Last April, when the Trudeau government tabled a budget amid some of the most difficult economic questions in decades, it said it was going to seek help finding answers.
In the budget, the government announced it would establish a permanent Council of Economic Advisors. This body of top economic experts would be there to provide sage counsel on how to shape policy to best navigate the current murky waters, and chart a course for future prosperity. It promised details about the council’s composition “in the coming months.”
But nearly eight months later, the promised council isn’t helping find those answers. The government hasn’t even found its council yet.
The Liberals have been all but silent about the plan since trumpeting it in the spring budget. There was no mention of it at all in the government’s fall economic statement this month.
“Work is still very much ongoing,” Finance Department spokesperson Jessica Eritou assured me through an e-mail on Friday.
But from the perspective of the community of expertise that would be tapped for this body, no “ongoing” seems to be going on at all.
I canvassed numerous senior Canadian economists last week, all of them policy experts who would be logical candidates for such an advisory body. No one has heard a peep. None of them have been approached about the possibility of sitting on the council, nor do they know anyone who has been approached.
“Haven’t heard anything in public or private channels,” said University of British Columbia economist Kevin Milligan, who served as a special adviser on economic recovery in the Privy Council Office in 2020-21.
“Nobody who I would imagine would be tasked to run [the council] seems to know anything about it,” said Western University professor Mike Moffatt, who has advised the Trudeau government on innovation policy in the past.
It’s a chorus of crickets out there.
It’s odd, and disappointing, that the government looks to be so adrift on an initiative that it seemed to consider pretty important this time last year. The Liberals promised a permanent economic advisory council – loosely modelled on the White House’s Council of Economic Advisers in the United States – as part of its 2021 election campaign platform. It was contained in Deputy Prime Minister and Finance Minister Chrystia Freeland’s mandate letter last December. And then, there was the commitment in the budget.
And it’s not as if anyone would argue against the need for strong economic advice. The country is in the grips of the worst inflation problem in decades, and we look destined to enter a recession long before the inflation problem has been solved. Soaring interest rates have cast a dark cloud over the housing market. Global trade lines are being redrawn by shifting geopolitical forces. The government has talked often about the long-term need to expand Canada’s economic potential – to increase its capacity and productivity – but still lacks the kind of comprehensive, big-picture strategy to make that happen.
Unfortunately, this is something of a pattern for the Trudeau government – to champion great economic ideas and then drag its feet on implementing them, losing its way in the details.
The infrastructure program, which formed the economic backbone of the Liberals’ 2015 election platform, spent years failing to meet ambitious spending targets. When then-U.S. president Donald Trump unleashed sweeping corporate tax changes in early 2018, then-finance minister Bill Morneau promised policy action to restore Canadian business competitiveness – and then spent nine months thinking about it, before producing an underwhelming response.
The government has been talking about the need for changes to the Employment Insurance program pretty much since the early days of the COVID-19 pandemic, when it quickly became apparent that the current outdated system leaves far too many workers without an adequate safety net. But it has nibbled around the edges of the issue, without addressing the need for an overhaul of the EI program. Now the country is on the brink of another recession, without having fixed the most glaring policy problem exposed in the last one.
The Trudeau government demonstrated in the early days of the pandemic that it is capable of swift, decisive and innovative economic policy action on a large scale. And yet outside of emergencies, they choose to dither. When that dithering extends even to establishing a committee to give some advice on policy direction, we start to sense that even this government’s weeds are getting lost in the weeds.
It’s hard to say precisely what is holding up the Council of Economic Advisors. There may be internal disagreement over the structure and mandate of the body.
The council was originally championed by former deputy finance minister Paul Rochon – the department’s top bureaucrat – who, apparently, had strong ideas about those crucial details. But Mr. Rochon resigned and returned to the private sector nearly two years ago. In his absence, the government has kept the idea, but seems to have become bogged down in the details – or perhaps, the concept has simply slid down the priority list.
It really shouldn’t. This government faces crucial economic decisions, both short- and long-term. It needs to raise its economic bench strength to form sound and decisive policy on these key questions.
If the Council of Economic Advisors is going to be part of the solution, then let’s get on with it. Not in another six or 12 months, but now.