The Liberal-NDP governing agreement^{1“Today, the Prime Minister, Justin Trudeau, announced an agreement reached by the Liberal Party of Canada and the New Democratic Party in Parliament, Delivering for Canadians Now, A Supply and Confidence Agreement.” https://pm.gc.ca/en/news/news-releases/2022/03/22/delivering-canadians-now} may not technically be a coalition, but in practice it may be worse. 

A coalition government in the Westminster parliamentary system is, as the name implies, a government made up of more than one political party. This is what happened in the United Kingdom in 2010, when David Cameron, whose Conservative Party had won the most seats but fallen short of a majority, reached a power-sharing agreement with the third-place Liberal Democrats. The government consisted of sixteen Conservative cabinet ministers and five Liberal Democrats, with Lib-Dem leader Nick Clegg taking the title of deputy prime minister. 

We have had coalition governments in Canada too, but since Confederation only at the provincial level. Federally, our coalitions are notorious as aborted failures. During the First World War, Robert Borden proposed a unity government to support conscription, but he was rebuffed by Liberal leader Wilfrid Laurier. In response, Borden created a new governing party, the Unionist Party, which included some floor-crossing Liberals who were pro-conscription.^{2“In early 1917, during World War I, recruitment for the Canadian Expeditionary Force fell to a very low level. PM Sir Robert Borden, opposed to any reduction in Canada’s commitment to the war effort, announced on 18 May 1917 that the government would introduce conscription to Canada. On May 25 he proposed to Liberal leader Sir Wilfrid Laurier that the Liberals and Conservatives form a Coalition Government to carry through the measure. After Laurier rejected the proposal on June 6, Borden tried to strengthen his government by bringing in individual Liberals and prominent political independents. His early efforts met with little success. In late summer, however, the Wartime Elections Act and the Military Voters’ Act appeared to increase the political prospects for a government supporting conscription. These Acts, together with strong pro-conscription sentiment in the English press and personal convictions that overrode party boundaries, made several Liberals and independents decide to accept Borden’s suggestion. On Oct 12 Borden announced the formation of a Union government made up of 12 Conservatives, 9 Liberals or independents, and one labour representative. A general election in Dec 1917 gave the Unionists a large majority.” https://www.thecanadianencyclopedia.ca/en/article/union-government} 

More recently, and doubtless foremost in the mind of voters and politicians, was the attempt by the NDP, Liberals, and the Bloc Quebecois to oust the minority Conservative government during the global financial crisis in 2008. That agreement was a strange hybrid of a coalition and what is happening today. It proposed that, after a vote of no confidence in the Harper government, the Liberals and NDP would form a coalition government. But, because they would still not have as many combined seats as the Conservatives let alone a majority, their coalition would be supported by a supply and confidence agreement with the Bloc. 

The rest of the story is well known. Harper staved off the no-confidence vote by proroguing parliament for an extended Christmas break, public opinion quickly turned against the proposed coalition, Liberal leader Stephane Dion was replaced by Michael Ignatieff, and the Conservatives were able to pass a budget in early 2009 with the support of the Liberals.^{3“Controversy erupted in 2008 when Prime Minister  Stephen Harper asked Governor General Michaëlle Jean to prorogue Parliament. This happened shortly before a confidence vote that could have defeated the Conservative Party’s minority government; the Harper government would have been replaced with an NDP– Liberal coalition supported by the Bloc Québécois. After talking with constitutional experts amid intense public and media scrutiny, Jean agreed to Harper’s request. His government survived.” https://www.thecanadianencyclopedia.ca/en/article/prorogation-in-canada} They would go on to govern for another two-and-a-half years before winning a majority in 2011. It was a bumpy ride, but the parliamentary system worked in the long run, as it always does. 

The parliamentary system will continue to work today too…eventually. But in the meantime, the Liberal and NDP agreement will severely strain its care principle of responsible government. 

Although the NDP didn’t even manage to wrangle so much as a single seat at the cabinet table out of the Liberals, Jagmeet Singh agreed to prop up Trudeau’s Liberals until June 2025 and the Liberals agreed not to call an election before then. During the three years in between, the Liberals committed to delivering or making progress on a number of policies, including national dental care and pharmacare, but also on housing, taxes, and labour policy (this may be the first document issued by a Canadian prime minister that uses the word “scabs”). 

In return, the NDP “agrees to support the government on confidence and budgetary matters—notably on budgetary policy, budget implementation bills, estimates and supply. Most importantly, “[t]he NDP would not move a vote of non-confidence, nor vote for a non-confidence motion during the term of the arrangement.” It is this provision that undermines the principle of responsible government. By extending its formal support for the government in the House and on committees, the NDP has weakened the accountability that responsible government is supposed to ensure.    

The roots of responsible government run back to the Stuart era and parliament’s attempts to impeach the King’s ministers. This established the idea that the King’s closest advisors could be held accountable and removed from office by parliament for their acts on behalf of the Crown, but it was not until almost two centuries later that parliament’s power to defeat a government and force the formation of a new one was clearly established and acquired the status of a fundamental principle of parliamentary government. (So enduring was the patronage system that preceded the introduction of responsible government that, as late as 1832, the Duke of Wellington could wonder “How is the King’s government to be carried on if the [First Reform] bill passes?”)

In Canada, the introduction of responsible government followed the recommendation in the Durham Report of 1839 that the colonies of British North America, which had until then been administered from Britain by an appointed Governor General, be permitted to control their own government through their elected representatives.^{4“In his report to the British Parliament, Durham said that the troubles in Upper and Lower Canada were the result of a misuse of power by the oligarchies and a clash between the appointed Executive branch and the elected Assembly. He realized the colonies should have a more accountable government.” http://www.canadahistoryproject.ca/1840/1840-10-durham-report.html} Responsible government thus began as a Canadian repudiation of direct rule from Britain, but it also had the effect of establishing in Britain the idea of responsible government as government with the consent of the elected representatives of the people.

Canadian scholar of parliamentary government, Philippe Lagassé, has explained what this means in practice: “When Canada is said to have a system of responsible government, we can take this to mean that the Cabinet is responsible to the Commons for the affairs of government, and that the House is the central actor in government formation.” It is the House of Common’s central role in forming (and unforming) government, along with the government’s power to dissolve parliament, that give the idea of responsible government teeth. Together these powers force cabinet and parliament to work together under the ever-present and chastening threat of the ultimate sanction of dissolution by one side or the other.

The NDP’s agreement to support the government removes this threat and its chastening effects for three years. At least in principle, the Liberal government can now stop worrying about being held to account by the House of Commons until the next election in 2025. By agreeing not to support a non-confidence motion—no matter what the Liberals get up to in the meantime, as long as they also abide by the terms of the agreement—Singh has committed the NDP to not holding the government to account. In other words, the agreement effectively suspends the operation of responsible government for three years. 

Yes, something like this happens in the case of majority governments, whose freedom to act is constrained only by the desire of its MPs to be re-elected. But in that case, the people have voted for a majority government. In 2021, fewer than a third of Canadians voted for Trudeau’s Liberals (only 20 percent, if you count Canadians who didn’t bother to vote) and fewer than one in five voted for Singh’s NDP (barely 10 percent, factoring in turnout). There isn’t even the fig leaf of a democratic mandate for the NDP to support a Liberal government in a de facto majority position.

This matters because parliamentary accountability means more than scrutinizing legislation. Most of what a government does, it does under its prerogative powers or under powers delegated to it by existing legislation. Virtually every decision the government makes—from allocating billions of dollars of grant money to deciding the annual immigration levels, from negotiating trade deals to deploying the Canadian Armed Forces—happens outside parliament. We rely on the House of Commons to hold the government accountable for every single decision it makes in and out of parliament. 

This includes some of the most controversial and unlawful decisions in recent Canadian politics. The Sponsorship Scandal did not happen in parliament.^{5“The sponsorship scandal, AdScam or Sponsorgate, was a scandal in Canada that came as a result of a federal government “sponsorship program” in the province of Quebec involving the Liberal Party of Canada, which was in power from 1993 to 2006.” https://www.wikiwand.com/en/Sponsorship_scandal} Nor did any of Trudeau’s ethics and conflict of interest violations, the government’s obstruction of parliament’s request for documents related to the firing of two scientists from the Winnipeg virus lab, or the declaration of a state of public order emergency. If the government were to declare war on Russia, that would not happen in parliament either. Would Singh, whose party opposes even lethal military aid to Ukraine, really support going to war? There is no “anti-war” loophole in the agreement. On all these matters, either the NDP is now toothless, or the new agreement is.

This brings us to the reality behind the rhetoric. I have said that “in principle, the Liberal government can now stop worrying about being held to account” and that “the agreement effectively suspends the operation of responsible government for three years.” Those caveats are important. The one thing this agreement cannot do is suspend the normal operation of politics. It does not change the fact that every Liberal and NDP MP will still have to consider the public’s reaction to the government every day between now and the next election. 

The safety valve in our parliamentary system is the connection between individual members and their constituents. Whatever a government does, the MPs who support it are responsible for it every time they go back home to knock on doors and ask their neighbours to vote for them again. This means that, whatever the agreement says, it will only last as long as it proves popular. A Sponsorship-level scandal, a (G*d-forbid) war, or a decisive public turn against the government over inflation, cost-of-living, or its arrogance and incompetence would mean the agreement is not worth the pixels it’s printed on. 

Either the agreement means something and changes things, or it doesn’t. If it does, then it means less effective scrutiny and accountability for the government; if it doesn’t, then what’s all the fuss about and what was the point? Time will tell which it is. And, ultimately, the success or failure of this coalition-lite pact will be decided in June 2025—if it lasts that long.

A sign of an astute politician is the ability to discern the big challenges facing his or her society and then to develop a compelling policy narrative and coherent governing agenda that responds to them. Think of Franklin Delano Roosevelt’s New Deal^{1“New Deal, domestic program of the administration of U.S. Pres. Franklin D. Roosevelt (FDR) between 1933 and 1939, which took action to bring about immediate economic relief as well as reforms in industry, agriculture, finance, waterpower, labour, and housing, vastly increasing the scope of the federal government’s activities.” https://www.britannica.com/event/New-Deal} as a left-wing example or Mike Harris’ Common Sense Revolution^{2“While inspired by the “Red Book”, the Common Sense Revolution was a decidedly right wing and populist document, promising broad tax cuts (30 percent) and less government. Not only a successful campaign document, the Common Sense Revolution became a governing template for eight years – and two majority mandates – of Harris government.” https://parli.ca/common-sense-revolution/} as a right-wing one. 

Conservative party leadership candidate Pierre Poilievre has made the idea of “gatekeepers” a key part of his early campaign message. It has the potential to similarly connect an overarching political narrative and accompanying policies to what may be the most pressing economic issue facing Canada: supply-driven stagflation caused in some part by sclerotic regulatory institutions and processes.

The basic notion of the gatekeepers is that a combination of bureaucratic inertia and intransigence has come to stand in the way of new housing construction, public transit and other community infrastructure, and natural resource projects obtaining regulatory approval and getting built. 

According to this political economy diagnosis, we’ve effectively created a policy environment in which the physical economy—what Peter Thiel refers to as the “world of atoms” as opposed to the “world of bytes”—is mired by red tape, endless consultations, and multiple and overlapping project approvals.  

One of the strengths of this message is it’s substantively correct. There’s considerable evidence, for instance, that Canada underperforms its peers on construction timelines and costs, drug approval timelines, and policy-induced housing costs. 

Just consider that Canada presently ranks 34th of 35 OECD countries for the length of time to obtain general construction permits.^{3“It takes nearly 250 days to get a permit in Canada – three times (168 days) longer than our competitors in the United States. In the OECD, only the Slovak Republic takes longer.” https://theorca.ca/visiting-pod/slow-permit-processes-undermine-canadas-competitiveness/} This has contributed to, among other things, the dubious distinction of being home to the fewest homes per capita of any G7 country and a national average house price of $816,720 and counting. 

Due in large part to the tangibility of these outcomes, Poilievre’s critique of the gatekeepers has the potential to be a politically potent message. As Ben Woodfinden recently wrote for The Hub, it appeals to a significant mix of core conservative voters, populists, younger Canadians, and those who increasingly feel “left behind.” This constellation of voters could form the basis of a broad-based coalition capable of competing for national power. 

Poilievre’s message has tended to focus on housing, which is intuitive both because of the magnitude of the supply-driven price increases (20 percent year-over-year) and the issue’s political salience. But there’s scope to extend his narrative more broadly to describe how government policy —from drug approvals to occupational licensing—is contributing to artificial scarcity across the entire economy. 

This point is worth underscoring: Poilievre is not only on the right track but, if anything, he may be underestimating the relevance, scope, and appeal of his gatekeeper narrative. He can draw on a growing intellectual and political movement calling for a new supply-side agenda—what The Atlantic’s Derek Thompson has defined as an “abundance agenda”—as a much-needed response to today’s twin economic challenges of rising inflation and slow growth. 

These “new industrialists”, as Bloomberg columnist Noah Smith has called them, come from different political persuasions and intellectual backgrounds but they share one common idea: we need to unshackle the modern economy so we can build and produce more stuff. 

Their basic insight is that the progressive focus on demand-side policies—namely, redistributionist changes to the tax and transfer system—may advance certain equity goals but they’re no substitute for a pro-growth policy agenda.^{4“Canada’s economic sluggishness long predates the COVID-19 crisis. The rate of economic growth has been falling decade-over-decade for the past fifty years. Average annual GDP growth per decade between 1960 and 2000 was 4.08 percent. It has been just 1.99 percent since the start of this century.” https://on360.ca/policy-papers/a-post-pandemic-growth-strategy-for-canada/} As a matter of economics, redistribution without growth is a recipe for stagflation. And, as a matter of politics, it’s a recipe for populism, polarization, and a diminished sense of progress. 

The unofficial manifesto of the “Building More Stuff” movement may be a 2020 essay by leading American venture capitalist Marc Andreessen entitled “It’s Time to Build”. It set out a comprehensive critique of the failings of Western economies to build and produce in the physical economy. In response, Andreessen called for a new Left-Right political consensus in favour of “building.”

Since then, such a consensus has started to take shape. Leading thinkers including New York Times columnist Ezra Klein, George Mason University economist Tyler Cowen, and even Treasury Secretary Janet Yellen have endorsed a new supply-side agenda focused on boosting production in key sectors such as advanced manufacturing, clean energy technologies, agriculture and agri-food, and biomedicine. 

The policy expression of the “abundance agenda” is the subject of some debate. Depending on one’s ideological preferences, it may involve a bigger or smaller role for the state in terms of public-private partnerships, public investment, and private investment incentives. But virtually all of its proponents agree that it requires sweeping regulatory reforms. As Klein recently wrote (citing an interview with an environmental scholar): “it [regulatory policy] penalizes and regulates technology, infrastructure and growth—often quite explicitly.”

One of the key strengths of this line of thinking is that it stands in contrast to the zero-sum politics that have marked the post-financial crisis era. It is inherently positive-sum, futuristic, and pro-progress. Thompson calls it “unabashedly utopian”, Smith has described it as the “product of hope”, and Klein has positioned it as a means to a “radically better” future. It’s a powerful idea that has only taken on greater salience in light of current supply bottlenecks. 

Notwithstanding its growing prominence in U.S. intellectual and political circles, there hasn’t quite yet been a similar pro-Building More Stuff movement in Canada. There are exceptions of course—Hub contributors Chris Spoke and Matt Spoke are examples and a recent Ontario Housing Affordability Task Force has a pro-building bias—but it’s fair to say that Poilievre has something of a first-mover advantage on a message of abundance and progress. 

The good news for him is that there’s certainly a lot of evidence for a new supply-side agenda to draw on. Take the federal Department of Health’s drug approval process. Last month the National Post reported that the global pharmaceutical company Merck has thousands of doses of its COVID-19 therapeutic drug in storage while it awaits federal approval. 

Never mind the drug has been approved by regulators in peer jurisdictions such as the United States and the United Kingdom. Or that the World Health Organization has recommended its use for high-risk patients. Or that the federal Industry Minister, François-Philippe Champagne, previously lauded Merck’s partnership with a Whitby-based company to manufacture the drug here in Canada. 

Notwithstanding these key considerations, the federal government has still carried out its regulatory review at what’s been described as a “snail-like speed.” The costs of these drug approval delays, unlike in the case of housing, won’t be mainly measured in higher prices but rather in higher rates of hospitalization and even deaths from COVID-19. 

In this particular case, the answer probably ought to have come in some form of regulatory harmonization with the United States such as a system of mutual recognition, joint review panels, or what is sometimes known as a “convergence test.” At this point, though, it’s critical that the Department of Health just approve the drug so that it can be administered in Canada as soon as possible. 

More generally, Canadian policymakers should be replacing these slow and duplicative regulatory processes—particularly in the face of a life-threatening endemic—with a model that preferences progress over a lot of bureaucratic busywork. Think of it as a pro-abundance response to the problem of government-induced scarcity. 

There are countless other examples across the Canadian economy that similarly represent an impediment to growth and progress. Poilievre is right therefore to focus on the gatekeepers. They stand in the way of abundance. It’s time to open the gates.