On June 20, the House of Commons adjourned for the summer and will resume sitting on September 17. The Senate is set to adjourn for the summer on June 21, marking the end of the spring parliamentary session and the beginning of the summer BBQ circuit. Not without its challenges (and Senate adversaries), in the final sitting hours, the Trudeau government was able to pass its pot bill, ending the session on a high note and checking off a major election promise for the Liberals.
Up until now, Trudeau’s declared sunny ways approach has been relatively well received by Canadians. A dark cloud, however, may be looming if a recent by-election is a precursor of what could come in the next federal election, with the Conservatives handing the Liberals their first by-election loss since 2013—the first loss since Justin Trudeau became leader of the Liberal party.
Further, the party polling numbers remain tight. According to the latest Nanos federal ballot tracking on June 19, for example, the Liberals have 36.9 percent support, the Conservatives at 32.5 percent, and the NDP with 19.9 percent support. For now, Justin Trudeau remains the preferred choice as Prime Minister at 38.7 percent, Andrew Scheer is trailing behind at 25.4 percent, while Jagmeet Singh is holding on with nearly 20 percent support.
Despite the notable win on the marijuana legalization file, Trudeau’s government faces an uphill battle with many critical issues remaining as the Liberals head into the final year of its first mandate. Economic woes, including pushback from small businesses on taxation and concerns about competitiveness, indigenous reconciliation, carbon pricing and environmental reviews, will be top of mind for the Liberals as the summer marks the de facto start of the 2019 election campaign season.
One year out: what to expect when Parliament returns
To this end, when Parliament resumes in September, the Trudeau government will be essentially one year away from the next federal election, scheduled for October 2019. Over the summer, and into the fall, it will become all the more critical to showcase what they have achieved over the course of their majority mandate, and what remains to be completed. Despite their commitment to program “deliverology” and mandate letter related report cards, it will be critical to communicate precisely how they have delivered for Canadians—and in what areas.
The DNA of this government is clear: steadfast commitments to gender equity, the (still ill-defined) middle class, aboriginal affairs, youth, and innovation. The “brand” is therefore relatively easy to distinguish. But ask the average Canadian—irrespective of the region in question—what exactly they have accomplished and the potential responses would undoubtedly be mixed. And likely lacking specificity.
It won’t get easier when the House returns. There are major “X factors” squarely facing them as MPs head home to their ridings: whether a NAFTA agreement is truly in the cards over the summer before the fall 2018 U.S. mid-term elections, and in the meantime, whether a costly (and politically messy) all-out Canada-U.S. trade scrap can be avoided; the ongoing scrutiny around the Government’s Trans Mountain pipeline purchase, and specifically how this issue plays out over the summer in B.C. and Alberta; the growing questions around whether a pan-Canadian carbon tax plan will be successfully delivered; how best to showcase signature results to Atlantic Canada, where the government holds every seat; decipher the parameters of a potential new pharmacare program through a recently-announced advisory council; and, critically, how to find common ground (or alternatively, a perfect political foil) with respect to the new Ford Government in Ontario.
In the meantime, the summer period will also serve as an opportunity for the Prime Minister to potentially re-tool his cabinet; better define the contrast between himself and his Conservative and NDP opposition leader counterparts; and begin to lay the foundation for what will be the pre-2019 election homestretch.
Spring 2018 session highlights and milestones
It has been a relatively turbulent session for the Liberals – between the politically-damaging India trip to ongoing pipeline politics, a fiery G7 Summit and seemingly endless U.S. trade disruptions.
In his end-of-session press conference, Trudeau touted accomplishments such as strengthening gun laws and increasing transparency of party fundraising. Interestingly, none of the accomplishments Trudeau listed were not major newsmakers of the session—FHR notes below some of the major milestones and highlights of the spring parliamentary session.
Throughout their mandate, the Trudeau government has reiterated that the environment and the economy must go hand-in-hand. Perhaps the biggest test to this rhetoric came in May 2017, when British Columbia elected an NDP provincial government, led by John Horgan, who campaigned against the federally supported Kinder Morgan Trans Mountain pipeline, and propped up by Andrew Weaver and the B.C. Greens. The Horgan government sent shockwaves across Canadian provinces, sparking inter-provincial trade wars, casting a shadow of uncertainty over the future of Kinder Morgan’s Trans Mountain pipeline, and more broadly, a shadow of economic uncertainty over the future of international investments in Canada’s natural resources.
This spring, Kinder Morgan announced that they had suspended all “non-essential” spending on its pipeline due to opposition from the B.C. government, issuing an ultimatum that it wouldn’t commit any additional funds to the project unless Premier Horgan’s government stood down. This led to the decision by the government to buy the project and related infrastructure for roughly $4.5 billion, framing it as a short-term purchase agreement that is financially sound and necessary to ensure a vital piece of energy infrastructure gets built.
CanAm relations at an impasse
Tensions between Canada and the United States are running at an all-time high as the spring sitting comes to a close. The U.S. imposition of tariffs on Canadian steel and aluminum exports, along with references to Canada as a threat to national security, has effectively created a wedge between the two countries. Further threats from the U.S. loom, with tariffs on the auto-sector rumoured to be on the horizon. With Canadian retaliatory tariffs set to take effect as of July 1st, the summer recess will inevitably pose a great test to the Trudeau government as they hope to overcome this setback.
As NAFTA renegotiations continue to evolve, Canada has remained adamant that the negotiations are going smoothly, despite clashing with U.S. negotiators over a proposed ‘sunset clause’. If all sides can’t reach a deal soon, individual bilateral trade deals could also become a reality, as both the U.S. and Canada have hinted at the possibility. President Trump has also been vocal about his thoughts on what he calls Canada’s “unfair” supply management system. Expect these statements to have an impact on how NAFTA negotiations unfold moving forward. With current uncertainty of the Canadian-American relationship, the future of NAFTA remains unclear.
Trudeau pressing for progress internationally
A key priority for the federal government over the past year has been diversifying the Canadian market, notably as Canada’s trade relationship with the U.S. deteriorates. Part of that mandate has been commencing, signing or ratifying free trade agreements with various countries or groups of nations. Adding some complication to trade talks is Canada’s progressive internationalist agenda, ensuring feminist and human rights values are entrenched in all FTAs signed. In some areas, the Liberals are achieving relative success while struggling to deliver in others.
Talks with China, Mercosur, the CPTPP and CETA have all included nods to the fairness and feminism integral to the Trudeau brand. While the status of these FTAs ranges from exploratory talks to nearly ratified, International Trade Minister Francois-Philippe Champagne – the self-proclaimed “Chief Marketing Manager of Canada” – believes Canada will be able to achieve consensus in several of the ongoing trade talks, ensuring Canada’s progressive lens is applied.
Uncooperative federalism on the horizon
For the remainder of 2018, and heading into the 2019 election year, Trudeau will face an uphill battle to make good on a 2015 election promise of renewed and cooperative federalism. While the relationship with provinces such as Manitoba and Saskatchewan have been rocky since the election of the federal Liberals, Doug Ford’s definitive Ontario sweep marks the loss of a key ally for the feds.
Adding to this tension is the ongoing carbon tax debacle. While some provinces—B.C., Quebec, Alberta (and up until this week, Ontario) already have carbon pricing regimes in place, others such as Manitoba and Saskatchewan have been clear in their staunch opposition to the policy. On the flip side of this debate is B.C., where tensions are running high as the federal government has gone to extreme measures to ensure Kinder Morgan’s Trans Mountain Pipeline expansion comes to fruition. In all cases, the Trudeau government has many challenges ahead, particularly in the realm of reconciling the economy-environment dichotomy.
Close eyes will be on the 2019 provincial election in Alberta, where United Conservative Party leader Jason Kenney has a chance to end Rachel Notley’s NDP rule. While Notley has been vocally critical on some of Trudeau’s policies, in many ways she is one of the few remaining allies who truly believe “the environment and the economy go hand-in-hand.” Outside of Alberta, the upcoming Quebec provincial election and outstanding questions on health care, equalization and cannabis regulation, will certainly be at the forefront of uncooperative federalism.