The left, the right, and our northern neighbors

The latest editorial commentary in Barron’s features Michael Taube‘s analysis of unexpected political developments in Canada.

These days, politicians often lament about our upside-down world in fits of partisan rage and exasperation. Yet, as ideological consistency turns into a distant memory for political parties, leaders, and voters, their world doesn’t know its up from its down — or its left from its right.

Canada has certainly turned into a topsy-turvy place. The upcoming federal election, scheduled for Oct. 19, has turned into an exceedingly tight three-way race between the right-leaning Tories (who have governed for nearly a decade), centrist Liberals, and left-leaning New Democrats.

Moreover, the most fiscally conservative province, Alberta, has started a political flirtation with socialism. In contrast, the traditionally left-wing province of Quebec is now leading the charge when it comes to, of all things, tax cutting and fiscal prudence. …

… Today’s most fiscally responsible and prudent Canadian province is the one with the longest history of being the most state oriented and fiscally irresponsible: Quebec.

Premier Philippe Couillard of the Liberal Party unveiled a zero-deficit plan in March that would be the envy of most small-government supporters. He offered a budget of C$100.2 billion that’s more than balanced, for it includes paying down the provincial debt by C$10.5 billion.

There are no tax increases or massive social spending measures to be seen. Instead, the budget contains significant cuts to personal and corporate income taxes, introduction of a tax shield to protect workers, gradual removal of a mandatory health-care contribution, and massive slashes to the bureaucracy in the name of reducing government waste.

Couillard’s Liberals have very few free-marketers in the party caucus. Most of them would be more likely to support public health care and welfare than private health care and work-fare. Yet the new government has decided to fix economic inefficiencies that have long contributed to Quebec’s economic doldrums.

In a province that has received the most federal money through transfer payments, suffered with high unemployment rates for a generation, holds the biggest public debt in Canada, and went overboard with a carbon tax (the only one in my country), this is most welcome news, indeed.