02.15.2014 10:46 AM

Trudeau is right on the economy

This week, a few of us liberals and Liberals at Daisy were confronted on-air with a clip of Justin Trudeau on CPAC saying (apparently) “the deficit will take care of itself.” Stephen Harper and the Conservatives seized on that, in Question Period and elsewhere. They mocked him for what he (allegedly) said.

When we were permitted to see Trudeau’s full statement, it was apparent he didn’t say that. In fact, he said that – with significant economic growth (and, impliedly, with program review and healthy revenue streams) – the deficit will, in fact, be taken care of. Worked for Chrétien.

In this Globe quote, below, he further fleshes out his deficit observation. Personally – and not just because I’ve been hammering away at this fact in Sun columns – I think he has identified the fiscal dilemma of the coming decade: a federal government with a structural surplus, and everyone else – provincial governments, municipal governments – being in a structural deficit.

Here’s Trudeau:

“Canadians are tapped out, provinces are tapped out,” Mr. Trudeau said. “The federal government, because of smart decisions taken in the 1990s, has a little more leeway. Our debt-to-GDP ratio is great. So what we need to be looking at is how we can leverage the fact that we do have a little more wiggle room on the federal side to actually get our economy growing the right way.”

We are heading into a period with a tremendous number of money demands being made of the federal government which Trudeau hopes to lead. The provinces and the cities will be (and are) desperate. For the separatists, in particular, it’s a very helpful circumstance.

I write more about this tremendous challenge in the Sun this weekend. But I’m glad Trudeau is talking about it.

25 Comments

  1. Swervin' Merv says:

    Warren (and Justin) is right. Provinces have the “burden” of health care and education/training costs and, along with municipalities, major needs for infrastructure renewal. Some rebalancing of revenues from the federal government is in order.

  2. Russ says:

    Obama’s mess? What a short memory you have Gord. He inherited A country facing a financial abyss and embroiled in 2 foreign wars. He will leave a country that has returned to growth, dramatically falling deficits and troops returned home. Harper inherited a country with a sound fiscalfootprint and quickly built a structural deficit, before the crisis hit.

  3. Chris says:

    My small town is completely fucked financially, as are many others around it.

    Any sort of help would be nice.

    • frmr disgruntled Con now happy Lib says:

      As is mine……municipal services have been cut to the bone, we have huge youth unemployment, many businesses have closed, and my boss jokes that “flatline is the new growth”…..

      I don’t know what Shangri-La Mr. Tulk lives in, but property assessments in the Fraser Valley have started to cool….after many years of explosive growth…..even assessments in certain areas of Vancouver have started to drop…..don’t even ask about Vancouver Island, the Gulf Islands and many areas of BC’s interior…..

      • debs says:

        yep, my own gulf island is one, and of course to add insult to injury, the ferry fiasco that BC govt keeps making soo much worse.

      • Iris Mclean says:

        Same here in eastern Ontario. Almost all manufacturing jobs are gone. Tourism and doing each other’s laundry are how we get by.

  4. G. Mcrae says:

    Is Justin really saying this is or is part of the script he has been given by his handlers? Past remarks indicate the later and this comes across as empty rhetoric. I really want to like the guy, but he’s not making it easy.

  5. Steve T says:

    Good grief, how much longer are the Liberals going to milk the fiscal situation of the 1990s? It’s like listening to the aging rockstar talk about the “glory days”. No one believes it, and no one wants to hear it anymore, because it has NOTHING to do with the current situation.

    I’m not saying this to support the Harper government. I’m saying it because it would be equally unfair for the Conservatives to blame the policies of the 1990s, if the fiscal situation were poor.

    Let’s try living a bit more in the present, shall we?

  6. jerryj says:

    The assumption is that the Canadian economy will flourish again under a Trudeau Liberal government, possibly a minority government shored up by the NDP as in days bygone. But what happens if the Cons only manage another minority government in 2015 with the Liberals as the OOP and the NDP a rump again? Will we have another snap election on a vote of no confidence by the Liberal and NDP opposition? And then what happens in another election in say 2016? Will Trudeau emerge victorious with a majority Liberal government, or will the Liberals and NDP be forced to merge before they can dislodge the Cons from governing with a minority or majority government?

    • Kaspar Juul says:

      Perhaps a unicorn will jump over your house.

    • Swervin' Merv says:

      You’re not paying attention to this space, boys and girls. A Harper minority would be defeated pronto and the GG would have to ask the next leading seat getter if they could sustain a government (with support from the third party). Harper only survived 2008-09 because the then GG was of the view (with public opinion similarly persuading opposition parties) that Harper hadn’t yet had a long enough chance to govern. Not so in 2015, after nine years. NDP and Libs will refuse to talk coalition before the election but they may well need an informal one after–unless Trudeaumania rides again.

  7. Ottawa Civil Servant says:

    A Trudeau with the keys to the treasury? That is scary.

    What his statement does is reinforce the image of a flippant man-child with his father’s spending proclivities.

    You guys talk about Martin saving the country’s finances (slashing transfers, seizing surpluses and killing capital investments), fine.
    I want to talk about my fear: Trudeau as a McGuinty, believing that spending wildly during good times is A-OK instead of constantly looking to improve government by being better, more efficient and more focussed.

    Why is trudeau already musing on spending more, when we should be addressing productivity, the environment and trade?

    • dave says:

      During the 1990’s I thought the Chretien and Martin were adopting Reform deficit fears to keep the Reforms in opposition. Preston, a great salesman, sold deficit fears successfully, and also sold 1920’s corporatism and privatization as ‘new ideas.’ At beginning of 1990’s I figured Reform would be a force to reckon with when they stole our(NDP) self righteousness.
      I remember watching the evasiveness, arrogance, and sneering of the Chretien front benches and thinking, ‘You guys are going to elect us a Reform government.”
      Present government keeps yapping about lowering taxes, but they (and provincial government here in BC) keep adopting and raising assorted user fees that more than make up for tax reductions for us little people.

      We have system that puts legislative powers and executive powers together in the prime minister’s office (premier’s offices provincially) so I suppose it’s realistic to make such a big deal about a party leader. But leader worship(the conservatives have taken it to embarrassing highs), and bashing someone else’s leaders as effeminate or superficial also makes sense (and Conservatives have taken this to grubby lows) sure does detract from really putting time into wrestling over issues and policies.

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