None of My Business
Appeared in Business in Vancouver – Issue 1154, December 6-12, 2011
Paul Martin looked at a clock in Vancouver and saw that it was late.
The clock was the debt clock in the window of a downtown bank, Martin was on a year’s tour of Canada to sell his deficit-reduction plan, and as finance minister he was determined to do it. And did.
“I’ve got to tell you, Vancouver’s debt clock didn’t hurt,” Martin chuckled, speaking between engagements. He’d just flown in from Tunisia where he was one of a nine-member African Union and UN think tank, one of the only two non-African members. In Washington he was just about to grab a nap before advising Americans about their present, infinitely larger debt.
Martin, finance minister from 1993 to 2002, is credited with doing, 10 years before the current global crisis, what the rest of the world should now be doing, and thus positioning Canada – in the early 1990s the worst G7 basket case except Italy – to be the poster boy for taking proper and timely action.
Martin, who 20-odd years ago gave the undersigned one of the best interviews of his career, at the time of the Liberal leadership race with Jean Chretien – “what if we’re having a beauty contest, and he’s winning?” among his bon mots – is modest about his accomplishment. He eliminated a $42 billion budget deficit in four years. And he credited the Canadian people for bearing the sacrifice equally.
He’s telling the Americans that the Republicans and Democrats are trying to dump the sacrifice on each other. The U.S. government has to unite the people behind them.
How did Martin – who was in Vancouver on the weekend as part of a panel discussing what to do about voter apathy – pull it off, especially in his own party?
First, ordinary Canadians didn’t doubt the severity of the problem. They were just sceptical that anything could be done about it.
Martin gave his pitch touring the country for a year. Then in Ottawa he took caucus members aside in groups of just five and explained his plan to them. Cabinet was a tougher sell.
“Cabinet would be not unlike you and me,” Martin said. “Cabinet said ‘You’ve got to deal with the deficit, but my department is so important you can’t touch me’ – which is a perfectly natural thing.”
Stroke of luck: “The Mexican peso crisis occurred two months before I brought down the big budget in 1994 and interest rates were going through the roof. When cabinet saw that, they said “Yeah, we know you’ve got to do it.’ “
The clincher was that Martin set yearly targets. He understands why Greeks are disbelievers today when targets are set and then missed. Martin hit his targets.
Does he get enough credit for his feat? “Look, I get people stopping me on the street from time to time. But this is the truth: This was a great Canadian victory.”
He had helpers, and he praises them unstintingly. His deputy ministers were David Dodge and Don Drummond, who went on to become governor of the Bank of Canada and chief economist of the TD Bank respectively. “They were very strong, and beneath them they were very strong. I had the strongest people in the government, thank God.”
And what should Canada be doing right now? “I think we should be investing in infrastructure and education because other countries can’t do it. This is a chance for us when labour costs are low and interest rates are low to really steal a march on the rest of the world so we’ll be much more competitive when they get their act together.” Got that, Mr. Harper?
© Trevor Lautens, 2011