Federal elections rarely boil down to a single issue for voters. Yet political parties of all stripes know that their economic promises must be clear and compelling. Pocketbook issues normally rule all. Although statistics are usually a good metric for the overall health of the economy, Canadians are not guided by numbers. They are guided by very real day-to-day concerns: can they feed and clothe their families? Will they be able to pay their bills? Can they continue or even begin to save for retirement? To this end, 32% of Canadians rank the cost of living as their biggest worry leading up to the federal election.
Accordingly, they will not only ask politicians to come up with policies strong enough to protect them in times of economic turmoil; they will also push them to deliver on improving their financial positions. The status quo is not enough, even for a government with a strong economic record. And especially during a time of economic instability.
Most parties have yet to release their campaign platforms. However, judging from past actions and positions, there seems to be two contrasting narratives at play:
- a continuation of a largely “Keynesian” doctrine whereby the Government plays a key role in stimulating growth (generally speaking, the cornerstone of Liberal policy under Prime Minister Trudeau); or
- a return to an economy that more readily embraces free market (generally the underpinnings of Andrew Scheer’s political DNA).
Why is this important? These contrasting positions highlight divergent views on governing and the role of the government in the lives of Canadians. And the “nerve system” of how a party will shape their economic policies when elected.
As we inch closer to election day, while key economic metrics are key to track, voter sentiments on the economy may tell a different story on where support will galvanize. At this stage of the pre-campaign period, this needs to be viewed predominantly through a two-party lens: red and blue.
This will be a critical point of friction until the election, with the NDP, Bloc Québécois, and Green Party looking to wedge themselves into the debate.
Accordingly, for the Liberals, some key challenges include the following:
- Job numbers: Canada has its lowest unemployment rate in over 40 years (5.4%) and exhibited the highest growth rate amongst G7 countries throughout the past four years. Yet political “credit” to this end is hard to secure. Voters will undoubtedly demand a response to this rather simple question: what’s next?
- Results stemming from previous economic promises: The Liberals promised to run deficits to spend money on infrastructure projects. That push has yet to materialize. Will the Liberals now turn to more “boutique”—even populist—type economic promises? Are targeted tax cuts in the mix to broaden their declared middle class target voters? Voters may continue to be comfortable being in the red. But they will also need to see that such “investments” make their lives markedly better.
- International trade and global economic “ripples”: Global markets have generally seen an uptick in 2019 after a weak 2018. And the Liberals have successfully negotiated two free-trade agreements (CETA and CUSMA). Will any of this matter at the ballot box? Further, the government’s current political difficulties with China have impacted Canada’s canola and meat industries. The economic—and political—repercussions may represent a key challenge in October.
For Andrew Scheer and the Conservative Party, seeking to regain power after their 2015 loss, contrasting their position to the Liberals’ plan will be key. They likely will look to put the focus on “kitchen table” economic campaign commitments. And carve out areas of differentiation with the Liberals, including the following:
- Oil and gas sector: Number one on their agenda is the oil industry—a key stimulus to Canada’s economic growth. By removing red tape such as enhanced consultations with stakeholders and environmental assessments, and by seeking to give more leeway to the federal government in instances of provincial obstruction, the Conservatives hope to reignite Canada’s struggling natural resources sector.
- Interprovincial trade: The Conservatives have also indicated their willingness to remove all interprovincial trade barriers, paving the way for a full free-trade agreement within Confederation.
- Tax cuts: Scheer has pinpointed his opposition to the Liberals’ carbon tax and clean fuel standards as examples of “pocketbook” issues he’ll change as Prime Minister. Yet the key question is how—and to what degree—he’ll scale back taxes to attract votes.
Economic issues will likely not generate the same amount of passion—nor vitriol—as other issues. 2019 will not see a “free trade election” like we saw in 1988. But economic issues will nonetheless be a collective “X factor” as we move to e-day. Parties know that, above all, connecting with Canadians through their wallets is an absolute must-do on their political checklists.