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Stephen Harper’s long tenure as prime minister may be nearing its close

Sunday October 18, 2015

THIS summer visitors to Ottawa were treated to a free sound-and-light show beamed against the neo-Gothic façade of Canada’s parliament and its “peace tower”. To lush violins and a tremulous soprano, “Northern Lights” recounted the high points of Canadian history, from the “first great collaborations” between Europeans and indigenous folk to 20th-century wars.

The patriotic extravaganza said more about the prime minister, Stephen Harper, than about the country, some Canadians grumbled. In his ten years in power he has tried to put a swagger into the easy-going affection Canadians feel for their country. Canada is not merely good, he wants them to believe, but great. He manipulated national symbols in subtle but telling ways.

The Canadian Museum of Civilisation became the Canadian Museum of History, reflecting a shift in focus to national identity. The Maritime and Air Commands were given their old names: the Royal Canadian Navy and Air Force (ties with Britain matter in Mr Harper’s notion of Canada).

The navy’s royal status is not a big issue in the campaigning for Canada’s national election on October 19th. Mr Harper and his main rivals, Justin Trudeau, leader of the centrist Liberal Party, and Thomas Mulcair of the left-leaning New Democrats (NDP), are competing over who can steady the economy and reassure a nervous middle class.

But the prime minister’s gold-braid patriotism, like his tax-cutting conservatism and personal support for the death penalty, crystallises the feeling of many that the Harper era has been a rupture with Canadian tradition.

His rivals promise a return to old virtues. Voters want “a government that is a reflection of our fundamental goodness”, declared Mr Mulcair in a recent television interview.

Although two-thirds want Mr Harper out, he could hang on, becoming the first prime minister since 1908 to win four consecutive terms. Economic weakness, caused largely by falling oil prices, could work in his favour: he saw Canada through the financial crisis. Critics say he deftly exploited a lone-wolf terrorist attack a year ago, and (more cynically) a controversy over Muslim women veiling their faces at citizenship ceremonies, to keep voters worrying about security and terrorism.

The alternative to five more years of Mr Harper is an experiment. The NDP has never governed the country. Mr Trudeau, the son of a glamorous prime minister, is charismatic but inexperienced. Still, odds are growing that Mr Harper will be voted out of office.

 The Liberals have pulled ahead of the Conservatives and the NDP, and look set to win the largest number of seats in parliament. They are likely to fall short of a majority but will probably find a way to work with the NDP, bringing Mr Harper’s reign to a close. He used his decade in power to nudge Canada toward lower taxes, smaller government and more reliance on enterprise and individual initiative. If he loses, his successor will nudge it some way back. The symbolism of the Harper era is more easily reversed than its substance.

Texan of the north

Until Mr Harper, right-of-centre politicians were gentlemanly sorts who fought elections under the banner of the Progressive Conservative Party. His edgier conservatism comes out of Alberta, the oil-producing western province to which he moved as a young man.

There he helped found the populist Reform Party and eventually united the right to form today’s Conservatives. He polarises opinion much like Margaret Thatcher, whose ideology and abrasiveness he shares. Yet he never had a hope of changing Canada as much as Thatcher did Britain: Canadian provinces and territories outspend the federal government by nearly two to one.

His main achievement was to contain the growth of federal government. Although total government spending is higher as a share of GDP than in 2007, the first full year of Conservative government, the federal portion has shrunk (see chart). He cut value-added and some business taxes, while squeezing the unemployed and the provinces. The state pension age is about to rise from 65 to 67.

Mr Harper refused to meet the provinces’ powerful premiers as a group, perhaps fearing that they would trap him into letting them spend more federal money. He capped the federal contribution to health care, the biggest item in their budgets. He reluctantly backed a fiscal stimulus to shield Canada from the global financial crisis, then set out to reverse it. He balanced the federal budget in the last fiscal year and plans to do so again this year.

Mr Harper’s other coup was to end a 20-year drought in big trade deals. He closed a deal with South Korea and has concluded one with the European Union. This month Canada joined 11 other countries in negotiating a Trans-Pacific Partnership.

On immigration he gave a conservative twist to the traditional Canadian welcome, favouring immigrants with job prospects over refugees and people who want to join family members. Canada continues to take in 250,000 permanent residents a year.

Some opposition to Mr Harper is a reaction to his smaller-government agenda. But what angers his critics most is his way of wielding power and pandering to the prejudices of a narrow political base. He has concentrated power in his own hands—he is the first long-serving prime minister since 1977 to dispense with a deputy—and has treated other branches of government with disdain. Presented with omnibus bills hundreds of pages long, a docile House of Commons has had little choice but to wave them through.

He brought to Ottawa an oilman’s attitude to climate change and a sheriff’s approach to law and order. In 2011 Canada became the only country to withdraw from the Kyoto protocol, an agreement to limit carbon emissions. The government muzzled scientists, critics contend, in case they drew attention to the problem. It enacted minimum sentencing laws to fight a non-existent crime wave.

Canada’s modest contribution to the American-led fight against Islamic State jihadists fits with Mr Harper’s belief that terrorism is a serious threat to Canada. It may be the least radical feature of his foreign policy. His diplomacy shifted away from its “non-partisan foundation”, laments Roland Paris of the University of Ottawa. Earlier leaders sought to strengthen Canada’s influence by working with international organisations; Mr Harper spurned them.

 In 2010 Canada humiliatingly failed to win a seat on the UN Security Council. And his relations with the American administration have been “chilly at best”, says Mr Paris, making it more difficult to win American co-operation on Canadian priorities, such as approving a pipeline to carry oil from Alberta’s tar sands.

If the main point of Harperism was to rouse animal spirits, it has not worked. Real growth has averaged less than 2% a year since 2006; labour productivity in the business sector has grown just 1% a year, less than half the rate of that in the United States. Instead of investing Mr Harper’s tax cuts, businesses are sitting on some C$680 billion ($525 billion) of cash.

The commodities boom, which masked weak underlying growth, hastened the decline of manufacturing by pushing up the currency. And now the boom has ended, leaving the economy fragile (see article).

This is not entirely Mr Harper’s fault. Canada’s workforce is ageing. It has invested too little in infrastructure for 25 years, at all levels of government. Bottlenecks for trade across the Canadian-American border reduce GDP by 1-2%. Taxes on small firms are lower than on large ones, which discourages them from growing.

That is a big cause of Canada’s low productivity. The government invests plenty in research and development; businesses invest too little. Provinces sap Canada’s economic oomph, for example by thwarting trade between them. A builder in Ottawa may not cross the river to work in Quebec.

Voters do not fume about things like barriers to inter-provincial trade, but they resent their consequences. The young are especially pessimistic, says Frank Graves of Ekos, a pollster. More than 40% of 25-to-44-year-olds say they earn less than their fathers at the same age. “Restoring middle-class progress is the key issue in this election,” Mr Graves believes.

No candidate has presented a programme that would do the job completely. Partly that is because much would have to be done by firms and the provinces. Both opposition candidates promise relief from Mr Harper’s government-trimming regimen, but in different ways.

Mr Trudeau would run a budget deficit until 2019 to pay for infrastructure spending of C$60 billion over ten years. Mr Mulcair’s pet project is a plan to offer 1m child-care places at a cost to families of C$15 a day. But he joins Mr Harper in promising balanced budgets.

Both challengers would reverse some cuts to the welfare state. But the biggest changes would be felt elsewhere. A government led either by Mr Trudeau or Mr Mulcair would scrap the British-style first-past-the-post voting system, a huge change to the way democracy functions. It would take climate change more seriously, and at least scale back Canada’s deployment in the Middle East. It would be friendlier to parliament and the provinces, and might decriminalise marijuana. If the Harper era ends, Canada will feel very different.


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