The title of Tuesday’s Speech from the Throne was “Building a Resilient Economy.” Don’t be fooled. This document may be many things, but it’s devoid of vision for an economic rebuild.
The text of the speech itself – intended to lay out the priorities of the government at the start of a new legislative session – does contain the word “economy” 11 times. Yet even for a document that typically is big on broad aspirational assertions and thin on specific policy intentions, there is shockingly little meat on those “economy” bones. (As my colleague Andrew Coyne pointed out in a Twitter post, the words “productivity,” “investment” and “growth” appear in the text a combined ZERO times.)
The re-elected Liberal government of Prime Minister Justin Trudeau has presented a game plan in which economic renewal is not so much a priority in itself, but rather a byproduct of the biggest files on the government’s to-do list. In the short term, the core of the plan is “end the pandemic.” For everything beyond that, it’s “green the environment.”
There is a lot of truth in that. These are crucial factors that will go a long way in determining the economy’s stability and growth trajectory, regardless of anything else our federal government pulls out of its policy hat. Nevertheless, the fact that public-health and environmental policies have economic ramifications hardly makes them the centrepieces of a coherent economic strategy.
Of course, a Throne Speech is far from a definitive statement on any government’s plans. The fall economic update expected in the next few weeks should reveal much more about this government’s intentions and their cost.
Nevertheless, the opening message from Mr. Trudeau entering his renewed mandate seems to be that if we do well on his government’s biggest priorities, the economy will come along for the ride. There’s little evidence of a coherent postpandemic strategy to build a stronger, more resilient, more productive and competitive Canadian economy.
The speech did address two major Liberal commitments that represent critical contributors to Canada’s future economic well-being: national affordable child care and increased immigration. Both are, at their heart, economic policies – the ultimate goal is to expand our labour capacity and efficiency, which is important for future growth. But these are re-affirmations of the policies of past Justin Trudeau governments. This is not new economic vision, it’s unfinished business.
In terms of new ideas, we’re still waiting. We waited through an election campaign, and now through a Throne Speech.
“Other countries are launching ambitious plans to unleash innovation, lower taxes and slash red tape to get their economies surging – and we see nothing from Justin Trudeau,” Conservative Party Leader Erin O’Toole said on Wednesday.
Whether you agree or not with the kinds of actions Mr. O’Toole suggests, they’re a lot more than the Liberals are talking about at this stage.
A government that was truly dedicating its mandate to building a better economic future would be stating an objective to finally remove interprovincial trade barriers, an absolute no-brainer to unlock economic potential, raise productivity and accelerate Canadian business competitiveness. A much-cited 2019 paper from the International Monetary Fund, co-authored by University of Calgary economist Trevor Tombe, estimated that the elimination of barriers to trade in goods from province to province would boost per-capita gross domestic product by about 4 per cent.
A government committed to economic renewal would launch a long-overdue full review of the antiquated Canadian tax code, a convoluted mish-mash of measures bolted onto a framework designed for an economy of more than 50 years ago. Critics have been saying for years that a revamp of the tax system could create a more competitive and attractive environment to foster business growth, investment and innovation. As a start, a healthy and sustained recovery will be elusive without an awakening of the country’s chronically lacklustre business spending – a problem crying out for policy measures as we emerge from the pandemic.
A government focused on economic priorities would direct its energies to a new strategy for education and retraining, to address the deepening skills mismatches in this country. Labour shortages, especially in specialized high-skill areas and in emerging technologies, were a problem long before the pandemic; the crisis has reshaped the labour landscape in ways that will demand new thinking and new policy.
The Throne Speech offers none of that. It pays lip service to our future economic security while avoiding committing itself to any new and ambitious ideas that would truly help achieve that. Its best ideas are old ones.
Let’s hope this Throne Speech is just a placeholder while the government prepares a more meaningful and concrete approach to the country’s biggest economic challenges. After almost two years of crisis and an unnecessary election, this is not nearly enough.
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