There is, I believe, a fundamental difference between the two leading parties contesting the upcoming election: the Conservatives and the Liberals.

The difference is basically philosophical and centers on the role government should fulfill in shaping the structure and functions of the economy and our society. It has persisted throughout much of Canadian history.

I should pause here and admit that concentrating on comparing and contrasting the two leading parties is somewhat arbitrary. This is particularly true given what has happened politically in recent decades with the emergence of other parties.

The rise of Reform, the Bloc Quebecois and the Green parties has had an influence on the two leading parties causing them both to adjust their policies. Further, we may well see a significant change in the relative standings of all parties after the election on Oct. 21. Nevertheless, their different overall approaches to the big questions of “how to govern” are important — not just for the next four years but for the foreseeable future.

In the following analysis, the terms “conservative” and “liberal” (all spelt with lower case) happen to coincide with the names of each of the leading parties. I use the lower- case terms, however, to emphasize a focus on their governing philosophies rather than their political identities or brands.

The conservative approach to government focuses on constraining government both in its magnitude and the range of functions it performs. That, in turn, implies relatively low taxation and a focus on a cash-flow balance in annual expenditures. It favours reliance upon individuals to decide how they should deal with the economic and societal factors affecting their lives. The conservative position does not oppose all change, but rather allows the passage of time to demonstrate the validity of forces initiating a change. It allows for an extended and thorough discussion of what intervention, if any, is needed in response to changes and asks what, if any, role only government can fulfill.

In the past, important questions about expanding the franchise (the right to vote), the need for public health legislation, the legalization of same-sex marriage, the division of powers between the federal and provincial governments on a multitude of issues from gun control to environmental protection, and the need for unified administration of financial markets (issuing and trading stocks and bonds) have all tested the conservative philosophical framework.

The liberal approach to governing sees a more active and extensive role for government underpinned by a belief that government can and should undertake tasks aimed at facilitating economic prosperity and providing assistance to individuals in cases where society would otherwise yield unsatisfactory outcomes. (Judging an outcome as unsatisfactory may not always be based on criteria which are clearly stated or consistent with past actions.)

The liberal approach to fiscal questions is focused on stimulating economic growth and full employment rather than balancing the budget annually. Thus, a liberal government will likely run deficits when the economy is operating at less than full capacity. In liberal thought, the total amount of government debt is of concern only if it is close to or greater than GDP and if it is growing at a faster rate than the economy. (Canada’s debt is currently at about 30% of GDP.) If the economy is experiencing inflation greater than about two per cent per annum, then even a liberal government will take measures to reduce if not eliminate the annual deficit.

While many voters are either unaware or unconcerned about these basic differences in how each leading party approaches governing the nation, it is important to be clear about what we should expect when choosing between them. For the engaged voter, making a choice between the two philosophies really comes down to how concerned you are about your level of taxes or about the need for government action to deal with an important issue, such as climate change, that calls for collective action.

So, some careful reflection about the implications of following one or the other approach to government is necessary. This may require some work probing the platforms of each party and trying to gain insight into what each is likely to enact with what consequences.

David Bond is a retired bank economist who resides in Kelowna.