The Morning Brief – 09.10.20

By Bruce Carson


To go to an election –or not to go?

The Search for a Legacy by Justin Trudeau

Will the Next Election be Trudeau’s Last?

Risks and Advantages arising from three election timing scenarios

The announcement by WE Charity last evening that it was winding up its activities in Canada brings home the fact in box car letters that once the dice is rolled to go into an election, one can’t control what may happen along the way to either reinforce that decision or make one live to regret it.

Yesterday, we looked at three timing scenarios for a federal election; the first coming on the heels of the Speech from the Throne (SFT), presumably as a result of a successful non confidence vote on or soon after the last day of debate on the SFT; second, would be a successful non-confidence motion put after a fall budget or fall economic update and lastly, a vote of non-confidence in the government next spring after the budget is delivered.

Of course, in all three scenarios, Prime Minister Trudeau could simply decide that he wants to dissolve parliament, visit the Governor General, seeking a fresh mandate from Canadians based on the measures contained in the SFT or the budgets.

In the calculations that are made as to whether to go or not go to the people, it is arguable that this time, there is more pressure on Prime Minister Trudeau to get the decision right than is on the shoulders of any of the opposition leaders.  The coming election would be Trudeau’s third as leader and unless the Liberals win a majority, it is reasonable to suggest that his days would be numbered as Liberal leader. Anything short of a majority would be seen as a failure of the prime minister and his ‘build back better’ plan based on large expenditures to deal with climate change.

The choice for Canadians, or even the ballot question could be framed with the Conservative Party focussed on jobs and the health of Canadians while the Liberals focus on their green agenda. Put another way, if Canadians are concentrated on jobs and health care (a second wave) will they tune out the Trudeau ‘build back better’ agenda?

Also hovering over any decision to force an election by either the government or opposition is the probability of a second bout of COVID-19 either this fall or winter. Do politicians want to be out campaigning during this period, with parliament dissolved and supports needed? Or as Hershell Ezrin , former principal secretary to David Peterson put it in a recent article “will a six week campaign help? The obvious answer is no.

The arguments for an early campaign after defeat of the SFT or with Trudeau deciding to seek a new mandate are dependent on how well the SFT is received and how concerned the government is with further hearings of the various committees looking into the ethical lapses of Trudeau and his former Finance Minister Morneau. As previously noted, last evening’s revelations demonstrate that there are surprises lurking in every campaign.

For the Liberals there is also the unknown attraction of a new leader of the Conservative Party, Erin O’Toole. His first couple of weeks on the job have been solid and as Canadians get to know him, will they see a sensible, pragmatic leader, who not only shares their concerns, but lives them and will do something about them. This is one of the many unknowns going forward.

The SFT if it is to be successfully received by Canadians must address shortcomings in Canada’s social safety net revealed by the pandemic. Childcare, long term care for Canada’s seniors, the place of women in the workforce and the continuation of economic support for the 1.1 million Canadians still unemployed along with business supports are a must.

The pandemic has exposed a number of groups of Canadians as being particularly vulnerable; women, as well as Indigenous and racialized Canadians have been severely disadvantaged. When these issues are addressed in a meaningful way, then Trudeau can move on to climate change and the environment. But first the SFT must be about help for Canadians. If the Liberals put pet projects ahead of the real needs and well-being of Canadians, they could be punished.

Although it may not be an exact fit in the SFT, given O’Toole’s tougher approach on China and his desire to work with allies on trade matters, Trudeau would be wise to include a section on foreign affairs in the SFT-with solutions or at least new approaches.

If the SFT establishes the right tone with substantive content, it may be wise for the government to move to an election quickly. Waiting for the fall economic statement or next spring’s budget is full of unknowns and some knowns that may be unpalatable for the government, but make a concerted effort by the opposition a possibility.

Kevin Page, former Parliamentary Budget Officer and now head of the Institute for Fiscal Studies and Democracy at the University of Ottawa was quoted yesterday in the Hill Times about the need for a broader planning document which would put money behind policies for parliament to debate.

He argues that a longer term fiscal plan is needed this fall to at least bolster public confidence. He believes Canadians need to see that longer term plan.

A forward looking document that lays out where the government thinks the economy is going to go, and these are the measures to get there; this plan to deal with contingencies would satisfy Page’s concerns.

However, the deficit and debt may scare the hell out of Canadians and stand in stark contrast to a more limited agenda which focusses solely on today’s and tomorrow’s issues as they directly affect Canadians.

The longer the Liberals wait, the closer they get to the release of the Ethics Commissioner’s report and the consequences of a second wave of COVID-19 and its inevitable economic and health fallout.

This brings us to the third scenario, next spring after the budget is tabled; this seems almost a logical time to go for both the government and the opposition.

But when one drills down, perhaps waiting, while it may be in the interests of the opposition,  may not be in the best interest of the government.

By spring 2021, the Ethics Commissioner will have reported and the country will still be in the midst of the second wave. There is no predicting how long the economy will take to return to pre-pandemic conditions.

The Bank of Canada yesterday stated that the “strong reopening phase will be followed by a protracted and uneven recuperative phase, heavily reliant on policy support.”

On balance, taking all of the above into consideration, it may be in the best interests of the government to have an early election and in the best interests of at least the Conservative Party with its new leader to wait.

And we get to see all of this play out in real time later this month and in the months ahead.

To Come

  • Bank of Canada Governor Tiff Macklem delivers a speech about the economy and monetary policy
  • The PBO releases a report entitled “Personnel Expenditure Analysis Tool: Key Insights”
September 14
  • New Brunswick provincial election
September 15
  • Monthly survey of manufacturing for July to be released
September 15-16
  • U.S. Fed meets
September 16
  • CPI numbers for August to be released
September 23
  • Speech from the Throne

The Morning Brief will return on Wednesday, September 16 and then return to its normal three day a week schedule starting September 22.

– BC