The ONW Salon: A Political Look Ahead For 2017
What will be the big issues on the federal political scene in the next year? How will the economy do? Two parties will have new leaders - the CPC and the NDP - but what will that mean for the country and for Justin Trudeau? Richard Mahoney, John Capobianco and Tom Parkin look ahead.
Let me first wish everyone a Happy New Year, including my friends Tom and Richard who I have enjoyed having a robust dialogue on all sorts of political issues throughout 2016 – I look forward to the same in 2017.
It was certainly an interesting year politically – and not because it was a leap year, but with all the changes around the world as well as in Canada.
I think 2017 will be relatively calm politically since there won’t be any major elections here with the exception of B.C., which should see Premier Clark re-elected. The Ontario election is not until 2018 and that outcome is more uncertain.
All that said, two major federal opposition parties will see new leaders elected this year – in May for the Conservatives and later in the fall for the NDP. This will add some stability to both the CPC and the NDP and Question Period will be altered considerably as will the media coverage when both have permanent leaders. I must say, albeit biasedly, but Conservative Interim Leader Rona Ambrose has been doing a solid job to-date, so much so that there was an active campaign to try and get Rona to consider (unsuccessfully) running for the permanent spot. Tom Mulcair continues to excel in the House and has been keeping the PM’s feet to the fire on all sorts of issues, not least of which on the cash-for-access debacle. So the new leaders of the CPC and the NDP will have big shoes to fill to be certain.
As for issues in 2017, there are a few significant ones that the PM started in 2016 that will need to be dealt with this year. Most importantly is the economy and jobs, which will need early attention given the upcoming budget. Canadians gave the PM a break when his first budget was way over the campaign promise deficit of $10 billion – I am not sure that will go over well if the trend continues.
Other issues to deal with include electoral reform, which has been badly handled to date, pipelines which will need to have some attention this year in conjunction with cap and trade taking shape in 2017 – to name a few.
Happy New Year John and Tom and to all who check out the Salon! Looking ahead to 2017, it first helps to have a look where we left off in 2016, as my friend John has done.
While many call 2016 a bad year because of certain global events and catastrophes, it was an important year for Canada and for the new Trudeau government. The Prime Minister's first year in office saw a focus on the economy - a tax cut for the middle class, a tax increase for high income Canadians to balance things, major enhancements to the Canada Child Benefit to help middle and lower income Canadians afford the cost of raising children, an historic transformation of the Canada
Pension Plan to help Canadians save for retirement in a changing and challenging global economy and an equally historic pan-Canadian deal on climate change. Finally, the government has also begun a gigantic investment in infrastructure, creating jobs and helping us build our public transit and transportation capacities across the country.
That said, the economy remains the toughest test for this ambitious government. Growth around the world is slow and while the tax relief and infrastructure investments will help our economy, all eyes will be on Finance Minister Morneau and the government generally to see what they can do to help the sluggish growth we now live with.
Finally, all that has to get done while the global economy is slow, and with the Americans throwing a major monkey wrench into the works by electing Trump, who promises more protection of U.S. industry and disruption to trade agreements. It brings to mind the elder Trudeau's characterization of the Canada-U.S. relationship as akin to "sleeping with an elephant". When the elephant rolls over....
In 2016, Justin Trudeau had it easy. Most Canadians were pleased with a new tone and having vanquished Harper. They were willing to give Trudeau more time to fulfill the platform he was elected on. Both the Conservatives and the NDP were without stable leadership. In 2017 it’s going to get a lot harder.
The biggest issue of 2017 will be the economy. The Canadian economy is still limping. We have about 30,000 fewer full time jobs now than when Mr. Trudeau was elected and an explosion of part time work. The average wage fell throughout much of 2016 and we are back to 2014 levels. Growth projections keep getting cut. And we had a near-record trade deficit of about $18 billion in 2016.
Meanwhile, U.S. GDP growth hit 3.5% in the three months ending in September and the U.S. Federal Reserve is beginning to starting hiking interest rates. Higher U.S. rates will put downward pressure on the Canadian dollar unless the Bank of Canada matches the U.S. rates.
The problems of the Canadian private sector economy won’t be fixed by budget deficits, another trade deal, more public-private infrastructure spending or a new energy super-project. And that, it seems, is about all the Liberals have to offer.
In their leadership campaign, it seems the Conservatives are more interested in talking about refugees and immigrants than talking about jobs and the economy. Given that it's young and working class Canadians who are most hurt by the poor economy, and given that there has been somewhat of an renaissance of economic thinking on the left, watch to see if the NDP can develop a clearer economic plan, challenge the Liberals and strengthen its support among young and working class constituencies.
The first half of the term for any new government is usually their best time and given the rather long honeymoon PM Trudeau experienced in 2016, it was a relatively easy ride for the government. Although it must be said the cracks were started to show going into the holidays with the Liberals slipping in the polls, in particular because the cash-for-access issue has hit a nerve with Canadians, according to many polls.
As the economy and pocketbook issues remain the most important, the result is still "to be determined" by this government as we see what it comes up with in early 2017. It will have to deal with the electoral reform issue - it was a key election campaign promise and it has gone sideways. Something will have to be done with this issue this year.
The other major unknown is our friends to the south, As Richard has alluded to above, the election of President-elect Trump will make for interesting times between our two countries - trade being the major stumbling block as we have seen so far with the PM's premature statements of his willingness to re-negotiate NAFTA after Trump made several campaign statements that he would scrap the deal. We all believe he meant (and means) to change the deal with Mexico more than with Canada, but it does leave significant unanswered questions for us and it will be interesting to see how the Trudeau/Trump relationship shapes up. It seems the Keystone pipeline will be one major issue both the U.S. and Canada can agree on and this will be a good way to start the relationship.
These issues are the obvious ones that need to be addressed in 2017, but of course we didn't mention any international ones beyond with the US, which will no doubt arise. Global Minister Stephane Dion has not performed well and the PM has pretty much taken over foreign affairs issues. This will have to change, which will mean a cabinet shuffle. I think all three of us will agree that a shuffle will take place - the only question is - how big?
While the Trudeau government got off to a solid start, as we have all observed in our own ways, 2017 will be no piece of cake for them. It will also mark a turning point for both the Conservatives and the NDP. Frankly, the Conservatives appear to have the upper hand right now with a large group of candidates seeking their leadership. Canadians want and deserve to see credible alternatives to any government and now is no exception. Trudeau’s crushing 2015 victory ended the career of Stephen Harper, who dominated the modern Conservative Party and gave it its personality in many ways.
The choice Conservatives make will tell us what kind of party it will be, and what kind of alternative they will offer to Canadians. Will it be the Trumpian doppelganger politics of Kellie Leitch? While many deride this possibility, it is important to note that just a few months ago, Kellie Leitch was an also-ran in the race. She now stands as a frontrunner, so the values test/identity politics approach she has taken, often bordering on race-based politics, has helped her rally support amongst the Conservative base. That may be a problem for her when the party wants to broaden its appeal, but it has helped her to date, without a doubt.
The NDP have a bigger problem, I think. They expected to win the 2015 election. They expected to further vanquish their rivals for the progressive votes, the federal Liberals. When Trudeau so deftly turned the tables on them, they reacted with anger and dumped their leader, Tom Mulcair, who broods in office still. The lack of any credible alternative emerging in that race yet is not a good sign. It is as if Trudeau took the wind out of them, and it has yet to come back. They have to hope that at least one of the many potential leaders that have so far declined the opportunity to put their name forward changes their mind. And, when and if that happens, we will all want to see which NDP shows up to oppose Trudeau and the Liberals. Will it be a Rachel Notley-style NDP that balances economic growth, bold action on the environment and progressive social values? If so, how would they differentiate that approach from that of the Trudeau government? Or are we looking at a more radical and historically “socialist” alternative, as contemplated by some in the NDP?
Right now, not much is clear on that front – another great question for 2017 to answer… stay tuned!
The second major issue will continue to be environment and energy policy – climate change, carbon pricing and energy projects. Each of the three parties has problems.
From one perspective, the Conservatives have the easiest time of it. They will continue to oppose any tax on anything and support any pipeline to any place. The federal Conservative Party, Brad Wall’s Saskatchewan Party and the two right-wing Alberta parties will unify around these positions. The problem for the Conservatives will be the perception that they hold a do-nothing position because they don’t believe climate change is real. Even one-third of Conservative supporters believe climate change is real. About 80-90% of Liberals and NDP voters agree climate change is real.
The NDP’s problem is that, while they are unified around carbon taxes and the reality of climate change, there are differences on the Kinder Morgan’s Trans Mountain pipeline (all NDP sections oppose the Keystone XL project as it will export jobs to the U.S. Gulf coast). Next spring’s BC election will be all-important to the NDP. In the contest, the NDP will oppose the Trans Mountain pipeline – a fairly simple decision for B.C. NDP leader John Horgan because the pipeline places the burden of environmental risk on B.C. while giving them very little economic benefit. That position puts him at odds with the Alberta NDP government. The federal NDP will continue to focus on guarding the integrity of approvals processes – rightly, as that is the focus of federal responsibility. Managing these different interests will be critical.
The Liberals’ problems are several. First, the Trudeau government did not live up to promises to restart the Trans Mountain assessment process under new rules. The NDP will be sure to remind B.C. voters of that. Second, B.C. Premier Christy Clark has said that while she may support the Trans Mountain pipeline, she won’t campaign for it. That will put pressure on Trudeau to explicitly support Clark and the pipeline leading up to the May 9 vote. Realigning his voter coalition with Clark’s is not an advantage to Trudeau as hers includes a significant faction of federal Conservatives. Third, pressure from the Conservatives and Alberta oil lobbyists to accelerate pipeline construction will push the Liberals into conflict with First Nations and environmentalists – groups the Liberals have courted to offset the appearance of business Liberalism. All these issues will be difficult issues for the Liberals to manage.
Richard Mahoney is a lawyer with deep experience in politics and governance. He is a former senior advisor to the Rt. Hon Paul Martin, a former Campaign Chair and President of the Ontario Liberal Party. John Capobianco is a Senior Partner and National Public Affairs Lead at FleishmanHillard. He has been a Conservative strategist with over 30 years of political activism at all three levels, including as a former federal Conservative candidate. Tom Parkin is a veteran NDP strategist and a frequent commentator on national issues.