1867. I firmly believe that a significant proportion of Canadians from other provinces could also support this idea.

We don’t need to reopen our Constitution. We don’t need to change our Constitution. What we need is to restore our Constitution.

I am convinced that if what I am proposing here were implemented, we would at once remove one of the most potent arguments in favour of separation. Separatists have been pointing for decades at federal intrusions in provincial matters as proof that Quebec’s autonomy was threatened and that federalism could not be reformed.

Nationalism can be a destructive force when it promotes intolerance and division. But it can also be a force for good, when it seeks to defend local autonomy against the homogenizing forces of larger entities.

Without Quebec nationalism acting as a counterweight, Canada would very likely be an even more centralized federation today. It would have an even bigger, more wasteful and unresponsive bureaucracy, trying to micromanage local issues across this huge country from offices in Ottawa.

Ending the federal spending power, eliminating the federal programs that violate the division of powers, and transferring tax points to the provinces would be the right thing to do from several perspectives.

First, it would be the constitutional thing to do. A Constitution is not meant to be a flexible arrangement which evolves from one decade to another depending on political expediency. When we tolerate violations to the Constitution, the entire moral foundation of our political system is shaken to its core.

Second, it would be the federalist thing to do. Solving this problem would send a powerful message to Quebecers and strongly reinforce support for Canadian unity in that province. Finally, it would be the Conservative thing to do. We Conservatives believe not in big, interventionist, centralized government. But in small and limited government, government as close to the people as possible.

For all these reasons, I believe this proposal should be brought back to the forefront of our political debates. And stay there until we’ve managed to implement it. If we succeed, we will have restored our federal union to its former greatness, and contributed to making the 21st century what Laurier would have called the Canadian century.

Thank you.

Published on May 11, 2016

I delivered this speech today before 450 participants at the first conference of the Quebec Freedom Network in Quebec City.
–23 October 2010

Redefining nationalism
Maxime Bernier
Quebec City, October 23 2010

First of all, I would like to congratulate the organizers of the Freedom Quebec Network for this initiative and to thank you all for being here. It’s quite impressive to see so many people assembled to talk about freedom! Nobody will be able to say after this that Quebecers are deeply committed to having a government which constantly meddles in their daily lives!

Individual freedom and responsibility are the fundamental values that motivated my involvement in politics. These values have for too long been considered retrograde by our elites. It’s about time that groups such as yours put them forward in public debates.

We’ve been asked for this panel to “redefine nationalism.” I prefer to say that we should reject one of the two common definitions of nationalism and put the emphasis on the other one.

imagescae34dm8 Nationalism is a negative force when it promotes intolerance and division, when it tries to exacerbate what differentiates us from other, or to impose to the minority the characteristics of the majority. In the history of the world, this type of nationalism caused a whole lot of conflicts and wars.
But nationalism also expresses attachment to a national community. It becomes a positive force when it motivates us to show solidarity and to voluntarily help others, when it protects a distinctive feature, when it defends local autonomy against the homogenizing forces of larger entities.

If we are gathered here today to discuss this question, it’s for a simple reason: because New France was conquered by England 250 years ago. The French and English societies that emerged from this event have since gone through several political regimes.

As Quebecers, we now have a choice between three national projects. One rests exclusively on Quebec nationalism and leads to independence; another rests on a dominant Canadian nationalism and promotes a centralized type of federalism.

These two options only get support from a minority of Quebecers. Despite that, they are the two main choices that we have been offered for decades.

To these two options, we can add a third, which proposes a more balanced coexistence between our two national identities: that of a more autonomous Quebec in a united Canada. Although it is supported by a large majority of Quebecers, this option never managed to get to the top.

Why is that? Why is it that the two most extreme national perspectives, the perspective of the separatists on the one hand and of the centralizing federalists on the other hand, of René Lévesque and Pierre Elliott Trudeau, have been monopolizing our political debates for the past fifty years?

To understand what went on, I believe we have to set this debate within the larger context of political evolution in the 20th century.

There has been everywhere a significant growth of government. The role, size and powers of government have drastically increased. The portion of the overall economy controlled by government in most western countries has gone from

10% a century ago to more than 40% today.

Here at home, Canadian nationalism was reinforced by a centralizing and interventionist outlook on the role of the federal government. After the Second World War, federal politicians wanted to have their say on all sorts of social issues, despite the fact that these matters were the responsibility of the provinces in our Constitution.

Canada always had a relatively modest government, just like the United States. So, to distinguish Canada from the US, Canadian nationalists invented the myth of a social-democratic Canada, with its public health care system, its numerous social programs, its national norms and cultural protectionism.

Today, the federal government intervenes massively in areas of provincial jurisdictions, and in particular in health and education. Without Quebec nationalism acting as a counterweight, Canada would very likely be an even more centralized federation today.

In Quebec, starting during the Quiet Revolution, Quebecois nationalists did exactly the same thing as Canadian nationalists. Before 1960, Quebec had had one of the least interventionist governments in North America. But then, after 1960, they developed a whole mythology around the so-called “Quebec model,” which is just another social-democratic model as there are everywhere around the world.

What is a social-democratic model? I think the former American president Ronald Reagan is the one who expressed it best: if it moves, tax it; if it keeps moving, regulate it; and if it stops moving, subsidize it!

See how absurd the situation has become. Canadian nationalists tell us that Canadian identity is based on having a bigger and more interventionist government than the Americans. Quebec nationalists tell us that Quebecois identity is based on having a bigger and more interventionist government than elsewhere in North America. In both cases, this was completely false 50 years ago. But nationalists have invented identities that correspond to their big government ideology.

And the funniest thing is that the roles are now being reversed. The US government, who wants to nationalize health care and is busy spending and piling up debt at staggering speed, will soon be larger than Canada’s government. Imagine, those Americans are stealing our identity!

Those two nationalist visions have been fighting each other for 50 years. Jacques Parizeau used to say that he and Pierre Trudeau agreed on almost everything, except where to put the national capital. Separatism in Quebec grew fastest during the Trudeau era, as a reaction against central government activism.

Stuck between these two extreme options, the view of a more autonomous Quebec in a united Canada never succeeded in bringing about change.

Yet, we have a Constitution that leaves a lot of autonomy to provinces. If we respected the division of powers prescribed by our Constitution, Canada would be a lot less centralized that it is today. And we could solve most of the conflicts between the two orders of government.

This is what I argued for in a speech in Toronto last week. I suggested that Ottawa put an end to its so-called spending power, completely get out of areas of provincial jurisdiction and transfer tax points to provinces. To reach that goal, there is no need to once again begin constitutional negotiations or to change the Constitution. What we need is simply to respect the Constitution. This is a very strong position from a moral viewpoint.

A Constitution is not a flexible arrangement which evolves from one decade to another depending on political expediency. When we tolerate violations to the Constitution, the entire moral foundation of our political system is shaken to its core. Asking our partners in Ottawa and in the other provinces that we cease to violate our Constitution should be the easiest position to defend.

In reality, this autonomist position has always been badly defended. One reason is that for 50 years, successive Quebec governments have weakened it by constantly asking for more.

Some of Quebec’s demands imply special privileges. Essentially, we’re saying to the rest of the country: we are the only ones here who are special and we should be getting more power and influence than all of you.

Among other things, we demanded that Quebec be recognized as a distinct society and that this distinction serve to interpret the Constitution; that Quebec get more seats in Parliament than what its demographic weight warranted; that only Quebec get a veto on constitutional changes. And we made these demands with a knife on the throat: you better say yes or else we separate.

Just put yourself in their shoes: didn’t they have some good reason to be reluctant?

The other explanation for the failure of the autonomist option rests on this fusion between nationalism and the big government perspective on society that I was talking about earlier. These demands were first and foremost aimed at feeding our big government in Quebec City, at giving it more “levers” to intervene ever more in our daily lives and curtail our freedom.

All political parties, including the Action démocratique du Québec, took part in this race to get more and more powers in addition to those that the Constitution gives us. But it would be like trying to add new floors to a building while its foundations are unstable.

Moreover, Quebec’s constitutional demands were always coupled with demands for more money, more transfers, more equalization payments, once again to feed our big provincial government. Quebecers claim that they want more autonomy or even independence, but all we have succeeded in doing so far is to become financially more dependent on the rest of Canada.

The moral authority that we could have mustered by asking for the Constitution to be respected was repeatedly compromised by a series of unrealistic demands to increase the powers and the financial resources of the Quebec bureaucracy. How can we be surprised that we haven’t got anywhere for the past 50 years?

After two referenda that ended in defeat for separatist forces, Quebec has no negotiation power anymore. A majority of Quebecers don’t want to separate. And nobody in the rest of the country, or here too for that matter, wants at this period in time to reopen the Constitution. And so, if we want to go forward towards the goal of making Quebec more autonomous and more prosperous, we have to adopt a completely different approach.

First of all, Quebec should stop making unrealistic demands. If we try not only to get the Constitution to be respected, but also to get additional powers, a special status, a veto, more money from the federal government, more equalization, we simply won’t get anything, as history has shown. Let’s concentrate on the most important goal, which is respect for the 1867 agreement, and we’ll have much better chances to succeed. We’ll see after that if other changes are called for.

In any case, Quebec society has no need of new powers or of special recognition to prosper. Is it because our politicians in Quebec City don’t have enough powers that we are one of the most indebted societies in the world? Is it some constitutional clause that will guarantee that our culture thrives and that the French language survives?

We should not measure the dynamism of a society by the number of laws and regulations that its government adopts, or of public entities and programs that it creates; but rather by the entrepreneurial spirit of its members, by their creativity and their ability to become self-reliant.

For Quebec to get ahead, we must also rely on the positive aspects of nationalism and set aside the more extreme, intolerant and divisive aspects. Since Quebecers have chosen to continue to live in Canada, they must learn to perceive other Canadians as fellow citizens and partners.

There are many Canadians in the rest of the country who share this vision of a society less dominated by big government, this vision of a less centralized federation. We should seek them as allies.

Supporters of big government have been in power for fifty years. They have brought us to a constitutional and economic dead end. Every day they endanger our prosperity and freedom a little more.

It is high time for supporters of freedom to get together and propose a new realistic vision of Quebec’s future.

Let’s state it loudly and forcefully: we need a smaller, less interventionist and less centralized government in Ottawa; but also a smaller, less interventionist and less controlling government in Quebec City.

A new chapter in Quebec’s history is being written beginning today. And together, through the strength of our convictions, we are the ones who shall be its main characters!

Thank you.

Published on May 11, 2016

The Financial Post ran my article this morning about the Bank of Canada’s risky monetary policy, as explained by its governor Mark Carney in a speech earlier this week. — 15 December 2010

Carney vows to keep pouring oil on the fire
Maxime Bernier, MP for Beauce

The Bank of Canada is in a bind. In a speech in Toronto on Monday, its governor, Mark Carney, admitted to an extremely risky strategy that could lead to even greater financial and economic imbalances than those of the past three years. But, he said in so many words, the bank has no choice but to continue to throw oil on the fire and urge everyone to stay as far away as possible from the fire.

After briefly explaining why we may be in for an extended period of very low interest rates, Mr. Carney spent about two-thirds of his speech detailing how cheap money “could potentially distort behaviour in public, financial, corporate and household sectors.”

In some countries, he said in the usual impenetrable jargon of central bankers, low interest rates might “create short-term flexibility” – meaning that it is easy for governments to borrow billions of dollars and bail out everyone – but this exposes them to difficult times ahead when rates go up and if markets abruptly change sentiment.

The conviction that rates will stay low is also likely to induce more risky lending behaviour in banks, a key factor in the financial debacle south of the border.

Mr. Carney also warned about the creation of zombie firms as in Japan. These are bankrupt companies that stay afloat because cheap money allows banks to roll over the debt they cannot repay, thus delaying the necessary restructuring and wasting resources.

Finally, the point that caught all the media attention is that, thanks to very low interest rates, “the proportion of households with stretched financial positions has grown significantly.” Data from the bank show that credit continues to grow faster than income. Canadian households are becoming even more indebted than American ones, and we could experience widespread default on mortgages and credit cards should another shock happen.

The bank’s conventional economists are finally agreeing with a lesson taught by the Austrian school of economics – that artificially cheap money does not bring long-term growth and only serves to create imbalances that eventually will have to be purged. In the Austrian view, the cheap money policies of the 1990s and 2000s fuelled the dot-com and real estate booms in the U. S. and elsewhere, leading inevitably to crashes.

So, why are we getting more of the same? The bank has only increased the overnight rate from 0.25% to 1%, still a historic record low level. It is not increasing interest rates further to prevent all these adverse developments because the bank is legally bound, in an agreement with the Minister of Finance, to keep the inflation rate at around 2%.

Raising interest rates would force businesses and households to reduce their borrowing and spend less, and would likely slow down the economy in the short term. Because the U. S., Europe and other regions are all pursuing Keynesian policies and creating money at a crazy pace, it would also strengthen the Canadian dollar, make imports cheaper and affect our export industries.

Although it does imply some short-term pain, this might be the only way to prevent other bubbles from forming and to keep Canada safe from the dangerous inflationary policies of our trading partners. But here is the catch: It would bring the inflation rate down. So, this policy avenue is closed.

Instead, Mr. Carney offers us three “lines of defence” that are clearly an admission of impotence. First, he advises everyone to “resist complacency and constantly reassess risks.” Yet, as he explained in his speech, people are not likely to heed this advice under strong incentives to do the opposite. The second line of defence is “enhanced supervision of risk-taking activities.” Nice to have, but am I alone in thinking that supervising the effects of a risky policy is not exactly optimal when the supervisor is himself the source of the risk? And third, the bank can deploy “counter-cyclical buffers” to prevent excess credit creation- that is, it can reverse its conscious policy of creating excess credit if it gets out of hand.

The contradictions in Mr. Carney’s speech are astounding. But they all derive from the constraint of having to artificially boost the economy so that prices increase by 2% a year, no matter the longer term repercussions.

Some months ago, I suggested that the bank’s inflation target should be lowered to 0% when it is reviewed next year. In the current situation, it would allow more room to raise interest rates and reduce all the risks that Mr. Carney is warning us about. It would more clearly preserve our purchasing power and reduce the distortions that inflation causes throughout the economy. And it would help prevent the cycles of booms and busts that we have been experiencing for the past couple of years.

Let’s have a real debate about all this instead of simply pursuing a policy with such obvious defects as the one laid out by Mr. Carney.

Published on May 11, 2016

A bad recipe for economic recovery

9 December 2010

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Hi,

Over the past two years, I have discussed several times in speeches and on this blog the origin of the economic crisis and the solutions to it. In April 2009, I said that there was one thing more dangerous than the crisis: the way we will react to it. If we intervene too much or in an inappropriate manner, we could very well aggravate and prolong the crisis. Unfortunately, I fear that this is what the world is doing now.

The situation has not really improved over the past couple of months. Several countries, including Greece and Ireland, have experienced major financial crises due to an unsustainable level of debt.

Since 2007, public spending has exploded everywhere. A scholar at the Brookings Institute, Eswar Prasad, has calculated that the level of debt of industrialized countries in relation to their overall economy has gone from 48% in 2007 to 71% in 2010, and could reach 85% in 2015.

At the same time, monetary policy continues to throw oil on the fire. We need to remember that the current crisis is the consequence of previous crises provoked by the Fed and other central banks around the world.

When they create too much money out of thin air and artificially reduce interest rates, they bring on artificial booms, which are necessarily followed by a crash. We had the high-tech boom at the end of the 1990s, followed by the crash in
2001. And then the real estate boom, followed by another crash beginning in 2007.

Each time, central banks inject massive quantities of new money in the economy to prevent the crisis. But all they manage to do is to create more instability.

In the United States, the Fed launched some weeks ago a new phase in what economists call “quantitative easing.” In simple terms, what this means is that it buys securities with newly created money.

The first phase, which injected 1700 billion dollars into the American economy, has not succeeded in spurring sustainable economic growth, nor in reducing unemployment. Instead of concluding that this type of measure did not work, they are now going to inject another 600 billion, while continuing to maintain interest rates at record low levels.

This monetary policy is now being criticized by more and more people, in the US as well as around the world. It should be obvious to everyone that printing money does not increase the quantity of goods and services and cannot make anybody richer.

This policy is the equivalent of a time bomb. For now, consumer price inflation stays relatively low because banks are keeping much of this new money in their reserves and not lending it. That does not prevent inflation in some areas. The prices of energy, metals and agricultural products are very much going up.

But at a certain point, the money kept in reserves will start circulating in the economy at large. When there is more money chasing the same number of goods, prices necessarily go up. We’re talking here not just about some more money, but about enormous amounts of money.

The Fed will then have two choices: either to let prices dangerously go up and the American dollar collapse; or else increase interest rates and take the surplus money out of the economy, which might provoke another crash.

Economics has taught us that to have sustainable growth, we need monetary stability and prudent economic policies that favour entrepreneurship and trade. But for many years now, western countries have tried on the contrary to produce wealth with more debt and more money created out of thin air. This is a recipe that has never worked and which may only prolong the crisis we are in.

We need to change direction, and the sooner the better.

Thanks for listening, and talk to you soon.

Published on May 11, 2016

On November 22, I was the keynote speaker at a luncheon organized by the Montreal Economic Institute, where I briefly worked as vice-president in 2005 before becoming Member of Parliament. I spoke about my way of doing politics differently. You can read the text of the speech in English or watch the two-part video with English subtitles. Some demonstrators came to disturb the event, which explains my comments at the beginning of my speech in the video. I would like to thank Stornoway Communications for recording and producing this high-quality video. – 23 December 2010

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Doing politics differently
By Maxime Bernier
Montreal Economic Institute
November 22, 2010

(Introductory comments and words of thanks)

So, let’s discuss a crucial problem of contemporary politics, politics as it is practiced in a conventional manner: why is it that so many people have the impression that things are getting worse, or at any rate are not getting better, despite economic growth and the advantages of modern life?

If we look at certain general historical trends, I think we can conclude that this impression is indeed justified.

The main trend that we observe is that governments are constantly getting bigger. A bigger government means a government that taxes more, spends more, gets deeper into debt, and regulates more. It’s a government which intervenes in all aspects of our lives, all the while curtailing our freedom to act.

This happened all over the world during the 20th century. The scope, size and powers of government have grown tremendously.

Take for example public spending as a proportion of gross domestic product, that is, the portion of the overall economic controlled by governments. In the main countries of the western world, it has gone from around 10% a century ago to beyond 40% today.

This means that almost half of all economic activity is controlled by the state. Half of your salaries are going away in taxes.

But these gigantic sums are not even enough to pay for all the programs and interventions of governments. They still have to borrow billions of dollars every year to make up for their deficits.

Some of you may have young children, or are planning to have one. Well, you should know that when they are born, Canadian babies already owe many tens of thousands of dollars, which they will have to reimburse in one way or another in the course of their life. Perhaps this is why they start crying as soon as they arrive in this world!

Talking about babies, governments too often treat us like irresponsible children and act as if they know better than we do what is good for us. It’s almost impossible to do anything nowadays without some authorisation from a bureaucrat.

Did you know for example that there is a law in Quebec and in other provinces which imposes a minimum price on the beer that you buy at the store? That’s right, beer could be cheaper, but the government is afraid that you may drink too much of it if it’s too cheap. So the Liquor Board determines, and here I’m quoting the law, a “minimum retail price for beer so that it does not encourage irresponsible consumption.” It’s a nice coincidence because that also happens to bring more taxes in government coffers.

Governments control whole sectors of the economy, such as health care and education. Sectors which seem to be in a permanent state of crisis and always have funding problems. Still, every year, their budgets increase faster than the overall economy. How is that possible?

Former US president Ronald Reagan explained it best when he said that big interventionist governments tend to see things as follows: if it moves, tax it; if it keeps moving, regulate it; and if it stops moving, subsidize it!

What we need to ask is why are governments always getting bigger? Does everyone really wish to have these obese and tentacular governments? Is this what people vote for?

Economists belonging to the school of Public Choice have tried to explain this dynamic. Their research shows how groups that share the same goals have a strong interest in getting organized to put pressure on politicians.

These special interest groups want subsidies, trade protection, more generous social programs, a fiscal or legal privilege, regulation that favours them and keeps out competition. Any favour they get from the government can potentially bring them huge benefits.

Of course, in the end, it’s you, the citizens, who will have to pay for these favours. But you probably don’t have time to go to meetings and demonstrate in the street to oppose a particular program that will cost you ten dollars, even if ten dollars here and ten dollars there add up to hundreds and thousands of dollars. You have to work and take care of your family. But the lobby group who gets 100 million dollars thanks to this program has a huge interest in getting organized and pressuring politicians.

It’s very hard for politicians to say no to these lobbies because they have the means to hijack debates, quickly mobilize support and fuel controversies in the media. On the other hand, nobody hears what the silent majority think about it, even though they are the ones paying the bill or having to conform to a new regulation.

Public Choice economists also explain that within governments, civil servants have their own interests to defend. What are these interests? To have bigger programs to administer, bigger budgets, more prestigious titles and more power to intervene in people’s lives.

Civil servants have a very large influence on political decisions because they are the ones who control the information and the day to day agenda of politicians. I got first-hand experience of this as minister of Industry. I had to fight civil servants in my own department to achieve my goal of deregulating an important part of the telecom sector, in order to foster more competition and offer more choice and better prices to consumers.

If special interest groups and civil servants want a more interventionist government, and if politicians not only do nothing to oppose this trend but encourage it by trying to buy votes with taxpayers’ money, then voters will get a bigger government, whether they like it or not.

That’s how government grows and grows. That’s how we become more and more regulated and indebted, less and less free, and more and more dependent on government.

We could conclude from such analyses that governments will continue to grow and that there is not much that one can do to counter this trend. On the contrary, I believe that we can change things. That’s what I mean when I talk about doing politics differently. What does it imply?

First of all, we have to be conscious of the political dynamic that favours the growth of government. We have to know history, economics, and theories such as those of the school of Public Choice. We have to take them seriously and draw the necessary conclusions from what they tell us.

A politician who doesn’t have a clear vision of the principles he is defending and of what he wants to accomplish will rapidly get caught up in this system that I have just described. He will let himself be manipulated by civil servants and interest groups and will revert to the traditional way of doing politics.

If we want our ideas in favour of more freedom and less government to have some influence on debates, we must also defend them in the public arena. Unless he can distribute favours, a politician’s only influence comes from the support of all those who agree with the ideas he puts forward.

This is why we must convince and mobilize citizens by defending these ideas openly, with passion and with conviction. Even if this means that many people who don’t agree with these ideas or who have an interest in having big interventionist government will be displeased. In any case, when you try to please everyone, there are good chances you will also displease everyone.

A sizeable portion of Canadians have lost interest in politics and have stopped voting because none of the political options on offer seems attractive to them. They only hear partisan, manipulative and contradictory talk from politicians.

They can readily see that it won’t be possible for politicians to keep all the promises they make. That each favour granted to one group implies that another group will have to pay more. And that the traditional way of doing politics only results in a lower standard of living, more of their salary being taken away and more debt falling on their children.

By doing politics differently, we can give these people a reason to hope that things will really change.

This is why, starting with my first election campaign, I have decided to never make promises. And in the past couple of months, I have put forward the ideas and principles I believe in before various audiences across the country.

It’s true that you have to be careful when raising all these issues. I’m also part of a team, the Conservative Party of Canada, whose accomplishments I am proud of. And I have a duty to stand by my colleagues and my government.

But you know what? It works, to do politics differently. When you take a stand on the basis of clear principles, conservative principles in my case, it may sometimes create a stir or a controversy. But it brings a new awareness of an issue and moves the debate forward. It also causes people who do not agree with you to at least respect you.

It’s obvious that a large segment of the population has had enough of the clichés that politicians come out with, of their manipulative jargon to say one thing and its opposite at the same time. They want to hear something else, based on clear ideas, principles and not just empty slogans.

Something else has changed. Today, with the new means of communications, it’s much easier to stay well-informed and to get organized. The theory of Public Choice as it was developed half a century ago is still valid, but the situation it describes has evolved.

It’s not only the interest groups with large resources who can influence public debates nowadays. A small group of citizens can easily reach thousands of others by using Internet social networks. It’s a lot less expensive in time and effort to express your opinion by joining a group on Facebook than by participating in a demonstration, which was one of the few ways you could do it twenty years ago. The increasing number of media sources also allows points of view that are not often heard to spread more easily.

We’ve seen it with the Tea Parties in the U. S., with the election of Rob Ford as mayor of Toronto, and with the launch of the Quebec Freedom Network in my home province: the traditional way of doing politics is increasingly being challenged.

I am willing to bet that authenticity will become a quality that more and more people will be looking for in politics. People are ready to support politicians who say clearly what they believe in, who recognize that we have difficult choices to make instead of promising the moon and the stars to everyone. And they’re also ready to support politicians who talk about individual freedom and responsibility, smaller government and freer markets.

The Nobel laureate in economics Friedrich Hayek wrote in 1949:

“We must make the building of a free society once more an intellectual adventure, a deed of courage. (…) If we can regain that belief in the power of ideas which was the mark of liberalism at its best, the battle is not lost.”

If you are here today, it is because you also believe in the power of these ideas. I urge you to actively promote them, either by supporting an organization like the Montreal Economic or by getting involved in other fields of activity.

The more these ideas will be understood and shared by a large number of people, the easier it will be for me and for others of my colleagues to do politics differently. And eventually, to make Quebec and all of Canada freer and more prosperous societies. Thank you.

Published on May 11, 2016

While a similar legal procedure set up by my colleague Jim Flaherty follows its course at the Supreme Court, audiences will soon begin at the Quebec Court of appeal on the constitutionality of my government’s draft bill creating a national securities regulator. After reading the documents filed by the government of Quebec, I decided to intervene publicly on the matter. Le Devoir ran my opinion piece this morning (see the translated version below).

As noted by the journalist who covers the story in the same paper, I am well acquainted with this file, having worked at the Quebec Securities Commission in the late 1990s and participated in a working group on that issue. The arguments that I put forward in this morning’s article were already contained in a speech that I gave in 2004, which was mentioned in a National Post article more than a year ago. — 12 January 2011

Quebec offers weak arguments to keep its Securities Commission

By Maxime Bernier – Member of Parliament for Beauce and former director of corporate and international relations for the Quebec Securities Commission between 1997 and 2000

Le Devoir

January 12, 2011

In the coming months, the Supreme Court will have to determine the constitutionality of a draft bill creating a national securities regulator. My colleague Jim Flaherty, the minister of finance, asked the judges’ opinion to make sure this initiative from the federal government does not constitute an intrusion into provincial jurisdictions. Contrary to the Liberal Party of Canada, which never hesitated to tread on provincial powers, our government has said that it will respect the Constitution.

As I have already said in the past, I personally believe that securities regulation is a provincial responsibility. That’s what the Supreme Court should conclude on the basis of jurisprudence and the elements of proof presented to it – provided that the rights arguments are being presented, of course.

However, I read the document filed by the Government of Quebec with the Court of appeal in a similar case and I was disappointed and disconcerted by its weakness.

Quebec is arguing that securities are the responsibility of provinces on the basis of section 92 (13) of the 1867 Constitution Act dealing with “property and civil rights.” This is a well recognized and accepted argument. But after you have said that, you have not said much that is relevant to the case.

That’s because the Supreme Court, even though it has already accepted this argument, has twice stated that it could change its opinion if it is demonstrated to it that the securities trade is not local in nature anymore, as it was ostensibly in pre-Confederation times, but rather interprovincial or even international.

This is what the federal government is pleading to establish the constitutionality of its bill. According to this argument, the new reality pertaining to trade in securities places it under federal jurisdiction, in accordance with section 91 (2) of the Constitution dealing with “the regulation of trade and commerce.”

What is most perplexing is that in its memorandum, Quebec ignores the warnings from the Supreme Court. It offers no historical proof showing that transactions in securities were in fact already, in the pre-Confederation era, being carried out at the interprovincial and international level, and that the Fathers of Confederation knew this. There is no doubt that this proof exists.

It can be observed that trade in securities already constituted an important economic activity in Canada before 1867. The Board of Brokers was set up in 1848. This was the first association of brokers dealing in securities in Montreal.

Pre-Confederation laws also show that this trade was already taking place at the time in an international context. Several of those laws contained clauses that had an extraterritorial reach. It cannot be a mere coincidence that they often anticipated that the securities of a corporation could be issued or transferred abroad, and that dividends could be paid to foreign holders. Some of these statutes set out the names of cities such as London, Boston and New York, where subscription books could be opened.

The globalization of financial markets is nothing new. A first phase of globalization started around 1820 and ended with the First World War in 1914. The second phase began after the Second World War and is still going on.

International financial markets were already well integrated before Confederation. The network of financial institutions established in London was responsible for large movements of capital across the planet, which fuelled the rapid growth of economies such as Argentina, Australia and Canada. The development of natural resources in our country was largely financed by foreign investments.

A number of studies have established the importance of the mobility of capital in the 19th century, which led Alan Greenspan, the former chairman of the Fed, to note that “the degree of globalization today is not measurably greater than that prevailing in the century-ago world of our grandparents.”

Not only does the document filed by the Government of Quebec ignore these facts, it mentions none of the historical studies showing that the Fathers of Confederation were well aware of what was going on in that field.

When we analyze the biographies of the Fathers, we observe that almost two thirds of them had studied in law and almost half belonged to the world of business. Thirty out of thirty-six Fathers had a personal interest in the various fields of finance, either as investors, members of a board of directors or lawyers. As members of the legislature, they had adopted the private bills necessary at that time to set up corporations. They knew that these had the right to issues securities and bonds outside of Canada.

It was thus with full knowledge of the facts that they gave provinces jurisdiction over that sector. Nothing has changed fundamentally since then that would justify transferring this jurisdiction to the federal government.

In its arguments to the Court of appeal, Quebec’s attorney general offers no reply to his federal counterpart on any of these points. He provides none of the arguments that would be necessary to win this cause, and so risks losing it.

If that were to happen, nobody will be able to say this time that Quebec’s powers were weakened by another illegal assault from Ottawa, since our government did everything it could to follow constitutional due process. It will entirely be Quebec’s fault.

Published on May 11, 2016

29 January 2012

Governments all over the world have been talking for several decades now about reducing red tape, or what is called the “administrative burden” of regulation. In Canada, there has been one federal report on the issue every five or ten years since the 1970s. A Paperwork Burden Reduction Initiative was created by our predecessors in power.

Yet, there is a distinct feeling among small business people that nothing has really happened at the receiving end, except probably a still higher regulatory burden. The problem is not unique to Canada. The Organisation for Economic Cooperation and Development (OECD) notes that, even when governments have reported significant drops in the paper burden, “businesses expressed little enthusiasm”.

I think the problem resides with governments, not with businesses. All these exercises may have succeeded in reducing red tape in the short term. But if it starts growing again, we find ourselves in the same predicament as Hercules fighting the hydra, whose seven heads grow again as soon as they are cut.

The Red Tape Reduction Commission, over which I have had the honour of presiding since last May, was launched a year ago by our government to take another look at this problem.

As required by our mandate, the Commission’s first task was to identify irritants to business that stem from federal regulatory requirements. Helped by our cross-country consultations 2,300 such irritants were identified. The Commission’s report, which was unveiled on January 18, contains some 90 specific recommendations to eliminate or alleviate them.

However, these short-term solutions will only go so far. Efforts at treating the symptoms, which are the irritants, are not sufficient. A deeper, long-term approach is necessary. The second part of the Commission’s mandate was to recommend options to control and reduce compliance burden on a long-term basis.

Some regulations are of course necessary. But too often, people are treated as children by governments. Governments seem to assume that people do not have private solutions to which they can resort. They sometimes try to eliminate all risk, which is an impossible goal and unnecessarily stifles innovation and growth in the process. The presumption should rather be that the people who elect us politicians are responsible individuals and should be left free.

It is unreasonable to expect any significant reduction in administrative burden if the flow of new regulations, which is the underlying cause, is not tightly controlled. We believe the government needs to “hardwire” a disciplined approach to controlling new administrative burden. This is why our Commission is proposing the adoption of a One-for-One Rule, as promised in the Conservative platform during the recent election: every time the government proposes a new regulation, it must eliminate an existing one.

The United Kingdom is the only country that applies a one-in, one-out rule based on the net direct costs of regulations to business. The approach is supported by strong political leadership and appears robust. Each regulatory submission for a new initiative must be accompanied by the repeal of another regulation of equal cost to business. “Ins” and “outs” must be reconciled within six months. The accountability for ensuring that this exchange happens is reinforced through transparent forward planning and public reporting on results.

The task of measuring regulation is difficult as there is no single, obvious, measure of “regulation,” which is made up of a large number of individual regulations relevant in many different fields. Yet, applying the One-for-One Rule or any other goal for controlling regulation and its burden on business requires an unambiguous standard.

This is why we are proposing to give the Office of the Auditor General of Canada the mandate of reviewing and reporting on the government’s progress in reducing red tape through its One-for-One Rule aimed at cutting the costs to business as well as in implementing its overall red tape reduction action plan. The Auditor General would report to Parliament every year on progress.

Good intentions, of course, are not sufficient. Those who make the decisions need to have the proper incentives to regulate efficiently.

Consequently, and again to deal with the long-term aspect of regulatory growth, we are recommending that a substantial part of the bonuses of senior public servants be directly related to their success in implementing the One-for-One Rule. If a department or an agency does not at least respect the One-for-one Rule, its senior public servants will lose part of their bonus. If it does even better and succeeds in reducing the stock of its regulations, the higher the bonuses paid to its public servants should be. This will bring the public servants’ incentives more in line with the long-term goal of controlling regulation and its burden on business.

These are the most important out of 16 systemic recommendations to cut red tape contained in the Report. Combined with our recommended short-term solutions to irritants, we believe they would contribute much to the process of controlling federal regulation and its irritants, and make our government a leader in this field.

Published on May 11, 2016

On March 18, the Réseau Liberté Québec organised a series of conferences for a full day in Lévis, near Quebec City. The organisers asked me to address the participants for a couple of minutes before a panel and I took this opportunity to encourage them to continue their efforts in defending liberty. Here is the text of my short presentation. — 9 April 2012

Dear friends,

I would like to briefly discuss three ideas with you this afternoon: liberty, tenacity and popularity.

Liberty is the fundamental value that draws us together here today. It is not an egotistic desire to do whatever we want without any constraint. That’s the perspective of those who believe they know what is best for us and who want to force us to adopt it.

Liberty is nothing less than the basis of our civilisation. Human dignity and equality of rights, social pluralism and cultural dynamism, scientific advancement and economic prosperity: all these achievements are impossible in a context where there is no liberty.

We are the defenders of civilisation and we should not be afraid to affirm it. I believe we have the duty to be tenacious and persistent in the defense of freedom. We have a duty to not hide anything to our fellow countrymen that we believe is necessary and true.

How many times have we taken a step back when faced with the false arguments of our critics and those who disparage us? How many times have we hesitated to express our convictions for fear that the left-wing media establishment use this to fabricate a controversy at our expense?

I have personally provoked media controversies when criticizing Bill 101 and calling for freedom of choice, but this had the effect of pushing the debate forward. It’s up to us to bring people to the cause of liberty, so that we can live in a society that is freer and more prosperous.

What is the point of having the best solutions if we keep them to ourselves because we are afraid to displease others? What is the point of embracing the cause of liberty is we dare not fight for it with passion and conviction throughout Quebec?

Ron Paul is a good example of tenacity that we should emulate. He has been defending with conviction, fervour and enthusiasm the values of individual freedom and responsibility for more than 30 years. At first, he was preaching in the desert, but only a couple of days ago, he talked before more than 4000 students at the University of Missouri who hung on his every word.

We should not get discouraged because our ideas are not that popular today and are not shared by the majority of our fellow citizens.

It is not the case that an idea is not just and true because it is not widely accepted. An idea does not become just and true because it is popular. The ideas of individual freedom and responsibility are just and true and will become popular if we stick to our principles, if we continue to defend these universal values, if we remain true to our dream!

What is not popular today can become so tomorrow, whether it be a person or an idea. Ron Paul was not popular at first but he has become popular because he stayed true to the ideals of his youth. This is what I want you to do, to stay true to your dream and your convictions, because the future belongs to you and the cause of liberty will always triumph in the end!

Thank you!