Last week, I attended the Manning Networking Conference in Ottawa. I had the pleasure to meet one of the greatest defenders of freedom and small government in the world, former Congressman Ron Paul, who gave the keynote speech. I also made a presentation on how to attract new supporters to the Conservative Party at one of the panels with my colleague Jason Kenney (photo: Jake Wright). The text of my speech is reproduced below.
Manning Networking Conference 2013
8 March 2013, Ottawa
We are discussing today on this panel if the federal Conservative Party has reached a high water mark. I hope not. Because if that’s the case, there won’t be any Conservative left in Quebec when we hit the low water mark! I mean, outside of my riding of Beauce, of course!
So, to answer the question, how can we continue to attract new supporters?
In conventional politics, the way to get more supporters is usually to reach for the center. If you are on the right for example, all voters who share right-wing beliefs and ideas are assumed to support you already. So if you want to get more support, you make proposals that are a bit more to the left. You do the opposite if you are a left-wing party.
That may be a winning strategy to some extent, in some circumstances. If we’re talking about social or moral issues, or foreign policy for example. It’s obvious that we need to be sensitive to the majority’s opinion and to reach for a broader consensus on such issues.
But when it comes to economic issues, I don’t buy that. I think being more conservative on economic issues is the way to make our economy more dynamic, our country more prosperous, and ultimately to increase our support among voters.
There are only two directions we can take on this issue. Either we create new programs, increase spending and increase taxes – in short, increase the size of government. Or we do the opposite and reduce the size of government.
The evolution of government size
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 principal countries of the western world, it has gone from around 10% a century ago to beyond 40% today.
In Canada, public spending peaked at 53% of GDP in the early 1990s, which put us in the same league as socialist countries like France and the Scandinavian countries. Fortunately, we reversed this trend in the past two decades. Public spending had gone down to 40% of GDP by 2008.
This is the main reason, I think, why Canada has been one of the top performers among industrialized countries since that time. And why we got through the recent crisis better than the others.
During the crisis however, government started growing again. If we take only federal program spending as a proportion of GDP, it went from 13% in 2006 to 16% in 2009. Since then, it has slowly been going down. If everything goes according to plan, we should be back at 13% in 2016.
Note that this is not because spending is going down. Our government has made spending cuts, but overall, total program spending is actually going to increase in the coming years. It is simply increasing less rapidly than the economy, which is why it is going down relative to the economy.
I believe we should be bolder. We should be more conservative. We should stop growing the size of government in real terms. Government is big enough already.
The benefits of smaller government
If we look at the available data, the evidence is quite clear that there are only benefits to having smaller government.
Most of you have probably heard about the Fraser Institute’s Economic Freedom of the World annual report. It looks at more than 20 components of economic freedom. Not only the size of government but also other components such as enforcement of property rights and freedom to trade.
Countries in the top quartile of economic freedom had an average per-capita GDP of $38,000 in 2010, compared to $5,000 for bottom quartile countries.
The poorest 10% of people in the most economically free countries are twice as rich as the people in the least free countries. The poor also benefit from smaller government and economic freedom.
Life expectancy is 80 years in the top quartile compared to 62 years in the bottom quartile. And political and civil liberties are considerably higher in economically free nations than in unfree nations.
The logic underlying the benefits of small government is the following. Governments can only spend what they have taken out of the real economy. A government has nothing to give anybody except what it first takes from somebody. A government cannot inject resources into the economy unless it has first extracted them from taxpayers through taxes or put us further into debt by borrowing the money.
Government spending always competes with private sector spending for scarce resources. Moreover, bureaucracies use resources less efficiently than private businesses, which have to remain competitive to be profitable and survive. When you divert resources from the more productive uses that they can find in the private sector to less productive uses in the public sector, you will see less growth.
A proposal from Beauce
What should we, as conservatives, do to reverse this trend? One way to change the terms of the debate would be to announce that the government is not going to grow anymore.
In January, the convention of the Quebec wing of the Conservative Party of Canada was held in Victoriaville. It adopted resolutions from local associations in preparation for the national convention next June in Calgary.
Among the resolutions adopted was one put forward by the association of my riding of Beauce. The resolution proposes to freeze government spending at 300 billion dollars from the moment when the budget is balanced in 2015-2016 and for the four subsequent years.
Of course, I gave my support to this resolution from the members of my riding and I hope it will become official party policy at the national convention next June. It is similar to a Zero Budget Growth proposal I made in a speech three years ago.
The idea is that given economic growth and inflation, a freeze in current dollar spending would have the effect of reducing both the spending to GDP ratio and real spending in constant dollar amounts.
The meaning of Zero Budget Growth
Think about what a frozen budget would mean. From that moment on, any government decision has to be taken within this budgetary constraint. Every new government program, or increase in an existing program, has to be balanced by a decrease somewhere else.
It means that we no longer have debates about how much more generous the government can be with this or that group, as if the money belonged to the government instead of taxpayers.
The focus of the debate is shifting to a determination of priorities: what are the most important tasks for government to achieve with the money we have? Is this government function really important and should we have more of it? Then what should we do less or stop doing and leave in the hands of the free market, voluntary organisations and individual citizens?
That would be quite a change, don’t you think? A commitment to Zero Budget Growth could become a powerful symbol of fiscal conservatism. But the consequences would be much deeper.
It would mean that every year, the relative size of government would be smaller. It would mean more prosperity through less government. It would force politicians, bureaucrats, lobbyists and everybody else to stop thinking that your salaries are just there to grab for their own benefit. And because of the budgetary constraints, Canadians would have a lot more confidence that we’re not wasting their money.
There is a large constituency for these small-government principles. Many people who don’t necessarily consider themselves conservative and who don’t vote for us are fed up with government overspending. They want to pay fewer taxes and they want their children to be debt free.
I believe that would be popular in Quebec too. There is a large proportion of Quebecers who believe that the federal government is too big and intervenes too much in too many areas. It may be for fiscal conservative reasons or for nationalist reasons but they want a small government in Ottawa.
We have to convince people that we’re not simply aiming to be better managers of a bigger government; we are aiming to be better managers of a smaller government. Being more fiscally conservative and defending the principles of individual freedom, personal responsibility and smaller government is the way to get their support.
Because Canadians want lower taxes to keep their money in their pockets. Because Canadians want to be able to go as far as their talents, ambitions, creativity and industry can take them. Because ultimately, Canadians support economic freedom and a free society. In other words, limiting government is a lofty endeavor. It is a powerful message that will give us more supporters.
If we do this, and if we ensure that Canada becomes an even more prosperous country, I can tell you that the Conservative Party will reach an even higher water mark! Thank you.