Policy Making in National Politics

MR. MACDONALD:

Today, we mark the official opening of a new season for a Club which grew out of a small gathering in Webb's Restaurant on November 18th, 1903. It has become a great Club and your Executive will do everything possible this year to ensure that it continues to be so. That greatness is reflected in its many traditions, but we believe that traditions are valuable only as inspiration to the present and nourishment for the future, not as a monument to to the past. That is why we are making a special effort this year to introduce a variety of opinion into our programme and to concentrate on problems that confront the Canadian as an individual; that is why we are determined that our approach to the Club's affairs should remain contemporary in spirit but not conformist in style. We trust that our programme will enhance the role of the Empire Club in the public life of Canada.

It is difficult to speak of Canada without speaking of politics; it is improper to speak of politics without considering the role of the opposition; and it is impossible to speak of the opposition without speaking of Mr. Stanfield.

The leadership of a national party is an office of great responsibility and significance. In a country of regional disparity and federal structure, it is a position which demands the ability to weave a fabric from varying strands and to assemble a mosaic both horizontal and vertical. Yet, the political party is a convenience for the Commons rather than an instrument of the constitution. When we speak of the office of leader of the opposition, however, we are speaking of an integral part of Parliament and its constitutional underpinnings.

About the time that I was inviting Mr. Stanfield to open our season today, a rather intense debate was underway in the House of Commons on the role of Parliament and on parliamentary procedures. It had been suggested in certain high places that members of the opposition were mere "nobodies". Accordingly, I came close to inviting our speaker today to consider the theme: "The Diary of a Nobody". I refrained on the grounds that such a subject might be somewhat political for the Empire Club, and the delightful Victorian commentary of that name was, after all, a work of fiction.

Parliament, however, must deal with questions of great complexity, touching on the whole future of this country; that, of course, is also the concern of this Club. It does no service to the country to over-simplify these complex issues, nor is it an easy task to reconcile them. Within the last few weeks, for example, we have seen two important national agencies--the Economic Council of Canada and the Prices and Incomes Commission--give very different emphasis to the questions of inflation and economic growth. It requires great judgment and imposes great responsibility to find a way through the cross-currents of expert advice.

That is why, Sir, we are delighted with your choice of a subject. What is the route by which the views of the people enter the political stream and find their way to the open seas of policy? And how is policy to be applied in a manner that will provide the people with leadership, not abuse, in a democratic society?

Great issues face Canada--our constitution, the future of our native people, the problem of poverty and opportunity, the quality of life, but, above all, the capturing of the soul of the nation or the establishment of our true national identity. In a recent address, John Fisher spoke of the irony of a ship called the Manhattan pushing through our Arctic waters and suggested that: "Canada fiddled while the Manhattan churned."

We welcome today a man whose responsibilities may require him to sing out of harmony from time to time, but who is devoting himself to the question of orchestrating a great future for Canada. I shall not presume on the knowledge of this audience or try your modesty, Sir, by reciting all of your background and accomplishments except to note briefly--a gold medalist at University, a Queen's Counsel in the practice of the law, eighteen years as a member of the Legislature of Nova Scotia, eleven of them as Premier, a father of four, and a gardener of note. I once heard another great gentleman described as "a man who would say please on a parade ground". Those who have had the privilege of knowing Mr. Stanfield would agree that such a description would apply well to him.

It is my great pleasure, Gentlemen, to present the Honourable Robert L. Stanfield, Leader of the Opposition and National Leader of the Progressive Conservative Party, and ask him to address us on "Policy-Making in Federal Politics".

MR. STANFIELD:

Mr. President, members of the Empire Club of Toronto, and guests. I must say that it is obviously a great week for Toronto. First of all you have a farmer from Scarborough as Metro Chairman, then the aeroplanes became a little irregular and now here I am!

I want to tell you it is not an easy thing to be a politician or a political leader. I know that they had great fun during the last election because my family name is associated with the underwear business. Let me tell you that there are ten thousand pink slips going to the civil service these days and every one of them has the Trudeau label on them! I do not know whether it would be a good thing or not for this country if the Prime Minister were to be known as the pink slip Prime Minister.

As some of you well know I have been here speaking to this club a number of times in different capacities. I had the privilege of speaking here a few years ago as the Premier of Nova Scotia and I have also spoken here as the Leader of the Opposition.

I don't propose today to tell you all I know about policy making either in my own party or other parties in the country, but I do want to talk to you for a little while about certain aspects that I think would be of some topical and current interest to you. What makes this topic timely from my point of view is the fact that the Progressive Conservative Party will hold a national policy conference at Niagara Falls for four days next week. Whether you are a member of my party or some other party (and I recognize that everybody here today is not, openly at least, a supporter of mine), or whether you have no party affiliation at all, I think that you and every person in Canada has a considerable stake in the processes of a party which is presently the Official Opposition in the Parliament of Canada. There is no need for me, in this company at least, to elaborate on this point; nor to define the two-party system--we have more than two parties in Parliament, but the two-party system in the sense of having the Government and an Official Opposition--and therefore, surely no need to apologize for taking your time to discuss some of the aspects of this important event in one of our two major parties in the country.

First of all, let me mention a very profound consideration in connection with a conference like this and that is money. A national policy conference involves a substantial financial commitment and the gross budget for ours will be something in the vicinity of eighty thousand dollars. Now I hasten to say right away that I don't mention this to indicate to you I am going to pass the hat around after I finish speaking. I simply mention it to emphasize that Progressive Conservative delegates who will be attending this convention, this conference, will be paying a registration fee of $85 plus their hotel, meals and other costs in Niagara Falls, plus their travel costs in most cases. There will be, of course, a partial travel subsidy for some categories of delegates. There are very few of these delegates of whom it can be said they can easily afford this kind of expense. Of course we expect that constituency associations will help out in many cases.

The point I want to make is one that I think you may want to remember, especially those of you who exercise your democratic right not to support a political party. It is well for you to remember the system could not operate without those who do support a political party. The active support for a party often involves more than the token sacrifice of time or money and, if your neighbours, friends, employees or employers make an effort, for the most part largely anonymous to the public in the sense they play it quiet (I don't mean a secret, but a quiet, role in their party), they deserve at least as much honour as those who take part in any other worthwhile cause.

I am not attempting for a moment to downgrade the importance of the independent voter, but I do think we should from time to time pay tribute to those who in their own way make their contribution to the political party of their choice.

So on Thanksgiving weekend several hundred of your fellow citizens, out of a sense of loyalty or duty or interest at some cost to themselves, or to their constituents, will hold a Progressive Conservative National Policy Conference.

Now what do we hope to accomplish? Well, of course we don't start out from scratch. We are not writing a completely new book. There are subjects where the Conference will probably find no reason to recommend any significant change or addition to the policy that was put forward in the last election campaign and evolved or stated during the life of the present Parliament of Canada. We don't start from scratch and in recommending policies we are not committing ourselves to those policies to the end of time. Our party, as a matter of fact, now requires under the new Constitution of our National Association that a national policy conference be held every two years, a conference devoted exclusively to policy. It will alternate with normal business meetings of the Association which until now have been held every year. So there is every opportunity for us as a national party to keep our policies under constant evaluation and report as to their effectiveness, as to their relevance, and as to their acceptability to the country. In this way we ensure that the party will be a vital political force for Canada.

Now the theme of our conference, and this was determined months ago, is Priorities for Canada. It is striking to me that, in the last report of the Economic Council of Canada issued a few weeks ago, the Economic Council should have put such emphasis at this time upon this theme and the importance of establishing in Canada better machinery for determining our priorities.

We are still waiting in this country for some leadership in the definition of priorities. I would have hoped and thought that a majority government with a secure term of four or five years would have found the climate right to take an initiative in this regard and to begin in earnest the necessary computations with the provinces. But apparently not, not yet at least.

Yet the serious discussion of national priorities is a most urgent responsibility facing the various governments of this country. A valid consensus of priorities, indeed the very process of working out a consensus of priorities would provide a sense of national direction that is lacking and a proper explanation and understanding of such priorities is one essential element in improving fiscal responsibility in our country.

Leadership should come from the national level and as a national party I hope the study and discussion of some eight broad policy areas in our conference at Niagara next week may indicate what in the autumn of 1969 are the priority problems and opportunities and objectives in our country. So far as government is concerned, where should the emphasis be placed in terms of government attention and financial resources and the exercise of its influence on public opinion? The question of course is much broader than the question stated by the Economic Council of Canada, which is stated substantially in economic terms and we know that the question of priorities to be determined, as indicated by our Chairman today, run far beyond strictly economic considerations.

It will be obvious to those attending the conference, as it is to you, that there are certain policy areas where conspicuously there is both a pressing need and good opportunity for new concepts and new approaches in national policy with regard to the reform of our tax system. For example, the Carter Commission, which provides the occasion for discussion, reported back in 1967 and we are still waiting for some words on what the government policy will be with regard to that report and to the questions considered by the Commission. The government's white paper on tax policy has been postponed a number of times. On the other hand and likewise the government has turned over to a committee of civil servants headed by the Deputy Minister of Health and Welfare the study of the present welfare system and the examination of the question as to whether some new approach is needed there.

On both these highly important subjects, as on others, the question, for example, of national identity, the questions of national policy touched upon and referred to by our Chairman today, on all these questions there is an opportunity and responsibility for the Progressive Conservative Party to meet the obvious need for a new approach even if the government has not yet done so. While it is certainly a very important part of the Opposition's responsibility, especially its parliamentary responsibility, to analyze and criticize and respond to Government policies, we also have a duty to take policy initiatives of our own and I assure you this is a continuing and primary concern with me.

Now I don't expect that this conference will draw up a detailed road map. Even in three or four days, even a meeting of Progressive Conservatives, even a meeting of Progressive Conservatives under my leadership will not find all the answers to all the questions of the country, but on these and some other issues our purpose is to confirm and establish a definite direction and it should be something more meaningful than a slogan such as the Great Society or even the Just Society.

With regard to the overhaul of the tax system, for example, I hope and expect that the conference at Niagara Falls will first of all look at our tax system as a whole and not just tinker with one or two particulars. Let me illustrate what I mean. I think, with respect, the Minister of Finance was wrong to rush into the fairly recent changes in estates and gift tax, especially when he was far from ready to decide on tax reform in general and still far from ready to present, for example, a white paper to outline the position of his government on tax reforms in general. I think those changes introduced and adopted by the last Parliament will have to be reconsidered in the light of an overall tax reform "package". As a result substantial alterations may then have to be made in the estates and gift tax legislation passed during the last session of Parliament. I hope we won't get involved in this kind of tinkering or looking at just one aspect of the problem of taxation during the policy conference.

Secondly, the delegates at Niagara Falls, in discussing tax reform, must try to achieve a sensible balance among the various considerations such as equity, encouragement of savings, investment, and economic growth, incentive to enterprise and the need for Canada to remain competitive.

Surely this question of balance is vital. I happen to feel quite strongly, for example, that the present level of exemptions on personal income taxation just cannot be justified in terms of its relative burden on the lower income groups. After all, the earning power of this exemption has been eroded year after year after year by the process of inflation. There should be adjustment as to the levels and as to their effect on the various income groups.

But the revenue lost from any such adjustment will have to be found elsewhere. If you are doctrinaire, or inclined to be doctrinaire about these things it is easy enough to talk about socking it to those in the ten or twenty thousand a year income group, but they already pay heavier personal income tax than their counterparts in the United States and so long at least as the brain drain concerns us, we should try to avoid a tax system that places us in too great a disadvantage vis-a-vis the United States in this respect. While there may be a general agreement that the level of exemption should be raised and its effect adjusted, still it is highly important to recover the revenue lost in ways that will not introduce new inequities or new anomalies into our system of taxation.

Now another question that is bound to be considered by the delegates at this conference is that of the capital gains tax. Here again I hope that a sense of balance and of practical criteria will be brought to the discussion rather than a reliance on theoretical or dogmatic arguments pro or con. Personally I would not think it good policy simply to pile a capital gains tax on top of the present system of taxation, but as part of an overall package of tax reform it has to be given serious consideration. Certainly on grounds of equity there are strong arguments for tax on capital gains as well as income. Indeed for many Canadians the concept of an equitable tax system has become almost synonymous with the introduction of a tax on capital gains in one form or other which, of course, may very well be an oversimplification.

This is what I want to emphasize: the conference will also have to take into account several practical considerations related to any approach to the tax on capital gains. For example, if such a tax were considered, special consideration could be devised with regard to gains arising from the sale of the family farm, the family home or the family business. Again, since most capital gains arise over a relatively long period of time account should be taken of this in establishing rates. Further, living as we are in a period of inflation, should inflationary gains be given special consideration or should special consideration be given to the fact that inflation exists and does in fact affect the real value of capital? Of course, in considering any such tax what is the likely effect on growth, economic growth, savings and investment in Canada?

Now these questions cannot be considered in isolation but must be resolved in the context of the whole tax system. As I indicated earlier, I believe that a capital gains tax proposal could only be implemented in the context of the system where the rate structure applying to all types of income is appropriate and doesn't seem to be and is in fact not confiscatory. Secondly, I think that some acceptable system of averaging would have to be worked out. Obviously I hope this will be the case. There would have to be balance and practical consideration given at Niagara Falls to the position to be taken by my party in connection with what is obviously a very current question in our country.

Again I hope that we can approach the question of the welfare system and its overhaul in a way that is both compassionate and realistic. By some estimates public welfare is now costing as high as three and a half billion dollars a year and it continues to grow. With one person in five still living below the poverty line, how effective is our welfare programme and our approach to the solution of our poverty programme problem. Those who read the last report of the Economic Council of Canada saw the Council's dissatisfaction with our anti-poverty programme and the methods that we have adopted to date. Surely there are some better answers than the system that has grown up over the years and I believe there is a growing public awareness of the need for an integrated approach to poverty, welfare, and to public assistance. At Niagara Falls we will confront this need and I hope recommend guidelines for a new approach by our Party.

You may know that I have expressed the opinion that a successful welfare programme must emphasize three principles. First, it must try to see that every Canadian will have the opportunity of a decent standard of living. Secondly, it must make sure that public welfare funds are not given away unnecessarily to people who don't need help. Thirdly (and I emphasize this in particular) it must incorporate a system of incentives, a plan that positively encourages a man to get out and work as soon as possible. I recognize that it is probably impossible, indeed it is impossible to devise a plan that completely satisfies in full all three of these principles. One must work out a plan that seems most satisfactory in satisfying some kind of common denominator.

Some may say now, "Why talk about this sort of thing during a period of austerity, during a period when we are engaged against inflation and fighting a battle to maintain restraints"? But of course the Economic Council of Canada has already emphasized the economic loss involved in continuing poverty on the scale that we now have it. Secondly, one does not devise a new approach to welfare overnight or put it into effect overnight and it is certainly not too early to start a discussion in a serious way, start planning in a serious way, because there will have to be discussions not only in my Party but obviously between the federal government and the provinces. Certainly we must approach this question in a spirit of responsibility, and anything we plan to do we must do with a sense of fiscal responsibility; I suggest it is urgent we begin promptly to devise a plan which will satisfy as nearly as possible the three principles that I have laid down.

Now some people are quick to apply labels to any new concept and refer to something like this as "guaranteed annual income" or something of that sort; but I hope that in this country we can examine each other's principles and policies and their merits without becoming too distracted by semantics or with trying to drag too many red herrings across the trail. I hope we won't have to answer charges that Stanfield is going to pay everybody an income and that I am ladling out the free stuff. People who feel that way are sure lucky that the Conservative Party does not have a real dangerous radical as its leader--like Richard Nixon for example.

Now on these matters and other very important matters with which we are all concerned--the future of our nation, the concept of our country--it is up to the men and women who will be delegates at our conference in Niagara Falls, a cross-section of our party, a cross-section I think of our country, acting on the best advice we can get (I say "we" because I will be there as a delegate), acting according to our own convictions, to balance and reconcile and harmonize the considerations and to achieve a consensus. This is not easy, it is not an easy process and it is never painless. There are bound to be differences within a political party, within any political party at least that tries to face problems that arise and tries to develop an honest approach and to adopt honest solutions designed to meet national difficulties. There are bound to be differences of opinion which are sometimes going to erupt into open conflict and open controversy and open differences and open splits. We had a few differences of opinion in my party last winter in connection with the Official Languages Bill. I hope that the Progressive Conservative Party of Canada will always be prepared to run the risk of differences of opinion and open controversy within the Party in order to move steadily towards the adoption of positions required in the national interest, but not to adopt positions designed to create differences within the country, nor to adopt positions with the effect of dividing the country. I hope that we will be prepared to fight things out among ourselves, sometimes quietly and if necessary openly in order to reach decisions that we believe are in the national interest. This is not necessarily a painless process but it is the first responsibility of any political party that would aspire to enhance continuously its credibility among the people of Canada, which is my determination as far as my leadership and my Party are concerned.

Mr. Stanfield was thanked on behalf of The Empire Club by Mr. H. N. R. Jackman.