Prescription Before Diagnosis: the Dynamics of Public Policy Construction in the BC Liberal New Era, 2001-2005

Prescription Before Diagnosis: The Dynamics of Public Policy Construction in the BC Liberal New Era, 2001-2005 By George Malcolm Abbott B.A., University of British Columbia, 1975 M.A., University of Victoria, 1978 A Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY in the Department of Political Science © George Malcolm Abbott, 2019 University of Victoria All rights reserved. This dissertation may not be reproduced in whole or in part, by photo- copying or other means, without the permission of the author. Prescription Before Diagnosis: The Dynamics of Public Policy Construction in the BC Liberal New Era, 2001-2005 By George Malcolm Abbott B.A., University of British Columbia, 1975 M.A., University of Victoria, 1978 Supervisory Committee Dr. Colin Bennett, Supervisor (Department of Political Science) Dr. Jamie Lawson, Departmental Member (Department of Political Science) Dr. James Tully, Departmental Member (Department of Political Science) Dr. Evert Lindquist, Outside Member (School of Public Administration) ii Supervisory Committee Dr. Colin Bennett, Supervisor (Department of Political Science) Dr. Jamie Lawson, Departmental Member (Department of Political Science) Dr. James Tully, Departmental Member (Department of Political Science) Dr. Evert Lindquist, Outside Member (School of Public Administration) ABSTRACT The BC Liberal New Era was an intense and often controversial period in the province’s political history. One day after being sworn into office with a massive majority, Premier Gordon Campbell announced a 25 percent personal income tax cut, potentially relinquishing one billion dollars in tax revenue. Seven weeks later, Campbell and his Finance Minister followed up with another billion dollars in business and corporate tax cuts. Based on the apparent success of tax cuts in provinces like Ontario, where tax cuts coincided with very strong economic growth, they believed deep tax cuts in 2001 would prove efficacious despite sharply declining economic indices. They initiated tax cuts in the face of cautionary advice from the Ministry of Finance and without the benefit of a report from their Fiscal Review Panel. Their decision proved to be a compelling, real-world example of prescription before diagnosis. The 2001/02 fiscal year saw only 0.6 percent economic growth, much as the Ministry of Finance had predicted, not the 3.8 percent growth anticipated by the Premier and Finance Minister. An overall $4.4 billion deficit quickly translated into deep expenditure reductions for iii ministries other than Health, Education, or Advanced Education. The latter ministries accounted for seventy percent of BC’s budget and were protected from cuts by a campaign commitment. Resource ministries were hit hard with cuts of up to 45 percent but could not come close to filling the budget hole. The New Era thus offers a second and stark example of prescription before diagnosis: the belief that social ministries could also manage deep budget cuts without detrimental consequences to the disadvantaged and vulnerable clients they served. Long before tax cut optimism began to fade, Campbell introduced an array of processes – like core review, deregulation, devolution, and alternative service delivery – drawn from other jurisdictions and, indirectly, from the tenets of New Public Management. Those processes were clearly designed to foster smaller government, prompting a critical question: was the introduction of dramatic tax cuts into a recessionary environment intended to produce a self- induced crisis, thereby underlining the imperative of austerity? My dissertation supports that suggestion, but also concludes that the “burning platform” became a far greater conflagration than its authors anticipated. The BC Liberal New Era campaign platform’s ambitious social policy agenda was consequently sacrificed to sustain its economic agenda. The New Era campaign document aimed to maximize voter appeal by promising “everything at the same time” and similar expectations drove New Era processes. Ministries were obliged to deliver on process goals as well as expensive New Era platform commitments while simultaneously cutting staff and programs. Confronted by seemingly endless and intractable problems, ministries looked nationally and internationally for policy experience that might inform provincial solutions. Policy transfer produced mixed results. The New Era experience suggests that the frequency and intensity of process demands – compounded by budget-driven resource attrition – inhibited rather than fostered policy success. iv TABLE OF CONTENTS Supervisory Committee……………………………………………………….…………..……ii Abstract…………………………………………………………………….…………………...iii Table of Contents………………………………………………………….……………………v Acknowledgments………………………………………………………….…………………...vi Preface………………………………………………………………….……………………….viii Chronology of Key New Era Events…………………………….…………………………...….xii Part I: Context Chapter 1 Introduction to the BC Liberal New Era……………………………………........1 Chapter 2 The New Era Narrative: Roots and Branches……………………………………16 Chapter 3 How Global Components Helped Shape the BC Liberal New Era……………...48 Part II: Policy, Process, and Institutions Chapter 4 BC’s Dramatic Tax Cut: Leap of Faith or Pretext to Harsh Medicine?................67 Chapter 5 Process Makes Perfect: Life in the BC Liberal New Era………………………..99 Part III: Effects Chapter 6 Community, Aboriginal and Women’s Services: Ministry of Lost Causes?.......133 Chapter 7 Human Resources: Budget Cuts Create Speed-Related Side Effects…………..155 Chapter 8 MCFD: Where Metaphorical Chickens Come Home to Roost………………..174 Chapter 9 Drawing Lessons from the Politics and Public Policy of the New Era………...198 Bibliography……………………………………………………………………………………218 v TABLES Table 1: Comparative Party Platforms…………………………………………………….....20 Table 2: Common Themes, Reform Party of Canada and BC Liberals…………...................24 Table 3: Comparison of Reinventing Government and the Gordon Campbell Narrative…….27 Table 4: Comparative New Zealand and BC New Era Reforms…………………………......58 Table 5: Comparative Federal Program Review and BC Core Review Questions…………103 Table 6: Social Ministry Comparative Challenges………………………………………….203 vi ACKNOWLEDGMENTS There are many people I want to thank for assisting me in pulling this project together. First and foremost I want to thank my dissertation committee: Colin Bennett (Chair), Jamie Lawson, James Tully, and Evert Lindquist. This venture would never have been launched, never mind completed, without their inspiration and advice. I had the good fortune to hold elected public office for 35 years. The New Era was resoundingly my least favourite period in political life and I was not initially enthusiastic about a deep dive into the topic. Happily, my committee convinced me that all the misgivings I nursed about the New Era made telling the story all the more important. Colin Bennett’s early advice with respect to content and organization was remarkably helpful, as were his subsequent suggestions for improvement. Committee members also provided great advice along with a careful and constructive reading of early drafts, producing a deeper and richer account as a consequence. My thanks also to Professor Allan Tupper of the University of British Columbia for his work as External Examiner. I am also appreciative of advice around the efficacy of tax cuts from Brant Abbott (Assistant Professor, Economics, Queen’s). I also enjoyed the benefit of draft reviews from former public servants and cabinet ministers of the New Era. Their wisdom, observations, and insights were very valuable and much appreciated (just like back in government) but acknowledging them personally here would be inconsistent with the objective of strict anonymity for interviewees. I was frequently surprised by the interest (and sometimes even passion) which former public servants demonstrated around the New Era project, enabling me to provide a far more precise and detailed vii account of the period than would otherwise have been possible. Their courage, energy, and wisdom also allowed me and other politicians to survive the New Era and I thank them for it. I would also like to thank my family. We do not get to choose our parents but I was entirely fortunate in my luck of the draw. My mother and father, Irene and Malcolm Abbott, were always supportive of securing a good education. I am pleased to report that my mother at 96 years of age will finally see her youngest son complete university! In my dissertation journey, my wife Lesley has always patiently answered my many questions about the mysteries of Word and word processing. Our children – Megan, Brant, and Wade – have long since ascended into adulthood but I remain appreciative that, despite the ignominy of a politician father, they are such balanced, thoughtful, and capable people. My political gene will perhaps re-emerge in my grandchildren – Raiden, Alissa, and Serena – but I won’t wish it on them. I do hope that someday, in a political science course of their own choosing, they will read this dissertation and say, “Oh, so that’s what Grandpa meant by ‘what a long strange trip it’s been.’” viii PREFACE My dissertation examines the BC Liberal New Era from the election of 2001, which ushered in the new government, to the throne speech of 2005, which signalled a profound shift from austerity and retrenchment to a more expansive social agenda headlined by “Five Great Goals for a Golden Decade.” The New Era – a title drawn from the

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