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On the Economy, Justin Trudeau Needs to Fire His Coaches and Raise His Game

Author: Gregory Thomas 2014/03/19

Justin Trudeau’s early moves on the political playing field are pointing the federal Liberals in an intriguing new direction: toward free trade and a dynamic leadership role for Canada in the global economy. (Photo Justin Trudea: Wikipedia/A.K. Fung)

But if he is to succeed, Trudeau needs to bench some of his recent rhetoric, especially about federal spending and borrowing, and the old school thinkers behind it.

Going into his party’s recent policy convention in Montreal, Trudeau released a video paying homage to free trader Wilfrid Laurier, the Liberal prime minister least amenable to federal intervention in the lives of Canadians.

Many of his remarks wouldn’t have been out of place at the right-of-centre Manning Conference that followed the Liberal gathering a week later. There were four references to freedom and seven to opportunity. Ten times he repeated his commitment to a growth agenda and growing the economy, five times he talked about the importance of international trade.

Trudeau even told Liberal partisans “it is a fundamental economic responsibility for the prime minister of Canada to help get our resources to global markets.” It could have been Stephen Harper huddling with Conservative supporters in Calgary, had Trudeau not gone on to suggest that tougher environmental rules for Canadians would cut us some slack with the professional eco-activists south of the border who want to shut down the oilsands.

There was even something for those of us who prefer low taxes and balanced budgets over the kind of fiscal approach promoted by his late father, and more recently by provincial Liberal premiers like Dalton McGuinty and Jean Charest.

“In the ‘90s, Canadians made some tough economic choices, so now our federal government is in a far better position than it once was,” he said, paying homage to the budget slashing of the Chretien-Martin era. “We’ve cut our debt dramatically, and that’s a great thing.”

And in nationally televised interviews after the federal budget was tabled, Trudeau railed against job-killing hikes in payroll taxes imposed by the Conservatives.

“The balanced budget they’re going to be announcing next year is balanced on the backs of Canadian workers,” Trudeau said on CPAC. “We’re talking about $5.2 billion that’s going to come because of artificially high employment insurance rates.”

So what does Trudeau’s performance mean for Canadians? Does it mean taking an axe to employment insurance taxes, letting Canadians take home a bigger paycheque after all the deductions?

Not according to Trudeau. In his video, he says, “it means that while the middle class is tapped out, the federal government has room to invest.”

What about the provincial and territorial governments?

“Well, they’re feeling tapped out as well,” Trudeau explained. “So the government of Canada needs to step up.”

Step up? How?

As he told the Liberal convention, “the middle class is already having a hard time making ends meet, and struggling with debt. Tax increases for them are not in the cards, and not on the table.”

So no tax increases. Gee thanks. But how exactly would Trudeau, you know, “step up?”

“Let’s see what kind of fiscal position we’re in next year,” he told CTV’s Robert Fife, “before we decide how we’re going to spend that surplus.

“I know there’ll be a tremendous debate in the next election about what the different parties think we should be spending that surplus on,” Trudeau continued. “I’ve been very clear; I believe that it’s smart infrastructure spending and an emphasis on education.”

Not all of Canada’s provinces are actually “tapped out.” Some have balanced budgets, some have booming economies. Ontario and Quebec, with just over 60 per cent of Canada’s population, owe 84 per cent of all provinces’ burgeoning half-trillion-dollar debt.

Not coincidentally, it’s Liberals in Ontario and Quebec who have spent most of the past 10 years “stepping up” by “spending that surplus” on “smart infrastructure” and an “emphasis on education,” notably handing out generous increases to unionized teachers and professors while the economy tanked. That’s not to mention financing lavish green energy infrastructure projects with borrowed money.

For the sake of the federal Liberals, and Canada too, Justin Trudeau needs to look beyond the failed playbook — and coaches — that once guided Dalton McGuinty and Jean Charest, and write a new game plan that reflects his vision for growing the economy.

 


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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