MNI INTERVIEW: Big-Spending Trudeau Seen Calling Snap Election

Canada's Liberal Prime Minister Justin Trudeau may use a debate over a post-Covid reconstruction package to force an early election in the fall in a bid to secure a parliamentary majority for a big-spending third term in office, a top adviser to former Conservative Prime Minister Stephen Harper, told MNI.

While major new policies have re-energized Trudeau, the opposition Conservatives have struggled to present a clear message, said Sean Speer, a senior economic adviser to Harper during his 2006-2015 government. Trudeau, who became prime minister in 2015 before winning again in 2019, may pounce, saying he needs a fresh mandate for a post Covid rebuild, Speer said.

"The more likely outcome would be that the government brings itself down and uses an argument that kind of hints at the end of their mandate" Speer said, noting that Harper turned a minority government into a majority in 2011 as the economy emerged from global financial crisis. "If they are depending on the opposition to bring them down, they may not get what they want."

Trudeau's Liberals lack a majority in the House of Commons and are approaching the two-year mark at which historically many such governments have dissolved. Speer said that with few chances for the Conservatives, Bloc Quebecois and NDP to combine on a no-confidence vote, Trudeau likely needs to call an election himself. Canada should also approach herd immunity to Covid around September, making a fall campaign less risky.

BUILD BACK BETTER MANTRA

"Post pandemic recovery and the build back better mantra, which seems to have manifested itself around a higher level of progressive ambition than we've seen to date, I think that this gives this government a new breath of life," Speer said.

Recent polls suggest the Liberals aren't guaranteed a majority if they seek a new mandate but there appears to be little chance the Conservatives could overtake them. The ballot question is likely who has better plans for economic recovery and any signature changes beyond that, Speer said, rather than looking back at delays in delivering vaccines.

"If the Conservatives think they are going to win the election litigating pandemic performance, I think that's a big mistake. I think people are prepared to give the government the benefit of the doubt," Speer said. "It has to be a contest of ideas about the post pandemic recovery."

Finance Minister Chrystia Freeland in April booked a record CAD354 billion deficit for the fiscal year ending in March and called for another CAD155 billion deficit in this period, going beyond income supports through the pandemic to include a push for a national child care program and spending to tackle climate change. Canadians' resistance to deficit spending that emerged in the 1990s has been fading since 2015 and is "gone" amid the pandemic, Speer said.

SLIM PATH FOR CONSERVATIVES

Bond investors don't mind, with government yields at low levels and Canada holding onto to top credit ratings as other major nations also build up debts.

"We are going to have ongoing spending, ongoing deficits, for the foreseeable future," said Speer, who now teaches at University of Toronto and works with the Public Policy Forum. "Canadians have been really supportive of the more activist approach the government has taken in the pandemic."

Liberal ministers held a press conference this week to say Conservatives are holding up vital legislation on pandemic benefits, as well as reforms to telecom and criminal justice policy.

Erin O'Toole took over as Conservative leader after his predecessor led a flat campaign last time marked in part by infighting over social issues such as abortion and immigration. While O'Toole has signaled he won't tame the deficit right away, his party has a chance to win voters with a more centrist platform versus Trudeau, Speer said.

"It gives the Conservative Party some significant openings to position itself on pretty substantive center-right territory" Speer said. "I'm just not sure they have it in them-- they have been pretty undisciplined, pretty unfocused, it's not clear to me what their priorities are."