THE WEST BLOCK
Episode 18, Season 5
Sunday, January 17, 2016
Host: Tom Clark
Guests: Bruce Anderson, Steve MacKinnon, Ron Liepert,
Unpacking the Politics Panel: Mark Kennedy, Susan Delacourt
On this Sunday, as the markets tank and the loonie falls, Trudeau soars. A new poll shows some surprising trends in the mood of Canadians. We’ll talk to pollster, Bruce Anderson, about the numbers.
So, is it time for the government to start spending to ignite the economy? Opposing members of the finance committee debate that proposition.
And then, as Justin Trudeau’s fame grows, the Conservatives start thinking about who can steal back the spotlight. We unpack the politics with Mark Kennedy and Susan Delacourt.
It is Sunday, January the 17th, and from the nation’s capital, I’m Tom Clark. And you are in The West Block.
Tom Clark: Three months after the election, Trudeau’s popularity continues to grow with his personal approval rating hitting 57 per cent. Now that’s just a bit less than what Stephen Harper had when he was first elected in 2006. But Trudeau’s numbers come on the heels of some of the worst economic news in eight years. Oil is down to its lowest level since 2003 and it is still dropping. The loonie is hovering around 69 cents, its lowest showing in more than a decade. And the markets are in official bear territory with the TSX having lost more than seven per cent of its value just since the Christmas break.
So, how do Canadians feel about all of this? Well I’m joined now from Toronto by Bruce Anderson. He is the chairman of Abacus Data. Bruce thanks very much for being here. Good to have you. Let’s deal first with just how worried people are. What did the numbers tell you?
Bruce Anderson: Well we did find that people are increasingly worried, Tom. Last year, two out of three Canadians said that they thought the economy was in good shape. Today, two out of three describe it as poor. There’s a qualification to that worry though. When we asked people whether they consider that we’re in a mild recession or something more severe, most people say that this is a mild recession as far as they’re concerned right now. That feeling’s a little bit stronger in Alberta where a third of the residents of that province say this is a severe recession. But what we’ve really seen in a nutshell is people move from thinking the economy was in a slow growth period to a mild recession situation.
Tom Clark: Well the Liberals in the last election campaign promised stimulus spending, incurring deficits of about $10 billion a year. Is that what Canadians want?
Bruce Anderson: Well I don’t think Canadians get up in the morning hoping that their governments will run deficits, quite the contrary. Having said that, I think that through the Harper government, and that’s still the case today, is that people are saying as long as the overall debt-to-GDP, not that people measure it that way, but their sense of the overall fiscal capacity of the country is not in peril, they’re prepared to see governments do things that governments deem necessary to try to stimulate the economy. So that is, if you like, some of the latitude that Prime Minister Trudeau has right now. I don’t think that people have a specific number in mind. I know that some folks in politics think that, well, because he said $10 billion, he can’t go over that. I don’t think that’s really the way public opinion works. That having been said, it’s perilous for a government to look as though it doesn’t care about achieving some kind of fiscal balance in the near or medium term.
Tom Clark: Bruce, you’ve said that you found regional differences. In other words, if you’re in Alberta or Quebec you’re looking at this somewhat differently. So, if this is breaking down with sort of separate regional stories, is it going to be more difficult than to craft a national response?
Bruce Anderson: Well it does and it doesn’t, and I suppose in a sense that the more severe that views might become, if the economic situation worsens, the more pressure that we’ll see on government. But compared to let’s say 20 or 25 years ago, people are much more aware of the fact that Canada to some degree is riding along on the tides of global economic fortune. There’s only so much they believe that governments can do to stop headwinds from affecting us or to create favourable winds for us. So there will be more pressure if things continue to deteriorate, but it’ll be qualified pressure as people look around the world and say maybe things could be worse than they are here or that things that are happening elsewhere are what’s causing much of the economic pain that we feel.
Tom Clark: So is any of this or all of this translating into trouble for Trudeau?
Bruce Anderson: No, not at this point. You know one of the rules that conventional wisdom points that we’ve heard so often in years gone by, Tom, as you know is that ‘it’s about the economy, stupid.’ The notion that politics is almost always hardwired to how people feel about the economy. But if we just take a look back over last year and into today, as I said earlier, last year, two out of three people said the economy was in good shape, but only one in three said that they were satisfied with the performance of the federal government. And of course in the end they voted the Conservatives out. Right now, we’ve got two out of three people saying the economy’s in poor shape but we’ve got only one in three – in fact, less than that, 25 per cent – who are disappointed in the current government. So that relationship for the moment anyway is broken because people are interested and find appealing the general style and approach that this government is taking and they think that the government is focusing on things that are largely in the right area.
Tom Clark: So Bruce where now, is the political divide in this country between left and right? Or is there one?
Bruce Anderson: On the economic questions, not so much. In fact, we asked the question—we asked people to give us a sense of how well they thought the government was doing in managing taxpayers’ money, handling the economy, dealing with the deficit, that kind of thing and there were differences but they weren’t profound differences. Generally speaking, we saw that people who voted for the NDP last fall were pretty happy with this government, as naturally enough were Liberals. The Conservatives less so, but not pulling their hair out at this point. The divides actually between Conservatives and other voters are more noticeable around issues of Syrian refugees at this point. We asked a question specifically about whether people felt that given the more recent economic situation that’s been developing with the decline of the dollar and so on, did they believe that the government should do more than it had planned and campaigned on to stimulate the economy? And opinion was split 50/50 really, which to me is more a measure of the fact that people are saying we’ll be prepared to listen to what government has to say and in fact, Conservatives were even more likely than others to say maybe the government should stimulate more. So plenty of latitude so far in the numbers for this government.
Tom Clark: Bruce Anderson, Abacus Data. Thanks very much for being here, Bruce. Appreciate your time.
Bruce Anderson: My pleasure, Tom. Good to talk with you.
Tom Clark: Well coming up, we’ll unpack the politics of Justin Trudeau riding high in the polls. But first, with the low loonie and sliding oil prices, what can the government do to turn the tide? That’s next.
Tom Clark: Welcome back. Well as we’ve just heard, Canadians aren’t panicking just yet, but they are very worried. Many, including most Conservative supporters, want to see stimulus spending even if that means going into deficit beyond the $10 billion-a-year promised in the Liberal campaign. But will the stimulus be big enough and fast enough to make a difference, and should we be spending at all?
I’m joined now by two members of the Commons Finance Committee, Liberal Steve MacKinnon here in Ottawa with me and from Calgary, Conservative Ron Liepert. Welcome to you both. So let me start with that very question to both of you and that is: is going to a $10-billion deficit enough when you take a look at what the numbers are last week?
Steve MacKinnon: Well look, we’re watching this economy closely, Tom, and obviously the minister and the prime minister are travelling the country and getting a lot of input and seeing first-hand and hearing first-hand what Canadians are telling us about the state of the economy is on the ground. So we’re watching these things very, very closely. The good news, is that the Liberal Party ran on a platform of growth, ran on a platform of investment. We had, as you are aware, the most pessimistic in terms of the outlook on the economy built into our numbers in the platform, so ours was the platform most adapted to the challenges that we face now. We’re putting money in the hands of the middle class. We’re going to put money in the hands of nine out of 10 Canadian families raising children—
Tom Clark: Okay, I don’t need the whole Liberal platform read back to me because I think that what we’re looking at right now in a sharp way. And Ron, let me throw this to you: $10 billion was something that you campaigned against during the campaign, but are we at the point now where we have to actually start looking at that? Or are you still saying no, this would be the wrong way to go?
Ron Liepert: Well I think first of all, we have to all agree that this government is not the one that’s going to get out of the financial mess that I think we’re going to be in over the next couple of years. It’s the private sector who creates jobs and we all know that. But I do not—I am not surprised that some Canadians, maybe the majority of Canadians feel that in order to get us over this hump, we need to spend some money on infrastructure. I’m not sure that, you know, we’ve never necessarily been opposed to that, but where does this budget deficit spiral that we’re starting to head down, where does it end? And so, those would be the kind of discussions that we need to have.
Steve MacKinnon: Well I think the minister’s been very, very clear about that of course. We’re going to continue managing our debt-to-GDP down. We’re going to continue to be careful stewards of taxpayer dollars and of course, we have a commitment that over the course of a mandate, that we’ll get back to balance.
Ron Liepert: Well I guess—
Steve MacKinnon: Mr. Morneau’s been very, very clear about that.
Ron Liepert: I guess the thing though that troubles me and I think troubles many Canadians is there’s no question that a lot of the numbers that were used in the Liberal platform were simply pulled out of thin air. They just—they haven’t held up to date. We’ve seen what’s happened on the tax cut that went through Parliament. The numbers didn’t add up. And getting back to GDP, I think what isn’t recognized in many parts of the country is that for the past number of years, Alberta’s been punching way above its weight, contributing about 20 per cent of the GDP with 10 per cent of the population. And I can tell you what’s going on in this province right now, that’s going to be in for a rude shock and so are the ministers in Ottawa.
Tom Clark: You know, you bring up an interesting point, Ron, and let me get your perspective on this because what the poll numbers discovered too was that the view of the economy is different depending on where you live. If you live in Alberta you’re a lot more worried about what’s going on than if for example, you’re living in Ontario. So faced with the fact that you’ve got regional disparities in this downturn, how easy is it going to be to create a national solution to what is increasingly a regional problem?
Steve MacKinnon: Look, we’re of the view that you—
Tom Clark: Just a sec, Ron, go ahead.
Ron Liepert: Well I think the severity of what’s happening in the oil and gas sector and is, you know, sort of reflective of what’s happening in the stock markets and the Canadian dollar and we’ve seen all of that this past week. That has hit home in Alberta very quickly. But I can tell you that over the next several months and into 2016, other parts of the country are going to start to feel this downturn because those flights, those daily flights that were coming out of Atlantic Canada, out of Quebec, out of Ontario, with workers going to the oil sands are not happening anymore. And those workers are jobs lost in Alberta, but future EI claimants in other parts of the country. So—
Tom Clark: Well, and to your point, Ron, I can tell you this, that the son of the Nova Scotia premier has been laid off in Fort Mac and he is not—no longer, to Ron’s point, going to be taking those flights. But Steve, jump in on this.
Steve MacKinnon: Well look, we’re obviously very sensitive to what’s going on in the commodity sector generally, obviously in the oil patch being hit by that. We have lessening demand in China. We have stocks following that trend of course downward. What our view is—is that you never lose by betting on Canadians and I would respectfully disagree with Ron by saying that now is the time for government to play a role in the economy. We have historically low interest rates. We do have unfortunately, unemployment. Now is the time to put people back to work by building us infrastructure, so thereby generating stimulus for the economy but also creating the kind of infrastructure we’re going to need to grow a 21st century economy here in Canada.
Tom Clark: But let me take you back to stuff on the ground here, the only thing that’s going up while everything else is going down are housing prices. And there’s some speculation that interest rates in this country may in fact go down next week as a result of these terrible numbers we’re looking at which will further fuel the housing market. Do—and I’ve only got a minute-and-a -half left, but from both of your sides, is the time that we’ve got to be thinking about ways to rein in the housing market?
Steve MacKinnon: Well Mr. Morneau has already brought forward, I think, some very measured and responsible measures in terms of—
Tom Clark: Still taking off like a rocket.
Steve MacKinnon: Well look, at the end of the day, we do have a supply-and-demand issue in the housing market, but we’re going to be coming with housing infrastructure money that was committed in the platform. We are going to be looking at ways, Tom, to bet on the Canadian economy, to bet on Canadians, to put more money in the hands of our families and of the middle class, something that we did on our very first day in Parliament. The Liberal plan is the one that is going to help us ride out this period of uncertainty—
Tom Clark: Let me give the last 45 seconds to Ron.
Ron Liebert: Well I think as I said at the outset, the Liberal plan is proving to be a pretty hollow plan. It’s numbers that were picked out of the air whether it’s Syrian refugees, whether it’s the revenue neutral tax cuts. You know, I’m a skeptic, but I—
Steve MacKinnon: Well what is the Conservative plan, Ron?
Ron Liebert: Well the Conservative plan is that we need to ensure that government is getting out of the way in a number of areas, not getting further involved in the economy and—
Steve MacKinnon: So less infrastructure spending?
Ron Liebert: I’m not suggesting it has to be less infrastructure spending, but if the Liberal government thinks that it can solve the majority of problems that this economy is going to be facing over the next number of months they’re in for a rude awakening.
Steve MacKinnon: Well we’re reducing taxes and spending on infrastructure. It sounds like we agree Ron.
Tom Clark: I’m going to jump in here because this is a preview of what you’re going to hear at the finance committee in the House of Commons when it—
Steve MacKinnon: You got that right.
Tom Clark: You got that right. Ron Liebert in Calgary and Steve MacKinnon here in Ottawa, thank you both very much for doing this. I appreciate your time.
Well coming up next, Justin Trudeau’s popularity continues to grow, so who will the Conservatives choose to try and steal back the spotlight?
Mayor John Tory: I will say that I should have you back because—more often because after everybody on the council was taking pictures with you, some of them said they felt sorry for me being left out and wanted to have their pictures taken with me. This was a very good development.
Tom Clark: Well that of course was Toronto Mayor John Tory talking about the scene at Toronto City Hall as Prime Minister Justin Trudeau visited this week. And, as Trudeau’s fame grows, the Conservatives, well they’ve got to choose who will go head-to-head with him in 2019.
Joining me now to unpack the politics of all this: Mark Kennedy, parliamentary bureau chief for the Ottawa Citizen and Susan Delacourt, an author and columnist for the Toronto Star and iPolitics. Welcome to you both.
Susan Delacourt: So my theory is that this proves that the election was not about the economy. You know there’s been this conventional wisdom that people vote with their wallets, that pocketbook issues are important, that value for the dollar has become more important than values of the heart and head, and I actually think the last election was about values, about change, and as long as Trudeau represents change and the hope thing of his motto, I think he’s going to be fine. I think that people are not looking for him to solve economic problems.
Mark Kennedy: I have to disagree. I mean, I do think the longer he is in power, with each successive budget; people are going to start looking for him for answers, for solutions. Listen, he’s only been in power since early November, so I don’t think it’s not at all a surprise that Canadians are going to say ‘I don’t blame you for where we are now because you haven’t had your hands on the levers of power, but eventually, it’s your job. You did promise to improve the lives of middle-class Canadians, you did promise to boost the economy to get economic growth moving.’ They’ll give him some time, but if after a year, if after two years, we’re still in the slump, they’ll look at him and they’ll give him a good swift kick.
Tom Clark: You know what’s interesting though and to your point, he’s been in power—I mean he hadn’t even gone through his three-month probationary period yet, you know. But when you take a look at the poll that Bruce Anderson talked about earlier in the show that in fact, a majority of Conservative supporters in the country say that we should blow through that $10-billion-deficit line and really spend, get government money flowing out of this place behind us and into the streets of Canada, and when even Conservative supporters say that, that’s got to be at least an indication, as you say that he’s got a lot of time.
Susan Delacourt: It’s almost the reverse situation of ’93 isn’t it? When the Liberals came in and the things they could afford to get away with doing were because Conservatives were demanding, which at that point was reining in the deficit. And as long as you are borrowing ideas or doing things that the Opposition is saying that you should do, you’re probably fine. And so, in many ways, he is the opposite of the ’93 victory, but I think on this one, it’ll be interesting to see how Conservatives try to walk that line in the Commons too.
Mark Kennedy: I mean increasingly, it’s now becoming politically fashionable just as it was fashionable in ’93 to rein in spending, to now get the dollars out the door quicker than the Liberals have initially anticipated to stimulate the economy. The question then becomes, however, if we have a $25-billion deficit followed by another $25- or $30-billion deficit, ultimately, the prime minster is saying that we’re going to have a balanced budget by the time we go back to the polls. It’s harder and harder to do that if you have three years of mega-deficits.
Susan Delacourt: Yes, if only to laugh a bit. I’d say it’s good for entertainment. I saw his former partner on Twitter this week, Amanda Lang, not a former TV partner, not—called him, its official, he’s Canada’s Donald Trump. I think he’s probably as you say, Mini Donald Trump. But I don’t mind having him around for entertainment, as long as nobody takes him seriously.
Mark Kennedy: Listen, I would question whether or not he’s serious about this or whether or not this is simply part of a strategy to get, as he is actually very good at, getting exposure to himself. He has a bombastic approach on-air to getting exposure to himself. He will quickly learn if he decides to go into politics, that to be successful, you actually have to get people around you to follow you, to believe in you, and you have to work with people. If you want to be a leader, that’s a big part of the job.
Tom Clark: At least he’s entertaining, well let’s put it that way. But let’s take a look at just four of the people who we think will probably look seriously at a run for this job. Of course in that mix, is going to be Lisa Raitt. It’s going to be Tony Clement. We’ve got Kellie Leitch and also, Jason Kenney. Now out of those four, there are some others that are worth talking about, Peter MacKay for example, I don’t think James Moore is going to be coming back, at least the statements that he’s making. Can you handicap this at the moment Susan, where are we?
Susan Delacourt: I think it’s really too soon. I think they are very smart to wait a while because I don’t think you can look at a leadership race. This is going to get wonky, but in isolation from how the electoral system is going to change because it may be proportional representation or some form of that would take out the need for a big tent Conservative Party. You may see if we go to a different voting system, you may see the Conservative Party go back to its old Progressive side and the Reform side and run as two separate parties.
Tom Clark: And only unite in Parliament as a coalition of—
Susan Delacourt: Right so you could see Peter MacKay running and Jason Kenney.
Mark Kennedy: And we’ll know presumably within 18 months because that’s the timeframe the Liberals have set out. But if we move towards a system of ranked balloting where in the next election, Canadians get to also put on their ballot their second choice. That’s a scenario in which the Tories would be wise to become Tories again. In other words, Progressive Conservatives because if they stay hard right, there are fewer people that are going to look to them as their second choice, and if that’s the case, presumably—presumably people like Peter MacKay, would have a better spot.
Tom Clark: Do you think, I mean I’ve only got 20 seconds left, but on a scale of one to 10, what is the probability of a breakup of the Conservative Party as we know it right now before the next election?
Susan Delacourt: I don’t think it’s united right now. I think you know there are the people in the House of Commons but I think a leadership race has the potential to drive it back into its factions.
Mark Kennedy: They have to decide who they are and that could get very messy.
Tom Clark: As always, great talking to you. Susan Delacourt, Mark Kennedy, thank you very much. Have a great week ahead.
Susan Delacourt: Thanks.
Mark Kennedy: Thanks.
Tom Clark: And that’s it for us today. I’m Tom Clark. Thanks very much for joining us. See you back here next Sunday. Have a great week.