Voluntary compliance on the part of politicians to balance the books, reduce debt and hold the line on taxes has proven a failure. As past CTF president Jason Kenney used to say “we’re in the 25th year of the government’s five year balanced budget plan.”
As early as 1994, CTF researchers went to work drafting model balanced budget/taxpayer protection legislation that would broadly do three things: balance the budget, require voter approval for new or increased taxes and penalize politicians for non-compliance.
Each province – where the CTF had a presence – responded. Saskatchewan passed a balanced budget law. As did Alberta. More important, Alberta’s included a debt retirement provision and in 1999 added a further provision requiring three-quarters of any surplus be directed toward debt repayment. A law passed in B.C. in 2001 requiring balanced budgets and penalizing ministers for overspending their ministry budgets.
Manitoba passed the first comprehensive taxpayer protection law in 1995. The Act included requirements for balanced budgets, referendums on major tax hikes and mandatory debt retirement. Ontario also passed a comprehensive taxpayer protection law (1999) in the wake of Mike Harris’ signature on the CTF’s Taxpayer Protection Pledge during the 1995 Ontario provincial election.
The benefits of these laws included debt repayment, lower interest costs and the ability of governments to finally reduce taxes. On March 31, 2005 Alberta became the first debt-free jurisdiction in the country!
Unfortunately, many of these laws have been gutted. Even before the recent economic downturn, former premier Ernie Eves weakened Ontario’s law and his successor Dalton McGuinty neutered what was left. B.C.’s law was amended twice in 2009 as was Manitoba’s in 2008 and 2009. Alberta returned to big deficits in a big way in 2008.
The CTF believes that with the exception of emergencies, federal and provincial governments should be required to balance their budgets like households, municipalities and states in the U.S. A more potent brand of the CTF-inspired balanced budget/taxpayer protection laws – perhaps voter protected – is needed. We’ve won this battle before, and can win it again.