The hardest job in Government

Regardless of your views on politics, you have to feel some sympathy for Finance Minister Blaine Higgs. He has the unenviable job of trying to keep the lid on provincial spending while respecting the political commitments that he and his colleagues in the Alward Government made in last September’s election. Even if the Provincial Budget was balanced, it would be difficult to find the $300 million or so in new spending that they promised without dramatic cuts in programs and services (or an equally large increase in taxes).

At the same time that Minister Higgs is trying to find the savings within Government, he will be facing pressure from his ministerial colleagues who are seized with the priorities within their own departments. Given the principle of Cabinet solidarity, which is earned rather than commanded, it may be that Higgs finds himself facing a united front of “spenders” as he tries to make the difficult choices that go into making a Budget. It can be a lonely experience to be the voice of fiscal rectitude against the administrative and political demands of your colleagues.

But the situation that Higgs faces is not unique. In the early 1990s, Saskatchewan was not the newly-crowned “Have” province of Confederation. The ruinous policies of Grant Devine and his Progressive Conservatives had pushed Saskatchewan to the very brink, a situation much worse than the one that New Brunswick finds itself in today. Government revenues were sinking, population was in decline and outside observers were claiming that Saskatchewan would be the first Canadian province to go into receivership.

Janice MacKinnon, the Minister of Finance in the newly elected NDP Government, faced the same challenge in those years that Higgs does now. Despite their public pronouncements, her cabinet colleagues were largely in denial about the state of the provincial finances. Even if the Province was running an unsustainable deficit, they said, perhaps there was a way to “free up a few million dollars” for a needed service or worthy new initiative.

It was down to Premier Roy Romanow to provide some much needed backbone for Cabinet. In addition to his unqualified support for his Finance Minister, he reminded his Cabinet colleagues of the strong fiscal management and balanced budgets of previous NDP and CCF Governments. According to one account, Romanow quoted Tommy Douglas saying “Deficit financing only helps the bankers.”

Romanow was able to provide the political support that allowed MacKinnon to administer the strong medicine that the times required. The measures were not popular but they were effective. Within three years, the Provincial budget was balanced.

To keep it balanced, an additional four years of fiscal restraint were required – seven years in all. These years were not easy, especially for those on the left of the Party and the public sector unions, but they restored the finances of the Government. For those who use a political metric to judge success, the NDP were re-elected twice more under Romanow and won once more under Romanow’s successor, Lorne Calvert.

With the election of the Chrétien Liberals federally in 1993, Finance Minister Paul Martin found himself in the same position as MacKinnon, facing the spending demands of his colleagues while trying to balance the Budget in a time of fiscal stress. Again, the unwavering support of the First Minister was critical to securing the support of Cabinet for the difficult choices that were required.

As Chrétien himself recounts, there was one Cabinet session on the Budget where Ministers kept bringing forward ideas for additional spending rather than focussing on the task at hand. With obvious frustration, Chrétien quipped that the next Minister to recommend more spending would see an automatic ten percent reduction in their departmental budget.

As in Saskatchewan, the federal budget was balanced within three years. Further, the fiscal rectitude of the Liberals was a key to their electoral success in the following three elections.

There are two lessons to be learned from these examples. The first is that Blaine Higgs cannot do what needs to be done without the strong political support of David Alward. The hardest job in Government, balancing the budget in difficult times, becomes the most futile if the First Minister does not rally the Cabinet behind the Minister of Finance.

The second lesson is that achieving a balanced budget within an expeditious time frame is more likely to lead to re-election than to defeat. Aside from Romanow and Chrétien, there are many other examples, in Canada and elsewhere, that prove this point.

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Originally published in the Telegraph-Journal