With the resignation of Prime Minister Justin Trudeau, Canadian politics is headed for a shake-up, with observers anticipating a federal election shortly after the Liberals choose their new leader in March. In the polls, Liberal support is at a low ebb with essentially all of that going to the federal Conservatives led by Pierre Poilievre.
Much of Poilievre’s commentary to date is centred around trash-talking Canada and blaming everything on Justin Trudeau and the federal Liberals. While that makes for good populist politics, it’s far from clear what he actually stands for and what Canadians can expect should he become the next Prime Minister.
As we await a full Conservative election platform, we can read the tea leaves of Poilievre’s statements to the media and in interviews. His recent hour-and-a-half interview with the controversial Jordan Peterson outlines his takes and positions on a number of issues.
Beyond capitalizing on the unpopularity of Prime Minister Trudeau, there is not much that is new in Poilievre’s small-government, free-market rhetoric. Ideologically, he cites the hard-right economist Milton Friedman as his inspiration. He claims his views have changed very little since he was a young man who wrote an essay about what he would do as Prime Minister.
That type of ideological rigidity should be cause for alarm given how much the world has changed in the more than two decades since. Moreover, for someone who so worships the free market, he has spent his adult life working as a politician. Despite targeting his message to disaffected youth and the working class, he remains among the elite, including time as a cabinet minister in the final years of the Harper Conservative government.
The Poilievre economic agenda is mostly to double down on the same old conservative policies of deregulation, cutting taxes and public services. This, we are told, will unleash the power of the private sector, leading to surging new growth and closing the productivity gap between Canada and the United States. That, plus a house you can afford, clean streets and getting on Donald Trump’s good side—or so he says.
Canadians have already been there and seen the disastrous results. Tax cuts, deregulation and free trade have all been invoked by past federal governments to close Canada’s productivity gap with the US. There is no reason to believe that cutting taxes for the wealthy or large corporations will stimulate broad-based economic growth. If anything, the benefit of these tax cuts will flow to the wealthiest Canadians, while households struggling to get by will be faced with the burden of public spending cuts needed to pay for upper-income tax cuts.
The bait-and-switch on affordability is illustrated by Poilievre’s attacks on federal carbon pricing. It has taken several years for the federal minimum carbon price to rise beyond symbolic levels and now (at about 18 cents per litre at the pump) they are contentious.
But a key plank of the federal policy has been to flow all carbon tax revenues back to households and small businesses through the Canada Carbon Rebate. The upshot is a vast majority of households get back more from federal carbon rebate than they pay in carbon taxes. Cutting this system will make people worse off, not better.
Abandoning carbon pricing abrogates our responsibility to do our part to cut the flow of greenhouse gas emissions that are now tearing the planet asunder with flame and flood. Worse, it would boost the fortunes of the oil and gas sector, which shattered its previous all-time profitability records during the inflation of 2022 and 2023.
If the Trudeau Liberals deserve heat on affordability, it’s for failing to tax these excess profits back then, not for its carbon pricing.
Poilievre positions the Trudeau Liberals as the enemy of Alberta and the oil and gas industry. Certainly, any action to reduce emissions must include the oil and gas industry that is causing the problem of climate change in the first place. The extraction and processing of oil and gas accounts for more than 30 per cent of Canada’s emissions (and much more if we count the carbon embodied in fossil fuel exports).
Capping oil and gas emissions is a necessary step, but one that has been too slow in implementation. Since the Liberals took power in 2015, the production of oil and gas has surged (oil up 27% in 2023 compared to 2015 and gas up 14%). To help the industry, the feds bought the Trans Mountain Pipeline to the BC coast and spent $34 billion to triple its capacity, all for export.
Ultimately, Poilievre’s small-government mindset fails to address the overarching challenges facing Canadians. The reason the Liberals won in 2015 and subsequent elections is that they spoke to important issues facing the nation, like climate change, the soaring cost of housing, homelessness and stagnant wage increases for ordinary households.
These issues remain top of mind because, in classic Liberal fashion, the Trudeau government was big on election talk, and slow on action. Our book, The Trudeau Record, looks at the failed promises of the Trudeau era in a number of areas and finds that reality has failed to live up to the hype.
The Poilievre campaign puts the blame on Trudeau for the wrong reasons and promises that our pressing problems will be solved by doing even less.
Consider housing, where Poilievre has been keen to position the Conservatives as beneficiaries of the Liberals failure to dent unaffordable ownership and rental housing. But rather than bolstering the National Housing Strategy, Poilievre would withdraw the limited funds that have been put towards providing genuinely affordable housing.
In terms of solutions, so far all Poilievre has to offer is a cut in the GST on new housing (rental housing and student residences are already exempt) and to push municipalities to approve more housing supply (which the federal Liberals have already done through the Housing Accelerator program).
In the face of big challenges, we need a strong public sector to reduce extreme inequality and ensure we have the infrastructure and public services that share the wealth and provide a base for sustainable economic development.
Poilievre’s‘s hard-right conservatism can be seen in verbal attacks on “socialists” who “want free stuff for everyone” and a massive state. A big plank of his economic agenda is aimed at cutting back the size of the federal government.
One important exception is that he would support a major increase in military spending. It’s not at all clear how Poilievre will make the fiscal math work since he also decries Ottawa’s budget deficit. Bringing in tax cuts and growing military expenditures and balancing the budget together imply massive cuts in federal spending.
What would Poilievre cut? Most federal spending is for transfers to individuals (such as seniors’ and children’s benefits) and to provinces/territories (to support health care, post-secondary education and social services). Discretionary spending by federal departments is a fairly small part of federal revenue. Defunding the CBC would save little but would be very unpopular and undermine an already-weak media sector.
Putting away the broadsides, social-democratic programs are broadly popular in Canada and are built into our social safety net, from income support programs to public health care and education, and other public services, Crown corporations and infrastructure. All of these collective enterprises are key parts of a dynamic mixed economy.
If anything, the federal Liberals have done too little to deepen public services and investments in areas where the market is not delivering. Public dental care and the beginnings of a national pharmacare system are sensible directions and if anything, the government has not gone nearly far enough.
New public investments in childcare have greatly reduced out-of-pocket costs for families with young children, and have generally been supported by pro-business groups. The case for public support can be made in terms of advancing women’s ability to participate in the labour market along with benefits to young children. Again, we need more public investment, not less.
While Poilievre is clearly tapping into a general malaise that the Canadian economy is not delivering for everyone, his small-government approach to economics suggests he won’t be the standard bearer of working Canadians. It’s just a recipe to funnel even more income to those at the top.
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Canada’s future has never been more up for grabs. In the “Unpacking Poilievre” series, we will interrogate the Conservative agenda on housing, inflation, fiscal policy and climate change and energy policy. And we will look at the policy ideas emerging from the Liberal leadership race, the looming federal election and the big shadow cast by the incoming Trump administration. Tune in for more updates in the weeks to come.
