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Trudeau's Economic Reset Speech May Lack Fiscal Anchor, Push Green Shift

CANADA
  • PM Justin Trudeau's Liberal government re-opens Parliament Wednesday with a "Throne Speech" that triggers a confidence motion, and he needs one of 3 opposition parties to support him to avoid a snap election.
  • Two of 3 opposition leaders are in Covid isolation, boosting chances the government passes the confidence test.
  • The NDP and Bloc parties both favor more social spending, so Trudeau can easily gather needed support that way. Even new Conservative leader has said the budget should only be balanced over the next decade, a shift away from prior hawkishness.
  • Investors and biz groups have told MNI the main thing they want is a restored "fiscal anchor" like a debt:GDP target or spending caps.
  • Throne Speech often sets high level economic goals rather than any detailed economic/fiscal numbers; it's due at 210pm EST and webcast is here.
  • Trudeau could also follow the example of 2 provincial premiers who have called snap elections amid the pandemic, by delivering a "poison pill" speech the opposition must reject.
  • That case is weakened because Trudeau's of less popularity lately, replacing his Finance Minister, ethics probes into his backing a CAD900m WE Charity contract despite family ties.
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
Homepagemarkets-real-timePolitical RiskPolitical Risk BulletBulletMarketsFixed Income BulletsForeign Exchange Bullets
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
Homepagemarkets-real-timePolitical RiskPolitical Risk BulletBulletMarketsFixed Income BulletsForeign Exchange Bullets

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