Dispatches

The budget is a roadmap for the next election campaign

Liberal leader Justin Trudeau boards his campaign plane in Ottawa on September 29, 2019. Ryan Remiorz/The Canadian Press

Within minutes of the federal budget being tabled on Monday, the opposition Conservatives were referring to it as an election platform, rather than a dry accounting of the nation’s finances.

With more than $100 billion in new spending and a number of crowd-pleasing proposals contained in the 700-plus page document, it’s not exactly a wild accusation.

And by autumn, Prime Minister Justin Trudeau’s second term will be two years old, which is about the usual retirement age for a minority Parliament. If Trudeau decides to take a chance with the electorate this year, this budget gives us a glimpse of how the campaign might play out.

Here are three issues that could dominate a hypothetical election campaign this year.

Childcare

Any future election campaign will now see childcare front and centre thanks to a massive new proposal in Monday’s budget to spend $30 billion over five years.

The proposal aims to create $10-per-day childcare spaces by 2026, except in Quebec where the province already runs its own childcare program. The proposed spending will see the federal government enter into a series of 50-50 cost-sharing agreements with the provinces, which have jurisdiction over childcare.

It’s no surprise the Liberals took this moment to take the plunge on childcare, because the economic effects of the pandemic have put a spotlight on the issue. In the year since stay-at-home orders were declared across the country, nearly 100,000 women have left the workforce, according to a report last month from RBC economics. That number is a stark contrast to the fewer than 10,000 men who exited the workforce in that time.

This budget doesn’t provide much in the way of immediate relief on childcare, though, despite its ambitious long-term goals.

“Do not expect to see $10/day spaces in your neighbourhood next year. Or the one after. Unless they are already in place and didn’t close during COVID,” said Jennifer Robson, a Carleton University professor and expert on social policy, on Twitter Monday after the budget was tabled.

If childcare dominates the next election campaign, it will be a throwback to the 2006 election, when Stephen Harper’s Conservatives wrestled a minority government away from Paul Martin’s Liberals. Harper’s party wooed voters with an innovative idea called the Universal Child Care Benefit, while the Liberals campaigned on a universal childcare system.

With their massive new Canada Child Benefit, the current Liberal Party seemed to be moving away from government-run childcare in favour of cash for parents. Today’s budget represents a shift back in the other direction.

Deficits

It’s not much of a surprise given the way money has been flying out the door since last March, but Canada’s deficits will be massive over the next few years.

The country is facing a $354 billion deficit in 2020-21, with the following year projected at a deficit of $155 billion and $60 billion in red ink the year after that.

Canadians are certainly anxious about all that spending. A full three-quarters of people are concerned about the amount of debt racked up during the pandemic, according to polling conducted by Public Square and Maru/Blue and provided exclusively to The Hub.

How will Canadians react to this at the ballot box? Not only is the situation unprecedented but it’s genuinely difficult to gauge public opinion on the issue.

It took almost everyone by surprise in 2015 when Justin Trudeau pledged to run deficits if he formed government. The political orthodoxy was so settled on the importance of balanced budgets that even Thomas Mulcair’s NDP solemnly pledged at the beginning of the campaign that they would eradicate the deficit.

It turned out voters were less fiscally conservative than political parties realized, or that other issues had taken precedent.

And once in government, Trudeau’s promise to run deficits was enthusiastically kept. His plan to eventually get back to balance was soon discarded in favour of a more relaxed debt-to-GDP guideline. Then, the pandemic hit and any semblance of fiscal restraint was sidelined in the fight to keep Canadians and businesses financially intact as the virus shut down the economy.

With that in mind, how will Canadians react to a $354 billion deficit? Will it be a rerun of 2015, where the political class overestimates the political cost of borrowing? Or will the Conservatives see opportunity with a message to get spending back under control?

Pandemic

As politicians at all levels look ahead to a possible election campaign in the wake of the pandemic, there is a high stakes blame-game playing out across the country.

For example, when Ontario Premier Doug Ford unveiled a raft of unpopular new restrictions last week in the face of rising COVID-19 cases in the province, he made sure to blame the federal government for the slow-trickle of vaccine doses.

Ministers in the Liberal government, and even Trudeau himself, have made pointed comments about the rollout of vaccines, suggesting that the provinces aren’t getting them out as quickly as they could.

Expect this kind of blame-evasion and jockeying for credit to continue as the pandemic ebbs away and various elections get closer.

At the Liberal policy convention earlier in the month, Trudeau gave a preview of his likely campaign rhetoric when he bragged that four-fifths of the pandemic relief money came from his government.

Monday’s budget kept much of that COVID relief in place, including the Canada Recovery Benefit, which provides an income stopgap for people put out of work by the pandemic. That benefit will taper off by 40 percent in the summer. The rent and wage subsidies for businesses will continue until September.

How Canadians judge the government’s response to the pandemic could be the number one ballot question in any upcoming federal election. Polling suggests that financial relief is the issue where Liberals can be the most confident and the federal budget suggests the party feels that way too.

Only 16 percent of Canadians said the financial response was poor or unacceptable, according to polling conducted by Public Square and Maru/Blue.

Trudeau’s government is on far shakier ground when it comes to vaccine procurement and travel restrictions, though. The same survey showed that 36 percent of Canadians said the government’s response on travel restrictions was poor or unacceptable and 39 percent said the response on vaccine procurement was poor or unacceptable.

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