As many Canadians mourn the death of former prime minister Brian Mulroney, it’s worth remembering his administration undertook a full-fledged attack on Canada’s poorest and most vulnerable while enriching the elite and powerful.
On Feb. 29, Canada’s 18th prime minister Brian Mulroney passed away. Expectedly, much of Canada’s political class came out to express their condolences. Chief among them was Prime Minister Justin Trudeau, who issued a statement shortly after the news of the former prime minister and Conservative leader’s passing: “[Mulroney] never stopped working for Canada. He was a champion of values that unite us as Canadians and will forever be remembered as a force for the common good.”
Mulroney is often remembered as a charismatic politician and having grown up in the eastern hinterland of Quebec, he was fancied as something of an outsider to the ivory tower of the Ottawa establishment.
The opposite couldn’t be truer.
Brian Mulroney’s administration lasted from 1984 to 1993 and saw the final blow at Canada’s already dwindling social security net with the undertaking of disastrous trade deals (NAFTA), as well as the lowering of taxes, selling public assets to the private sector and deregulating the economy.
The idea driving his policies was that freeing up the market from red tape and robust taxation on capital would lead to the wealth “trickling down” on the lowest earners; this never happened.
Canada’s lowest-earning families have been devastated by Mulroney’s policies.
The wealth of Canadian families from 1984 to 2005 for those composing the second to eighth deciles of wealth distribution have stagnated up until the fifth decile where there’s a gradual increase in the remaining three deciles. Those families who make up the bottom 10 per cent of the distribution of wealth has even seen their median net worth slightly decline during the same period.
However, the top decile of Canadian families in terms of wealth has seen their median net worth more than double from 1984 to 2005, going from — after adjusting for inflation — a median net worth of around $550,000 in 1984 to just over $1,200,000 in 2005 (Source: Lars Osberg, “A Quarter Century of Economic Inequality in Canada: 1981-2006,” Fig. 9).
As the above-cited figures show, the wealth never trickled down. Instead, it trickled up in a kind of reverse-wealth osmosis. This is because the economic rationale behind Mulroney’s and other neoliberal politicians’ free-market policies are based on a false premise.
When neoliberalism swept the major Western economies in the late ‘70s and through the ‘80s, a key part of the argument for stripping away social safety nets was arguing that public social welfare spending was the cause of such large public deficit spending.
This view conveniently leaves out other factors like military spending and unrepatriated profits from private enterprises who used major breakthroughs in public sector research and development (including the Internet, pharmaceuticals, nanotech and the basic search engine technology behind Google) to develop highly profitable corporate empires by adding their own spin to the basic innovation done by the state.
But in the case of the “cumbersome social programs” rationale behind chipping away at Canada’s social safety net in the Mulroney era, this made even less sense. Then as now, Canada ranks in the lower end of OECD countries in terms of social welfare spending as a percentage of GDP, sitting at 24th place in 2019 with a percentage of 17.3.
Though maybe the shoddy math wasn’t all that surprising.
The writing was already on the wall that Mulroney would become the Canadian Margaret Thatcher. Before becoming a full-time politician, he was the president of the Iron Ore Company of Canada, an American-based firm that exported its commodities to the US. Mulroney was very likely steeped in a rhetoric of free-trade capitalist exceptionalism by this fact alone.
Ironically though, having worked in the metal industry, and specifically at a firm which was transporting to the American Midwest, Mulroney would have been aware of the issues of capital flight for cheaper wages in Mexico when it came to manufacturing. Yet he still negotiated NAFTA, which further incentivized this behaviour and continued to gut or at least hinder the industrial heartlands of the US and Canada.
His home province of Quebec, for example, saw a 10 per cent decrease in employment for manufacturing as an effect of the treaty.
Mulroney’s policies of social-fiscal austerity were always based on half-baked premises that hurt the majority of Canadians, yet he was ruthless in implementing these policies: he cut the number of income brackets for personal income taxes from 10 to three; engaged in trade deals that weakened domestic environmental and labour protections (the investor dispute mechanism in chapter 11 of NAFTA); privatized 9 crown corporations; and reduced federal transfers to provinces to help with their specific social welfare needs.
On top of that, after Mulroney’s time in office concluded, the ideology he touted spread like wildfire in subsequent administrations.
After Kim Campbell’s brief period of holding office following Mulroney’s resignation in 1993, the Conservatives were decimated by the Liberal Party in the next federal election. The Chrétien Liberals, however, continued a policy of fiscal austerity, in some respects going further than Mulroney did.
Emblematic of the Chrétien Liberals following suit were the infamous budget cuts from finance minister Paul Martin which saw even further reductions in federal transfer to provinces. On top of this, the budget changes amalgamated once-separate post-secondary, healthcare and welfare funds to the provinces into one big fund. This led to welfare competing with healthcare and post-secondary funds in provincial spending decisions, making it immensely regressive.
After Mulroney’s office, even the Liberal Party which — once the party that implemented a universal healthcare system and the nation-wide Canada Pension Plan — had no problem further weakening the vestiges of social democracy in Canada.
The late Ed Broadbent, who served the longest as the leader of the New Democratic Party, put it best when he referred to former Conservative prime minister John Turner and Mulroney as the “Bobbsey Twins of Bay Street.”
Broadbent’s stinging nickname for the former prime minister is accurate. After browbeating an impending economic recession which could only be remedied by fiscal restraint on social programs, Mulroney’s prescriptive policies followed a free-market fundamentalism which saw a consolidation of corporate-elite power in Canada unlike ever before. As a result, wealth and income gaps have been the highest in the last 20 years than ever before in the Country’s history.
When it’s all said and done, Mulroney’s passing deserves to be remembered not in celebration of his political career, but in condemnation of it considering all the avoidable human suffering made possible by his administration.