In The Weekly Wrap Sean Speer, our editor-at-large, analyses for Hub subscribers the big stories shaping politics, policy, and the economy in the week that was.
Justin Trudeau would rather cosplay as a premier than govern as a prime minister
Donald Trump’s trollish social media post about Canada becoming America’s 51st state has of course generated a lot of commentary. But it was the second part of his comments where he described Prime Minister Justin Trudeau as a “governor” that should have gotten the real attention. Titling the prime minister as a sub-national leader is, based on his governing record, actually rather fitting.
Trudeau has overseen an unprecedented expansion of the federal government into provincial and local jurisdiction. The federal spending power has neither never been more extensively used nor heavy-handed. Think for instance childcare, dental care, health care, social housing, school food programs, and so on. As the authors of a major 2023 study by the Institute for Research on Public Policy showed, the Trudeau government’s conception of federalism essentially demands that the provinces are “accepting [of] the federal government’s policy vision.”
The net result is, as Bill Bewick set out at The Hub this week, that today at least half of federal spending is dedicated to areas of provincial or shared jurisdiction. We have a prime minister who’d seemingly much rather be a premier (or a governor).
Consider the massive run-up of federal spending, deficits, and debt and what we’ve gotten for it. Federal program spending has nearly doubled during his time in office. The accumulated debt has grown by roughly $1 trillion. And the deficit by all accounts is still growing rather than shrinking. Yet in spite of all of this, military spending as a share of GDP has barely budged from the Harper years.
Doubling federal spending and still not meeting our NATO target is a bizarre choice that can only be understood through the lens of the Trudeau government’s sub-national preoccupation. It has consistently diverted scarce resources away from its core responsibilities to ones outside of its constitutional jurisdiction. Put simply: its progressivism has just proven much more animated by provincial social policy than it is by federal defence and security policy.
This tendency has up until now come with no political costs—and has probably had political upsides. But we shouldn’t underestimate its downsides for Canadian governance.
Not only has it undermined provincial autonomy and basic constitutionalism, but it has also caused the Trudeau government to underinvest in core areas like defence and national security. Trump’s linking trade access to Canada’s woeful capacities in these areas is the regrettable yet predictable consequence.
His re-election and the risks that it represents to Canada’s economic and security interests are a reminder of the precarious moment in which we find ourselves. It’s one that calls for a prime minister and a federal government that’s interested in the exercise of national power as set out in the Constitution. We can no longer afford to have a prime minister who’d rather cosplay as a premier.
One of Trump’s political strengths is his uncanny ability to cut to the nub of an issue. It’s typically oversimplified and a bit crude (and oft-times even inadvertent) but it can still capture the essence of people or otherwise complicated topics. His description of Trudeau as a mere governor works for the same reason that it stings: it contains an essential truth about him and his government.
Are free markets the key to a Conservative realignment?
A persistent focus at The Hub in 2024 has been the political realignment and its implications for Canadian politics in general and Canadian Conservatism (and conservatism) in particular.
As a reminder, the political realignment broadly refers to shifting voting patterns in the Anglo-American world whereby center-right parties are increasingly home to voters without university degrees who disproportionately work in the goods-producing economy and live in rural or peripheral communities and center-left or progressive parties are now comprised of more educated voters who tend to work in the knowledge economy and live in cities.
These trends have been occurring for some time but, for various reasons, they’ve accelerated in recent years. Donald Trump’s 2024 election victory based on a multi-racial, working-class coalition are a big part of this story. Pierre Poilievre and the Canadian Conservatives’ gains with working-class communities and voters are another.
This past summer, I was honoured to speak to a group of Montreal Economic Institute fellows about the opportunities and challenges of the realignment in Canada—with a particular focus on the potential tensions between the rise of realignment politics and Conservatives’ traditional support for free-market economics.
There’s evidence for instance that the evolving centre-of-gravity of Conservative politics is less committed to notions of free enterprise or market capitalism. These voters aren’t socialistic but they also don’t have romantic views about business, entrepreneurship, or markets. To borrow from the title of Irving Kristol’s 1978 book, they’re prepared for one or two cheers for capitalism but definitely not three.
If this interpretation is correct, one can envision it creating possible conflicts between new and emerging Conservative voters who are key to the party’s political success and traditional supporters who may be more committed to these long-standing conservative precepts.
About a month ago, we released a podcast episode with Cardus Canada president Brian Dijkema who challenged this working hypothesis. I wrote about our exchange here.
This week, Dijkema returned to The Hub‘s pages himself to outline his argument that the Canadian Conservative realignment may, unlike the American one, actually involve a doubling down on free markets and free enterprise. It is a must read.
His basic case is that realignment conservatives in the U.S. can make a (semi-) persuasive case that American policy, particularly on trade and globalization, has overindexed for the consumption economy and wrongly discounted for production and its economic and socio-cultural benefits. According to this line of thinking, there’s a (debatable) case that American conservatives may need to accept that there could be a trade-off between hyper-efficiency and broad-based opportunity. To use an example from JD Vance, maybe they have to live with higher-priced toasters in exchange for more manufacturing employment.
Dijkema argues that the Canadian story is the opposite. Canadian policy consistently overpreferences production at the expense of consumer interests. There are various examples—including protections for airlines, banks and telecoms, supply management for eggs and dairy and large-scale subsidies for sectors like auto manufacturing. These policies prop up production on the backs (or wallets) of cost-conscious realignment voters.
If this political economy understanding is correct, then the free-market response also happens to be the realignment one: Open up these protected sectors to greater competition in the name of increasing the choice and purchasing power of consumers. It’s not just about eking out more economic efficiency. It’s a matter of economic justice.
What’s interesting is that one can see Pierre Poilievre testing Dijkema’s hypothesis. As I wrote in August, his appeal to realignment voters has tended to be rooted in a free-market framework. He’s made some compromises of course but no more than a typical politician—and in fact, he’s at time spoken in more first-principles terms about economic freedom than any Canadian Conservative politician in my lifetime.
He seems to be accepting Dijkema’s bet: Canadian voters in general and realignment voters in particular want to get rid of the “gatekeepers” who as he famously put it limit their choices and drive up their prices. Let’s hope they’re both right.
Sean Speer is The Hub's Editor-at-Large. He is also a university lecturer at the University of Toronto and Carleton University, as well as a think-tank scholar and columnist. He previously served as a senior economic adviser to Prime Minister Stephen Harper....
