This election’s second leaders’ debate, run by the Globe and Mail, was held this Thursday and focused on the parties’ approaches to the economy. In the lead up to the debate much has been made of the NDP and the Liberals’ ideological convergence. Through the campaign, and indeed over the past ten years, the Liberals have been moving left while the NDP has been moving to the centre. The result has been ideological convergence that is making it more and more difficult to distinguish between the two parties. The Liberals’ promise of budget deficits, contrasted with the NDP’s commitment to balanced budgets, has even led to some suggestion that the Liberals are now the to left of the NDP. The most recent leaders’ debate highlighted two issues on which the Liberals and the NDP can be distinguished, their approach to balanced budgets and their willingness to use government programs as opposed to tax cuts in order to redistribute wealth. Both highlight the way that each party’s pasts have informed their current policy positions.
One of the most significant differences between the Liberals and the NDP in this election has been the NDP commitment to a balanced budget as compared to the Liberal promise to run small short term deficits as a way to stimulate the economy. There is a temptation to use this difference to make the case that the Liberals are to the left of the NDP, but that overstates the degree to which balancing the budget is a left-right issue. Balanced budgets can be quite left-wing if they involve tax increases that are used to finance increased social spending, and deficits can be quite right-wing if they are caused by significant tax cuts. One might note that in the United States Ronald Reagan and George W. Bush ran significant budget deficits while Bill Clinton balanced the budget, and it would be hard to make the case that Clinton was to the right of either Reagan or Bush. The degree to which a commitment to a balanced budget is either left or right wing depends on the way that that budget is balanced. The NDP’s budget should not be considered right of the Liberal one just because the NDP’s is balanced.
The NDP’s and Liberal’s budget commitments respond to fundamentally different social and economic issues. The Liberal’s are right (at least if John Maynard Keynes is to be believed) to point to budget deficits as a way to stimulate the economy. The logic here goes that government spending or tax cuts can increase the amount of money in the economy, lead to greater demand for goods, and create jobs. The Liberals’ budget deficit thus is a reasonable response to Canada’s recent economic downturn. The NDP, however, appears to want to use increases in government spending to attack problems that are not unique to weak economies such as deteriorating infrastructure and transit, access to childcare, and support for retired individuals. These are social and economic issues and inequalities that exist in both strong and weak economies and thus cannot be addressed by budget deficits (unless a government runs a permanent deficit- which has its own problems). The Liberals have a plan that includes a budget deficit not because they are more left wing than the NDP, but rather because the policy options they have chosen to support are the kinds that deal with immediate economic downturns, while the policy levers chosen by the NDP deal with persistent and long-term economic inequalities and social issues. Because persistent inequalities are not well addressed by budget deficits, the NDP budget needs to be balanced no matter how left wing it is. This is not to suggest that the NDP does not have a plan to address short term job losses or that the Liberals do not have policies that respond to persistent inequality, but the focuses of their campaigns are different.
This difference fits with the different history of each party. The NDP, as a party that started off further on the left of the Canadian political spectrum, has a history of being concerned with persistent inequalities regardless of the country’s economic well-being. The Liberals, as a centre party, have a history of being more responsive to the country’s overall economic condition, but have often taken longer than the NDP to include responses to social justice issues in their platforms. As the NDP has become more moderate it has had to adjust many of its positions, but in this election, its commitments are still broadly focused on issues of broad social inequality. Similarly, the Liberals have had to increase their commitment to social justice issues as they have moved to the left of the political spectrum, but one of the highlights of their campaign is still a measure directed at responding to short-term economic growth and not social and economic inequality.
The second contrast between the two parties lies in the role that they see for government in wealth redistribution. The Liberals highlighted plans to adjust income taxes, with tax increases being levied on high income Canadians and the proceeds being used to decrease taxes on middle and low income Canadians. The NDP’s policies include little in the way of income tax changes (though they support a reduction in small business taxes as a job creation measure), but rather use corporate tax increases and the repeal of certain tax credits and loopholes to fund government spending on programs such as childcare, infrastructure, and health care. There is a distinction to be made between the Liberals and the NDP with respect to the extent to which they use government programs to redistribute wealth. The Liberals plan to do a large amount of their redistribution through the tax code while the NDP has emphasized government programs as a way to improve the lives of low and middle income Canadians.
Like the distinction between two parties on budget deficits, this difference fits with each party’s history. As a social democratic party, the NDP has a history of support for government programs, and pushed and were early advocates for the expansion of the welfare state into areas such as healthcare and pensions (both programs at the federal level were brought in by the Liberal government that was being pressured by an NDP that held the balance of power in parliament). The Liberals, as a centrist party, have never had the same ideological commitment to the expansion of government programs as the NDP. The Liberals have never been strongly opposed to increasing spending on government programs, but rarely have they been the first party to adopt such initiatives either. It thus makes sense that the NDP’s policies would focus more on government action while the Liberals adopt an approach to redistribution that is less about government programs and more about changes in the way that Canadians are taxed.
The Globe and Mail leaders debate on economic issues saw the Liberals and NDP compete with each other in an attempt to win the support of centre-left voters. The NDP’s move the centre of the political spectrum and the Liberals’ move to the left has meant that the parties are now competing over the same ideological ground. Each party’s past, however, has left it with an ideological legacy. With respect to the NDP, this comes through in their commitment to balanced budgets, responses to persistent social and economic inequalities, and support the expansion of government programs. For the Liberals this has meant a willingness to support budget deficits, a focus on improving economic growth in the short-term, and the use of tax policy to facilitate wealth redistribution. Both parties are trying to speak to similar voters, and many of their policies overlap, but the different focuses of each party’s policies suggests that there are still important distinctions to be made between the parties on the centre-left of the political spectrum.