Former Harper CoS: GST cut 'worked' because it helped elect CPC

[Hydrogen]

The EH-101 program was cancelled by the new Chretien government of the time largely because the helicopter project was defined as a PC Mulroney (then Campbell) initiative during the preceding election campaign. It was by-and-large paraded as a waste of money during that election (and during a recession).

So while different than cutting the GST, this campaign promise did bring about the cancellation of the EH-101, eliminated thousands of Canadian jobs and cost the country $500 million in cancellation fees. It also left the military with a shrinking fleet of aged helicopters. Years of planning for this replacement were essentially wasted, and the Liberals offered up no contingency plan or options for replacement even though there was a clear acknowledgment that such a replacement was very much needed. It was politically popular at the time to cut the military budget.

That's why we still have Sea Kings today. Probably older than most of you out there.

 

[jade_lee]

The EH-101 program was cancelled by the new Chretien government of the time largely because the helicopter project was defined as a PC Mulroney (then Campbell) initiative during the preceding election campaign. It was by-and-large paraded as a waste of money during that election (and during a recession).

So while different than cutting the GST, this campaign promise did bring about the cancellation of the EH-101, eliminated thousands of Canadian jobs and cost the country $500 million in cancellation fees. It also left the military with a shrinking fleet of aged helicopters. Years of planning for this replacement were essentially wasted, and the Liberals offered up no contingency plan or options for replacement even though there was a clear acknowledgment that such a replacement was very much needed. It was politically popular at the time to cut the military budget.

That's why we still have Sea Kings today. Probably older than most of you out there.

The liberal campaign promise to cancel the conservative government's order for forty three new EH-101 military helicopters at a cost of 500 million for the contract penalty saved Canadians at least 6 billion in interest payments over 10 years and compared to that the pentaly doesn't look so bad all things considered.

BTW when the military pressured the Chretien government to replace it's 40 year old Sea King helicopters once the deficit went into a surplus position, they were advised by the liberals to go look at some good used ones from the Americans right away and it was at that time our Defence Department learned that the same model of the Sea King that we already owned was 1. still being used by the White House to ferry the president from the White House to his retreat at Camp David and 2. the helicopters our generals looked at turned out to be in worse shape than the ones we already had.

We do require our leaders to be critical thinkers. Where has all the money gone?

 

[lordmandeep]

well many say Martin and Chretien cut to much in the 1990's.


However they made the federal govt a sustainable entity until the Conservatives came in power.

 

[Hydrogen]

If you measure everything on the basis of dollars you can claim things don't look so bad. For $500 million, the country got nothing. Moreover, that tab did not include the cost of all those left unemployed by the cancellation of the EH-101 contract.

As for critical thinkers, it is a shame that this campaign promise made by the Liberals actually put lives at risk. The helicopter was out of date, deficient, and costly in terms of maintenance and parts. The fleet was subsequently grounded on a number of occasions due to safety issues.

BTW when the military pressured the Chretien government to replace it's 40 year old Sea King helicopters once the deficit went into a surplus position, they were advised by the liberals to go look at some good used ones from the Americans right away

Chretien's government had no actual plan for replacing the Sea King, they only had a plan for cancellation. Believe it or not, second-hand helicopters are not as cheap as you think. People will look at second-hand material when they have no choice but to look at it.

...it was at that time our Defence Department learned that the same model of the Sea King that we already owned was 1. still being used by the White House to ferry the president from the White House to his retreat at Camp David...

This was used as a facile excuse at the time - one that buried the fact that each Sea King required something like thirty hours of maintenance for one hour of flight. It also glossed over the fact that the helicopter used by the President is not used for the demanding work such as search and rescue or patrol work. Additionally, the helicopter used by the President is not as old as those used by the Canadian Forces.

Interestingly, when Chretien retired, replacing the Sea Kings became a top priority for the Martin government. Nevertheless, every effort was made to dance around looking at the EH-101. Sadly, the whole affair smacked of putting lives at risk solely to maintain a campaign promise - regardless of the consequences.

 

[kEiThZ]

The liberal campaign promise to cancel the conservative government's order for forty three new EH-101 military helicopters at a cost of 500 million for the contract penalty saved Canadians at least 6 billion in interest payments over 10 years and compared to that the pentaly doesn't look so bad all things considered.

This is one decision you will find indefensible. Would you like to explain to the families of the half a dozen airman that died as a result of this Liberal decision that you think a balanced budget is worth more than them? Would you given your son or daughter a 30 year old car that you had used almost exclusively as a off-road vehicle, as their primary form of transport? I would hope not. That's essentially the decision the Liberal government of the day made. They decided that they would equip our aircrew with 30 year old helicopter to operate in some of the harshest operating environments in the world. By the time the Sea King leaves service it will have been in the fleet for nearly 50 years. So again, would you take your family off-roading in a 50 year old car every day?

Aside from the moral responsibility of our government.... How do you figure money was saved? Defence equipment like everything else needs to be replaced every 2 decades or so (just like transit buses, postal vans, school buses, etc). You think interest of 6 billion was saved? We paid a half billion in penalties and then spent 800 million buying the exact same helicopter for our search and rescue fleet. Only this time they were built in Italy. And finally, look at what we bought instead:

http://www.airforce.forces.gc.ca/site/equip/ch148/background_e.asp

We might end up spending over 5 billion dollars for 28 helicopters that are no where as capable as the EH-101. That aside your six billion figure is ridiculous. Are you suggesting that we saved interest equal to over 100% of the original project costs? If that was the case, we should all sincerely doubt the Liberal Party's claim to having a record of sound fiscal management if that's their track record on borrowing. Thankfully, it's not the case. It's merely you throwing out ridiculous information with no evidence to back it up once again.

There weren't even too many Liberals who thought it was a good decision. Forget the military requirement which was (and sadly still is) genuine and pressing (the Sea King has vaccuum tubes instead of transistors on board). Set aside the fact that Chretien's decision probably cost the taxpayer a billion or two for less capable platforms in the end. Wasn't it better to have purchased a helicopter that was to have been designed and built by Canadians at home? You completely ignore the fact that Chretien's decision gave the biggest blow to Canada's aerospace sector since the cancellation of the Avro Arrow. Imagine what could have been achieved had we had that helicopter manufacturing line in Canada exporting that airframe for the next 30 years all around the world. That cancellation resulted in the manufacturing line being relocated to Italy. The parts manufacturers followed suit.


So how much exactly was saved? How many jobs were saved?

BTW when the military pressured the Chretien government to replace it's 40 year old Sea King helicopters once the deficit went into a surplus position, they were advised by the liberals to go look at some good used ones from the Americans right away and it was at that time our Defence Department learned that the same model of the Sea King that we already owned was 1. still being used by the White House to ferry the president from the White House to his retreat at Camp David and 2. the helicopters our generals looked at turned out to be in worse shape than the ones we already had.

Again you spew absolute nonsense that you know nothing about without providing any evidence whatsoever.

We never considered buying used helicopters. Not for a second. Want to know why? Because the sea king was so out of date that several of parts manufacturers had gone out of business making sustainment of the fleet extremely difficult.

Next, carrying a president from Camp David to the white house is completely different from operating a helicopter off the back of a frigate in sea state 5. They literally slam the helicopter onto the deck to land to make sure they don't miss the ship as it rolls. The sea going helicopter is also exposed to corrosive sea spray. It also operates at higher loads, lower altitudes, varying temperatures, etc. Your comparison is like saying a rally car driver and a soccer mom have the same requirements for their automobiles.

 

[jade_lee]

http://www.canada.com/ottawacitizen/story.html?id=09e9ff83-a2ce-4e4d-8f18-b12c6f7880a0

Is this performance of government any better? Does it make you feel safer? Is this the more competent decision making process you promote?
Smoke and mirrors as usual.

 

[kEiThZ]

http://www.canada.com/ottawacitizen/story.html?id=09e9ff83-a2ce-4e4d-8f18-b12c6f7880a0

Is this performance of government any better? Does it make you feel safer? Is this the more competent decision making process you promote?
Smoke and mirrors as usual.

Yes they shouldn't collect the fines. We changed the specs so much that if we did try to enforce the fine Sikorsky would win quite easily in court

The equivalent would be going to a dealership, signing a deal for a car to be picked up in 2 months and then every week going in asking for an addition. This week you want grey paint. Next week air conditioning. Week after a roof rack. Then when the car is close to being delivered you threaten to cancel the contract because the car dealer is late delivering (cause he's working on your mods) or you decide that you should pay what you originally agreed on but should still get all the mods you wanted.

And those delays by the way are directly attributable to decisions made by previous Liberal administrations. They didn't want the EH-101 to win the competition for the third time so they umm 'instructed' the air staff to dumb down the specs so that another airframe would win. But of course, the politicians also refused to drop missions from the military, which meant not only having to select an unproven airframe but then having to go through the effort of integrating more advanced and unproven avionics to make up for some of that bird's lack of capability.

Aside from all that....seems to me that if the Liberals had built the helicopter in Canada in the first place we would not be worrying about collecting fines from a manufacturer who is building the chopper in the US. We'd be building this chopper in Canada with Canadian workers. Our government would be collecting tax dollars from a company and workers building helicopters in Canada. By this point our military would also have had the EH-101 in service for nearly a decade at this point, and we would not be worrying about keeping a 40 year old helicopter airborne (50 years by the time it leaves service) while rushing through to get a replacement.

So are you still ready to defend the wasting of billions by the Liberals on the EH-101 fiasco and the loss of thousands of jobs and a half dozen lives with the retort that the Conservatives are worse for not collecting a 36 million dollar fine that would not be defensible in court and was largely a result of various Liberal era policies and decisions?

 

[kEiThZ]

Back on topic.....

I didn't agree with cutting the GST. But there's no doubt that cutting it had electoral value even if it was a bad decision. Let's not forget that the Chretien Liberals did run against the tax. Yes, yes, they didn't really mean to cut it. It was going to be modified, blah blah. That's not what the average guy on the street believed. Most voters hated the GST and many voted for the Liberals because they were going to cut the tax. So we should applaud the party that ignored the wish of voters and followed with sound policy or the party that followed the wish of the voters and made a poor decision?

Like I said, government of all stripes make those kinds of decision. Jade_lee notwithstanding, I doubt anybody else here think Chretien's cut of the EH-101 was wise industrial, defence or fiscal policy. Nevertheless, it was what voters wanted and it's what they got. Is the GST cut really any different in this regard?

When it comes to stuff like this, I'd like to see politicians actually follow the will of voters. Really, what's the point of having a democracy otherwise? Why not just allow the civil service to run the country for us? The policy analysts I work with drum up some excellent analysis which pretty much always shows the right way to go. If we wanted sound policy, we could do away with politicians and let these guys run the country. You'd never have screw-ups.

Let's not forget what winston churchill said:

'The best argument against democracy is a five-minute conversation with the average voter.'

and

'Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.'
-Sir Winston Churchill, Hansard, November 11, 1947

 

[Hank]

So we should applaud the party that ignored the wish of voters and followed with sound policy or the party that followed the wish of the voters and made a poor decision?

Clearly the former. The government's job is to run the country, not to pander to voters. Otherwise, why have a government? Why don't we just have a referendum every time we have to make a decision?

A government is, in a lot of ways, like a corporation (and I also realize that it's not like a corporation in many other ways). The duty of a CEO is to the corporation, not the shareholders. If what is in the best long-term interests of the corporation is detrimental to shareholders in the short term, the CEO must by law make the decision that it's in the best interests of the corporation. A CEO that panders to shareholders and hurts the company is just as culpable as a prime minister that panders to voters and hurts the country.

Also, if you're arguing that politicians should follow the will of the voters, then I don't understand your first Churchill quote above. Churchill was exactly right - voters as a whole generally don't know what's good for them and also generally don't look at the long-term. That's why we elect people who do know (or at least in theory should be more informed) to make these decisions for us.

If Chretien's cancellation of the EH-101s was bad for the country, then it was as bad of a decision as Harper's. The fact that a previous Liberal government made a bad decision doesn't excuse Harper's in this case. Two wrongs...

 

[kEiThZ]

Clearly the former. The government's job is to run the country, not to pander to voters. Otherwise, why have a government? Why don't we just have a referendum every time we have to make a decision?

I disagree. This is exactly what makes most people cynical about politicians....they believe that they can run on anything and do whatever they want after they get elected. The government's job is to run the country within the bounds of the mandate given to them by the voters; a mandate usually based on their electoral platform. If the public voted them in on the belief that they would cut a tax, they should cut the tax.

A government is, in a lot of ways, like a corporation (and I also realize that it's not like a corporation in many other ways). The duty of a CEO is to the corporation, not the shareholders. If what is in the best long-term interests of the corporation is detrimental to shareholders in the short term, the CEO must by law make the decision that it's in the best interests of the corporation. A CEO that panders to shareholders and hurts the company is just as culpable as a prime minister that panders to voters and hurts the country.

The CEO is usually given a mandate in terms of targets given to him by the board of directors who represent the shareholders. So in effect the CEO is always pandering to shareholders. If he/she didn't they would be fired by the board. If a CEO promised to cut costs and then turned around and decided it wasn't in the long term strategic interest of the corporation to do so, he/she could get canned for not following the instructions of the board.

Also, if you're arguing that politicians should follow the will of the voters, then I don't understand your first Churchill quote above. Churchill was exactly right - voters as a whole generally don't know what's good for them and also generally don't look at the long-term. That's why we elect people who do know (or at least in theory should be more informed) to make these decisions for us.

The quotes should be read together. Yes, voters aren't always bright bulbs. That's why politicians have a responsibility to put forward responsible policies in their platforms. This means not suggesting that you will cancel a helicopter which will create thousands of jobs and vastly improve the defences of the country. This also means that you should not propose a tax cut that virtually any grade 12 economics student could argue against.

However, there's also the real world. How many Canadians would vote for a platform stating that we should raise consumption taxes further and lower corporate and personal income tax or even preferably lower corporate taxes to zero eventually so that we can create tons of high-paying jobs in Canada.

If Chretien's cancellation of the EH-101s was bad for the country, then it was as bad of a decision as Harper's. The fact that a previous Liberal government made a bad decision doesn't excuse Harper's in this case. Two wrongs...

Never said it did. However, I was suggesting that these actions are no different. Why is anyone surprised that Ian Brodie would suggest the GST cut was a poor economic decision but one that helped elect them? I am sure if you ask Chretien's COS he would say the same thing about the EH-101 program. Some on here are suggesting that the Conservatives are the only ones who fall prey to these kinds of decision. I am suggesting that they are not the only political party that has had to make such compromises.

 

[Hank]

The government's job is to run the country within the bounds of the mandate given to them by the voters

I can see why you (and many people) would feel this way, but I fundamentally disagree. In my view, governments exist to run the country. If the voters are in favour of something that would hurt the country, then the government should ignore them.

If a CEO promised to cut costs and then turned around and decided it wasn't in the long term strategic interest of the corporation to do so, he/she could get canned for not following the instructions of the board.

He sure could, but he doesn't have a choice. The CEO has a fiduciary duty to the corporation. The CEO HAS to make decisions in the best interest of the corporation even if he knows he's going to get canned for it. Does this always happen in the real world? Obviously not, but that's the way the system is supposed to work, and it's supposed to work that way for a reason.

The quotes should be read together. Yes, voters aren't always bright bulbs. That's why politicians have a responsibility to put forward responsible policies in their platforms. This means not suggesting that you will cancel a helicopter which will create thousands of jobs and vastly improve the defences of the country. This also means that you should not propose a tax cut that virtually any grade 12 economics student could argue against.

However, there's also the real world. How many Canadians would vote for a platform stating that we should raise consumption taxes further and lower corporate and personal income tax or even preferably lower corporate taxes to zero eventually so that we can create tons of high-paying jobs in Canada.

Good points. Both decisions were likely bad for the country. I also agree that governments shouldn't lie to voters (if only to avoid complete disillusionment with the voting process). What's the solution? I'm not sure. That doesn't change my view that a government should always make decisions it thinks are good for the country.

I am suggesting that they are not the only political party that has had to make such compromises.

True, but just because it's happened before doesn't mean we should become blasé about it. Every single time it happens we should be just as mad.

 

[kEiThZ]

^ Correct me if I am wrong but I have always understood the CEO's fiduciary duty to the corporation to mean his/her duty to fulfill the mandates expressed by the board of directors to the betterment of the corporation. However, should there a fundamental conflict between the board and the CEO, the board would prevail. That's certainly what my engineering law professor taught me.

As to your view about democracy. We can agree to disagree. I think part of the reason there is so much voter apathy these days is because politicians do whatever they want when they get elected. That's why voters don't believe in the system. This has lead to an all round decline in civic interest. How many voters really took the time to inform themselves about the impact of the GST cut in the recent elections or the impact of the EH-101 cancellation nearly two decades ago? I don't think voters should be shielded from their poor decisions. Politicians should do what voters ask them to do. And voters should feel the consequences of those decisions. That would prompt a renewal of civic participation and improve confidence in our democratic systems. As it stands right now, Canadians are so cynical our civic participation is lower than most developing countries plagued with war, ethnic violence, poverty, etc. And those are problems that could return if Canadians continue not to care about the decisions our governments make....a lack of concern arising out of their cynicism of our self-centered politicians who think that every decision they make is the right one.

When Winston Churchill made those quotes he did not mean that voters should be over-ruled. He meant that democracy was not perfect but that it was the best system we had and that politicians should follow the will of voters even if voters make poor choices from time to time.

 

[lordmandeep]

of course politicians want to limit the public's interest in its affairs.


Think about it...

If voters have apathy they stay home, thus the number of people who votes goes down and this means special interest groups or loyal party followers get a much larger sway. It is known low voter turnout usually favours the incumbent party.




I would have to disagree with you Kieth, sure a politician breaks his promises but sometimes its for the best. Sometimes the majority is wrong and it has been wrong many times.

 

[afransen]

CPC electoral strategy for the past two elections has been to create apathy and antipathy toward politicians to drive down voter turnout. They won fewer votes in 2008 than 2006, but won because they managed to drive down support for other parties more. Something is profoundly wrong with an organization that will do such a thing.

Furthermore, it isn't just a matter of implementing a bad policy that will help a party get elected, it's considering a bad policy successful solely on the basis of its utility in electing the government.

I suspect that neither the GST promise nor the helicopter promise truly helped elect the LPC in 1993. The PCPC defeated itself. I think that more likely, those promises were made without due consideration of whether they were good policies, and there was pressure to fulfill those promises. The GST cut was abandoned because Ottawa would have been bankrupted by it.

 

[lordmandeep]

All I know its going to be a while till we see one party get a majority and keep power for a decade.

The Tories are not in such position , the Liberals are looking better everyday. However they will find it hard by having less cash.