Forging a National Economic Agreement
The Empire Club of Canada Addresses (Toronto, Canada), 27 May 1993, p. 33-41
Campbell, The Hon. Kim, Speaker
Media Type
Item Type
Candidacy campaign platform. National economic agreement among the various levels of government. Deficit elimination. Job creation. 21st century economy. Tax reform.
Date of Original
27 May 1993
Language of Item
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Full Text
The Hon. Kim Campbell, Minister of Defence, Minister of Veteran's Affairs and Progressive Conservative Leadership Candidate
Chairman: Dr. Frederic L. R. Jackman President, The Empire Club of Canada

Head Table Guests

Montague Larkin, Chartered Accountant and an Honorary Director, The Empire Club of Canada; Erica Spencer, grade 12 student, Lawrence Park Collegiate; Alan Schwartz, Partner, Gluskin, Shelf & Associates Inc. and National Fundraiser for P.C. Party, Kim Campbell Fund; Ian MacPhail, Barrister and Solicitor and a former Director, The Empire Club of Canada; Isabel Bassett, Author, Broadcaster and President, The Canadian Club of Canada; Dr. Reginald Stackhouse, Principal Emeritus, Wycliffe College, Author of You Don't Have To Be Neurotic To Be Insecure and a Past President, The Empire Club of Canada; The Hon. Shirley Martin, Minister of State for Transport; Thomas Wells, former Agent General for the Province of Ontario and a Director, The Empire Club of Canada; Effie Triantafilopoulos, practices Immigration and International Trade Law with the firm Fogler Rubinoff; Catherine R. Charlton, M.A., President, The Charlton Group and a Past President, The Empire Club of Canada; Robert McGavin, Chairman of the Board of Governors, University of Toronto, Chairman of the Board of Trustees, Olympic Trust of Canada and Senior Vice-President, Toronto Dominion Bank.

Introduction by Dr. Jackman

Honourable Minister, distinguished Past Presidents, guests, members and friends, welcome to the third Progressive Conservative leadership speakers' forum. This forum was established to provide each candidate a more lengthy platform than in the recently-concluded televised national debates.

Unlike Stanley Hart, the moderator of that TV series, "Who will you vote for tonight?" and who would always want each candidate to summarize their position in 10 minutes, we unlike him want to give each candidate a setting in which they can give full scope for personal and policy expression and for some interchange with an articulate audience. Ms. Campbell has agreed to respond to questions from the audience at the conclusion of her address. Please print your questions on the cards provided on each table, raise your hand and someone will collect your questions.

It is 10 years since the Progressive Conservative Party has held a leadership convention. The winner, on June 13 will shortly become the Prime Minister of Canada and will play on the main stage of national politics for some years to come.

Before introducing Ms. Campbell, I would like to acknowledge, in our audience, John Long, who as an ordinary citizen, convincingly proved that our political system is open to all. Mr. Long has left the leadership race and will not be appearing as one of our speakers. Mr. Long would you rise and be recognized.

Today, we have the pleasure of welcoming The Honourable Kim Campbell, Minister of National Defense and Minister of Veterans' Affairs. With the Minister's busy tour schedule, coupled with her numerous official duties, we are delighted that she has included The Empire Club of Canada in her busy agenda.

No Canadian politician in recent memory has stimulated such wide public interest and received closer scrutiny from Canadian and international journalists. Featured on the cover of many magazines, her comments are quoted, requoted, misquoted and quoted out-of-context.

I do not propose to summarize what has been said about Kim Campbell. She has been televised, interviewed, highlighted and spotlighted. There is hardly a newspaper, magazine, TV or radio story that does not carry a Campbell episode. However, just in case you have missed all of it, there is a brief biography on each table.

Ms. Campbell can speak with directness, frankness and with spontaneity. In doing so there are attending hazards which Ms. Campbell appreciates fully. Kim Campbell would like to continue to be open to Canadians. In doing so she would like responsible reporting from the media and a new kind of politics for all Canadians.

We are here because we wish to experience Kim Campbell in person, without the competition of other candidates or having her reduced to a 30-second TV clip or a 10-second news bite.

Ladies and gentlemen, would you welcome The Honourable Kim Campbell.

Kim Campbell

All of the candidates for the leadership of the Progressive Conservative Party have focussed on the federal deficit as the single greatest barrier to sustained economic growth and job creation. In this regard we differ from Jean Chretien and Audrey McLaughlin who, true to form, have attacked every spending cut in the most recent federal budget and called for billions of dollars in new spending on everything from infrastructure to child care to grants to business, farmers and the fisheries.

All of us in this leadership race are supporters of the policies that have given Canada the lowest and most stable inflation and interest rates in more than 20 years. Consumer prices are rising twice as fast in the United States as they are in Canada. Think about what effect that is going to have on cross-border shopping.

But again, Jean Chretien and Audrey McLaughlin have a different point of view. Just three months ago, Mr. Chretien stood up before The Empire Club and called for a more "balanced" approach to inflation. In fact, and I quote, he said that Canada "should attempt to do about as well as the United States on inflation--only in very unusual circumstances should we attempt to do much better."

So we have somebody who would be Prime Minister of Canada advocating a "made in the United States" inflation policy. Jean Chretien doesn't believe we can or should do any better. His policy is to double our rate of inflation and hand the keys of the Bank of Canada over to the Chairman of the Federal Reserve Board in New York. It's an abdication of responsibility and an abdication of Canadian sovereignty.

Yet Audrey McLaughlin is so impressed with Jean Chretien's policies that she said, last July in Kitchener, that she would join him in a coalition government or a Parliamentary alliance if there were a hung Parliament after the next election.

Well, I think they should both wake up and smell the coffee! We are witnessing in Canada one of those rare moments when we can make some very real and lasting changes to the way governments function. For the first time since I entered public life some 13 years ago, I can see the elements of broad agreement between all levels of government that will offer some relief to the very hard-pressed middle-income taxpayer. You know, we've thought we've seen the light at the end of the tunnel on other occasions in recent years--but it always turns out to be just another train coming our way.

But as someone who has been elected at the local, provincial and national level, I think we have not only an opportunity but the duty to forge a national economic agreement among the various governments of Canada--with the participation of employers, employees and consumers--to get the fundamentals of our economy back on track.

A national economic agreement should have as its purpose not only the immediate objectives of eliminating deficits and putting the economy on the path to sustained job creation, but also longer-term goals to prepare Canada to succeed in the new economy of the 21st century. I would want to invite all Canadians to participate in setting the agenda for a national economic agreement. From my own point of view, we should concentrate on five areas:

• A national fiscal plan to restore public finances at all levels of government;
• Comprehensive income-security reform programmes more effective at helping Canadians become self-sufficient and to ensure our elderly and disabled enjoy a decent standard of living as the population ages;
• A national effort to integrate education, literacy, job training, unemployment insurance, social assistance and labour force adjustment policies into a strategy to prepare Canadians to benefit from technological change and to keep highly-skilled and well-paid jobs in Canada;
• A national trade and technology policy to create new jobs and new hope for Canadians--one element of which must be to eliminate inter-provincial trade barriers; and
• Serious national tax reform to provide relief to taxpayers and to address those elements of the tax system--long-term capital gains taxation and payroll taxes--that dampen new investment and job creation.

I have laid out proposals in each of these areas over the course of the leadership campaign. In each case I have stressed the need for the Federal Government to bring provincial governments onside, and to involve interested Canadians in the process. I have made that a priority because I think the time has come to stop pretending that any single government--or even all governments together--can or should manipulate the national economy as if it were some machine with levers, knobs and buttons. The national economy is 13 governments, one million businesses, 13 million employees and 25 million consumers. It is arrogant, foolish and old-fashioned to believe all of that can be directed around a cabinet table in Ottawa.

Today I would like to discuss one component of a national economic agreement in more detail, to share with you the reasons I think it is necessary for Canada. I agree with my colleagues in the leadership race on a broad range of policies to cut the federal deficit. But until they start talking they are limiting themselves to solving only half the problem. Because we don't just have a $32 billion federal deficit in Canada, we have a $60 billion national deficit. And the foreign lenders, who finance half of the total amount, do not much care whether it's Saskatchewan, New Brunswick, Ontario Hydro or the Government of Canada--to them, we are all in the same boat and we all sink or swim together. And, frankly, I agree with them.

That's why, five weeks ago in Montreal, I called for a national approach to solving government deficits. If I become prime minister I want to sit down with the premiers and thrash out the issues of reducing duplication and overlap and cutting expenditures. It's going to take a lot of courage, a lot of good will and a lot of imagination. But we have to seize the moment and capitalize on public and provincial concern about deficits. To get the ball rolling, I would make the following suggestions.

Reform means, at its most basic, that federal and provincial governments must realign their basic programme responsibilities and match them with appropriate revenue-raising powers. It does not make sense in the long run to separate the power to design and deliver programmes from the discipline of having to raise taxes to pay for them. I believe that is one of the root causes of deficits in Canada.

The next step is to reach agreement on taxes. What is the point of one government cutting taxes and offering some relief when another level of government simply raises its taxes? The taxpayer doesn't see any benefit at all. We have to ensure that different governments are not working at cross-purposes.

I would go one step further. Does it make sense for there to be 13 different tax-collecting bureaucracies in Canada? Is it really necessary for the Federal Government and each provincial and territorial government to be in that business?

Already, Revenue Canada, by agreement, collects personal income tax on behalf of nine provinces, meaning that they don't need their own bureaucracies to do it. In his recent budget, Premier Ralph Klein suggested that Alberta might save money by joining those provinces that have Revenue Canada collect their corporate income tax. I would like to explore with the provinces the possibility of having a single independent national commission to collect consumption and income taxes on behalf of all governments who agree to take part. I think it has the potential to cut duplication of efforts very significantly.

In addition, I have called for opening up the budget-making process at the federal level--in particular, using the House of Commons Finance Committee to lay out broad budgetary principles and hold public hearings on them so that people have a chance to comment on the whole range of options. I think if people saw the range of options and the thinking that went into the setting of priorities, it would be more difficult for special interests and the opposition to pick particular items out of context.

To go one step further, I would invite the provinces to join a more co-ordinated federal-provincial budget-making process on a relatively fixed cycle. Canadians would be better served if we could agree on economic and fiscal outlooks, harmonize our policies and establish, when possible, common objectives.

The need for this last point was brought home to me this past week when the Ontario budget came down.

I have proposed on-the-spot GST visitor rebates to boost the tourism industry; Ontario has just cancelled all visitor rebates of provincial sales tax. I proposed doubling the GST rebate on new home purchases to boost the construction industry; Ontario has increased land transfer fees, put an eight-per-cent tax on mortgage insurance, and raised development fees. I have proposed holding the line on taxes; Ontario has imposed heavy tax increases that will dampen the recovery. I have proposed measures to boost investor confidence; Ontario has just imposed retroactive income tax increases that will do just the opposite.

If I were prime minister of Canada, I would want our minister of finance to sit down with his or her provincial counterparts and sort those sorts of things out. If we can't all head in the same direction, maybe we could at least avoid undoing each other's efforts.

One cause of Canadians' frustration with government finances is that targets are never met, economic forecasts are rarely believable and federal-provincial finger pointing permits governments to dodge accountability. That is why I would like to use the federal-provincial budget-making process to set realistic spending, deficit and taxation targets. I believe such a system would put a powerful tool in the hands of taxpayers and voters to hold politicians accountable.

At the end of the day it is the taxpayers and voters who have to decide who has a more realistic approach to meeting Canada's challenges. I am absolutely convinced that this country has a tremendous future awaiting us--if we only pull ourselves together long enough to grasp the opportunity.

We will not grasp that opportunity if we stay stuck in the old politics of "he said, she said," or the old dynamic of federal-provincial bickering. The time has come to open our minds, open our ears and open our eyes to the need for national solutions to national problems.

Some people make light of the whole question of process. They talk about being results-oriented as if process and results were unrelated. They think the act of governing is simply to issue edicts and tell people--and other governments--what's good for them. That kind of "rambo federalism" makes for good rhetoric, but it has one serious flaw. It won't work.

What's important is not jurisdiction--it's securing our economic future and quality of life. I believe there is nothing we cannot achieve in this country if we can summon the political will to act together in pursuit of our shared hopes.

As I have travelled across Canada, I have been struck by the real fears of many Canadians, especially young people, who worry that we have lost that will. I believe we owe it to them to try to rediscover it. That will take the commitment of every Canadian and every level of government. But most importantly, it will take a leader who shares that vision and is determined to bring about lasting and effective solutions. If I have the honour of becoming prime minister of Canada, I would consider it my very first priority.

Thank you very much.

The appreciation of the meeting was expressed by Catherine R. Charlton, President, The Charlton Group and a Past President, The Empire Club of Canada.

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Forging a National Economic Agreement

Candidacy campaign platform. National economic agreement among the various levels of government. Deficit elimination. Job creation. 21st century economy. Tax reform.