Prime Minister Justin Trudeau defended the Liberal government’s economic policies on Thursday, following public criticism from his former finance minister, Bill Morneau.
Mr. Morneau, who resigned from the federal cabinet under pressure from Mr. Trudeau in 2020, delivered a toughly worded speech Wednesday evening to the pro-business C.D. Howe Institute, which he headed before he became finance minister in 2015.
He criticized the Trudeau government for focusing more on wealth redistribution than economic growth and competitiveness, echoing sentiments dozens of Canadian business leaders have previously expressed in interviews with The Globe. Although Mr. Morneau did not mention his successor by name, he said the current Finance Minister, Chrystia Freeland, has not set out a prudent debt target to underpin public spending.
Mr. Trudeau countered that Mr. Morneau helped shape major wealth-redistribution programs, including the Canada Child Benefit and an increase in taxes on wealthier Canadians.
“Bill was a huge part of that – an important member of the team,” Mr. Trudeau told reporters at a news conference, where he was unveiling a $1.3-billion land-claim deal with the Siksika First Nation of Alberta.
The Prime Minister said the government had to shift gears when the pandemic hit, by spending billions of dollars to provide economic relief to businesses and individuals.
“We did that, not just because that was going to be the best way through the pandemic, but it was the best way of ensuring the economy would come back as quickly and strongly as possible,” he said.
Mr. Trudeau argued that Canada’s job recovery has been better than that of the United States, as the global economy has begun to rebuild from the COVID-19 pandemic.
In Mr. Morneau’s speech to the C.D. Howe Institute, he said there was never any urgency in the Trudeau cabinet to combat Canada’s low productivity. The former finance minister noted that the Organization for Economic Cooperation and Development predicts Canada will rank last among wealthy countries in terms of real GDP per capita between 2021 and 2060.
He also said the Trudeau government does not consult with corporate Canada or listen to its views, another criticism frequently levelled at Ottawa by business leaders.
But Mr. Trudeau appeared to rule out a change in direction for his government.
“Even as we see growth pick up again, we need to continue to be there to support families. Right now that means supporting them with the cost of living,” he said.
Agreements that Ms. Freeland negotiated with the provinces to provide $10-a-day child care will save families about $5,000 a year each in day-care fees, he said.
“These are the kinds of things we have done, and we know through supporting Canadians – making sure everyone has a real and fair chance to succeed – that is how you create the best growth,” he said.
Conservative finance critic Dan Albas said he agrees with Mr. Morneau’s concern that the Liberal government is more interested in redistributing wealth than in growing the economy. But he added that many of Mr. Morneau’s growth-related policies as finance minister – such as establishing the Canada Infrastructure Bank and creating “superclusters” of innovative businesses and researchers – were not successful.
“I completely agree with his assessment that this government likes to cut up the pie,” Mr. Albas said. “It certainly has no idea how to grow it.”
Ben Bergen, president of the Council of Canadian Innovators, which represents technology companies, accused Mr. Morneau of ducking any responsibility for his role in designing the Liberal government’s economic agenda.
In comments on Twitter, Mr. Bergen said his organization had tried repeatedly to provide Mr. Morneau with advice on modernizing federal programs and policy to create greater economic prosperity.
“You had your head in the sand. You don’t get to rewrite history,” Mr. Bergen wrote.
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