The clock ticks on a Liberal plan for economic growth

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The federal Liberals head into a new budget season talking about pursuing bold, new strategies to shape Canada’s economic future. But listening to Chrystia Freeland discuss it this week, it all sounds a bit old and tired.

“As we look to the years ahead, our focus must be on jobs and economic growth – priorities that will form the foundation of the budget,” the Deputy Prime Minister and Finance Minister told a Monday news conference, marking the launch of public consultations for a budget she framed as forming a blueprint for the country’s long-term economic prosperity.

“Jobs and growth” are the “motherhood and apple pie” of economic objectives. Find me the last government that didn’t say these were its priorities. It’s more platitude than policy. Might test well with the focus groups, but it’s not a meaningful starting point for a serious rethink of long-term economic policy.

More than six years into this government’s time in office, it’s time for something more ambitious. If the Liberals have a vision for the country’s economic future – and it’s not clear they do – they’re running out of time to act on it.

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Yet even when discussing the country’s most immediate and pressing economic worries, the Liberals display an unsettling lack of ideas. The recovery strategy for the COVID-19 pandemic is stuck in “get vaccinated.”

That was Ms. Freeland’s response when reporters asked her Monday about the trucker protest, and the economic issues raised by it. She offered nothing about policies to address supply chain bottlenecks. Nothing about addressing inflation. Nothing about working with the United States and other trading partners to minimize cross-border slowdowns.

Vaccination has, unquestionably, been a huge part of the economic solution over the past year. But this was our best idea a year ago. Since then, nearly 90 per cent of the eligible population has gotten at least partially vaccinated – and in the process, serious new economic problems have emerged. It’s great that the government is keeping its focus on the vaccination effort. But it’s not nearly enough.

Casting her gaze toward the long-term economic picture, Ms. Freeland certainly recognizes where the challenge lies: “I think we all really, really need to be focused on measures to increase Canada’s economic potential,” she said.

Few economists and public-policy experts would disagree. We live in a country with relatively low population growth (and, by extension, a slow-growing labour force) and chronically tepid productivity growth. Without policies to address those issues, we face a sluggish long-term economic outlook that threatens to compromise our living standards and strain our public finances.

This need to grow long-term potential is not new – indeed, the Liberals recognized it when they came to power in 2015. They have taken some important steps to address the problem: the national affordable child-care plan, the higher immigration targets and the increased commitment to infrastructure spending. But the government’s overall record on tackling long-term economic priorities is, to be generous, spotty.

It has yet to establish a coherent strategy on innovation. It has fiddled around the edges of the country’s ancient, convoluted and inefficient tax code, which desperately needs a complete overhaul. It has made discouragingly little progress in removing interprovincial trade barriers.

The government’s efforts to increase public infrastructure investment have proven over-ambitious, with billions in budgeted spending failing to get out the door. It hasn’t developed a serious plan to accelerate the country’s chronically listless private-sector capital investment.

Its biggest wins in international trade have been a North American pact that achieved little more than safeguarding market access that Canada already had, and pacts in Europe and the Pacific Rim that closed deals that had already been largely negotiated by the previous Conservative government.

In short, there is much, much work still to be done. It’s debatable whether this government’s inability to make serious progress in many of these areas is the result of a lack of will or a lack of execution; it’s probably a bit of both.

What should be clear to the Liberals is that they don’t have a lot of time left to get going. This is very likely Prime Minister Justin Trudeau’s final mandate before he makes way for a new Liberal leader, and history tells us that minority governments have pretty short life expectancies. The Liberals may only have two budgets before they are wrapping up the Trudeau era and preparing to go to the polls with a new leadership team.

Yet despite Ms. Freeland’s naturally enthusiastic personality, you have to wonder whether the pandemic has worn down this government. When it discusses the economic task ahead, it talks an awful lot about the policies it has already put in place. It seems more comfortable leaning on past successes than proffering fresh ideas.

Ms. Freeland invited think tanks and business groups to “give me some great recommendations that we can put in place.” But we’re not suffering from a lack of ideas (see above). What we need is a government that still has the imagination to lead the discussion, and the energy to get things done.

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