Trudeau’s Throne Speech seeks balance between COVID-19 crisis and economic recovery plans

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The Liberal government’s Throne Speech Wednesday will be a political balancing act.

Prime Minister Justin Trudeau and his party are itching to deliver on the green and social agenda they campaigned on last fall, yet mounting cases of COVID-19 as kids return to school underscore the fact that talk of recovery may be premature.

Amid this tension, Wednesday’s speech will aim to accentuate the short term, while also outlining plans for the economy once the pandemic is under control.

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The document will have three broad themes, according to a senior government official. The Globe and Mail is not identifying the official because they were not authorized to speak publicly on the matter.

The first will be on the immediate measures the government is taking to respond to the pandemic from a health perspective. The second will focus on federal income support for Canadians who still need help, including potential options for more regionally focused programs based on need.

A third section will outline the eventual recovery phase, including green-economy jobs in areas such as building retrofits and electric vehicles and measures aimed at Canada’s information technology sector, among other plans.

Like most Throne Speeches, the document is not expected to provide detailed plans. Those specifics will come later when Prime Minister Justin Trudeau releases new mandate letters to his ministers.

How much all of this will cost and how the new debt will be managed is a topic that will be left for Finance Minister Chrystia Freeland to explain this fall in either an economic update or a budget, according to the official.

Federal ministers spent the first part of the past week huddled in a largely empty federal building in Ottawa for a cabinet retreat. The common theme from their public comments was that the government’s top priority is the COVID-19 crisis. Action on an economic recovery plan would have to wait.

It was a stark reversal.

Just one month earlier, the Prime Minister stood in the foyer of the House of Commons with his new Finance Minister, Ms. Freeland, explaining why he had just prorogued Parliament to set the stage for a Throne Speech.

“We can choose to embrace bold new solutions to the challenges we face and refuse to be held back by old ways of thinking. As much as this pandemic is an unexpected challenge, it is also an unprecedented opportunity," he said in August. “This is our chance to build a more resilient Canada, a Canada that is healthier and safer, greener and more competitive, a Canada that is more welcoming and more fair."

That was then. The Trudeau government’s Throne Speech is still expected to leave room for an activist agenda on environmental and social issues, but that kind of political rhetoric is no longer said out loud.

“It was really quite tone deaf,” said former Saskatchewan finance minister Janice MacKinnon of the government’s initial explanation. “I think they read the tea leaves that it’s not time for an agenda of their choosing. It’s a time to focus on the fundamentals.”

Ms. MacKinnon co-chairs the C.D. Howe Institute’s Fiscal and Tax Working Group with former Liberal finance minister John Manley. In a recent report, they urged the federal government to set limits on spending and to ensure that when spending is approved, it is truly necessary and contributes to Canada’s longer-term productivity.

This year’s one-time payments to seniors, rather than targeting funds to those who are most in need, is the type of pandemic spending that is of concern, Ms. MacKinnon said. In contrast, she said the expected new programs to encourage renovations of homes and buildings to reduce energy consumption are the types of initiatives that creates jobs while also leaving a lasting benefit.

Mr. Trudeau’s shift back to the pandemic reflects where Canadians are, said Shachi Kurl, executive director of the Angus Reid Institute. After a summer where Mr. Trudeau took a “bruising” from the WE Charity controversy, she said it makes sense politically that the Liberals are starting the fall back on safer territory.

The pivot suggests that the Prime Minister is hoping his “we’ve got your back“ message on the coronavirus will resonate again, Ms. Kurl said. At the same time, she said climate remains a key issue, especially for Liberal voters, so the government can’t afford to let it fall off the agenda.

The frontline response to COVID-19 rests mostly under provincial jurisdiction. This summer, Ottawa negotiated a $19-billion deal to help cover unexpected costs from more contact tracing and maintaining public transit systems that have lost their riders. On Friday, the premiers called for billions more for infrastructure and $28-billion more in yearly health transfers to the provinces. That would raise Ottawa’s share of health costs to 35 per cent from 22 per cent.

The Prime Minister has already said he will meet with provincial leaders later this fall to discuss health care funding.

Policy advocates who have communicated with federal officials told The Globe they expect the speech will signal how the government will address challenges facing women in the workforce, systemic racism and repeat its commitments on reconciliation.

Assembly of First Nations National Chief Perry Bellegarde, who met Friday with the Prime Minister, said he hopes there is reference in the Throne Speech to policing as an essential service and if it isn’t included, it needs to be referred to in mandate letters sent to ministers.

The Liberals promised a national pharmacare program in their past Throne Speech, just over nine months ago. Eric Hoskins, the chair of a 2019 federal advisory council that called for a national pharmacare program, told The Globe this week that he is confident the program will again get a nod.

Climate change was the top focus in December’s Throne Speech, but even the federal cabinet’s staunchest advocates for action on the environment gave the issue a back seat this week. While Environment Minister Jonathan Wilkinson put the response to the pandemic first, he said climate change “remains a huge priority” and the government will “take significant action” on it.

Mr. Wilkinson acknowledged this week that time is running out and said the government is going to rely on a mix of regulations, tax incentives and “significant spending” to “achieve and exceed our 2030 target.”

Support for zero-emission vehicles, home-energy retrofits, and investments in clean-energy sources such as hydrogen were mentioned by Mr. Wilkinson and advocates this week and are expected to be acknowledged in the Throne Speech. The non-governmental Task Force for a Resilient Recovery called for $55.4-billion in new spending over five years. “This is a matter of us keeping up with where the world’s economy is going,” said Merran Smith, the executive director of Clean Energy Canada.

Canadian entrepreneur Jim Balsillie, who advocates for domestic tech companies as chair of the Council of Canadian Innovators, said he’s receiving positive signals that the government is looking at measures on intellectual property and efforts to keep and attract talent. In an interview, he said he’ll be watching to see whether a clear shift in the government’s economic approach emerges.

“The objective is a prosperous country in a world that’s gone from tangibles to intangibles,” he said.

With a report from Kristy Kirkup

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