The glitches should have been a sign of what was to come.
We’ve all become experts at overlooking the inopportune white noise in online meetings and filling in the gaps for oblivious speakers undermined by overloaded technology.
But when Justin Trudeau and Erin O’Toole presented their economic recovery road maps one after the other this week at the Canadian Chamber of Commerce annual meeting, it was nearly impossible to connect the dots in between the glitches that riddled both their presentations.
The gaps for both the Liberal and Conservative leaders were as much about spotty policy as spotty IT.
For Trudeau, the rare address to the chamber annual meeting was a prime opportunity to give the business community some reassurance that he has a long-term growth and recovery plan in mind — a plan that would confront the immediate needs of the pandemic economy, but also set some markers to ensure spending and deficits are sustainable once we can start to recuperate.
But he didn’t go there. Instead, he assured them, “I don’t have to tell you that low interest rates mean we can afford this,” he said, referring to the hundreds of billions of dollars in pandemic response.
“We will be there to support Canadians and Canadian business — (glitch) — for as long as this pandemic lasts.”
He explained there’s no sense in setting out guidelines around spending and deficit management right now because the economic trajectory is so uncertain that fiscal discipline is meaningless.
Yes, he says Liberal fiscal policy will be responsible and sustainable, but you’ll have to wait until we stabilize, or maybe until we have a mini-budget, to find out exactly what that means.
To be fair, Trudeau’s treading water on fiscal policy has given his somewhat-new finance minister, Chrystia Freeland, time to get up to speed. She took over the finance portfolio in August and has had a crash course in managing the biggest deficit ever during a devastating health-and-economic crisis.
But soon, when the COVID-19 numbers are declining and the economy is free to open up with confidence, there will be a fiscal rule or guide-rail that will slowly set spending on a more sustainable track.
Perhaps it will all start to amount to a coherent plan, eventually, but it’s been a long time coming at a time of unprecedented spending, lending and new programs.
O’Toole addressed the forum right after Trudeau, and he wasted no time mocking the Liberals for leaning on low interest rates as a fiscal “anchor.”
True to his role as leader of the Opposition, he pointed to the Liberals’ ineptitude and blamed it for scaring away foreign investment, especially in the oilpatch.
But what would he actually do instead? It was mostly a repeat of O’Toole’s leadership campaign, which finds its roots in the days before the pandemic set in.
He would embrace natural resources, work closely with Indigenous business, renegotiate trade deals and invite Canadian companies to steer clear of China, preferably producing here in Canada, instead or at least in other democratic countries.
As for fiscal policy, he wants to reduce spending “in a balanced way,” cut taxes and spur growth. The timeline, long-term vision and details will have to wait though, until we have a full-blown election campaign.
At a time when the International Monetary Fund is urging governments to increase spending and investment to spur growth, and at a time when economists warn that austerity has undermined recoveries in the past, when would O’Toole embark on his deficit-reduction exercise?
How would that square with cutting taxes at the same time? And how would the Canadian economy grow and attract investment if we cut China out of the loop?
To be as fair to O’Toole as to Freeland, the new Conservative leader has only begun to outline for the general public what he would be like as prime minister.
Perhaps with some time, he will reconcile his populist push to retrench production in Canada with the more traditional conservative push to growth through trade and foreign investment.
But to be fair to the public, these are uncertain times where large amounts of money and major decisions on the economy are flying at us at warp speed — without much thought about efficiency, or about whether today’s income support will help tomorrow’s recovery, and how we will finance the mounting deficit over the long term.
In a recent IMF report on the recovery, Canada stands out for having bulked up its deficit more than other rich countries, carrying a bigger total (public and private sector) debt load, and a lower take-up on its job-retention efforts despite all the spending.
But the IMF also sees Canada getting that debt and deficit load under control within a few years, resuming a course of fiscal sustainability as the pandemic supports wind down.
That doesn’t happen by itself though. Neither one of the leaders can get away with blaming the gaps in their economic recovery plans on technical glitches for long.
Heather Scoffield is a columnist with Torstar Syndication Services