OTTAWA, Ont. — As Canada’s Parliament resumes for its fall sitting, with a new opposition leader in place, one question lurks in the background: How long will it last?
Prime Minister Justin Trudeau’s minority government is being propped up by the left-leaning New Democratic Party in an agreement that could keep the Liberals in power until 2025 in exchange for progress on key NDP priorities, including a federal dental care plan.
Over the summer, there was plenty of speculation about whether Trudeau might > Chair is calling for term limits. He called Senators like Chuck Grassley who have sat in DC for DECADES part of the ‘Washington ruling class.’”
An attack like that “sort of validates the strategy that Sen. McConnell is talking about,” said Senate Minority Whip>.
Inflation could also influence a key area of policy focus for the Trudeau government: climate change and the transition to a low-carbon economy.
Retooling and retrofitting the economy to the tune of C$2 trillion over 30 years may not jibe with voters should they encounter a recession. The massive price tag underscores the scale of capital that will be required to fund a green industrial revolution that reforms high-polluting industries.
High inflation will create communication challenges for the government. Spending untold sums of money to help industry move through a green transition while taxpayers are saddled with dealing with runaway inflation is a recipe for discontent.
New affordability legislation
To tackle growing concerns about inflation and cost of living, Trudeau has promised that an affordability plan will be one of the first pieces of legislation to be introduced this fall.
Announced at his party’s summer caucus retreat, the C$4.5 billion, three-pillar plan is geared to give respite to low-income families. It would temporarily double the federal goods and service tax rebate for “low and modest” income earners and offer a one-time, C$500 top-up for rental support. It will also launch a national benefit to cover dental expenses for children under the age of 12, up to C$650 per child annually. Poilievre has warned the multibillion-dollar aid package could make inflation worse — and some economists agree.
The goal is to introduce and pass legislation before Dec. 1.
NDP Leader Jagmeet Singh has a deal with the Liberals that would give Trudeau the votes he needs to pass legislation until the next election in 2025. Trudeau, in exchange, has agreed to prioritize some marquee New Democrat policies.
Chances are high Canada would be thrust into an early election were Singh to pull his party’s support, which would throw Trudeau’s fate as prime minister and Liberal party leader into uncertainty.
Fall economic statement
Pressure will be on the Trudeau government to draft a relatively thrifty fall economic statement or risk inspiring economists and business leaders to share their thoughts on the ways Ottawa spending is driving inflation.
Regarded as mini budgets, the fall update often includes new policy announcements and tax measures. They also include updated numbers showing forecasts and the state of federal finances. Finance Minister Chrystia Freeland will have to balance calls for more support and financial prudence.
Ottawa has a laundry list of election promises, and the mini budget could be an opportunity to at least move on outstanding items, including a pledge to bring in a one-time income tax deduction of up to C$15,000 over three years for new health care professionals and a proposal to introduce a “career extension tax credit” for workers over the age of 65.
The fall statement will also be an opportunity for Canada to announce new cleantech measures to compete with the suite of climate investments promised stateside in the Biden administration’s Inflation Reduction Act.
Pass pre-summer legislation
When MPs get back into the rhythm of committee, they’ll deal with a couple of high-profile pieces of legislation sure to generate electric debate in the House and Senate.
One is C-11, a government bill proposing to overhaul the Broadcasting Act and bring streaming giants such as Netflix, Spotify, Amazon Video, Disney+ and others under Canadian content rules. The last time major changes were made to the Broadcasting Act was 1991, before the internet became ubiquitous contemporary infrastructure. There are, however, concerns the bill’s CanCon rules will allow streaming giants to collect more personal data from Canadians unless current language is amended.
The Liberals’ latest firearms legislation is also expected to be a source of fiery debate. Bill C-21 is the government’s proposed handgun “freeze.” It made international headlines in May after Trudeau announced the measure shortly after the deadly school shooting in Uvalde, Texas. If passed, the new law would allow the revocation of gun licenses if the holder has “engaged in an act of domestic violence or stalking or become subject to a protection order” — a provision opposition Conservatives support and offered to expedite to committee stage if the bill could be split into parts. The Liberals declined.
Find fundraising mojo
Campaigns cost money and political parties are always spending it.
Federal fundraising numbers show the Conservatives left other parties in the dust during the second quarter of this year, raising more money than the Liberals and NDP combined.
The party, which at the time was undergoing a leadership race, received more than C$4.4 million from donors. Trudeau’s Liberals, on the other hand, raised approximately C$2.8 million in the same period. But if Poilievre and his supporters continue to jam social media with partisan ads with the same ferocity as they did during the leadership campaign, the Liberals will be pressed to return digital fire with their own attacks.
Poilievre has proved himself effective at fermenting and mining anti-Trudeau sentiment to his advantage by both growing the party’s base toward the right and translating that increased support into more cash. It's a winning formula that doesn't give the new Conservative leader any reason to stop, despite criticism about tolerating extremism for votes.
U.S. midterms diplomacy
Canada’s economy is intertwined with the U.S. It’s a marriage that could get slightly more complicated if Democrats lose Congress in November.
President Joe Biden and Trudeau created much fanfare with their so-called road map for a renewed U.S.-Canada partnership in February 2021 shortly after the president took office. Despite the simpatico announcement, concerns about protectionism endure.
After being reelected to a third term a year ago, the prime minister assigned key Cabinet ministers to fight U.S. protectionism.
Parliamentary all-party delegations have been dispatched to Washington in recent months to meet with American policymakers and get a jump on what lies ahead in the U.S. capital — and how to prepare for the next two years if the road map goes nowhere.
Canadian business leaders are worried about what’s next and where the U.S., a proverbial elephant, will move next.
