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                A Populist Moment,  Another Status-Quo Budget


By Luke Savage

“Real change.”

This was the catchy, if deliberately vague slogan which less than two years ago helped catapult the Liberal Party from its third place nadir back into the familiar position of government. While many factors helped give Justin Trudeau his majority, the party’s economic messaging was perhaps foremost among them.

Alongside a campaign of personality politics built heavily around the figure of Justin Trudeau, soaring rhetoric about deficit spending and raising taxes on the 1% gave many voters the impression they were backing a populist, left-leaning government serious about tackling inequality and resisting the global penchant towards austerity. Following the election, much of the Canadian media seamlessly wove this narrative into its commentary. The international press, probably as a result, followed suit and have since grown fond of representing Trudeau and his government in the same light.

Something like a miniature version of this same arc preceded Wednesday’s budget.

In a speech to an elite audience at the St. Matthew’s Day Banquet in Hamburg last month, the Prime Minister made the same, by now familiar, gestures towards some kind of populist policy pivot. When “companies post record profits on the backs of workers consistently refused full-time work,” he declared, “people get defeated.” When “governments serve special interests instead of the citizens’ interests who elected them, people lose faith.”

Though not exactly the stuff of Phil Ochs songs, Trudeau’s posturing did prompt observant columnists like the Toronto Star’s Paul Wells to speculate about a “strongly populist shift in economic policy, beginning with next month’s federal budget.”

And yet here we are, coming up empty once again.

Of course, this budget (as most do) contains a few things worth celebrating. The limiting of unpaid internships in federally regulated industries is a basic step towards fairness for some young workers. The Liberals also delivered on a campaign promise to extend parental leave and benefits to 18 months.

But in overall orientation, the 2017 budget comes nowhere close to reflecting the populist ambience the Liberals projected in their 2015 campaign or again in Germany last month.

In its place, Bill Morneau today offered a lukewarm porridge of phrases like “leading globally and create jobs for Canadians”, “a government that puts people first”, “building stronger communities”, and innumerable other verbal circumlocutions too soporific for polite conversation.

As obscene inequalities of wealth endure, the richest Canadians will continue to receive preferential treatment on their income from stock options, capital gains, and dividends (despite the Liberal commitment to close this very loophole). Corporate tax rates, slashed repeatedly by Stephen Harper at the cost of tens of billions to the federal treasury, will remain at paltry lows as Canada’s biggest companies continue to hoard unfathomable profits in offshore tax havens. (Mercifully, the apparently nascent plan to privatize valuable public assets like airports seems to have been shelved...for now.)

Fundamentally, there is nothing in the 2017 budget that seriously addresses the deep and abiding inequalities in Canadian society or the structural problems that allow them to persist.

While the Conservative opposition will no doubt continue its quasi-Pavlovian routine of branding the Liberals some sort “tax and spend” government, nothing could be further from the truth.

The 2015 Liberal platform’s claim to economic policy dynamism was essentially premised on two heavily advertised commitments: modest deficit spending and raising taxes on the wealthiest Canadians. Peel back the rhetorical layers, then and now, and what you find is a lot less bold than even the initial posturing suggested.

Though the government is indeed running deficits, its original plan hinted at direct borrowing (the Liberal platform noting that interest rates remain at historic lows) rather than the private infrastructure bank now being touted by Morneau, which has to guarantee investors a healthy return while socially useful projects are sidelined. In short, many of the Liberals’ much vaunted investments, including some of those announced today, will end up costing more and benefiting the public less.

The same can be said for the other totem of Liberal economic policy: raising taxes on the wealthy. Combined with the so-called “Middle Class Tax Cut” (the benefits of which predominantly accrue to Canada’s wealthiest 10% of earners) the revenue gains from the new tax bracket applying to the richest 1% are more than cancelled out.

So much for a populist shift or the return of activist government.

In place of any clear diagnosis of what’s driving inequality or the way our economy is disadvantaging wage earners and becoming increasingly precarious for young people, the Liberals have adopted the safe and anodyne language of “helping the middle class” - the words so ingrained they now seem to roll off the tongues of the entire Liberal cabinet as if by animal instinct.

But while the PM and his Finance Minister talk ceaselessly about the middle class they steadfastly refuse to define its parameters with anything besides the usual technocratic gobbledygook. In the going Liberal parlance, “middle class” refers to no identifiable income bracket, no specific bureaucratic classification, no concrete socioeconomic category.

And yet, by my count, it appears in the budget some 153 times.

What all this suggests is a government profoundly glib and unambitious, obsessed by polling and focus groups, lacking a clear ideological compass, and utterly unwilling to offer even the most tepid challenge to any interest with wealth or power even when the public would probably embrace it.

In 2015, the Liberals correctly took the temperature of post-2008 popular anger toward both inequality and the growing power of elites and offered up an election campaign that articulated it without seeming particularly threatening to anyone who mattered. In government, their posture has only grown more conservative, their rhetoric more tepid, their policy goals more modest. This budget is only a further continuation of an existing trend.

In other words: the next time Justin Trudeau makes populist gestures at home or abroad, perhaps we should all wait to see the fine print.


Luke Savage is a Toronto-based writer whose work has appeared in Jacobin Magazine, Canadaland, Metro News Canada, and Current Affairs.






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