Same answers but Liberals start to fret over new inflation question

If there was a political hint to be taken from the verbiage of Tuesday’s Speech from the Throne, it was that Justin Trudeau’s Liberal government has realized the economy could become a thing.

After running an election campaign on vaccines and child care and a green future and sundry other items, the Liberals had Governor-General Mary Simon outline their third-term legislative program in a speech entitled “Building a Resilient Economy.”

In it, we learn that the Liberals are now alive to concerns about increases in the cost of living, a new-ish kind of recognition after an election campaign where Mr. Trudeau treated inflation as something he didn’t much worry about and didn’t need to talk about.

Luckily, the solutions for this newly unearthed problem of inflation just happen to be the same things the Liberals have been promising for months or years. What serendipity!

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To combat a rising cost of living, Mr. Trudeau’s government will bring in the national child care plan it promised in last year’s Throne Speech, and the housing policies it promised in the summer election campaign, when Mr. Trudeau wasn’t much fussed about inflation at all.

Now, it is true the government’s funding agreements with provinces for child care will reduce costs for parents of young children, and Quebec’s experience with the policy has shown it will stimulate economic growth by encouraging greater participation in the labour force, particularly among women.

But there are reasons to doubt that the housing policies proposed by the Liberals would have the same salutary effect.

And notably, the approach suggests that in the face of every new, complex problem there is the immutable value of what the Liberals wanted to do all along.

No mention was made here of trying to tackle supply chain constraints, or transportation blockages.

One didn’t expect Mr. Trudeau’s Liberals to tread on the independence of the Bank of Canada or its conduct of monetary policy – for good reason – but you’d think that a speech that declares “we must keep tackling” the rising cost of living would hint at a few government policy levers that aren’t already being pulled.

Perhaps it might have included some suggestion that the three-year, $101-billion recovery program that Finance Minister Chrystia Freeland outlined in her April budget will be rejigged now that the immediate concerns about the economy aren’t so much about stimulating demand.

To be fair, a Throne Speech never has much detail, so the government’s prescriptions for the cost of living might wait until Ms. Freeland delivers an economic statement later this fall. But so far, it appears the plan is to tell Canadians that past policies are fit for all future purposes.

That’s not a new tendency in Mr. Trudeau’s Ottawa. The postpandemic plan to build a better Canada outlined in last year’s Throne Speech looked a lot like the prepandemic plan the Liberals outlined after they won a second term in 2019, but with bigger budgets.

Throne speeches are always vague outlines, and it was no surprise that Tuesday’s one rehashed the promises from the recent election campaign.

But the new elements showed the Liberals slowly coming to grips with the notion that postpandemic economic issues are emerging as a political problem.

The Conservatives, particularly MP Pierre Poilievre, have been hammering away at inflation for weeks, although not always with a coherent diagnosis or program to counter it. Party Leader Erin O’Toole likes to tweet about the cost of living. A lot of the party’s MPs think it’s a winning issue if they pin the blame to Mr. Trudeau’s Liberals.

So the Liberals threw some words at the economy. The speech acknowledged concerns about the rising cost of living even if it didn’t suggest doing anything new to deal with it. The title was about the economy, even if the content wasn’t really. We were told that “as we move forward on the economy of the future, no worker or region will be left behind,” although it wasn’t clear how this would come to be.

But at least we now know the Liberals are starting to think the economy could become a political issue. Who knows? The next step could be doing something about it.

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