Pollster Nik Nanos.The Globe and Mail
Nik Nanos is The Globe and Mail's pollster and chairman of Nanos Research. Follow him on Twitter at @niknanos.
Deficits are the bogeyman that Canadians are not afraid of. But letting them run rampant, without connecting them to jobs and hard investments, can damage the reputation of a government.
A recent survey for The Globe and Mail by Nanos Research suggested that 52 per cent of Canadians would support the federal government running a deficit if the economy was uncertain or weak, while 27 per cent opposed a deficit.
If balancing the books had significant political traction then one could reasonably argue that the Harper Conservatives could have won the election as a reward for fiscal stewardship in the last part of its mandate. That didn't happen. A number of factors cloud the risks and benefits of deficits.
First, it's important to delineate between what people take an interest in and what drives political behaviour. The key frame for most citizens is "what does this mean to me personally." If there is no direct linkage, then it likely falls into the "of interest" bucket. If it directly touches the lives of citizens now, you likely can grab their attention. The deficit, similar to issues such as the environment or even foreign policy, has a longer time horizon and does not have as direct a connection to the day-to-day lives of Canadians.
Second, when a government runs a deficit, it is usually great fodder for opposition parties and political elites. Opposition parties, most times, see deficits as signals of fiscal imprudence and the inability to manage within the means of the public purse. They make for very good headlines and snappy opposition one-liners in the House of Commons. In that respect, deficits pose a risk in terms of the narrative on the direction of the government of the day. However, both Conservative and Liberal governments have won elections regardless of their spending track record and have taken political heat as part of that spending journey.
Third, the research suggests that deficits in the cause of stimulating the economy are accepted by Canadians. A recent survey for the Canadian Council of Public Private Partnerships suggests that a majority either support (39 per cent) or somewhat support (35 per cent) running a deficit to invest in infrastructure. The survey asked Canadians what they thought about Liberal priorities for economic, social and green infrastructure. All three were considered high priorities by a majority, but investing in infrastructure projects such as public transit, roads, bridges and transportation corridors was perceived as having the greatest sense of urgency. This speaks to the "proximity effect" on Canadians – investing in economic infrastructure receives more intense support than social or green infrastructure projects.
It shouldn't be a surprise. According to the Federation of Canadian Municipalities, each $1-billion spent on infrastructure would directly create about 18,000 jobs. In an uncertain environment with a fragile economy, spending to create jobs to deliver the infrastructure Canadians need does not likely pose a significant political risk.
There will invariably be the gnashing of teeth by the opposition parties when the deficit numbers are released by the Trudeau government. Perhaps the greatest risk for the Liberals is not the deficit itself, but the Liberal government's ability to effectively manage a deficit and to deliver the infrastructure.