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Scott Reid: Change always wins. The sooner Justin Trudeau accepts this, the better

Commentary

Prime Minister Justin Trudeau appears at a Liberal Party fundraiser in Markham, Ont., Friday, June 28, 2024. Christopher Katsarov/The Canadian Press.

Change. You capricious son of a bitch.

Sometimes it will sweep you to power atop a tidal wave of enthusiasm, applause, and anticipation. But just as easily, it can bury you beneath the hard clay of political history.

When change rallies to your side, every move becomes genius. Every word, a song. Every choice, predestined. There is no more intoxicating or reliable campaign slogan. No force more elemental or unbeatable. Like charging into battle holding Hercules’ club.

But when change turns its back on you, politics can become orphan-lonely. Every decision is damned. Every appearance is ridiculous. Each adjustment is desperate. Change can chew you up, spit you out, and threaten your parliamentary pension.

Most political leaders encounter change of one sort or another. A few last long enough to experience both its shine and shade.

That is where Justin Trudeau now stands. Nine years ago, change was his warmest friend. Today, he suffers its coldest shoulder.

Until June 24th, it was at least partially possible for Liberals to dismiss bad polls as an untested prospect. No longer. The knee-weakening loss of Toronto-St. Paul’s removes any such pretense. For Liberals, it’s as bad as it looks. Worse, maybe.

So, what is to be done?

The answer will only be found in the concrete truth of change. Canadians want it. They will have it. The only practical decision left for Liberals is whether they will even attempt to provide it.

Alicia Planincic: Prices have gone up but so have wages. Are Canadians falling behind? 

Commentary

A shopper reaches for groceries in a No Frills grocery store in Toronto, May 30, 2024. Chris Young/The Canadian Press.

In each EconMinute, Business Council of Alberta economist Alicia Planincic seeks to better understand the economic issues that matter to Canadians: from business competitiveness to housing affordability to living standards and our country’s lack of productivity growth. She strives to answer burning questions, tackle misconceptions, and uncover what’s really going on in the Canadian economy.

Inflation may be cooling (barring last month’s surprise uptick) but less inflation just means prices are going up at a slower rate. The price of milk is now 20 percent more expensive than it was just five years ago and is unlikely to get any cheaper.

But it’s not just prices that have gone up. Workers have also seen their wages rise faster in recent years than they did in the past. When unemployment was extremely low and consumer demand was high, businesses had to compete for employees. This meant offering increasingly attractive wages to be able to add or even simply retain staff.

The question is if this has been enough to offset the pain of inflation. As it turns out, it has. Sticker shock aside, Canadians are better off financially than they were five years ago. But it’s not all good news.

First, the gains are extremely small. Over the last five years, prices rose by 18 percent while average hourly wages increased by 20 percent (according to a survey on payrolls that accounts for compositional changes in the workforce). This means “real” wages have grown by just 2 percent, and Canadians can afford slightly more than they could back then.

Graphic credit: Janice Nelson. 

Of course, this is only an average. Plenty of people are not in better financial shape such as those in provinces that have seen weaker wage growth, including Saskatchewan, Newfoundland, and Alberta. Likewise, certain occupations—including those in construction, finance, and hospitality—have seen weaker wage gains. At the same time, higher-than-average price increases for certain items (e.g., rent, gas) will weigh more heavily on some.

Second, weak real wage growth in recent years is not an anomaly but the continuation of a longer trend. From 2014 to 2019, growth in wages only marginally outpaced increases in prices: 11 percent versus 8 percent, leaving real wages up just 3 percent.

All this means that Canadians have seen real wages grow by well under 1 percent per year going all the way back to 2014. With this in mind, perhaps the affordability problem that is top of mind for Canadians today is not just about inflation, per se, but instead reflects something else: a fundamental weakness of Canada’s economy to deliver real improvements in wages for an entire decade.

This post was originally published by the Business Council of Alberta at businesscouncilab.com.