Crisis shows limits of incrementalism

The first decade of the new century is nearly behind us and, from an economic perspective, it has mostly been a pleasant time of annual increases in our gross domestic product, a rising stock market, declining unemployment, low interest rates and stable inflation.

Politically, this first decade has produced a remarkable transition that few of us could have foreseen when we were busy celebrating the arrival of a new millennium. The Liberal Party of Canada - then unassailable - seems finally to have run out of gas and good luck, and a commanding new figure has emerged on our national stage. His name is Stephen Harper.

Consider his accomplishments. He has united a fractious and divided right that spent a full decade mired in a fratricidal war that assured the Liberals a free ride to successive majority governments.

He has won consecutive elections, albeit with a minority of seats both times. But he has knocked two Liberal leaders out of the game - Paul Martin and now Stephane Dion.

Despite a glaring dearth of administrative or executive experience, he has proven himself more than capable in both areas by managing Parliament, keeping his caucus and party united, and by standing up to the national press gallery.

He has achieved all this with the thinnest of programs. Harper's approach has earned its own label - incrementalism. He won his first election with small initiatives of limited impact that were designed to win votes among moderate, middle-class Canadians.

But incrementalism has its limits and that became glaringly obvious when a global financial crisis erupted amid the recent federal election. Modest, inoffensive measures may suffice when times are good and the populace is content. They do not represent an adequate response to tough times. Nor can they be considered a comprehensive program for a country as diverse and difficult to govern as Canada.

If Harper hopes to turn his impressive start into a durable achievement he needs a program. Every successful Canadian prime minister has had one. Sir John A. was the architect of Confederation and builder of the transcontinental railway. Sir Wilfrid Laurier filled the West with homesteaders.

Mackenzie King led the country through the Second World War and laid the foundations of the welfare state. Louis St. Laurent and Lester B. Pearson completed that project. Pierre Trudeau gave us the Charter of Rights and Freedoms. Brian Mulroney introduced free trade. Jean Chretien rescued the country from impending ruin caused by 25 years of budgetary deficits and a rising national debt.

Harper cannot hope to add his name to this list by getting tough with young offenders or offering middle-class parents tax credits on music lessons for their kids. He needs policies and programs that address the first fundamental challenge of the new century and that issue is economic.

Our prosperity is threatened in the short-term by the meltdown in the global financial system and the prospect of a deep and nasty recession. Long-term, this country's affluence is imperiled by two things: The growing economic might of China, India and other emerging economic powerhouses; and the aging of the population, which will drive up the costs of universal health care, public pensions and other cornerstones of the welfare state.

The election just completed demonstrated that the parties of the left - the Liberals, the New Democrats, the Bloc Quebecois and the Greens - remain irrevocably committed to high taxes, activist government and the redistribution of wealth. They continue to believe that what worked in the second half of the 20th century will do just fine in the opening years of the 21st.

Their single-minded approach leaves Harper loads of room to distinguish himself by introducing fresh ideas and policies that address the fundamental needs of the country. Such a program puts wealth creation first and redistribution second.

It would include specific initiatives to: Increase the productivity of the workforce; encourage young people to enter skilled trades; promote entrepreneurship and the formation of new businesses; support the commercialization of scientific discoveries; attract investment; and ensure that we have secure sources of energy.

It would also overhaul and revitalize the federal civil service by offering buyouts for aging, over-the-hill middle managers, discontinuing programs that have outlived their usefulness and adopting other restructuring practices that have allowed private-sector corporations to flourish over the past 15 years.

This plan recognizes that the country needs a productive workforce and a competitive economy to sustain the welfare state and guarantee our social security, challenges that grow by the year due to an aging population.

It says we need policies to ensure that Canada can compete against China, India and other emerging economies. It affirms that we need to address the challenges and demands of the future because this century will not be a replay of the last.

(D'Arcy Jenish can be reached at jenish@businessedge.ca)