Election-cycle politics will not solve Canada’s economic crisis of a generation

On his first day as Conservative Leader, Erin O’Toole had what his office described as a “cordial” telephone conversation with Justin Trudeau.

Based on the way Ottawa’s political culture normally works, their perfunctory pleasantries last week – in which the Prime Minister and the new Official Opposition Leader chatted about their families and broadly exchanged some policy concerns – may be just about their last civil conversation until one of them loses his job.

That’s potentially a big problem, when it comes to charting a path out of the biggest economic crisis of our time. Because some semblance of collaboration, between the people currently running this country and those waiting in the wings to do so, could be needed to steer Canada into a strong position in the postpandemic world.

It’s not just that politics as usual should ideally be set aside in immediate response to the current emergency. On that front, there was some mildly encouraging news coming out of their chat, when the Prime Minister’s Office said Mr. Trudeau had offered briefings with Chief Public Health Officer Theresa Tam to help the Conservative Leader keep abreast of COVID-19 developments.

The greater undertaking, and the one partisans are likelier to roll their eyes at, would be for the leaders and their parties to try to find some common ground in plotting the economic rebuild to come.

Coming out of this unprecedented economic disruption, Canada’s government will join others around the world in launching policies aimed at reviving devastated sectors and igniting new ones to replace those that never recover.

It will be responding not only to direct effects of the pandemic itself, but to weaknesses it has highlighted (such as work-force supports, particularly for women) and global shifts it has potentially accelerated. Those range from decarbonization and digitalization, to mounting protectionism and a reordering of trade relationships driven partly by mounting hostilities between the United States and China.

The implementation of policy responses, and any impact they have, is going to play out over many years. And that means their effectiveness will be badly hindered if the strategy resets every time there’s a change in government or even if that looms as a possibility.

Consider industrial policy, especially. There are all kinds of things that Ottawa could do, as part of its recovery strategy, to try to attract investment – subsidies for specific sectors, tax breaks, infrastructure upgrades, skills training. But investors will be hesitant to make long-term commitments based on any of those, if they know the incentives could be abruptly yanked away whenever there is an election.

In a functioning democracy, rival parties obviously need to offer varying options to voters. And when it comes to economic policy, the two leading Canadian ones have genuine differences of opinion. Mr. O’Toole has signalled, for instance, a more skeptical approach toward dealings with China than the one Mr. Trudeau has taken. His Conservatives will in almost any scenario be somewhat more concerned by the scale of deficits than will Mr. Trudeau’s Liberals, more inclined toward tax cuts, more unreservedly supportive of fossil fuel industries.

But the parties also agree on more than they like to let on. Based on some of Mr. O’Toole’s leadership-campaign messaging around the pandemic’s lesson that Canada needs to be more “self-reliant,” and on recent conversations with Conservative policy experts, that may include some shift away from the relatively laissez-faire economic approach that has been in vogue since the 1980s. And to some extent it could involve an embrace of more interventionist approaches to building competitive advantages.

They also may not be that far apart on the need to modernize supports to promote what the Liberals call “inclusive growth,” which is to say reducing pre-existing economic inequalities rather than having more Canadians left out of the recovery. The Tories’ criticism of the Liberals’ early steps toward employment-insurance reform has been fairly muted, for instance, and there has been less reflexive Conservative dismissal of calls for a national daycare program than when the Liberals implemented one 15 years ago, only to have it swiftly scrapped when Stephen Harper took office.

But even in areas where parties may broadly agree, there is always a risk of a new government reinventing the wheel, to avoid their predecessors getting any credit, and in the process slowing the path to whatever the intended outcome.

Ideally, Mr. Trudeau and Mr. O’Toole may respond to the stakes of this pivotal moment in history by establishing a continuing dialogue with each other. Along with leaders of the other parties, they could find agreement on certain policy priorities and some of the means to pursue them, then make those publicly known to help build public and investor confidence.

That wouldn’t necessitate glossing over differences, necessarily. If they agreed that clean-economy transition is a worthy goal, for example, they could still continue to have differing takes on the merits of a carbon tax. But they could also conceivably agree on specific green sectors that they want to support, particular forms of research and development funding or loan programs and tax mechanisms that they agreed would help clean-tech companies scale up.

If lack of mutual trust makes that level of co-operation unrealistic, there’s another way that Mr. Trudeau could take some initiative – during this period when his government still has only a fairly vague idea of what its new economic agenda will look like – to try to avoid a recovery-planning reset whenever the Liberals lose office.

Rather than relying mostly on ideas and advice offered behind closed doors by ideologically like-minded policy advisers, he could establish a more public and more cross-partisan process. If, say, an appointed panel included some of the best and brightest from Conservative (and New Democratic) policy circles alongside those from Liberal ones, it could result in a consensus recovery roadmap that compelled future governments – whatever their stripe – to adopt at least some recommendations.

There would be echoes of the way Mr. Trudeau’s government approached the NAFTA renegotiations during its first term, when it enlisted high-profile Conservatives such as former interim leader Rona Ambrose and former minister James Moore to serve alongside labour leaders and others on an advisory council. But there would have to be a more ambitious emphasis on policy development and less of a pre-established preferred outcome.

Even that may be too much to expect, particularly when a minority Parliament has the next election perpetually looming. The Liberals prefer to campaign by suggesting that any popular initiative on their part will be reversed by the Conservatives. The Tories want to be able to pounce on any Liberal policy rollouts going awry. Neither often sees political benefit in shared ownership.

If those considerations prevail, perhaps it would be best for Ottawa’s inevitable late-summer election speculation to culminate in an actual federal campaign this fall. Possibly one of the parties would emerge with a majority government and some runway.

But even a four-year term would be over before the project of navigating the postpandemic future was complete. And it’s just as likely that an election would result in another minority Parliament and no more stability than currently exists.

A better bet, for politicians seeking to build legacies out of this dark moment, would be to seize opportunities to untether the coming rebuild from election cycles.

Source:- The Globe and Mail

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