Social Policy in Ontario

Liberal Leader Justin Trudeau is routinely accused of being vague about the economy. That criticism is no longer quite so valid.

A careful reading of the Liberal leader’s speech to his party’s policy convention Saturday gives a pretty good idea of how he intends to position himself for the 2015 election.

First, the obvious. Trudeau focuses on what he calls the middle class. At one level, this is just good politics. Most Canadians think of themselves as middle class.

But at another, it is telling. To focus on middle-income earners is to pay less attention to both the poor and the wealthy.

Trudeau’s argument here is that both poor and rich gain when the middle class prospers.

For the poor, a strong middle class represents a “ladder to stability and security.” Put simply, this means that a minimum-wage retail worker, while unlikely to become a corporate CEO, has a fair chance at getting a well-paid factory job — but only if such jobs exist.

For the wealthy, Trudeau says, a satisfied middle class diminishes the threat of voters electing a government hostile to the free-market “growth agenda.”

Second, taxes. In 2011, under then leader Michael Ignatieff, the Liberals campaigned on a promise to raise corporate taxes. Under Trudeau, that’s gone. Gone also, it seems, is the previous Liberal plan to cancel or limit tax breaks for oilsands producers and those who earn stock options.

In his speech, Trudeau said only that he would not raise taxes on the middle class. But in an earlier interview Saturday on CBC Radio, he went further, ruling out any kind of tax hike.

“I don’t think we need to raise any taxes,” he said. “We are not going to be raising taxes.”

Third, the deficit. Trudeau’s language on government finances is more sophisticated than that of those who preach austerity. Fiscal discipline, he said Saturday, is important. But in the end, government budgets can be balanced only if the economy grows.

In general, he’s right. Canada’s federal deficit was eliminated in the ’90s by a surging world economy, not by the then Liberal government’s decision to cut spending.

But in terms of the 2015 election, Trudeau’s approach to deficit financing is moot. The Liberals and other opposition parties will be happy to accept the Conservative government’s claim of a return to fiscal balance by that year.

As a result, the 2015 campaign will focus not on how to deal with deficits but on how to allocate any surpluses.

Fourth, infrastructure. Trudeau wants the federal government to put an unspecified amount of money into projects like roads and bridges. He also wants Ottawa to fund infrastructure aimed at countering the effects of climate change. It’s not clear what he means by the latter.

Fifth, resource extraction. Trudeau is a fan. Like Conservative Prime Minister Stephen Harper, he wants pipelines built to move Canadian oil and gas to global markets. Like New Democratic Party Leader Tom Mulcair, he wants a “robust environmental policy” to make sure that other nations don’t discriminate against Canadian crude.

Sixth, free trade. Trudeau is a big supporter. He has already endorsed the Canada-European Union deal. In his speech he called for a “strategic approach to trade,” without specifying what that might mean.

He argues, correctly, that too many Canadians get no benefit from free trade. He promises to remedy this, although it is unclear how.

Seventh, education and training. Here, too, Trudeau echoes Ignatieff’s 2011 platform, saying that Canada should aim to ensure that at least 70 per cent of the population has some form of post-secondary education.

Indeed, if I read him correctly, he portrays education and training as long-term solutions to the woes of the middle class.

I’m not sure he’s correct about that. Thanks to globalization, even the highly skilled can lose out to cheaper labour abroad. Look at what has happened to information technology workers.

Still, this is Trudeau’s formula for the economy: Keep resources moving; embrace free trade; don’t raise taxes; spend any surplus on education and useful infrastructure. It may or may not be correct. But it is pretty clear.

< http://www.thestar.com/news/canada/2014/02/25/how_justin_trudeau_would_handle_the_economy_walkom.html >