Tuesday, April 29, 2008

Ethics and prudence go hand in hand

Many Canadians may glaze over the details of the "in and out" scheme, or of untendered contracts, or of uninviting the opposition to international events to which they have traditionally sent a delegation. They may also wonder what the big deal is over secret cabinet meetings, muzzling members of the caucus, filibustering committee proceedings.

It's true that the last couple of days, the opposition has gotten back its swagger over the economy, particular high commodity prices and the rapid growth in grocery bills. However, it's important to keep plugging away at the issues involving ethics and trying to control the agenda.

The best government is open government, not a closed one. When there is transparency in how things are done, Canadians are in the best position to determine whether they are getting value for money. In a parliamentary system, secrecy does even more no good than the secret government that Bush and Cheney have run the last few years. The Sponsorship scandal was horrifying but at least some people were held to account in the end. Under the current regime it appears no one ever will be for what would be deemed as corrupt and definitely illegal in most member states of the European Union.

On the economic front, it's possible that the government may still be able to get away with making a surplus for 2009 if only because of the ad valorem nature of the GST on gasoline and diesel purchases (i.e. the effective rate of the tax actually goes up as the price of oil does, as opposed to a flat per litre excise tax). However, such a model is unsustainable and relying on a boom in resources is irresponsible. Eventually the resources will be depleted; or it is also possible that the price of oil and natural gas could crash downwards substantially. Either scenario would hurt not only the federal coffers but that of all provinces that produce even minimal amounts of fuel.

Recall what happened the last time an oil bust hit Alberta. Now imagine the domino effect of the next bust on Alberta, then spilling on to British Columbia, Saskatchewan, Newfoundland -- as well as pinching the federal coffers.

It may happen this year, or next year, or even the year after. But it will happen -- and the consequences may be catastrophic. An income tax cut will have been seen by that point as more prudent than a two point GST cut we got -- by then it will be too late.

And the real winners will have been those who can ride out the storm, those with big pockets in the corporate towers of Calgary and Toronto who supported Harper. The rest of us will have gotten the shaft. They won't care about ethics violations so long as it doesn't affect them.

So ... keep plugging away at the government on the economy. But don't forget integrity either. Inevitably, they go hand in hand. Look at the countries the IMF and the World Bank have to keep bail out. It's those with corrupt governments who squander resources. It's only a matter of time before they have to bail out the United States, like they did the UK in the 1970s. Canada may be in a much better position but only because of the tough decisions we made during the 1990s. A return to corruption and irresponsibilty, however, and we'll eventually wind up the same way.

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