The Continuing Crisis
of Social Democracy:
Ontario's Social
Contract in Perspective
STEPHEN MCBRIDE
I
ntroduction
Conventional views of the choices available to social democrats counterpose
the pursuit of
power to ideological purity. In Canada such debates
have been endemic. Even commentators
sympathetic to a
radical ideology depict it as an obstacle to achieving power,
and hence to acquiring the ability to effect real change. I
The practical corollary is a perceived need to moderate a
party's image and program in order to achieve electoral success. In the historiography
of Canada's social democratic
parties the theme of a structural transition from "movement"
to "party" has often been associated with an ideological transition from "radical" to "moderate.'? Participants in the process, of course, might reject these dichotomies, saying the
purpose of gaining power was to change society for the better
in line with social democratic values. Nonetheless much of
the literature posits or implies a linear development from
radical movement to moderate party, with the process driven
by electoral imperatives.J
The early 1990s were kind to the notion that ideological
moderation could purchase electoral success. New Democratic Party governments were in office in Ontario, British
Columbia and Saskatchewan and thus governed some 52 percent of Canadians. All were led by determinedly moderate
leaders and had been elected on mildly reformist platforms.
By mid-decade, however, there were few optimists about
the future of Canadian social democracy. In part this was
Studies in Political Economy 50, Summer 1996
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Studies in Political Economy
due to public opinion polls that showed the Ontario and
British Columbia parties, in particular, to be deeply unpopular. In part it was due to the debacle of the 1993 federal
election, which saw the NDP reduced to 7 percent of the
vote and a rump of 9 seats (losing, -in the process, its status
as an official party within Parliament). The federal party
sank to even lower levels in opinion polls in the two years
following the election.
Electoral prospects aside, there are more fundamental factors underlying the mood of pessimism among party activists
and supporters or, increasingly, among former activists and
supporters. The exhaustion and failure of social democratic
economic analysis and policy is the most important of these,
a condition made clear by the Ontario NDP government's
social contract initiative of 1993. Before returning to that
example, the centrepiece of this study, the experience of
social democratic governments in office elsewhere in Canada
should be sketched to illustrate the problems the party suffered in consequence of the demise of Keynesianism. If during the Keynesian era the party did not set the world on
fire through radical reform, and if it occasionally alienated
groups of supporters, overall there were solid achievements
that entrenched its base of support. Social democratic policies were not particularly distinct from those implemented
by other political parties, but this did not precipitate conflict
with supporters. By contrast, under monetarism and neoconservatism the failure to develop a distinctive social democratic political economy has become a liability for the party
when in government and a source of disillusion for supporters.
The greatest social democratic success story remains Saskatchewan between 1944 and 1964. While this period coincided with the postwar boom and the adoption of Keynesianism by the federal government it was not an easy time
on the Prairies. Yet the CCF government managed to combine
fiscal caution with economic development and social reform,
winning widespread respect for its competence.' During Allan
Blakeney's government (1971-82) relations with the NDP's
base constituency were more problematic. The government's
"technocratic rationalism ... decisively eclipsed the traditional
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McBride/Social Democracy's Crisis
left-populist values of participation and local control,"> and
many trade unionists were alienated by the government's
acceptance of wage controls under the Trudeau government's
Anti-Inflation Programme of 1975. On the other hand, many
of the government's
province-building
activities could be
fitted under a social democratic rubric, and healthy resource
revenues meant that no fiscal crisis loomed during its period
in office.
In Manitoba, during Ed Schreyer's first term, a series of
progressive reforms were carried out in health care, welfare,
housing, and consumer and tenant protection.v However, little difference can be detected in the government's
revenue
and expenditure choices in comparison with those made by
other provincial governments, or even in comparison with
its Conservative predecessor.? Indeed, Schreyer's defeat has
been attributed to his government's
increasing conservatism.f This did not, however, deter the election, in 1981, of
another NDP government under Howard Pawley.
Pawley's government operated under the more adverse
circumstances
of the 1980s. It adopted an activist role in
economic development and attempted to deal with the effects
of the recession through provincial employment programs
and by maintaining social services. The mixture was recognisably social democratic but its implementation
proved
problematic under conditions of high interest rates and federal cutbacks in transfer payments. By the end of its term
in office, "[t]he NDP paradigm appeared to have come to
its limits ... there had not been a major extension of traditional
social democratic reforms or objectives. Nor had a tangible
or viable 'post-Keynesian'
social democratic
alternative
emerged. The defence of existing social programs and the
purposefully
counter-cyclical
fiscal strategy had exacted
high political and economic costs."?
In British Columbia the retrospective
view within the
NDP of Dave Barrett's government (1972-75) is that it went
too far too fast, thereby ensuring that it would have only
one term in office.' 0 In fact, the Barrett government had
established its credentials as a social democratic government
by increasing support for seniors, increasing welfare payments, and improving and expanding health services and the
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Studies in Political Economy
childcare system. It also established public auto insurance
and sought to curb property speculation through the Land
Commission. If these measures alienated business, however,
labour was similarly unhappy with reforms to labour relations. Nevertheless, the party's defeat in 1975 was largely
due to the consolidation of the right-wing vote behind Social
Credit rather than any loss of support among its own electoral constituency. The NDP percentage of the vote dropped
by only half a percent.
If the record of provincial social democratic governments
in the Keynesian era was generally unexciting, for the most
part they behaved in ways that satisfied their supporters.
This condition proved more difficult to achieve for the three
provincial NDP governments in the 1990s.
In British Columbia, the NDP government elected in 1991
introduced labour relations reforms, negotiated a form of
social contract that was acceptable to public sector workers,
and has maintained public services at higher levels than
might have been anticipated under either the opposition parties. Nonetheless, the government has adopted the rhetoric
and practice of the political right. It cracked down on alleged
"welfare cheats" and granted unconditional legitimacy to the
priority of deficit and debt reduction, apparently on the theory that "pandering more to the right" represents the route
to electoral success. I I As an electoral strategy, proclaiming
a balanced budget backfired disastrously
when a leaked
document disclosed Treasury Board advice that, "[ e ]ven
though the government has reduced the deficit and plans to
balance the budget, an Achilles Heel of the government's
sound fiscal record is the rapid and unsustainable
growth
in non-operating,
tax-supported debt resulting from capital
spending.vl- Thus Mike Harcourt's government risked falling into the trap of alienating many of its traditional supporters in its pursuit of a right-wing agenda, while failing
to attract support from the right - a dangerous game indeed .
.In Saskatchewan, the government of Roy Romanow has
adopted, and already achieved, the goal of balancing its budget.
Major spending cuts for universities, health care and municipalities have been matched by increases in regressive taxes.
This strategy was not electorally harmful; the Saskatchewan
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McBride/Social Democracy's Crisis
NDP was re-elected to government in 1995. But, as one
commentary on its record concluded, "if... New Democrats
in power have merely become Tories in a hurry, what's the
point?"13
This paper will argue that the problems of the Ontario
NDP, and those of British Columbia and Saskatchewan to
a lesser extent, result from a profound gap in the party's
capacity to understand the new economic circumstances
it
faces. The problem is, then, more than one of electoral opportunism and moderation. Lacking a theoretically coherent
account of contemporary capitalism the party, when in office,
seems doomed to replicate the policy objectives of its political rivals. Moreover, because policies based on such objectives undermine the political forces that have traditionally
supported social democracy, the prognosis for the survival
of a social democratic alternative is not good.
A Failure of Ideas In the 1930s and 1940s the socialist
aspect of the social democratic inheritance was externally
visible and internally legitimate. In the postwar era a process
of clarification 14 occurred which identified the CCF, and
subsequently the NDP, as parties of moderate social reform
whose ideological
roots increasingly
lay in the liberal,
Keynesian, and technocratic critique of unregulated capitalism rather than in a socialist critique of capitalism per se.
In such formulations lingering notions of class and class
conflict were much diluted, and often appeared as "problems" to be overcome, rather than central concepts by which
capitalist society might first be understood, then changed.
The abandonment of a class-analytic perspective eroded the
capacity to provide a distinctively social democratic account
of the political economy of capitalist society. "Eroded" is
used deliberately since the point here is not that social democracy became identical to parties of the centre and right
that also adopted Keynesian ideas, but merely that its distinctiveness diminished over time. IS
Parties of the centre and right also adopted many of
Keynes' ideas. This was seen both as electorally essential
and entirely consistent with an accumulation strategy for the
postwar world. One effect of the dominance of Keynesian ideas
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Studies in Political Economy
was to reduce the apparent differences between political parties. Indeed, the age of the "end of ideology" was confidently
announced. In retrospect it seems that commitment to Keynesianism by the other parties was quite contingent. Underlying
liberal Keynesianism
was a continued attachment to the
"common sense" of pre-Keynesian economic theory. Indeed,
at one level Keynes' own ideas were a modification of those
theories to fit a specific set of circumstances, rather than a
wholesale repudiation of them. In Canada, moreover, the
attachment
to Keynesian policy prescriptions
was more
qualified than in many countries - partly because state and
business elites were not enthusiastic supporters.lv and partly
because such policies were difficult to implement in a small,
open and regionally differentiated
economy permeated by
high levels of foreign direct investment. I?
Social democratic attachment to Keynesianism, however,
tended to be wholehearted.
For a lengthy period after the
war the crisis-free future, promised in some popularizations
of Keynesianism, was widely believed to have arrived. The
traditional constituency of social democracy also benefitted
in real ways from full-employment policies and a more comprehensive welfare state. Therefore, despite critiques from
the Left, both within and outside the party, that simple
Keynesianism was not the same as the earlier commitment
to replacing the capitalist system, the CCF and NDP were
resolutely Keynesian, as were many social democratic parties
in Western Europe.
The consequences of this history are that renewed economic crisis has been more disruptive for social democracy
than for ideologies with right-wing origins; there is no reason
to believe that this is about to change. To understand why
this has been true we need to trace social democracy's attachment to Keynesianism
and analyze its response to its
demise. The implications of its response can then be highlighted through an examination of the social contract imposed by the Rae government in Ontario.
Social Democracy and its limits If in the post-1945 years
traditional social democratic solutions to the ills of capitalism, such as public ownership appeared less relevant, social
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McBride/Social Democracy's Crisis
democracy nonetheless did propose an alternative logic. IS
It rejected the notion that profit maximization is the central
imperative of human existence and this principle served to distinguish it from right and centre parties that also subscribed
to the Keynesian package, though perhaps for more instrumental reasons.
Keynesian policy prescriptions envisaged an active state
manipulating the big levers of fiscal and monetary policy
(mostly the former) to ensure levels of aggregate demand
that would sustain full employment.J? Within this general
approach social democracy added an emphasis on satisfying
a variety of human needs through efforts to remove medical
and educational services from the market, and to provide
more adequate income maintenance
programs and social
services.
For social democratic followers of Keynes there were
some important, but, perhaps, unanticipated
side effects.
Keynesianism did not imply a more democratic approach to
economic management; rather it substituted the implementation of technical criteria and adjustments based on them
("fine-tuning"),
for overtly political judgements. Under these
conditions there was little need for mass mobilization; the
period witnessed declining mobilization and this had real
consequences.
Prewar social democrats sought to organize, mobilize, and
use working-class pressure. In part their activism may have
been triggered by competition with Communists for the loyalty of the working-class base to which both sought to appeal. This was certainly true when CCF activists participated
in, and in many cases led, labour organizing drives in the
1930s and 1940s. They advocated genuine and far-reaching
reforms without which mobilization would not have been
possible. A close connection thus existed between the organized base or constituency of social democracy and its
reform program. Sine 1945 both have atrophied. Mobilization has declined and so too has the commitment to significant reform of the system. Similar changes in European social democratic parties led Marcel Liebman, for example,
to characterise postwar social democracy as "reformist without reforms.t'-"
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The causes of the unravelling relationship between program and social base are undoubtedly complex. The most common social democratic explanation is that social change preceded ideological moderation and made it necessary. Others
draw attention to the role played by political parties in shaping class consciousness.U
In this view the deradicalization
of the party led to decreased working class mobilization;
the failure to generate socialist consciousness
in the good
years sowed the seeds of further failure once the crisis hit.22
In general, one can argue that the apparently technocratic
politics of Keynesianism facilitated a technocratic approach
to political processes. Outside election periods efforts to mobilize supporters declined and, with advances in electoral
technology and an increased reliance on electronic media
for campaigning, the decline spread even into the sphere of
electioneering.
As long as all major social actors remained
committed to the goals of Keynesianism, this had little substantive impact on social democracy's political base - after
all, politics was about how best to achieve the aims that
social democratic parties had adopted as their own. With
the onset of economic crisis all this changed. Business and
academic economists, and political parties of the centre and
right increasingly rejected Keynesian orthodoxy. In this situation an activist, highly mobilized social constituency might
have been an asset.
Moreover,
social democratic
parties began to adapt
Keynesianism to the new economic conditions and to work
out post-Keynesian
solutions to problems such as inflation.
Often, as happened with wage controls,23 post-Keynesian
solutions pitted social democratic governments against their
own supporters, thereby ensuring that any mobilization that
did occur was counterproductive
for social democratic parties.24 Thus, in contrast to prewar social democrats who
sought to mobilize the working class, social democrats in
the late Keynesian period found themselves the target of
workers' anger and sought to contain it.
The failure of the federal NDP to win office saved the
party from some of these dilemmas. Nonetheless, with NDP
governments in several provinces, the process appeared in
Canada, and cast doubt on the capacity of the federal party
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McBride/Social Democracy's Crisis
to handle economic issues. In addition, the NDP had to take
a position on a wide range of issues, such as the Constitution.
Although dominant issues in Canadian politics, they are not
"natural" issues for a social democratic party. The difficulty
had long been recognised. In 1970, for example, Ed Broadbent observed, "focus on the theme of unity and its representation as a constitutional problem has had the effect of
obscuring and even obliterating the class issue of equality. "25
In practice the party failed to develop a coherent approach
to constitutional issues and tended to trail the dominant elite
approach - that of Trudeau at the time of the patriation of
the constitution, and of Mulroney in the Meech Lake and
Charlottetown
Accords. The leadership's
endorsement
of
each of these initiatives was internally divisive-s and reflected a debate between advocates of a strong federal government and those favouring provincial rights. The 1990-92
debates especially represented the intrusion of neoconservative economic and social aims into a constitutional
debate
previously focused primarily on matters of language and cultural recognition as well as regional redistribution.Z?
Participation of NDP provincial premiers in the negotiations
resulted in a shift toward the "strong provinces" wing of
the party, at the expense of the one that favoured nationally
guaranteed social programs. The NDP leadership appeared
either to have been unaware of or unconcerned about the
contradiction. Nor does it seem to have extracted any concessions for its endorsement of the Charlottetown
Accord.
Daniel Drache 's analysis illustrates this well:
They were selling Mulroney's agenda, and it was a bad agenda.
And they were getting very little in return. The price for Charlottetown should have been no to free trade ... There was a kind
of absence of a bottom line for the NDP. They never seem to
come to these issues with policies that let them say, We get this
or we're out.28
As a result of its lack of clarity on these issues, the NDP,
federally and in Ontario, became trapped in an agenda and
discourse shaped entirely by others. Certainly the stances
that the party leadership adopted served to fracture the NDP
internally, along regional lines and on some occasions by
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Studies in Political Economy
gender as well. Faced with a coalition in disarray and lacking
a coherent vision of the future of social democracy, the NDP
leadership took refuge in "contentless populism.t'-? the Canadian equivalent of "reformism without reform." Canada
was not alone in having a social democratic party in trouble.
Debates occurred within many social democratic parties
about the future of social democracy. Advocates of alternative economic strategies that would turn the parties back
towards their radical roots contended with proponents of
post-Keynesian
economic policies that echoed the newly
dominant themes of restraint in government and greater reliance on markets. Indeed, debates of the 1980s echoed those
of earlier decades. In the British Labour Party, for example,
battles waged in an earlier period between the "Bevanites"
and the party's right-wing establishment-" were the precursor
of debates between the "Bennites'v! and the right-wing.
In 1983, the fiftieth anniversary of the Regina Manifesto,
the NDP issued a restatement of social democratic principles
suitable for the 1980s. The new Regina Manifesto was a
delicate compromise between various sections of the party.
Whitehorn-l- points out that this document is far more emphatic in its use of the term "socialism" than any other party
manifesto. It closed with the pledge that the party would
"not rest content until we have achieved a democratic socialist Canada," and overall represented "a return to a more
confident self image as a socialist party." Various other attempts were made in the 1980s to re-state social democratic
principles and solutions in a way that would be theoretically
convincing and electorally attractive.V Lacking a firm consensus around any of them, and locked into its own view
that moderation was all that would succeed electorally, the
leadership
continued to practice "contentless
populism"
through the 1988 election and beyond. The opportunism of
this policy in the context of the "free trade election" exemplified by Broadbent's failure to mention free trade in
his first election address and the conviction of his advisers
that "integrity" rather than policies were the issue - stimulated discontent within the party that spread beyond the tra-
ditional left caucus.v'
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McBride/Social Democracy's Crisis
Further efforts were made to devise a social democratic
alternative to the dominant neoconservative ideology following
the replacement of Ed Broadbent by Audrey McLaughlin. Strategy for a Full-Employment Economy: A Jobs Plan for Canada
from Canada 50 New Democratsi>
emphasized the party's
commitment to full employment, to be achieved through a
significant degree of state intervention in the economy, and
in which the enhancement of physical and social infrastructure would be a key government responsibility.
The document married post-Keynesian
rhetoric about creating a high
wage, high value-added economy through investment in human capital, and a traditional Keynesian commitment
to
make fiscal and monetary policy serve the party's top priority, achieving full employment.
But other combinations were possible and seem to have
had greater influence on the NDP in office at the provincial
level. The role of the state within "post-Keynesianism,"
as
within neoconservatism,
has been aptly described as the use
of "market reinforcing rather than market replacing" intervention.w There are differences, of course.J? Post-Keynesianism tolerates more state intervention and has a greater
interest in neo-corporatist partnerships. However, the context
of the state's enhanced role is set by the objective of supporting and promoting adjustment to the new realities of a
global economic system, just as it is for neoconservatives.
Much of this activity lies in facilitating technological adaptation, promoting human capital development through increased emphasis on training, and orchestrating partnership
between business, labour and government to pursue competitiveness. Paralleling this economic role is a restructuring
of social policy so as to link it to the requirements of a
capitalist labour market from which Keynesian-inspired
social programs are being removed incrementally.
Post-Keynesians
see the creation of neo-corporatist
institutions as central. In the postwar years corporatism was seen
as a means of sustaining full employment while restraining
inflation through voluntary wage controls. Today It has become a means of enlisting the support of key economic
agents in the drive for competitiveness.
Frequently training,
retraining and labour adjustment are identified as the policy
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Studies in Political Economy
areas crucial to increased competitiveness
and where the
fruits of partnership may be most productive.P Ontario's
attempt at introducing new partnerships to facilitate training,
industrial policy, and handle downsizing and adjustment
should be seen in this light.
At first glance post-Keynesianism
of this type would seem
to have little to do with social democracy. Nonetheless, the
intrusion of this combination of ideas into social democratic
ranks has become quite influential and has even received
its own label, "nco-socialism,"
supplied by the most outspoken proponent of the position, John Richards.J? "Neosocialists" have attempted a comprehensive re-alignment of
social democratic thinking because of their "shared frustration with the parochial thinking and practice of the Canadian
left."4o At the rhetorical level we find the following riposte
to the Regina Manifesto: "we must not only be prepared to
live with capitalism; we should welcome it where it contributes to the real wealth of the community.t's! At a more
mundane level the "nee-socialists"
challenge the traditional
social democratic preference for a strong federal state. In a
series of publications
Richards has advanced
a public
choice'l- rationale for decentralized federalism.v'
In a way
that is reminiscent of monetarist theory; labour is dismissed
as a "special group" that serves to block adaptation to market
forces.vl More importantly, Richards has called for the elimination of the deficit within the life-time of a single Parliament and for the welfare state to be reconfigured along familiar neoconservative
lines and methods. These included:
reducing the public-sector payroll by 5 percent; scrapping
the Canada Assistance Plan in favour of tax credits; workfare; reforming unemployment
insurance; and in general
making major spending reductions.
Similar themes are found in articles and speeches by others associated with the "nee-socialist"
tendency in social
democracy.
For example, Saskatchewan
MLA Pat Lorje
called for the reconsideration of many social democratic orthodoxies such as support for universal social programs and
unemployment
insurance, and opposition to free trade.t>
And, inside the Ontario NDP, during the run-up to the 1990
provincial election, the party sought to tap the economic
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McBride/Social Democracy's Crisis
advice of left intellectuals, some of whom like Chuck Rachlis, Riel Miller and David Wolfe would occupy influential
advisory positions when Rae formed a government. Though
the exercise proved inconclusive, most participants did reject
the party's Keynesian legacy and
the tenor of the ideas that were presented - with their emphasis
on wealth creation through training, cooperation and linking social programs such as welfare to the needs of the economy were remarkably similar to ideas already accepted on the right
and centre right.. .. they were articles of faith among both federal
liberals and the Mulroney Conservatives.46
The problem with these attempts to devise a post-Keynesian alternative that, for many, shares too much common
ground with neoconservatism,
is that it does not represent
a particularly social democratic response to the problems
of the 1990s. Some social democrats may accept these answers to current problems in lieu of an alternative. But they
are not social democratic answers. At best social democrats
claim to implement such solutions in a more humane or
socially conscious way: "The underlying reality is that the
economics of the public-service sector have changed as definitively as the fish stocks in Newfoundland.
What distinguishes us as social democrats is how we deal with it: humanely and with effectiveness.vt?
Such statements are limited in vision, and uninspiring. Moreover they provide little
ideological justification for supporting social democratic organizations at a time when social conditions increasingly
resemble those of the inegalitarian, class-divided societies
of the nineteenth century which served as a breeding ground
for socialist ideas.
Ontario's
Social Contract
Elected in September 1990, it
was soon apparent that the first NDP government in the
province's history had entered office in the midst of a major
recession. The party had not expected to win the election
and was ill-prepared to govern. Clear policy positions had
not been worked out. It had a general approach that can be
labelled the "pursuit of partnerships"
and the "pursuit of
competiriveness.v'f The approach owed much to the reports
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Studies in Political Economy
developed by Liberal David Peterson's Premier's Council.
It was applied most comprehensively
in developing new
structures to administer training (the Ontario Training and
Adjustment Board or OTAB). Other examples were the Ontario government's assistance to worker buy-outs and ownership at Algoma Steel and in Kapuskasing and efforts to
forge an industrial strategy for Ontario. Beyond this the government introduced social reforms in areas such as employment equity, minimum wages, and labour relations.
In its first budget, in April 1991, the new government
made a virtue of running a $9.7 billion deficit: "we had a
choice to make this year - to fight the deficit or fight the
recession. We are proud to be fighting the recession.t's? Although this sounded as though economic policy was still
informed by a Keynesian perspective, both critics and supporters overestimated the extent to which the NDP government was committed to counter-cyclical
budgeting: "only
$640 million of the deficit reflected new expenditures, while
the rest could be attributed to decreased revenues and ongoing commitments.v-"
The government perceived the economic and political
costs of this venture into deficit financing to be too high.
Persistent high real interest rates made the issue of debt
servicing loom large, and a steady barrage of criticism from
the financially orthodox, business and the media in particular, took its toll on a government lacking in experience, selfconfidence, and, most important, a clear vision of an alternative economic strategy.
During 1992 it became clear that the government had discovered the attractions of fiscal conservatism. Premier Rae
asserted his determination
to move close to a balanced
budget before the end of his term and public sector wages
and social spending were reined in accordingly. The length
of the recession seems ultimately to have created a deficit panic
and, following a government caucus meeting at Niagara-onthe-Lake in March 1993, the Rae government launched its
social contract initiative.
Rae had earlier rejected a proposal from Canadian Union
of Public Employees leader, Judy Darcy, to negotiate a modest social contract along the lines followed by the British
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McBride/Social Democracy's Crisis
Columbia government and its health sector workers. That
agreement had enabled restructuring to occur on terms relatively generous to workers.>! Instead Rae decided to resort
to the imposition of a far-reaching Social Contract on all workers in the broader public sector. This initiative marks the adaptation of Ontario's social democracy to neoconservatism's
agenda. It is true that the mode of implementing the agenda
was distinctive, consisting of a mixture of post-Keynesian
rhetoric and proposals
designed to elicit union consent
through involving them in neo-corporatists
discussions on
the future structure of the public service. Substantively, however, it was a "paradigmatic
event," with far-reaching implications for the future of social democracy in Canada, for
two reasons. 52
First, the exercise was coercive and involved setting aside
the provisions of negotiated collective agreements in the
public sector. Secondly, the Rae social contract represented
a qualitatively different approach to social contracts. Its goal
- deficit cutting through contraction of the public sector
- was identical to that of the neoconservatives.
Focusing
on the deficit and targeting the public sector as the party
primarily responsible for it are two of the hallmarks of neoconservatism.
All that remained of a distinctively
social
democratic approach to managing Ontario's political economy was the effort, unaccompanied by real dialogue, to enlist
public sector union support for the notion that cuts were
necessary. And, while Ontario's experience cannot automatically be taken as representative of Canadian social democracy as a whole,53 the easy slippage from social democratic
"recession-fighting"
to neoconservative
"deficit-fighting"
can serve as an indicator of how close social democratic
ideology stands to terminal decline.
Rediscovering
the doctrine of "sound finance": the Ontario Deficit The Social Contract formed part of a package
of measures designed to "ensure that the government [would
be] in a position to invest in Ontario's future, rather than
borrowing from it."54 Without drastic action the government
estimated that the deficit would rise to $17 billion rather than
its target figure of $10 billion. A key issue in the discussions
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Studies in Political Economy
between the government and the Public Services Coalition
(PSC), formed by unions and staff associations in the public
sector to oppose the Social Contract, was whether $17 billion
was or was not a realiable estimate. Holding the line at $10
billion for the moment, with further reductions to follow,
was deemed by the government to be essential "not just
because various external financial agencies say we should,
but because our responsibilities
to present and future generations of Ontarians demand that we must."55
The idea that budget deficits are a charge on, rather than
an investment in, future generations
is one that features
prominently in monetarist political economy. Within the Public Services Coalition credence was given to the view that
the government took its cues on deficit matters from business
organizations. 56 Certainly the NDP government approached
its expenditure reduction program in a way that made it
clear that permanent reduction of the public service, rather
than temporarily freezing expenditures, was what it had in
mind. While the government was prepared to unilaterally
cut some expenditures ($4 billion was to be axed in 'what
was termed the Expenditure Control Plan), it sought to n~gotiate an additional round of reductions, amounting to $2
billion, with public sector workers. The principles underlying
this effort at legitimation through participation and negotiation were presented, on April 23,1993, in the following
terms:
Real and enduring restraint is crucial to solving our fiscal problems. However, workers need assurances that the costs of restraint and restructuring are being distributed equitably across
society... Like the private sector, our public sector must adapt
to the modern imperatives for continuous updating and productivity enhancement ... In exchange for voluntarily restraining
compensation,
public sector workers will expect to enter into
long-term partnership arrangements for planning and implementing the future development of Ontario's public services.>?
Thus, the government argued, the $2 billion cut represented
by the Social Contract proposals could come entirely out of
jobs, entirely out of wages or, as in the Social Contract
proposal, occur through negotiation and "creative participation" of the "stakeholders.v'f
80
McBride/Social
Democracy's
Crisis
In the negotiations that followed, the coercive process
implemented by the government became a major issue, joining the size and significance of the deficit as a rock on
which the government's
expectations of union compliance
were to founder. The Public Services Coalition came to view
the offer of negotiations as symbolic, because the only matter
on which the government was prepared to negotiate was on
how cuts could be made, and even on that issue some felt
there was little flexibility.
The government's original proposals indicated the scope
of the sacrifices demanded: a 5 percent wage cut in each
of three years, to be achieved by workers taking 12 days
of unpaid leave annually; a 3 year wage freeze, including
freezes on merit pay, career progress, and cost-of-living allowances; a freeze on benefit improvements; a cut of 5 percent in entry level pay; and enhanced early retirement measures with public sector employers making available 1 percent
of payroll for adjustment purposes. 59 Later versions of the
government's
proposals, for example the draft Social Contract Framework Agreement released on May 26, became
less specific about the way the $2 billion reductions might
be achieved. Later still, as an inducement to unions to reach
agreements, the target was lowered to a potential $1.6 billion
with the reductions to be applied only in sectors where an
agreement had been reached. In whatever version, the proposals represented a major assault on the pay packets of
public sector employees and were an exercise predicated on
the government's
view of the likely size of the deficit and
the implications of running a deficit at that level.
The themes of achieving fiscal responsibility through expenditure restraint were prominent in the Budget Speech of
May 19, 1993: "we cannot build a solid and sustained economic recovery if we do not take firm action on the public
debt."60 Floyd Laughren, the provincial Treasurer, focused
on reduced spending rather than increased taxes: "For every
dollar in new taxes we have found almost four dollars in
savings and reduced costs ... For the first time since 1942,
our operating spending will actually decline this year."61 To
this end the Expenditure Control Plan cut government costs
by 10 percent,
reduced the number of ministries,
and
81
Studies in Political Economy
trimmed the size of the public sector by 3,800, in addition
to 1,200 positions that had already been eliminated. Savings
realised from the social contract were rationalized in terms
of 20,000 to 40,000 jobs that would otherwise be lost or at
risk.
Although the measures were surrounded by a rhetoric of
job protection, fairness and equity, few in the Public Services
Coalition (PSC) saw much difference between what was being proposed and measures introduced in other jurisdictions
by neoconservative
governments. The coalition sought unsuccessfully to shake the government's newly acquired obsession with the deficit and its attachment to "sound finance." An alternative economic strategy, based on making
unemployment
rather than the deficit the top priority, was
drafted by the PSC.62 In the Coalition's view, slashing the
deficit along lines proposed by the government would cause
more unemployment, with negative effects on revenue, and
would hinder achievement of deficit reduction targets. The
Coalition proposed a mixture of cost savings and revenue
increases to realise what it felt was a more reasonable target
of deficit reduction and went on to make the point that: "If
we are seriously to engage in these discussions, the agenda
must include government revenue as well as the total picture
of public service delivery." This early formulation of the
Coalition's position thus identified two key issues: the adequacy of the government's
deficit projection and, as a test
of its sincerity in wishing to negotiate a social contract, its
willingness to broaden the scope of negotiations to include
the whole economic picture.
Premier Rae's initialreaction
to the PSC's alternative proposal was diplomatic but not encouraging: "the severity of
our financial situation does not permit a halting of necessary
management and program measures already announced. "63
In other words the $4 billion cuts under the Expenditure
Control Program would continue. Michael Deeter, the government's chief negotiator in the social contract talks, made
it clear on May 12 that the $4 billion in expenditure cuts
and $2 billion wage target were not open to negotiation.
The following day he was even more explicit in presenting
the government's
response to the Public Services Accord.
82
McBride/Social Democracy's Crisis
Taxation policy was not up for discussion. Further, it was
"not necessary to have a debate on the nature of the economy
and the government's views of the economy ... Philosophical
discussions about principles are not going to get us very
far."64 The government did express some interest in Coalition
ideas about detecting waste and inefficiency in the public
service, but it became apparent during subsequent discussions that not all the savings so identified could be applied
against the $2 billion social contract target. These exchanges
clarified the government's view of the matters negotiations
could touch upon.
The Coalition promoted discussion of an Infometrica Report that the Canadian Union of Public Employees (CUPE)
had commissioned.
Judy Darcy, CUPE National President,
claimed that the report showed that the government was making "insupportably pessimistic assumptions" about future interest rates and government revenues: "The government's
projections are so far out of line with other reputable forecasts that they call into question the entire government analysis and the harsh restraint measures that rest upon it."65
These conclusions seemed to be confirmed by research done
at the Institute for Policy Analysis, of the University of
Toronto. Within the Coalition, the Ontario Confederation of
University Faculty Associations (OCUFA) lobbied strenuously for the Coalition to expose the shaky theoretical and
empirical basis for the government's proposals. This pressure
was successful in forcing a confrontation between economists representing the Coalition and their counterparts in
government employ.
The Coalition statement released after this confrontation
is noteworthy because it summarises the depth of distrust
of the government that had developed as well as dealing
with the substantive issue of whether cuts on the scale proposed by the government were really necessary. The PSC
charged the government with running a deliberate disinformation campaign:
Their deficit projections are wrong, their interest rate projections
are wrong, and their revenue projections are wrong ... Government
economists, when asked to indicate whether the PSC's projections
were incorrect, neither refuted nor rebutted the Coalition's analysis.
83
Studies in Political Economy
The government admitted that its interest rate assumptions were
based on extreme worst case scenario's.
A Coalition spokesperson said that "we are being forced to
the social contract table with a gun to our heads to solve a
problem that is largely invented ... we are the victims of gross
political manipulation.t's''
The inability of government economists to substantiate
the government's economic case, or to rebut the Coalition's
alternative arguments was a key factor in OCUFA's decision
to withdraw from the Social Contract sectoral talks; this
move preceded by only a few hours a similar decision by
the entire Coalition. The validity of the government's
economic stance was one factor in the decision. We now turn
to consider another, the attack on free collective bargaining
represented by the Social Contract proposals and the manifestation of government intentions in the negotiating process
itself.
Collective Bargaining and the Social Contract Negotiating Process In seeking consensus about the necessity for
cuts and the best means of implementing them, the government used a standard brew of threat, inducement and exhortation. The attempt proved counterproductive,
however,
as participants came to perceive the process as one of cynical
manipulation on the government's part. This perception grew
because the threats - agree to the Social Contract or suffer
between 20,000 and 40,000 public sector layoffs - were
simply not tolerable from a nominally social democratic government which most of the unions involved, or at least the
activists in those unions, had worked to elect. The inducements of reforms to collective bargaining and partnership
in various neo-corporatist arrangements were insufficient to
compensate for the draconian measures imposed under the
Social Contract and the Expenditure Control Plan.
The Rae government had gained much credit in labour
circles for its reform of the Ontario Labour Relations Act.
Promises to move public sector collective bargaining toward
the OLRA model did, therefore, have considerable attraction.
This was offset by the reality that any reforms would have
84
McBride/Social
Democracy's
Crisis
no impact during the three years the Social Contract was in
effect and that the post-Social Contract starting point would
be inferior to the status quo. On the same day that it introduced legislation imposing the Social Contract, the government also moved to reform the Crown Employees Collective
Bargaining Act by extending the right to strike to public
employees.s? Extending the right to strike, and simultaneously removing it for a three year period, in many ways
typify the Orwellian symbolism of much of the Social Contract process: a contract, unilaterally imposed by one "partner," and sectoral agreements deemed to have been made
even if none of the parties had signed them.
Besides the process, the content of the proposals and,
subsequently, the legislation, undermined the possibility of
union agreement. The essence of the union position was outlined early in the process:
The public services labour coalition believes that what the Ontario government has offered us is not a social contract... The
government is demanding a package of significant wage and
benefit restraints of public service employees and the suspension
of our free collective bargaining rights, in exchange for delivery
of items many of which have already been promised to us and
to all the people of Ontario generally... The package is silent
on the question of what the government expects from or intends
to give the other "partners" in the economy. For example corporations, banks and other private sector employers as well as
private sector unions have been left out of the proposed agreement. This creates an enormous credibility gap in any attempt
by the government to call this a social contract. The government
announced its proposals in conjunction with a comprehensive
package of public service cutbacks that will significantly curtail
and compromise the quality and level of public services received
by the people of Ontario. The government has created an extremely threatening context as a backdrop for the "social contract" discussions... The "social contract" package contained an
explicit threat of huge numbers of layoffs if the coalition members did not accept the government's terms. In short, this is not
an agreement that has freely been entered into by the parties;
there is no agreement on the goals, objectives or processes; and
the scope is too limited.68
Later assessments of the legislation tended to confirm
this initial reading of the proposals. Journalist Thomas
85
Studies in Political Economy
Walkom has argued that the Social Contract was one of the
toughest anti-union laws the province had ever seen:
If workers don't agree to have their wages cut, the government
will punish them for not agreeing - by nicking then for an
extra $400 million, or about $420 a head ...The fail safe element
of the Ontario law would give individual public sector employers
the right to open up agreements with their employees and take
away specific items.ev
Similarly,
the firm of labour lawyers,
Sack Goldblatt
Mitchell, prepared a client assessment that concluded that
the legislation constituted "a significant interference in free
collective bargaining, the interest arbitration process, and
the enforcement of freely negotiated or arbitrated collective
agreements." The report identified 16 specific elements of
the bill which infringed on collective bargaining and would
be of major concern to union clients; outlined four reasons
for questioning whether the act conformed to international
law (ILO Convention No. 87 concerning Freedom of Association, to which Canada is a signatory); 70 and, in line with
the critique of the government's Orwellian actions advanced
earlier, noted that the purpose of the Job Security Fund established under the legislation "is not to provide for job
security, but instead to provide payments to employees who
are released from employment by their employers, and payments to employers for purpose of extending the employment
of employees who will be released from employment by the
employers. "71
One of the more notable features of the legislation was
the amount of discretion left in the hands of the Minister
of Finance. An OCUFA document provides a useful summary:
The Minister has the power to change the sectors, add subsectors,
and determine who is in them. He sets the expenditure reduction
targets for both sectors and the employers in them, and determines whether targets should be lowered for employers where
there is a sector agreement. The Minister determines who the
bargaining agents are and what restrictions shall be placed on
the recognition of certain parties as bargaining agents. He decides whether a plan relating to a sector should be designated as
a sectoral framework. The Minister has the discretion to override
86
McBride/Social Democracy's Crisis
the criteria laid out in the act for a plan to constitute a sectoral
framework, if he feels there are "special circumstances"
which
would dictate this. These criteria include ... the protection of employees earning under $30,000, provisions to minimize job loss,
and redeployment, training and adjustment programs. The Minister may require employers in any sector to implement a redeployment plan which has been established by the Minister.72
While Leo Panitch and Donald Swartz are correct in their
argument that "what distinguished the NDP's attack on trade
union rights ... was the particularly perverse and dangerous
fashion in which it attempted to conceal coercion as consent,"73 what is perhaps most surprising, is the government's
belief that such measures could be camouflaged successfully.
Political Fall-out The Social Contract caused major internal
conflict within the NDP and the labour movement, as well
as between the party and the trade unions. Within the party,
federal finance critic Steven Langdon was dismissed from
his post after publishing "An Open Letter to Bob Rae." The
letter accused the Rae government of having an unjustified
preoccupation with the deficit, and of acting coercively towards the unions: "Your government's strategy has been to
announce a whole set of non-negotiable decisions that will
eliminate up to 11,000 jobs, and to narrow the areas for any
real negotiation so entirely as virtually to force a collapse
of these discussions." And the man who had nominated Rae
as Leader of the Ontario NDP, former MPP Mel Swart, called
for his resignation because Rae had "undermined, torn apart
and trampled on the basic principles, policies and integrity
of the NDP causing its members and supporters to turn
away."74
In protest against the social contract, prominent labour
representatives
resigned from bodies like the Premier's
Council on Economic Renewal.Z> Leading unions such as
CUPE adopted resolutions modifying their pattern of support
for the party. The CUPE resolution stated that the union
"will not support the re-election of any of the 66 members
of the Ontario NDP caucus who voted in favour of the social
contract legislation.v/s
The Ontario Federation of Labour
87
Studies in Political Economy
resolved that it would not support the NDP in the next provincial election unless the legislation were repealed.??
The resolution resulted in a split between public and privatesector unions, although the biggest private-sector union, the
Canadian Autoworkers (CAW) joined the public-sector unions
in condemning the Ontario NDP. A number of private-sector
unions (including the Steelworkers [USWA] and the Food
and Commercial workers [UFCW]) indicated their continued
support for the NDP, although they were critical of the Social
Contract legislation. They considered that the alternatives
were certainly worse. Their position lent tacit support to the
argument that public-sector
sacrifice was necessary, given
what had happened to the private sector.Z"
A further sign of division and weakness was the failure
of the public-sector unions to organize mass mobilization
against the legislation. To minimize the impact of the legislation on their members, most of these unions finally
signed some form of agreement. This was an understandable
tactical decision that reflected the difficulty of coordinating
a large and diverse coalition and the rather passive tradition
of many of its member organizations.
Conclusions The extent of the alienation felt by NDP supporters was revealed by the election in June 1995. A social
democratic government has been tried in Ontario and found
to be bankrupt of any ideas, save those espoused by its neoconservative and post-Keynesian rivals.Z? Because it lacked
a social democratic alternative, the Rae government found
itself a prisoner of the hegemonic ideas. The government's
justification
for its actions is essentially the same as that
advanced in Mrs Thatcher's famous line - "There is no
alternative." It claimed a new reality had imposed its inexorable logic on governments of all political persuasions. To
this it added the calculation that the electorate would reward
only those parties in tune with the new reality. The tough
stance taken towards the deficit and public employees is
also a continuation of the NDP's long-standing pursuit of
"moderation,"
a political position that continuously adapts
its platform to the presumed temper of the times. Thus, the
behaviour of the Rae government might be ascribed to a
88
McBride/Social
Democracy's
Crisis
combination of "inevitablism" and "opportunism."
Far from
bringing about the brave new world of "social democracy
without illusions," the Rae government has produced a social
democracy of disillusionment
and despair.
The opposition to the Social Contract, and the crisisdriven efforts of the Public Services Coalition to construct
an alternative economic package, indicate that a vision of
an alternative political economy persists. The tasks facing
those who would promote such an alternative seem daunting
indeed. Yet, the Social Contract episode demonstrates that
the option of electing a government that lacks an alternative
conception of how to manage the economy is futile. Given
the significance of Ontario within Canada, and the fact that,
although the Ontario NDP's actions may be more extreme
than those of the other provincial NDP governments,
the
same general drift in governmental priorities is observable
in those jurisdictions,
a worst-case generalization may well
be appropriate. The word "crisis," though overused, carries
with it the connotation of a "turning point," which may be
for better or for worse. In this sense the Ontario Social Contract may be said to have precipitated or crystallized a crisis
in Canadian social democracy.
Notes
I would like to thank Marjorie Griffin Cohen, Sam Gindin, Henry Jacek,
David Laycock, Rianne Mahon, Leo Panitch, Lukin Robinson, Saul Ross,
John Shields, James White and Alan Whitehorn for comments on earlier
drafts of this paper; Greg Albo, Neil Bradford and Bill Carroll for their
valuable critiques of a more recent draft; and Jane Jenson for her rigorous
editorial suggestions.
1.
2.
3.
For example, Walter Young, The Anatomy of a Party: The National
CCF, 1932-61 (Toronto: Univ. of Toronto Press, 1969).
For example, L. Zakuta, A Protest Movement Becalmed (Toronto:
Univ. of Toronto Press, 1964); Young, The Anatomy of a Party ... ;
M.Cross, The Decline and Fall of a Good Idea: CCF-NDP Manifestos,
1932 to 1969 (Toronto: New Hogtown, 1974).
Alan Whitehorn,
Canadian Socialism:
Essays on the CCF-NDP
(Toronto: Oxford Univ., 1992), Chps. 1-3. Whitehorn presents the
revisionist view that organizationally
the CCF was always more of
a party than a movement and that there is as much evidence of ideological continuity as of change.
89
Studies in Political Economy
4.
5.
6.
7.
8.
9.
10.
II.
12.
13.
14.
15.
16.
17.
18.
19.
90
See Ivan Avakumovic, Socialism in Canada: A Study of the CCF-NDP
in Federal and Provincial Politics (Toronto: McClelland, 1978), Ch. 6.
Christopher
Dunn and David Laycock, "Saskatchewan:
Innovation
and Competition
in the Agricultural
Heartland" in Keith Brownsey
and Michael Howlett (eds.), The Provincial State: Politics in Canada s
Provinces and Territories (Toronto: Copp Clark Pittman, 1992), p.
221.
See Rand Dyck, Provincial Politics in Canada, 2nd ed. (Scarborough:
Prentice Hall, 1991), pp. 391-6 for an overview.
James McAllister, "The Fiscal Analysis of Policy Outputs," Canadian
Public Administration
(Fall 198 I).
Harold Chorney and PhiIlip Hansen, "Neo-conservatism.
social democracy and 'province building': the experience of Manitoba," Canadian Review of Sociology and Anthropology
22 (1985).
Alex Netherton, "Manitoba: The Shifting Points of Politics, A NeoInstitutional Analysis" in Brownsey and Howlett (eds.), The Provincial State, p. 98.
Marjorie Griffin Cohen, "British Columbia: Playing Safe is a Dangerous Game," Studies in Political Economy 43 (1994), p. 150.
Cohen, "British Columbia," p. 149.
British Columbia Report 6 March 1995, p. I I.
Phillip Hansen, "Saskatchewan:
The Failure of Political Imagination,"
Studies in Political Economy 43 (1994), pp, 166-7.
I use the term "clarification"
advisedly - clearly it is possible to,
and perhaps this paper does, exaggerate the extent to which early
CCF programs were based on a class analysis of Canadian capitalism.
Thanks are due to James White and Alan Whitehorn for reminding
me of this in emphatic terms. On the connection between the CCFNDP and class see Janine Brodie and Jane Jenson, Crisis. Challenge
and Change: Party and Class in Canada, Revised ed. (Ottawa: Carleton University Press, 1988).
Remnants of a class analysis remained, but these tended to find expression in populist forms. In Canada this tendency was no doubt
accentuated by the agrarian heritage of the CCF.
See Robert Campbell, Grand Illusions: The Politics of the Keynesian
Experience in Canada. 1945-75 (Peterborough:
Broadview, 1987) and
idem, The Full-Employment
Objective in Canada, 1945-1985 (Ottawa:
Economic Council of Canada, 199 I).
Neil Bradford and Jane Jenson, "Facing Economic Restructuring
and
Constitutional
Renewal: Social Democracy"
in Frances Fox Piven
(ed.), Labor Parties in Postindustrial Societies (Oxford: Polity, 1991).
Adam Przeworski, "Class, Production and Politics: A Reply to Burawoy," Socialist Review 19 (1989), p. 10. The view that public ownership was a necessary instrument has been criticized as an unduly
restrictive conception of socialist transformation,
notably by Gosta
Esping-Andersen.
For a useful discussion of the contrasts between
Przeworski and Esping-Andersen
see Thomas A. Koelbe, "Social Democracy between Structure and Choice," Comparative
Politics 25
(1992), pp. 359-72.
Stephen McBride,
Not Working: State, Unemployment
and NeoConservatism in Canada (Toronto: Univ. of Toronto, 1992), Ch.3 for
McBride/Social Democracy's Crisis
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
a more detailed account of the Keynesian paradigm and some of its
rivals.
Marcel Liebman, "Reformism
Yesterday and Social Democracy Today" in Ralph Miliband, John Saville, Marcel Liebman and Leo
Panitch (eds.), Socialist Register 1985/6: Social Democracy and After
(London: Merlin, 1986), p. 12.
Adam Przeworski and John Sprague, Paper Stones: A History of Electoral Socialism (Chicago: Univ. of Chicago, 1986), p. 9.
Leo Panitch "The Impasse of Social Democratic Politics" in Miliband, Saville, Liebman and Panitch (eds.), Socialist Register 1985/6.
See, for example, Leo Panitch, Social Democracy and Industrial Militancy (Cambridge: CUP, 1976).
Public sector unionism rendered relations between social democratic
governments
and trade unions far more complicated
than they had
been in days when unionism was confined to private sector workers
whose demands had no direct impact on state budgets.
Ed Broadbent,
The Liberal Rip-off: Trudeauism vs. the Politics of
Equality (Toronto: New Press, 1970), p. 15.
See, for example, Whitehorn's
account of the internal aftermath of
the 1982 Constitution in Canadian Socialism, pp. 193-4.
On this, see Stephen McBride and John Shields, Dismantling
a Nation: Canada and the New World Order (Halifax: 1993), especially
Chp.3.
Quoted in Ian McLeod, Under Seige: The Federal NDP in the Nineties
(Toronto: Lorimer, 1994), pp. 78-9.
Bradford and Jenson, "Facing Economic Restructuring ... " p. 207.
Taking their name from Aneurin Bevan, whose resignation from the
1945-51 Labour cabinet over its decision to impose prescription
charges under the National Health System crystallized left opposition
to the rightward drift of social democracy at that time.
After Tony Benn.
Whitehorn, Canadian Socialism, pp. 13, 64.
Bradford and Jenson, "Facing Economic Restructuring ... ." pp. 206209.
Arguably the failure of the NDP to make the free trade issue its own
can be traced to the expulsion of the Waffle a decade and a half
earlier. See Rianne Mahon, "The Waffle and Canadian Political Economy," Studies in Political Economy 32 (1990), pp. 190-1. More generally, even the Waffle's opponents came to realise that "When the
Waffle left the NDP, most of the brains left with them," David Lewis
cited by Reg Whitaker, "The 20th Anniversary of the Waffle: Introduction," Studies in Political Economy 32 (1990), p.170.
New Democratic Party, Strategy for a Full-Employment
Economy: A
Jobs Plan for Canada s New Democrats (Ottawa: 1992).
Michael Howlett and M. Ramesh, "The Limits of Post-Keynesianism:
Lessons from the Canadian Experience," Political Science 45 (1993).
Andrew F. Johnson, "Neoliberalism:
The Ideology of the Canadian
and Australian Welfare States in Transition," Journal of History and
Politics 8 (1990).
This strategy had been dubbed the "progressive
competitiveness"
model. It is effectively critiqued and accurately situated as a subsidiary
element in what I term neoconservatism,
in Leo Panitch, "Globalisation
91
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Studies in Political Economy
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
92
and the State," and Greg Albo, '''Competitive
Austerity' and the Impasse of Capitalist Employment Policy," in Ralph Miliband and Leo
Panitch (eds.), The Socialist Register /994: Between Globalism and
Nationalism (London: Merlin, 1994).
See Patricia Best, "The Chastened Socialists,"
Globe and Mail 30
April 1994. The neo-socialist group identified in the Globe and Mail
article includes both chief negotiators for the Ontario government in
the social contract talks, Michael Deeter and Peter Warrian, and Saskatchewan Minister of Finance, Janice MacKinnon.
John Richards, Robert D. Cairns and Larry Pratt (eds.), Social Democracy Without Illusions: Renewal of the Canadian Left (Toronto:
McClelland & Stewart, 1991), p. 7.
Henry Milner, "What Canadian Social Democrats Need To Know
About Sweden and Why" in Richards, Cairns and Pratt (eds.), Social
Democracy
Without Illusions, p. 61.
Although public choice analysis may not inevitably lead to neoconservative conclusions the fact that it is built upon neoclassical
economic assumptions,
including methodological
individualism,
means
that it usually does. See Peter Self, Government by the Market: The
Politics of Public Choice (Boulder: Westview, 1993).
See, for example, John Richards,"The
Social Policy Round" in William G. Watson, John Richards and David M. Brown, The Case for
Change: Reinventing the Welfare State (Toronto: C.D. Howe, 1994),
pp.51-2.
See Neil Bradford, "Ideas, Intellectuals,
and Social Democracy in
Canada" in Alain G. Gagnon and A. Brian Tanguay (eds.), Canadian
Parties in Transition (Toronto: Nelson, 1989).
See the Globe and Mail 16 August 1994; and 20 September 1994.
Thomas Walkom, Rae Days (Toronto: Key Porter, 1994), pp, 94-5.
Peter Warrian, head of the Ontario Public Sector Labour Market and
Productivity
Commission,
quoted in the Globe and Mail 30 April
1994.
Outlined most cogently in "Budget Paper E - Ontario in the 1990s:
Promoting Equitable Structural Change," which was part of Ontario,
Ministry of Finance, Ontario Budget /99/ (Toronto: Queen's Publisher, 1991).
Floyd Laughren in Ontario, Ministry of Finance, Ontario Budget /99/
(Toronto: Queen's Publisher, 1991), p. 3.
George Ehring and Wayne Roberts, Giving Away a Miracle: Lost
Dreams. Broken Promises and the Ontario NDP (Oakville: Mosaic,
1993), p. 304.
Walkorn, Rae Days, pp. 132-3. NDP provincial governments are thus
somewhat differentiated
in their approach to labour.
See also Leo Panitch and Donald Swartz, The Assault on Trade Union
Freedoms (Toronto: Garamond, 1993), pp. 170-2.
On this point Panitch and Swartz argue that the BC and Saskatchewan
governments "did not evince a sufficiently different practice to deflect
a general sense of crisis in political strategy pervading the whole
labour movement," in The Assault on Trade Union Freedoms, p. 179.
Ontario, Ministry of Finance, Ontario's Expenditure
Control Plan,
(Toronto: Queen's Printer, 1993), p. I.
McBride/Social Democracy's Crisis
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
Ontario, Ministry of Finance, Jobs and Services: A Social Contract for
the Ontario Public Sector (Toronto: Queen's Printer, 1993), p. I.
A view fuelled by reports in the media. For example, Mac/eans (3
May 1993) reported that "Rae and other premiers were persuaded
by representatives
of the Business Council on National Issues (BCN!)
that their spending threatens to destroy Canada's economy, reputation
and social programmes."
Ontario, Jobs and Services, pp. I 1-2.
Ibid., 5.
lbid., 8.
Ontario, Ministry of Finance, Press Release, 19 May 1993.
loc. cit.
Public Services Coalition (PSC), "A Public Services Accord," 1993,
mimeo.
Letter to the Public Services Coalition, quoted in Ontario Confederation of University Faculty Associations (OCUFA), Internal Memorandum 12, "Government
Will Discuss Accord at Central Table," II
May 1993.
OCUFA, Internal Memorandum
14 "Government
Responds to Accord," 13 May 1993.
Canadian Union of Public Employees, Press Release, 14 May 1993.
Both quotations are from the Public Services Coalition, Media release,
"Exploding the Exploding Deficit Myth," 2 June 1993.
Panitch and Swartz, The Assault on Trade Union Freedoms, p. 175.
PSC, "A Public Services Accord," p. 3.
Toronto Star 15 June 1993.
In fact the ILO rejected the complaint launched by the Canadian
Association
of University Teachers and the Canadian Labour Congress against the social contract legislation. This may tell us more
about the ILO than about the legislation.
Sack Goldblatt Mitchell, "Client Memorandum
Re: Social Contract
Act, 1993 (Bill 48)," pp. 33-4.
OCUFA, The Social Contract Act, 1993 (Toronto: 1993).
Panitch and Swartz, Assault on Trade Union Freedoms, p. 162.
Toronto Star 30 October 1993.
Globe and Mail 20 August 1993.
The Leader January-February
1994.
Ontario Federation of Labour. Labour's Relationship
with the New
Democratic Party When the NDP is in Government (Toronto: 1993).
Special Caucus of Unions Affiliated to the Ontario Federation of
Labour, "Political Action and the NDP," 22 November 1993, mimeo.
Those wishing to offer a partial defence of the government's
record
can cite the reform of the Ontario Labour Relations Act and the
financial assistance rendered to worker buy-outs of enterprises threatened by plant closure, such as Algoma Steel. Such actions account
for continued support of the NDP by many private sector unions,
notably the Steelworkers.
However, both these examples may be said
to stem from the early period of the government's
term, before the
"conversion" to orthodox economics was apparent. Further, the OLRA
reform was a much watered-down
version of what had originally
been envisaged and it is by no means unknown for right-wing governments to bailout
firms facing collapse.
93