National Column: Liberals are taking a gamble by reversing election promises

by Paul Wells

What’s a government to do when promises start to unravel? We’re about to find out.

The Trudeau Liberals’ 2015 platform took quite a knocking this month. Electoral reform? Not if Canadians don’t want it, says Justin Trudeau, while continuing to resist the obvious mechanism – a referendum – for finding out whether they do. More generosity on health care? Actually, Stephen Harper’s plan for modest growth to transfers is fine, thanks. “Targeted federal funding” for provinces to implement “their own” carbon pricing policies? Trudeau announced a very different plan in Ottawa while federal and provincial environment ministers were meeting in Montreal.

Well, new times demand new plans. And just in time, here comes the Liberals’ 2016 platform: Higher immigration, more foreign direct investment in Canada and a bigger stake for outside investors in Canadian infrastructure.

It’s not what Canadians voted for in an election only a year ago. But the author of the new plan – Dominic Barton, the influential head of Finance Minister Bill Morneau’s Advisory Council on Economic Growth – hopes to make the shock more palatable by dangling the prospect of a $15,000 raise for the average Canadian family by 2030.

This oughta be fun. Barton is the global head of McKinsey & Co., the consulting firm. His mandate is to find ways the government can add a percentage point to Canada’s rate of economic growth. If such a thing were easy, everyone would be doing it. The committee he leads is full of blue-chip business leaders, a Canadian Establishment for the 21st century. He is so close to Morneau and to Trudeau’s circle of advisers that even after he took this volunteer advisory gig, Trudeau kept trying – so far without luck – to recruit Barton as Canada’s new ambassador to China.

These people talk all the time. There is zero chance that anything in Barton’s first report comes as a surprise to anyone in Morneau’s or Trudeau’s office. Barton’s new gospel is a classic case of preaching to the choir.

His proposals are bold. He says so himself. Repeatedly. He wants to increase immigration by 50 per cent in five years, to 450,000, through an increase in the economic immigration stream. He wants to make it far easier for growing firms to get highly skilled employees into the country, essentially recasting the Temporary Foreign Worker program as a pipeline for MBAs, not unskilled labour.

Barton also wants Trudeau to create a new agency to attract foreign direct investment. This would be on the other end of the ideological universe from Pierre Trudeau’s Foreign Investment Review Agency, the central institution of early-1970s Canadian economic nationalism. Even Stephen Harper’s wariness about many investments – for instance, those by Chinese state-owned enterprises in an Alberta oil patch that was substantially privatized not that long ago – would go by the boards in Barton’s vision.

Finally, Barton calls for a Canadian Infrastructure Development Bank, to bridge the gap between Canada’s bottomless need for roads, rails and transmission lines, and global investors’ need for steady returns on investment.

I wrote about this part of Barton’s plan, which is already Morneau’s and Trudeau’s, at length here last weekend. The scale of their ambition here is breathtaking. “Examples include toll highways and bridges, high-speed rail, port and airport expansions, smart city infrastructure, national broadband infrastructure, power transmission and natural resource infrastructure,” Barton writes airily.

This week all kinds of questions have already been raised about how this beast would work in real life. What happens if an investor gets cold feet, or goes bankrupt, five years into a 20-year project? What if no investors want to back projects in Atlantic Canada, where every MP these days is a Liberal?

To smooth over such objections, Barton suggests his recommendations, taken together, would boost real, pre-tax median annual household income by $15,000 by 2030. That’s a raise from $79,000 in 2014 to about $105,000 in 2030, whereas it is currently projected to hit somewhere around $90,000. That target date is at least three federal elections in the future. Makes accountability tricky.

There’s a precedent for this manoeuvre. In 1994, a year after Jean ChrÈtien’s government was elected, the Liberal finance minister of the day, Paul Martin, released a purple-covered book with the imposing title, “A New Framework For Economic Policy.” It announced that the Keynesian pro-growth policies Chretien had run and won on were now postponed, in favour of fighting deficits. Barton’s recommendations work essentially the same trick in reverse.

The cost of such quick-change acts is measured in confusion and voter cynicism. Their success, Liberals hope now as they did then, is paid in the hard coin of a strong economy. It’s a gamble.

Paul Wells is a national affairs writer. His column appears Wednesday, Friday, and Saturday.

Copyright 2016-Torstar Syndication Services

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