The Liberals at the crossroads: A preview of the Speech from the Throne

Canada’s COVID-19 response has focused on short-term policies designed to alleviate the various hardships caused by the pandemic. Federal spending has been understandably heavy, and pandemic response coordination with provincial and territorial governments has been consistent.

Yet the road ahead for Canadians in all regions—in all economic sectors—remains unclear. The governing Liberals know that this tenuous fiscal situation simply isn’t sustainable, particularly after a difficult summer beset by self-inflicted scandals and the election of a new leader of the Official Opposition.

By proroguing Parliament in July, Prime Minister Justin Trudeau created a political showdown over the Speech from the Throne, set on September 23: the political fate of the Liberal government rests on how the next few weeks will be navigated. It will be a major test for the new federal Minister of Finance, Chrystia Freeland, only weeks into the job.

While all Throne Speeches are deliberately pegged at the proverbial 50,000-foot mark, the precise language on commitments will never matter more to the life of this current Parliament. In short, this speech is not a mere parliamentary procedure: it is a glimpse into our immediate future. It is also the measuring stick by which each parliamentary faction will articulate its own vision.

As a result of the pandemic, Prime Minister Trudeau never had time to implement his agenda after securing a minority government in October 2019. The government’s budget, originally set for March 30, was cancelled, and the entire federal government was refocused on fighting the outbreak.

Here is what Canadians can expect from the Throne Speech:

• Accelerated pandemic response efforts. Having learned lessons from the first wave of the pandemic, the government will more strategically deploy resources and focus its direct efforts on securing a vaccine.
• An acknowledgment that our fiscal deficit is unsustainable. As entire industry sectors were effectively shut down and millions of Canadians were suddenly out of work, the government had to focus on direct assistance to Canadians and businesses to salvage the economy. It largely succeeded, but to the detriment of our national debt.
• A plan to refocus government priorities and an attempt at creating a “green recovery” in the coming months. The Liberals believe that the crisis created by the pandemic has moved public opinion toward supporting a more aggressive transition in economic policy. The Liberals appear ready to spearhead a green recovery, one that will put a strong emphasis on clean, renewable technologies. They have already signaled a willingness to invest in electric vehicles. The Liberals are also banking on the prospects that a green “revolution” will create jobs and boost economic growth. What that means in tangible terms remains unclear, however, including for Canada’s oil and gas sector.

But will Justin Trudeau be allowed to implement this plan? This is, after all, a minority Parliament, with an emboldened opposition sensing a tired, weakened government.

The Conservative Party appears focused on the “now”. This will be the first chance for newly elected leader Erin O’Toole to shore up his national profile, so the Official Opposition will likely vote against Speech from the Throne regardless of whether it agrees with specific elements of Trudeau’s plan.

Its position reflects a belief that the Prime Minister has lost the moral authority to govern due to its various ethical scandals and that the Conservative Party is more prepared to manage the country’s finances during a time of crisis. The Conservatives will likely oppose the speech for the following reasons:

• An insufficient plan to fund and approve rapid testing for COVID-19
• No clear approach for creating the well-paying, high-quality jobs needed to lift Canada out of economic turmoil
• A green “revolution” will be viewed as a risky economic scheme that can only be paid through unsustainable deficits, ultimately resulting in higher taxes for Canadian families.

However, due to the election speculation, it won’t be enough to just criticize the government. Expect the Conservative Party to also offer alternative vision and solution to the crisis.

Meanwhile, the Bloc Québécois is eager to kick-start different conversations:

• While the party is likely to support any measure leveraged to mitigate a second wave of COVID-19, the Bloc is also keenly interested about the future allocation of federal health transfers. Expect this to be a condition of Bloc support for the speech; it is the most important item on Premier François Legault’s list, and the Bloc will fight the government tooth and nail to ensure that the funding sought by Quebec (and unanimously backed by the rest of Confederation), an increase of 13% from past levels, is granted without conditions.
• The Bloc has also hounded the government for months on the topic of compensations for dairy processors in the wake of the ratification of the Canada-United States-Mexico Agreement (CUSMA), a Liberal pledge that has yet to materialize. The sector is growing impatient and will likely request assurances in the form of a clear-cut timetable.
• The tourism and hospitality industry, which has long been a motor of the Quebec economy, is in a dire need of stimulus funding. The Bloc will likely want to ensure that the Liberals dedicate funding to airports, hotels, restaurants and all the subsectors embedded to an industry crucial to Quebec’s growth.

Perhaps most importantly, all eyes will be on the New Democratic Party and what it wants to see in the Speech from the Throne. While the Conservative Party and Bloc have signaled a lack of support for the Liberal government, the NDP has shown an openness to work with the Liberals.

This position reflects the NDP’s financial situation and the party’s inability to afford another election so soon. Nonetheless, expect the NDP to focus on long-standing policies that have become more important in a COVID-19 context. These policies include:

• Funding for universal childcare. COVID-19 has exposed that childcare can impact economic output and productivity. Expect the NDP to make this argument as it seeks the resources needed to ensure every parent has access to this invaluable service.
• Increases to provincial and territorial healthcare transfers. Provinces are running out of money and the demand is only increasing as COVID-19 cases go up. The NDP will be the champion of the provinces as the Liberals negotiate for the NDP’s support.
• Permanent changes to employment insurance benefits, including for Canadians transferring from CERB to EI. COVID-19 has exposed on mass that it’s difficult to live on $2,000 and the NDP will champion Canadians struggling to find work.
• Greater investments in education. Universal post-secondary education has been a historical priority of the NDP. With the government set to fund an economic transformation using debt financing, expect the NDP to request this policy be included as part of that transition.

While it’s likely the Liberals will pursue one of the aforementioned policies, what’s less likely is that NDP leader Jagmeet Singh can convince the voting public that he is responsible for the implementation of any such policy.

But while each party’s plan for responding to the COVID-19 crisis might be vastly different than the approach of the governing Liberals, does this indicate that the opposition parties will oppose the Speech from the Throne, defeat the government and trigger a fall election?

Don’t count on it. Until the NDP’s financial situation improves and the party is confident it has the resources to fight a national election, Jagmeet Singh will likely continue to support Justin Trudeau’s minority government.

As a result, the policies announced in the Speech from the Throne will ultimately be implemented, if not through legislation, then by changes to regulations and ministerial directives.