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Jim Flaherty’s Troubled Legacy

For many marginalized Canadians, the former provincial and federal politician will be associated with neglect and lost opportunities.

Photo by Flickr user Ontario Chamber of Commerce.

When former federal finance minister Jim Flaherty died suddenly last week, his stunned colleagues and many political observers reacted with sadness but also with high praise. Those who had known and worked with Flaherty, even as political opponents, remembered him as an effective, personable, loyal, and dedicated public servant.

Many others, though, remember the legacy of a man whose administrations—the Mike Harris government in Ontario, and Prime Minister Stephen Harper’s federal Conservatives—made a point of accommodating certain Canadians while leaving others behind. The soaring tributes to Flaherty simply don’t ring true for many, particularly those who experienced poverty and marginalization during his 20 years of governance. Flaherty often espoused the view that those struggling to survive in Ontario and across Canada had only themselves to blame.

After Mike Harris was elected premier of Ontario in 1995, he cut welfare rates by 21 per cent, froze disability support, and tightened eligibility requirements for social assistance. At the same time, the government eliminated rent controls and stopped building social housing. Rents across the province skyrocketed, shelter use increased dramatically, and many poor Ontarians struggled to survive. Yet Harris and company focused excessive attention on so-called welfare fraud, even though its incidence was extremely low (about 0.1 per cent of cases in 2001–02). The government even pre-emptively mailed warnings to all welfare recipients indicating that their benefits would be cut off if they broke the rules.

Flaherty, who served as finance minister and deputy premier under Harris, characterized cuts affecting marginalized people as necessary, tough choices. “Am I going to say to the people of Ontario that it’s all gloom and doom?” Flaherty asked as he spoke in the legislature in 2001. “No, I’m not, because since 1995, Premier Harris and our team have made the difficult decisions, resulting in lower taxes, resulting in lower inflation, prudent fiscal management and three balanced budgets in a row.”

As federal finance minister, Flaherty and the Harper government restricted Employment Insurance benefits for political gain. Flaherty said surpluses in the EI program meant previous governments had been taking too much money from Canadians. But when the surpluses continued under his watch, Flaherty responded by toughening the eligibility requirements for EI recipients, and again launching investigations into alleged abuses of the system. Payouts declined despite the surplus, and unemployed Canadians who paid into the safety net were increasingly unable to access it.

Many remember Flaherty most for an infamous pledge—made during his 2002 Ontario PC party leadership bid—to force homeless people into hostels and shelters or, if they refused, to send them to jail. “There is nothing compassionate about allowing people to live on the streets,” Flaherty commented at the time. But those critical of the housing and social assistance policies Flaherty had supported found this proposal to be doubly cruel. Homeless advocate Cathy Crowe said the plan amounted to a criminalization of poverty whereby “certain people are made illegal and removed.”

It’s possible Flaherty meant well when he cut housing, raised eligibility for social safety net programs, and mused about jailing the homeless—but that’s beside the point. Flaherty passed on few opportunities to moralize about and scrutinize those in need, to raise the bar for government support on the assumption that too many Canadians seek it in bad faith. This assumption runs contrary to the experience of many Canadians, and for many of them, Flaherty’s legacy has been, and will continue to be, one of neglect and lost opportunities.


  • SonuvaScrimbro

    Agreed – after we’ve paid our respects and allowed family and friends to grieve, it’s important to assess the legacy of those who have passed on. And unfortunately for Flaherty, his legacy will be forever tied to those of Mike Harris and Stephen Harper — the former, a destructive premier who got out of Dodge before voters overwhelmingly voted his party out; the latter a prime minister whose accomplishments will be forever tarred by his image as a man who did everything in his power to muzzle opposition and centralize control in the PMO (while pretending all the Senate spending stuff somehow slipped under his radar).

    By all accounts, Flaherty was a nice guy in person, but he was all too willing to carry a spear when called on by these two men. Props to him for pushing back on things like income splitting, but he could have done so much more, especially given his position in Harper’s cabinet as one of the few people with the power to do more.

  • OpportKnocks

    Nice to see some needed balance to counter the “halo effect” being broadcast from his Conservative associates and loyalists like Harris and Harper.

    The bottom line was that Flaherty supported corporate interests, not the average Canadian, and certainly not the lower classes, as this article describes. There was no need for 8 consecutive deficit budgets, only 2 maybe 3 were needed after the 2008 recession.

    He cut corporate taxes so that large corporations pay about 1/2 the combined tax of middle class Canadians. What are they doing with that money? Using it for foreign acquisitions and shoring up balance sheets, whereas the public would have spent more to stimulate the Canadian and their local economy.

    He was about to join the private sector and cash in with corporate directorships (like Mike Harris) and lucrative “consulting” gigs which would have rewarded him for his loyalty to the corporate cause. I for one am glad this did not happen.

    • rich1299

      An awful lot of that money is sitting Canadian corporations’ bank accounts as dead money, there’s more dead money in corporate tax accounts than our entire national debt. Its dead money because its being kept out of our economy, our economy only works well when money flows all through it like blood flows through a body. To keep up the analogy, dead money has much the same effect on our economy as fat clogging up arteries restricting blood flow to parts of the body starving them of oxygen and causing them to whither. When paid as taxes that money was moved throughout our economy, the first corporate tax cuts lead to that money being reinvested which also kept it flowing. The problem is that the tax cuts became so massive that corporations no longer reinvested it all and haven’t been doing so in the vast majority of cases for a long time now. Instead its turned into dead money removed from our economy.

      Our economy is doing better than some countries and worse than others (it was only the strongest in the G7 for a short period) but historically its performing the worst it ever has since the Great Depression. It would be doing much better if instead of massive corporate tax cuts money was invested in people such as increasing social assistance rates, assisting small businesses, infrastructure projects, or in gov’t services. When low-income people get a little bit more money that money is immediately returned to the economy on essentials of life that benefit places like grocery stores or other business who then get to benefit from it. Its much the same with working class people, home owners, and small businesses who immediately use that money to improve their homes, businesses, send their children to school or summer camps or whatever. So long as money keeps moving around all benefit from it.

      Its also why “right to work” laws which force down wages are ultimately bad for the economy though good for corporate profits. When people can’t afford to spend our economy suffers, there’s only so much a relatively few wealthy people can do to get money flowing all throughout our economy. Wealth inequality hasn’t been as large as it is now since just before the Great Depression. It certainly hasn’t helped that much of our financial policy and trade deals have been directed by the organization of Canadian CEOs, I forget its official title offhand, who were regularly meeting with Flaherty and directly involved in trade deal negotiations. Corporations are by sociopaths by law, they have no choice but to be only concerned about increasing revenues for investors. They’re not permitted to take the social good or environmental well being into account when deciding business strategy. That’s not normally a problem if we have gov’ts who do care about the social good and environment, even Mulroney had a good environmental record, but when a gov’t is in bed with corporations focused only their interests they too become sociopaths. That’s what we’ve got in the Harper Cons.

      We really need to see the return of the PC party federally for better political choice for right wing citizens who care about society and the environment. The federal Libs are trying to fill that gap but risk losing their left wing in the process which is likely why the NDP has been doing better in recent years.

  • OgtheDim

    Thank you for waiting until after the funeral.

    Flaherty did a couple of things right in opposing the Income Trusts and Income Splitting that the high earner types want(ed). He did this more out of a sense of tax fairness to people making 100K a year in household income, who he considered average Canadians, but it was and remains the right thing to do..

    For me, the picture that will stand out is him and Eaves and Harris yelling out “The debate is over – tax cuts create jobs.”

    Ideology never works in practice.

    As much as the left hates people like Tory, and Soknacki, be assured that there are always people like Ford and Flaherty who are much more ideologically bent and who despise people like Tory.

    • rich1299

      I consider myself to be left of the NDP on many issues but also centre-left on other issues, over all I consider myself a rationalist who believes gov’t has no reason to exist if not to improve the lives of all citizens. I certainly don’t hate nor know anyone of a similar ideological bent as myself who hates politicians like Tory or Sonacki. They’re the centre-right like Lastman was, without the foot in mouth disease, who understand their job is to help everyone and not just a few segments of society. Hating a particular policy without hating the politician behind is easy when the politician isn’t evil scum of the earth who go out of their way to harm vulnerable citizens like Ford, Flaherty, and Harper.

      • OgtheDim

        Point taken…..”some on the left”

    • TheSotSays

      “Ideology never works in practice.”

      Right, that’s why Chow is finished even before we start.

      As for Flaherty he was simply an opportunist; one more failed street lawyer cum social worker well over his head in any type of government decision making. We see the same thing clearly in the collection of dud losers sitting as ward councillors at City Hall and need to take the opportunity presenting itself in October to flush the pack them once and for all.

      If Rob Ford comes forward with a proposal to cut their number in half, he has my vote.

      And I’m tired of providing Roman Emperor state funerals for these bozos at a million bucks a pop.

      • nevilleross

        Convincing sheeple like you that you’re voting for the wrong man’s impossible, isn’t it?

        • TheSotSays

          Well I know the 5 or 6 yapping left wing fruitcakes on this blog won’t be able to pull it off.

  • VictorianShuter

    I’m still very grateful to Flaherty’s creation of RDSP’s despite it being the only positive thing I can think of.

    • rich1299

      Unfortunately it only helps those with excess income who can contribute to it, for people who need everything to just get by or who don’t have enough to get by its of no help whatsoever.

  • Jordan

    Income inequality is something that spans many places even in our developed nations.

    In the end though these cuts to spending only delay the work that needs to be done. Everyone was slashing spending across party lines into the 1990s as it must be noted though. What Mulroney started, Chretien and Martin finished off. Even Bill Clinton cut welfare to much controversy back in 1996. But again that only puts off the work that needs to be done, especially when it comes to other areas of public spending like buildings and transportation infrastructure investment. Harris slashed on spending on capital transit improvement projects and affordable housing construction, now transit and affordable housing are the focus of many lively public debates, and mass transit infrastructure expansion has taken off once again, now that time is starting to run out. .

    In the end, we heal from our wounds and move on. Perhaps some day down the road people out there like the Harris/Harper crowd will know that be it someone with such as a mental health issue, or a mother with her children fleeing an abusive relationship, or manufacturing communities that have been devastated from the collapse of our manufacturing sector, that there is a reason why we chose that path to fight for a decent social safety net back in it’s early days; because at that time we still remembered for an eternity of generations before how hard life could be up until the late 19th/early 20th centuries.

    Collectively, we have the means, resources and technology for all to live free from marginalization wherever it may be, and our still relatively new found inter connectedness through the internet will definitely bring a new level of debate to the ages old challenge humanity has faced from our own self imposed inequality…

    • Rico_Featherbutt

      This free money plan sounds great. Where does it come from?

  • GerrardCoxwell

    This clears up and articulate many things I wondered and thought about Flaherty and his legacy. Good job, Desmond.

  • Ryan

    Bob Rae f*cked ontario – which was clear by people voting almost every NDP seat out of office 4 years later- Flaherty adjusted their mess under Harris -then McSquinty kept those fixes for 8 years – Dalton was the problem – Flaherty Did a great job !
    Extending the $1,000 hiring credit for small businesses for one year.
    Introducing a “Working While on Claim” pilot project.