Setting A Bold New Agenda: Trudeau Government Prepares for Recovery

Today’s installation of Chrystia Freeland as Finance Minister is intended, as much as possible, to tie off the loose ends dangling from the extraordinarily disorderly departure of Bill Morneau. How many of the Trudeau Government’s many and severely-frayed threads will be braided back together – and how swiftly – is an open question.

Freeland’s appointment signals continuity and stability. She is a known commodity with strong relationships around Ottawa and in both global and provincial capitals. The return from illness of Dominic Leblanc, a close and trusted confidant of Trudeau’s with a sure touch, to the Intergovernmental Affairs portfolio underscores the theme of stability. However, key policy and political issues remain stubbornly unresolved and determining the approach to these challenges will be the focus of the upcoming Speech from the Throne on September 23 and the government’s bold plan for economic recovery.

First the public policy questions. Last night’s note from StrategyCorp raised six areas of acute uncertainty:

  • The government’s fiscal policy
  • Overall economic approach
  • Appetite for sectoral fixes
  • National unity
  • Participation in global economic policy responses, and
  • The two key international dimensions, relations with the US and with China.

Many believe that the policy differences between Trudeau and Morneau have been over-sold, but it is a mistake to cynically believe that they never existed. Morneau’s views on all of these issues were of great importance and are subject to revision with Freeland at the helm. One personality with a set of strong opinions has been replaced in a key slot by another, so it is not clear how much policy continuity lies below the surface of the otherwise reassuring appointment of Freeland.

The passionate multilateralist Freeland can be relied upon to stay the course on global financial engagements and, as former Foreign Minister, will likely continue the US and China courses she and Trudeau set, as corrected by subsequent events.

But tougher questions await on the economic front. Will Freeland side with her Department on fiscal questions? On resisting an economic perestroika aimed at meeting the world’s galloping climate crisis? On demurring from sectoral restructurings and the expansion of industrial policy? Will this former Intergovernmental Affairs Minister pursue a tough line on the perceived fiscal imbalance disfavouring Ottawa, or seek a longer-term structural fix, or simply open the spending taps for the provinces as an election approaches in a suddenly unstable minority parliament?

This last point raises questions regarding the all-important political loose ends now fluttering. The already-overstretched government has called a badly needed time-out, with a five-week prorogation. This will give all five parties in the minority parliament a chance to assess matters, and for the Conservatives, the chance to install a new Leader following this weekend’s selection result.

Answers on the policy questions will be finely tuned to a minority situation which, following the BQ’s surprise turn last week towards an early election call, suddenly seems closer to dissolution than any had previously imagined. Conservatives smell Liberal blood in the water and will likely be emboldened no matter who is chosen as their Leader. The Bloc has already taken a bite but may swim off for now. If the Conservatives and Bloc combine, the government’s 156 seats square off against 153 (Morneau’s date of departure is vague, but a vacancy now exists in York Centre). All eyes are on the NDP, who can trigger an election if they choose to do so. Even if the Greens sided with the Government, defeat would be inevitable if the three main Opposition parties combined.

The government will attempt to stitch the threads together with a September Speech from the Throne and the ensuing confidence vote, which gives the Opposition parties the chance to strike – and the government the chance to engineer its own defeat on chosen ground. Six months ago, politics settled into the back seat as public health concerns took the wheel. Politics is now firmly in command of Ottawa, and of Canada’s fitful course in a time of immense global turmoil.

One last observation, of critical importance in all of this, is the mood of the electorate that the politicians and bureaucrats serve. It is highly unlikely that ordinary families, struggling with mass unemployment, back-to-school impossibilities, elderly loved ones at risk, and making the most of the last days of a (relatively unquarantined) Canadian summer, are preoccupied with the drama in the nation’s (virtual) capital. They are likely dismayed by the WE scandal, puzzled by Morneau’s departure, disparaging of the mess, and blaming the Government for losing sight of the real issues at stake in their lives.

This mood will be a powerful brake on both Government and Opposition strategists as they seek to coax partisan advantage from recent events in Ottawa. A lot of eyes will be on New Brunswick, where a snap election gambit from PC Premier Higgs is being critiqued sharply by the Opposition. If the gambit backfires, Ottawa’s current fever pitch could settle down to normal in quick time, which is probably what the Trudeau government is hoping for.