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MNI: Cost of Living Woes May Bring Canada Election Stalemate

MNI (Ottawa)
OTTAWA (MNI)

Adviser to former Liberal PM says cost of living is a deep problem that's hard to tackle with campaign promises.

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Liberal and Conservative leaders are struggling to respond to top voter concerns about the rising cost of living on Canada's campaign trail, making it harder for either to win a clear mandate in the Sept. 20 election, former prime ministerial adviser Elly Alboim told MNI.

Liberal Prime Minister Justin Trudeau called the election Sunday saying he needs a majority government to push the next phase of the pandemic rebuild, and a rush of pledges to tackle faster inflation and sky-high housing prices hasn't given any side a clear advantage. Problems such as expensive cell phone bills and housing are longstanding and deep issues that are difficult to tackle on the campaign trail, Alboim said. Instead some parties are embracing small solutions to pick up slices of voters, such as Conservative leader Erin O'Toole promising a one-month sales tax holiday.

"It's a difficult one, there isn't a whole lot governments can do about the cost of living and structural problems like housing, but the electoral demand is pretty clear," said Alboim, a top adviser to former prime minister Paul Martin and now a Principal at Earnscliffe Strategy Group. "It ends up with token boutique promises that can have some impact at a personal level for a limited period of time, so it forces parties to pander towards the issue without offering the kind of structural change that would make a difference."

Even amid a fourth wave of Covid-19 inflation has emerged as a top concern in polling, ahead of health care or government finances. Figures released Wednesday showed the fastest inflation in a decade in July, coming on the heels of this spring's eye-popping 42% rise in resale home prices.

HOUSING STRAINS

"We have a housing crisis in Canada, we have a cost of living crisis in Canada," O'Toole said at a campaign stop Tuesday, "due to Mr. Trudeau's spending." The Conservatives have also offered to lower cell phone bills and food costs. Liberals pledged before the campaign began to make life more affordable with ten-dollar-a-day childcare and various measures to subsidize housing, and Trudeau didn't directly answer a question about inflation at a campaign stop on Wednesday.

Consumer prices rose 3.7% in July from a year ago, Statistics Canada reported Wednesday with the fastest in a decade led by home upkeep, gasoline and cars. Even that understates the pinch from a housing boom, since the CPI mostly excludes resale home prices that have more than tripled in Vancouver and Toronto since 2005. Pressures will also worsen as interest rates rise in a nation where household debt has surpassed GDP.

With no dominant issue parties are vulnerable to surprises like media scandals or a damaging fourth wave of Covid, Alboim said. Early days of the campaign have brought little shift in polling suggesting the Liberal bid to regain the majority government they lost in 2019 is something of a coin toss.

Early campaigning suggests the ballot issue will be what party or leader is seen best equipped to bring the country through the pandemic and generate a strong economic recovery.

"It's around the question of trust, particularly in leadership, who do you trust to manage their way through this," he said. "If it turns out to be an election about nothing central, then it becomes very vulnerable to lurches" raised by the media or other groups, he said. "We could sleepwalk to election day with low interest and very low turnout."