Neoliberal policy path has made things worse for Canada

(Oleksandr Rybitskiy/Shutterstock)

Most people would probably agree 2020 has been a tire fire of a year. A lot of that comes from the coronavirus, but part of it also comes from issues that have been building for a very long time.

The federal government had to borrow a colossal amount of money as part of its relief efforts to keep people from losing their livelihoods and provide medical care. It’s also had to order and import a vaccine developed in a foreign country. I can’t help but wonder how much lower those deficits would be if previous governments hadn’t repeatedly cut taxes, especially for the purpose of “tightening the screws” and making it harder for Ottawa to do anything, as political scientist Tom Flanagan claimed. I also wonder whether we could have gotten access to a vaccine faster if we had more local production here in Canada.

These issues are part of the same neoliberal policy path Canada has been following for nearly 40 years. It’s based on the writings of economists like Milton Friedman and Friedrich Hayek, who claimed that unregulated markets should dominate, and that governments and other entities should just ‘get out of the way’. Friedman went further and said businesses don’t have any responsibilities except to make as much money as possible for their shareholders.

Following their advice, Canada signed free trade deals, continually cut taxes further and further, and allowed more and more of its economy to be bought up by foreign ownership. The results? Canada’s lost valuable companies that help provide good paying-jobs and capacity to make things locally (like vaccine research), more and more Canadians have trouble meeting ends meet, and when we face huge crises like COVID that demand governments act, they’ve had to borrow huge amounts of money to do it.

In short, the neoliberal policy path has made things worse for Canada, and its problems have been simmering for decades. We’ve spent so much time ridiculing the idea that public government action can actually be helpful that when it’s necessary, like with the pandemic, we have trouble actually implementing it.

This isn’t to say that we need to nationalize everything and make it all public. Private enterprise has a valuable role to play, but idolizing it the way Friedman and Hayek did leads to the problems we have today. R.B. Bennett, our Prime Minister during the 1930s, said that ‘capitalism needs to be the servant, not the master’. You don’t need to be a Marxist to think so — Bennett himself was a multimillionaire businessman.

Sometimes taxes and spending need to be increased, sometimes they need to be cut. But there should always be a healthy balance between public government actions and private business action. It’s arguably created the greatest benefits for the greatest number of people, as we saw after the Second World War.

If the pandemic offers any lessons, maybe it’s that we need to reconsider the path Canada’s been following for the last four decades.

Originally published at on December 30, 2020.



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Jared Milne

Passionately devoted to Canadian unity. Fascinated by Canadian politics and history. Striving to understand the mysteries of Canada. Publishes every few weeks.