It has been decades since Canadians were offered a Throne Speech that promises so much conflict, and that places the country’s finances so much at risk.
To save its political skin, Justin Trudeau’s Liberal government intends to cut taxes while ramping up spending on everything from electric-car subsidies to student loans. Bill Morneau – the Finance Minister who never says no – will preside over ballooning deficits and, if the economy goes awry, much worse.
Pierre Trudeau, reduced to a minority government in 1972, spent his way back to a majority two years later. Like father, like son.
Stripped of its sometimes-bizarre rhetorical flourishes – “we are inextricably bound to the same space-time continuum and on board the same planetary spaceship” – the speech offers a series of seriously expensive promises.
First up, the government promises, will be a tax cut “for all but the wealthiest Canadians.” The federal budget has been in deficit since the Liberals came to power. With this tax cut, those deficits are bound to get worse.
If you were thinking that the tax cut would be accompanied by spending restraint, don’t fool yourself. The Throne Speech promises new investments in subsidized housing, enhanced pensions for seniors, support for parents with young children and for students of every age, and improved primary health care.
There are promises to improve water quality, health care and infrastructure for Indigenous communities, along with enhanced support for veterans. But all that is dwarfed by two enormous commitments, which will shake government finances and the national economy.
The first is to “to achieve net-zero [carbon] emissions by 2050.” This is a goal far beyond Canada’s previous carbon-reduction targets. There will be money to make homes more energy efficient, subsidies for zero-emission vehicles, business and community subsidies, and a program to plant two billion trees. But most of all, there are bound to be ever-higher carbon taxes and ever-tighter regulations on emissions, which will reshape the economy for better or worse.
The second is to “introduce and implement national pharmacare,” a multibillion-dollar program to provide low-cost prescription drugs to those not covered under existing private or government programs. The Throne Speech also promises, in passing, to explore the NDP’s proposal for a national dentacare program.
There is one forlorn sentence promising to “pursue a responsible fiscal plan to keep the economy strong and growing.” Seldom has a clause been so overwhelmed by what came before and after.
We can expect the government to act on this agenda, because the Liberals need the support of the NDP or Bloc Québécois to stay in power, and because these commitments fit with Mr. Trudeau’s inclinations in any case. Mr. Morneau will find ways to justify all this new spending and, in truth, the debt will be bearable as long as circumstances don’t change.
But if the unforeseen arrives, such as a recession, then the pressure on the federal purse could send deficits through the roof, which is where they went when Pierre Trudeau was prime minister and employed the same tactics to keep New Democrats onside.
There are other stress points. As carbon prices escalate, provinces that are now compliant with federal standards, such as Quebec and British Columbia, could find themselves facing federal penalties.
However welcome the goal of ensuring all Canadians have access to prescription drugs, most provinces will resist a federal pharmacare program that is bound to increase provincial as well as federal health-care costs.
And if, as the Throne Speech promises, Ottawa moves to entrench the United Nations Declaration on the Rights of Indigenous Peoples in legislation, with its guarantee of “free, prior and informed consent” over proposed developments on their territories, then First Nations will finally have what they long sought: an effective veto over natural resource projects.
Although the Throne Speech vowed to address the issue of growing regional tensions, most of its commitments are bound to worsen them, as Western provinces react to draconian efforts to reduce carbon emissions, even as Quebec leads the charge against the latest federal intrusions in health care and other areas of provincial jurisdiction. The Throne Speech, in short, is a prescription for conflict.
Never think that the problem with minority government is that nothing gets done. With this address, too much is being done by half.
John Ibbitson