Bill Bennett's austerity program has had long-lasting consequences
Former premier Bill Bennett has been the subject of glowing profiles in newspapers and on television since he died on Friday at the age of 83.
Premier Christy Clark has called the former Kelowna businessman "one of our greatest and most influential leaders". There's no denying that Bennett irrevocably changed B.C. by pushing for the development of the Coquihalla Highway, B.C. Place Stadium, SkyTrain, and the Vancouver Convention Centre.
Bennet has most often been described as a "builder" over the past three days. But as a young man coming of age in Victoria during the Bennett era, I can unequivocally state that I never felt that the premier was ever on the side of my city's residents.
When he fired thousands of civil servants during his restraint program in the early 1980s, it had a catastrophic impact on the local economy. I ended up moving to Winnipeg for nearly a year because I had so little hope in the future of my hometown.
The recession of that era had already led to the closure of the Gorge Road sawmill, which was a big employer. Tourism, long one of the lifebloods of the Victoria economy, was in the dumps. I could see the impact while working nights at a hotel desk. Another major employer, the University of Victoria, was starved for funding, leading to tuition hikes in the early 1980s.
Then Bennett decided to aggressively slash away at the provincial government, which was the city's largest employer, with an unprecedented austerity program.
His May 1983 budget called for reducing the provincial public service by 15 percent, from 47,000 to 40,000 employees.
In a 1988 paper published in Studies in Political Economy, political scientists Michael Howlett and Keith Brownsey suggested that Bennett's restraint program wasn't a sudden response to an economic crisis. They maintained that the premier's actions must be seen in the context of larger societal changes. From 1941, they wrote, the B.C. economy had been making a transition "from a relatively competitive economy to one dominated by large corporate concerns".
"This period witnessed the decline of many small- and medium-sized businesses in industries such as forestry and mining (which formed the province's economic base) and the development of a new economic structure dominated by large, mostly transnational capital," the political scientists stated. "During this transition period, the provincial class structure changed from one associated with a competitive resource economy to one shaped by a state-led, monopoly-controlled, resource economy."
They noted that this transition led to the expansion of a "large new middle class of civil servants and a large public-sector working class directly dependent on government employment".
Howlett and Brownsey wrote that the "new state-sector middle class and the public-sector working class" were supporters of the NDP. That's because it backed public-sector unionization and Keynesian spending programs to offset cyclical economic declines.
"When viewed against this background, the 1983 budget package cannot be seen as the result of a sudden conversion of the government to the ideology of neo-conservatism or the 'New Right'," the academics wrote. "Rather, the 'New Reality' must be seen as the continuation, albeit in heightened form, of the old reality of social conflicts inherent in the government's long-term economic policy of promoting capitalist resource development coupled with the short-term need of the government to maintain its electoral coalition."
As early as 1978, Bennett was urging other Canadian political leaders to reduce government spending to one percent less than the economic-growth rate for at least three years. Later that year, he created a Ministry of De-Regulation.
Howlett and Brownsey noted in their paper that Bennett was eager to subsidize big business. (One example was through a $400-million investment to launch a coal industry in northeastern B.C.)
However, as the economy slowed in the early 1980s, the government saw a decline in resource revenues because of falling commodity prices.
"While this revenue decline was not of crisis proportions in terms of the overall government budget, it did eliminate a substantial portion of the 'discretionary' funds available to the government to subsidize economic development," Howlett and Brownsey wrote.
The Bennett government's response was to slash social-service spending "to free up funds for the continued subsidization of the provincial economy".
Vancouver received a convention centre, a SkyTrain line, and a world's fair. The Interior resource industry benefited from the development of the Coquihalla Highway. A new road was built to Whistler.
Howlett and Brownsey also put the Bennett government's controversial legislative package into context. Twenty-three bills were introduced between July and November of 1983. Among other things, they "limited the powers of municipalities and regional districts, extended compulsory review of wage levels of organized workers, expanded management rights in the workplace, abolished rent controls, and dissolved the provincial Human Rights Branch".
It was disaster capitalism writ large.
In the view of Howlett and Brownsey, the Bennett government "made conscious choices that favored the members of its electoral coalition rather than those in the coalition of the opposition New Democratic Party".
"The government was quite clear about these choices, choosing, for example, between decreasing the number of provincial civil servants and building access roads to the Whistler Mountain Ski Resort, or between increasing funding for the handicapped and writing off $470 million of the accumulated debt of B.C. Rail, in both cases preferring the latter course of action."
The beneficiaries of these policies were often business people in mainland areas of B.C. whereas the losers were often public-sector workers living on Vancouver Island.
Is it any wonder that Vancouver Island continues to elect a large number of New Democrats in provincial elections whereas much of the mainland areas of the province tend to support the modern Socreds in the B.C. Liberal caucus? Only two of the 14 MLAs from the island are on the government side of the house.
The political divide has even fuelled a nascent Vancouver Island separatist movement promoted by those who don't feel that the B.C. government represents their interests.
This is a Bennett legacy that you likely won't read about in the Vancouver Sun or the Globe and Mail.