Two Cheers for Bob Rae

Two charges are regularly made against Bob Rae. The first, leveled by Ontario NDP leader Howard Hampton, is that Rae is an “opportunist.” The second, encountered frequently in comments from people with various ideological perspectives, is that Bob Rae left the Ontario government in a fiscal shambles and the provincial economy tattered and torn. Both of these charges are a crock.

Let me dispose of the second one first. Bob Rae was sworn in as premier of Ontario in September 1990, at a time when the North American economy was sliding into the deepest recession since the Great Depression of the 1930s. Two things made the economic plunge in Ontario particularly severe. The Bank of Canada’s tight money policy in the early 90s hit Canada right between the eyes. The Bank was more monetarist than Milton Friedman in those years, and was much more monetarist in refusing to ease up on interest rates than the Fed in the U.S. The consequence was a longer and deeper recession, with higher levels of unemployment, north of the border than in the United States. For a refresher course on what happened, read Linda McQuaig’s book, Shooting the Hippo.

The second disaster for Ontario was the onset of free trade in January 1989. The first years of the FTA and later of NAFTA were especially hard on Ontario. In that period, U.S. investments in Canada remained flat while Canadian investments in the United States skyrocketed. During the 1990s, Canadian investments in the U.S. soared until they were two thirds as high as American investments in Canada. That shift was underway even before free trade, but the onset of free trade dramatically intensified it. What was happening was that Canadian business was using the free trade regime as an opportunity to run away from Canada, to the southern U.S. and to Mexico, in search of lower wages and taxes, less stringent environmental rules, and to escape from unions. The flight of Canadian capital to the U.S. during the 1990s is the great untold story of the impact of free trade on Canada.

As premier of Ontario, Bob Rae could do nothing about Canadian monetary policy and the impact of NAFTA. During its first couple of years in office, the Rae government tried to ride out the storm by not adding to the misery through sharp cuts in its own spending. Eventually, the government concluded that it had to face the worsening fiscal situation head on. It brought in a program that raised taxes, cut spending and reduced the payroll in the public sector, through the so-called “Rae Days”, additional holidays that cut public sector pay without laying off employees. The last element, the so-called “social contract”, was the most controversial and is the most remembered. It opened public sector contracts without the agreement of the unions involved. The alternative, as the government saw it, was to lay off employees. My beef with the social contract was that it was imposed from on high and that its political effect was to cast a pall over the Rae government, robbing it of its claim to be progressive.

The point here is not to rehash arguments that have been rehearsed a hundred times, but to stress the truly dire situation in which the Rae government found itself through no fault of its own. Ironically, had Rae stayed in power for another five years, the province would have returned to fiscal health and a balanced budget. Instead the people opted for Mike Harris whose Common Sense Revolution handed huge tax cuts to the highest income earners, and imperiled the government’s recovery and its ability to undertake new social programs. Ontario has still not rebounded from the nightmare of the Harris-Eves years.

The second charge, that Rae is a political “opportunist” grows out of a long established tradition on the left in which opponents charge each other with selling out the working class on the one hand or insist on the other that their rivals are “infantile” leftists. For all the good these arguments have done, this rhetoric would have been put to better use had it been published on rolls of toilet paper.

Philosophically, the Rae government straddled a rather wide area that could be described as progressive liberal or moderate social democrat. (It banned the use of strike breakers and it advanced the cause of employment equity.) People can get very fussed about such distinctions but there is no greater waste of time than the narcissism of small differences. Over the years, there may have been some evolution in the political values of Bob Rae, but I don’t see much. Today he favours a variety of capitalism that places the emphasis on social fairness, education and equality. He’d be very much at home in the centre left in Western Europe. I don’t buy into everything Rae supports. For instance, I sharply disagree with his notion that with higher tuition fees and more support for average and lower income students we can create institutions of higher education that combine quality with accessibility. I think we should work toward the abolition of tuition fees.

Now that Rae is seeking the leadership of the federal Liberal Party, we can see his vision of Canada more clearly than when he was a provincial politician. His federalism combines a strong recognition of the unique place of Quebec within the federation, with a philosophy of social fairness that should ameliorate regional antagonisms and disparities. Most of all, he is a clear opponent of a neo-conservative global policy for Canada. He would stand up to Stephen Harper on this most critical of issues and would keep Canada out of the Anglo Gang of Four (with the U.S., the U.K. and Australia.) He has sharply challenged Michael Ignatieff on this issue and has made it plain that he doesn’t want a Liberal Party that is an echo of the Conservatives.

Rae has decided over the past decade that his natural political home is in the Liberal Party. Fair enough. He has come to that conclusion in the same way that Pierre Trudeau did and for reasons that are just as legitimate. Others can disagree with the choice he has made, but they ought not to question his motives.

My own choice is to remain with the NDP. As a socialist, I believe that reforming capitalism in the interests of all is a much more daunting challenge than progressive liberals like Rae are willing to admit. Further, I believe that the socialist and social democratic tradition that has been fostered with such courage and energy over more than seven decades must be kept alive. The left needs a political party and it is the NDP.

That said, progressive liberals and socialists have a common foe in Stephen Harper’s hard-right government. Bob Rae has made it clear that one of the reasons for his switch to the Liberal Party is to combat the very real threat from the right.

As a non-Liberal, I won’t offer advice to Liberals on which candidate they ought to choose as leader. If Bob Rae gets the job and beats Harper in the upcoming election, I’ll sleep better at night. But I reserve the right to have sharp words of criticism for Rae on those not infrequent occasions when socialists and liberals need to argue about their important differences.