Finance Department now a fact-free zone

Posted on December 9, 2014 in Governance Debates – Opinion/Commentary – Finance Minister Joe Oliver takes the word of small business lobby for a reduction in EI premiums without doing any separate analysis.
Dec 08 2014.   By: Alan Freeman

Since Stephen Harper began governing Canada almost nine years ago, one of his goals has been to turn the federal government into a fact-free zone.

The scrapping of the long-form census. The muzzling of government scientists. The systematic elimination of independent voices like the National Roundtable on the Environment and the Economy. Harper simply cannot abide evidence-based advice that gets in the way of his partisan policies.

This evisceration of analysis and independent thought in the federal government has now reached into the summit of government — the Department of Finance. In a remarkable admission to a recent session of the House of Commons Finance Committee, Finance Minister Joe Oliver revealed that the Harper government has given a tax cut of $550 million to the nation’s small business lobby without conducting any analysis of its own.

The measure, announced in September, offers reductions in employment insurance premiums to the smallest of small businesses and is aimed at getting them to create jobs although they’re not required to create a single job to get the money. It’s a gift to the government’s most loyal special interest group, the Canadian Federation of Independent Business, whose president attended the announcement and waxed lyrical about the benefits of the cut.

According to Oliver, the measure will create 25,000 person-years of employment. How does he know that? Why, the CFIB told him so.

When asked by an opposition MP if the government had done its own analysis of the plan, particularly in light of estimates from the parliamentary budget office that the measure will create a mere 1,000 jobs, Oliver said the department hadn’t bothered to do its own analysis because the CFIB had already done the work.

“Well, we relied on those who know their industry best,” Oliver responded. It was a remarkable admission and one that promises to change the role of the federal government forever. Why hire thousands of your own economists, lawyers and scientists when there’s all this free advice available from special interest groups?

Is Environment Canada looking for a study on the environmental impact of the Northern Gateway and Energy East pipelines? You could commission an in-depth scientific study of the risks from an uncontrolled bitumen spill, but that would take time and cost lots of money. So why not turn to Enbridge and TransCanada? They certainly “know their industry best” and will be glad to serve up their latest analysis for free.

Is Transport Canada looking for a risk management study on the transportation of toxic materials on small regional railways? Why not ask the Montreal, Maine and Atlantic Railway? They must have done work on the subject and they certainly “know their industry best.” The same goes for drug trials and wireless pricing.

As for the EI premium cut, the CFIB is simply doing what it’s supposed to do. Defend the economic interests of its dues-paying members. But Oliver should know that the CFIB is not in the business of job creation. Nor does it represent the interests of small-business employees, who are generally low-paid with little political clout and no high-paid lobby group to fight for their interests.

That’s why we have a government, to hear the pitches of special interest groups, get independent advice and make public policy in the interest of all Canadians.

The CFIB loves the EI premium cut because it lowers payroll costs. Small business owners may use the extra money to hire a new employee, but there’s also a good chance they’ll buy a new piece of equipment or simply put the cash in their pockets.

Finally, this tale is also a sad comment on the fate of the Finance Department. Once led by forceful deputy ministers like Clifford Clark, Simon Reisman and David Dodge who never shied away from duelling with their political masters on issues of substance, the department now plays second fiddle to the “Tiny Tory” political operatives who set policy from the Prime Minister’s Office.

Finance still attracts bright young economics graduates from our leading universities. But they quickly learn that their most valued job skill is taking dictation from the PMO or the research branch of the Canadian Federation of Independent Business.

Alan Freeman is a Senior Fellow at the University of Ottawa’s Graduate School of Public and International Affairs.

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