No agreement on creating prosperity

Within a couple of hours of federal Conservative Leader Andrew Scheer delivering a key speech on economic policy last week, Finance Minister Bill Morneau popped up on Twitter and Facebook with a highly scripted critique of the plan — complete with the requisite students forming a human backdrop behind him.

An ad by any other name, the two-minute clip was ostensibly a response to a reporter’s question about Scheer’s proposal to end oil imports. Journalists had been invited to question the minister for his reaction to Scheer, although Morneau’s response did not make a single mention of oil imports.

Rather, Morneau sought to obfuscate.

The Conservatives, he said, would have to chop $55 billion out of the federal budget to keep all their promises. Scheer would cause the economy to shrink, kill jobs and cut programs.

Scheer has been a good match for the obfuscation. In his speech, even before he got to the new ideas that will form the basis of his election platform, he took repeated aim at the Liberals.

Under Trudeau, he said, the government has raised taxes on the middle class, is spending recklessly and has squandered all the good things left to Canada by the previous Conservative government.

Both parties are accusing the other of having no credibility on fiscal policy, systematically — and ironically — undermining their own credibility by hurling accusations.

For a degree of clarity in the midst of pre-election posturing, the International Monetary Fund came out with a fairly independent assessment of Canada’s economy on Tuesday. In its annual summary of Canada’s fiscal policy, the IMF says Canada’s economy — and the management of it — is basically fine right now, as it was under the Conservatives before.

Growth is solid and business confidence is returning now that the new NAFTA has been negotiated. Financial institutions are robust, and our taxation levels make us competitive enough.

On debts and deficits, the IMF has no complaint about the federal path, although it chastises Ottawa for having no clear fiscal goal.

(Scheer has said he would balance the budget, but the path to get there is very unclear. Trudeau has said he would keep the debt burden on a downward track.)

Where the IMF doesn’t go is into the inner workings of the Canadian economy — the gap between the rich and the poor, the ability of millennials to make their way, the anxiety about future prosperity that plagues the middle class.

And that’s where the two parties have a chance to make a difference — if they can move past their obfuscating.

They are both keenly sensitive to voters’ anxiety and are edging toward competing proposals to address it. For the Conservatives, it means smaller government that allows individuals and the private sector more leeway to control their economic destiny.

The Liberals are more interventionist, aiming to solidify the social safety net, enhance skills and training for the workforce of the future and bolster business where they see opportunity.

But whether either party could implement their vision and still receive the blessings of the IMF is another question.

Scheer’s path to balance could well be rapid, which implies serious cuts to services even if government spending is reined in and rises at a low pace.

That’s because so many big programs in government have fixed costs or are tied to inflation.

And Trudeau’s path risks placing bets on the wrong winner or integrating government benefits into people’s lives at an unsustainable pace, just as an aging population demands more and more.

Rather than obfuscation, voters would benefit from a clear choice.

Heather Scoffield is a columnist with Torstar Syndication Services.

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