Will the Liberals’ New Leader Bring the ‘Third Way’ to Canada?

{The following 650-word essay was written for the Thompson Rivers University "TRU Stories" series, and appeared in local newspaper(s)on Thursday December 7, 2006. Clearly, it was written before the selection of Stephane Dion as the new Leader of the Liberal Party of Canada on December 2, when I anticipated a Bob Rae victory. The "Third Way" prism remains a useful one, however, and one that cuts across the NDP and Liberal policy agendas with conspicuous perpendicularity.}

Political events like leadership conventions take place on a larger canvas. While the selection of a new leader for a major party does not determine the future, it plays a significant role in determining when and in what form new policy trends develop, and whose interests are served in the process.

Political trends have a habit of running in long cycles. The 1950s to the mid-1970s saw the massive expansion of social spending and the routine use of deficit spending to ensure full employment: this was the heyday of traditional social democracy. The late 1970s and 1980s saw the rise of “neoliberalism” (also called, somewhat confusingly, “conservatism”), led by Margaret Thatcher in Britain and Ronald Reagan in America. This period has been characterized by the deregulation of markets, the privatization of government enterprises and services; tax-cutting; and “free-trade” agreements.

Arguably, the turn of the new century has seen the advent of a “third way” of thinking about public policy. This perspective sees neoliberalism as a deeply flawed approach to politics, because it fails to take responsibility for the social and environmental consequences of market-based decisions. At the same time, the third way recognizes that in a world of globalization and the post-industrial ‘information’ economy
there is no sense turning back to traditional welfare state’s preoccupation with public ownership and national redistribution of wealth. Instead, what is needed is a more pragmatic political project which is willing to break free from the straightjacket of left/right politics.

Claims that such an approach could promote both wealth creation and social justice at the same time have been made on behalf of Tony Blair’s “New Labour” government in Britain and the Clinton –led “New Democrats” in the United States in the 1990s. It also informs the policies of Segolene Royal, the Socialist Party candidate who is favoured to win the 2007 presidential election in France. Former Liberal Prime Minister Jean Chretien sometimes made similar claims for the Liberal Party, but less convincingly. The third way is not simply the middle way, but rather the renewal of social democratic values in the context of globalized markets. It is the politics of the center-left, not merely the centre. This perspective does not fit easily into either the New Democratic Party, the left wing of which has been “anti-globalization” and which fiercely resisted the steps necessary to bring the debt crisis under control in Saskatchewan and Ontario; or the Liberal Party, which has usually realized its most progressive policies only under pressure from the NDP. Where, then, does it fit? One possible role for the recent Liberal leadership contest was to answer this question for Canada.

Certainly, Bob Rae is a Canadian political leader who fits the “third way” label perfectly. In leaving his former party, the New Democrats, Rae was consciously following Blair’s example and criticizing the federal and Ontario NDP for not doing so as well. His emphasis on education and student aid as “the one policy that combines prosperity and opportunity”; his proposal for an earned income tax credit to encourage people to get off welfare and work their way out of poverty, clearly have the stamp of third way thinking. The role of policymaking in this view is not merely to shield citizens from the greater risk and insecurity that globalization brings, but to provide ‘proactive’ government which invests heavily in social and human capital, as well as environmental sustainability. Trade liberalization and greater flexibility in labour markets , anathema to trade unions and to the old left, are seen as necessary but not sufficient for meaningful full employment. They must be combined with minimum wages, strong health and social policy, massive investments in training, and public work projects where necessary—all anathema to the new right. Other Liberal candidates, such as Gerard Kennedy and Michael Ignatieff, expressed some of these views, though not as clearly or comprehensively as Rae.

Of course, if the ‘third way’ theorists are correct, this trend will eventually be confirmed in Canada regardless of who the major parties choose as their leaders. The only question is—will we be ahead of the curve, or behind it?


Mark Crawford currently teaches political science at the Williams Lake campus of Thompson Rivers University. His most recent publications describe the new linkages forming between domestic health policy and international trade regimes.