Liberals and New Democrats Ink “Confidence and Supply” Deal

In a surprise move, Prime Minister Justin Trudeau and NDP Leader Jagmeet Singh announced a “confidence and supply” agreement. The agreement provides Trudeau’s minority Liberal government with assurances that the NDP will vote with the Liberals on all matters deemed to be confidence matters, as well as on supply matters (the process in which Parliament votes funding to government in order to carry out government business – itself a confidence matter).

Today’s agreement is similar to the one that New Democrats and Greens in British Columbia signed in 2017, allowing BC’s NDP leader John Horgan to form an NDP government that had the confidence of the legislature for up to four years. A point to consider – the BC NDP broke the terms of that agreement and called a snap election with a year remaining on the deal which ultimately proved disastrous for the Greens.

Ultimately, the deal only lasts as long as one or the other party benefits from it.  The commitments made by both parties will be tested on whether they are delivered or not, and either party has the right to back away at any time if they believe the terms are not being met.

What’s In the Deal?

The Liberal/NDP agreement includes seven key points:

• A better healthcare system – Commitments include a new dental care program launched in 2022, passing a national Canada pharmacare act by 2023, tabling a long-term care act for seniors, and generally improving the healthcare system after the fallout of COVID-19.
• Making life more affordable for people – The deal commits to affordable housing initiatives, support for new homebuyers, and introduction of an Early Learning and Child Care Act by the end of 2022.
• Tackling the climate crisis and creating good paying jobs – Commitments include seeking to achieve the Liberals’ emission reduction targets by 2030 including creating a Clean Jobs Training Centre, implementing legislation to transition existing energy workers to greener jobs, improving Canada’s supply chain, and phasing out public financing of part of the oil and gas sector.
• A better deal for workers – The deal calls for 10 days of paid sick leave for all federally regulated workers starting as soon as possible in 2022, as well as legislation around the use of replacement workers in federally regulated workplaces during a strike or lock-out.
• Reconciliation – Commitments include investment in Indigenous housing in 2022, accelerating the implementation of a Federal Pathway as well as a Federal-Provincial-Territorial table to address Missing and Murdered Indigenous Women, Girls and 2SLGBTQQIA+ People with Indigenous partners, and providing support to First Nations, Inuit, and Métis communities for burial searches at the former sites of residential schools.
• A fairer tax system – This includes expanding the number of institutions who the government feels made excessive profits during the pandemic and implementing a publicly accessible “beneficial ownership registry” by the end of 2023.
• Making democracy work for people – Some slight measures around elections including a proposed “three-day Election Day” and improvements around mail-in voting. Notably, there is no mention of electoral reform, including proportional representation, a long-held NDP priority.

Budget Timing?

Official Ottawa has been abuzz the last two weeks about Budget timing rumours, suggesting that the 2022 Budget would be tabled the first week of April.  Very little in today’s agreement is so time-sensitive that it would require inclusion (other than the language of the agreement itself) in the Budget, so odds are that the current thinking around Budget timing would likely hold. Recent reports have suggested that the upcoming budget would be “prudent” and would focus on being a “back to basics” document.

What Does it Mean?

Liberals

Today’s deal accomplishes a few things for the Liberals. Most importantly it gives them certainty that they can govern as a majority government for much of the next three years, with no risk of being defeated on matters of confidence.

After the 2021 election, the Liberals had two potential minority dance partners: the Bloc and the NDP. Either had the votes to enable legislation to pass. This situation has given the Liberals a lot of leverage; if the NDP didn’t like something, the Liberals could go to the Bloc for support and vice versa. In fact, the Liberals relied on the BQ, not the NDP, to pass the 2021 Fall Economic Update and associated legislation.

With this deal, the Liberals are getting more certainty of staying in power for the next three years in exchange for occasional leverage by the NDP. The Liberals might not get everything they want on every bill, but they can count on getting NDP support on the most critical points of their agenda.

The deal also gives the Liberals a strengthened hand in House of Commons Committees, which bedeviled them during their 2019-21 minority government.  The Liberals faced a difficult challenge in dealing with Opposition criticism over Broadcasting Act reforms, as well as investigations into the WE Charity scandal and documents related to the Winnipeg National Microbiology Laboratory.  This work required NDP support to happen. Under the new agreement, it appears the government will have more control of committee agendas “to ensure committees are able to continue their essential work” and avoid challenges that “could impede the government’s ability to function or cause unnecessary obstructions.”

An additional reason for Liberals to create this deal is that their political singular narrative of the “middle class and those working hard to join it” faded away during COVID, replaced with a focus on the vulnerable.  (The 2021 Liberal platform slogan of “Forward. For Everyone” certainly was aimed at the broader electorate.) The priorities revealed in today’s deal with the NDP focus more on the needs of vulnerable communities. Dental care is means tested to households under $90,000 a year. Pharmacare particularly aides those in part-time or casual work without an employer drug plan. The rapid housing initiative is specifically for building homes for vulnerable Canadians.

Within the Liberal tent, many of the “Blue Liberals” (e.g., Scott Brison, John McCallum) have departed and have been replaced with Liberals from the more left-leaning side of the caucus. While the government’s voting coalition is large and encompasses many in the upper middle-class, the Liberals have realized that there is a voting coalition of progressive votes at the lower end of the socio-economic spectrum, often younger, under-employed and those left behind by the lack of affordability of housing.

Finally, the agreement provides as much flexibility to Prime Minister Justin Trudeau to craft his own political future and decide if he will stay or go before the next election. There are several whispers across Liberal circles surrounding a future Liberal leadership race and whether Ministers Chrystia Freeland, Francois-Phillipe Champagne, Melanie Joly, or Anita Anand could emerge as the next leader. However, Prime Minister Justin Trudeau has not yet publicly stated if he will seek re-election or not. The certainty provided through this agreement gives him the opportunity to make a decision and set up a 4^th campaign for Prime Minister or exit on his own terms.

New Democrats

What is less clear is what it achieves for the NDP, other than buying time until the next election.  Jagmeet Singh will certainly try and take credit for commitments around dental care, pharmacare and housing, but essentially has no guarantees these programs will come to pass. However, the NDP have previously struggled to capitalization on concessions from the Liberals and convert these wins into increased support.

Having a formal agreement may be Singh’s final attempt to firmly establish himself as the true statesman of Canada’s progressive movement which he will look to convert into support and seats in a future election.  It is also an opportunity to try and showcase NDP policies to the wider public. The agreement also gives the NDP certainty around the amount of time they have to fundraise and amass resources ahead of a possible 2025 campaign. However, these benefits place the NDP in a difficult situation – any successes will no doubt be claimed by the Liberals as wins, and any failures can be laid at the feet of the NDP for not achieving a win.

In addition, it remains to be seen how much New Democrats will align with Liberals in House committees and whether they are seen to be “hutting down inquiries and Opposition attacks that ultimately harm the Liberals.  The next three months of the House sitting will be a good test of how deep NDP support runs across House of Commons committees.

Conservatives

For the Conservatives, today’s announcement is good news as it fundamentally alters assumptions surrounding the current Conservative leadership race. The 2017 and 2020 leadership races produced leaders who had less than 18 months to prepare for a general election and needed to move more quickly than desired. Whoever wins the 2022 Conservative leadership race will have almost double that time to establish a narrative, build a team, define policies, and recruit good candidates for the next election.

It also allows that leader a longer timeframe in which to introduce themselves to Canadians and establish higher name recognition ahead of the general election campaign.  In the short term, it allows Conservatives to claim that “they were right” when in the last election they accused Liberals and New Democrats of working up a “backroom deal” – essentially a Liberal/NDP coalition – which creates a powerful foil for drawing a contrast between the current direction of the country and a contrasting Conservative vision.

The question for Conservatives in choosing a leader will be that whomever wins the leadership will likely have a strong opportunity to try and occupy the centre-right of the political spectrum.  The challenge as always for the leadership winner will be, once you’ve won the party, how do you try and win the country without alienating those on the right-hand side of the Conservative movement – a test that former Leader Erin O’Toole failed.