You’d think Justin Trudeau’s Liberals would be delighted to escape for summer break from Parliament, where they get pressed on an unusually long list of problems from passport backlogs and airport lines to allegations they asked the RCMP to release details of a mass-murder investigation to advance their gun-control agenda.
But although Parliament has adjourned till September, escaping to a quiet summer is a mirage. This will be the summer of inflation.
That’s a pot that will keep boiling, as Canadians fill up their tanks to go to the cottage or suffer sticker shock when they buy chicken for the barbecue. And seethe.
Yet Mr. Trudeau and his Liberals are letting people go off to that summer without making them feel they care. Or that they’re on the case.
Deputy Prime Minister and Finance Minister Chrystia Freeland managed to deliver something closer to the opposite message – what we are already doing will be enough – when she stepped out a week ago to outline an “affordability plan” of already-announced measures from her April budget and last year’s election campaign.
As a political message, that’s like telling people everything is fine – when those people feel something has gone very wrong.
The Liberals keep saying that existing plans, such as subsidizing child care, are working to combat the cost of living. The meta-message is that it’s not so urgent that they have to do something new.
It doesn’t help them that many economists are blaming the Liberal government’s big-spending ways for adding to inflationary pressure by increasing aggregate demand, as Scotiabank chief economist Jean-François Perrault did earlier this week.
Still, while that’s a blow to Ms. Freeland’s economic arguments, it’s not really the political conundrum the Liberals face.
Slashing government spending now would have a limited impact on inflation rates – and it just isn’t in the Liberals’ DNA, anyway.
More to the point, politicians don’t have to fear that Canadians will take to the streets with signs protesting excess aggregate demand. They have to worry individuals will feel their wallet is being squeezed. In economics, inflation and cost of living are closely related concepts; in politics, it’s cost of living that really counts.
That’s why the Quebec government headed by Premier François Legault, which is heading to an election this fall, introduced a special one-time cost-of-living tax credit that will give a lot of Quebeckers $500. That will add to inflationary pressures, not reduce them, but a lot of Quebeckers will see it as something that lowers their cost of living. Mr. Legault is wily enough to know the difference.
Mr. Trudeau’s government hasn’t found anything so simple. Some of his MPs have privately warned that a summer of Canadians seeing gas prices higher than $2 a litre is going to clobber the Liberals’ approval ratings. But cutting gas taxes, even temporarily, would clash with this government’s carbon-levy policy – and the rationale behind it.
That’s part of the larger problem the Liberals have in coming to grips with inflation as a political issue: After all this time in power, their reflex is to defend the things they have been doing, and to keep on doing them.
The political imperative is to tell Canadians you understand things are bad, the problem is urgent, and you will act, but the Liberals are now slow even to grasp that that’s necessary. There have been months of complaints about passport backlogs, but Mr. Trudeau finally stepped in this week to say the backlog is “unacceptable” and the government has to “step up.”
Mr. Trudeau has yet to send a similar message about inflation. It’s not just that his government doesn’t have a compelling policy response to inflation. It also doesn’t seem to understand the angst ordinary Canadians feel about it.
For this Prime Minister, that’s dangerous.
Seven years ago, he came to power by campaigning on economics. Mr. Trudeau won not by convincing Canadians that he was the better economic manager, but by arguing that then-prime minister Stephen Harper was austere and disconnected from ordinary folks’ economic concerns.
This year, he has failed to send a message that he is acting urgently on their most palpable economic concern. Canadians don’t usually spend much time thinking about politics over the summer, but this year it will include plenty of reminders about the rising cost of living.
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