LIFE ISN'T getting any easier for Brian Mulroney, the embattled prime minister of Canada. Now he's been bitten by the hand that feeds him. Three business organizations, until now consistent supporters of his Progressive Conservative government, denounced him this week for bad economic management and for spending that, they declared, is out of control.
The striking thing about Canadian politics, as seen from Washington, is the strong similarity with the situation here. In both countries conservative administrations are struggling dismally with the reality of enormously expensive programs of subsidies and social benefits, of which they disapprove in principle but which they dare not squeeze very hard in practice. "When we put a cap on funding programs," one of Mr. Mulroney's allies unhappily observed, "there are hunger strikes."
Mr. Mulroney is ahead of President Bush in one important respect. He has made up his mind on taxes and is grimly pushing through Parliament a 7 percent sales tax on goods and services. It is about as popular as you would expect, particularly since it will go on top of the provincial sales taxes. Taken together, the two will total 15 percent in Ontario, the most heavily populated of the provinces, and as much as 17 percent in others. He has had to pack Canada's appointed Senate to get a majority for his party and the tax there, and is now waiting out a filibuster by the opposition Liberals, who know a good thing when they see it.
Until the new tax goes into effect, the Canadian budget deficit will remain huge -- slightly larger in relation to the economy than the one here. Inflation there is somewhat lower than in this country, perhaps because their interest rates are higher. That's a particular grievance among the business people -- high interest rates that mean a high exchange rate for their dollar that means, in turn, a hard time selling exports to Americans. However outrageously high the interest rates here may seem to Americans, they remain conspicuously low by the world's standards.
One source of comfort to Mr. Mulroney is the calendar. He's still in the first half of his term and doesn't have to call an election until 1993. By then he hopes to see prosperity flourishing as a result of this year's pain. But at the moment Canada, like the United States, seems on the brink of a recession.
The North Americans present a curious spectacle these days. Both of these immensely well-endowed countries are richer than ever, yet the political leadership of each has been entangled and damaged in the attempt to get spending aligned with taxes.