A steady economic hand but a shaky foreign grip for Trudeau

Stay-the-course in troubled economic waters is good, but inaction on foreign files can be costly, Trudeau learns

Thestar.com
Jan. 20, 2016
By Tim Harper

Maybe it’s because the length of the campaign served Justin Trudeau so well that the prime minister sometimes sounds like he is still campaigning instead of governing.

When it comes to the Canadian economy, this never-ending campaign talk is serving Trudeau, and Canadians, well.

But the same recipe of inaction on our role in an anti-ISIS coalition is costing this government.

This is a government with a strong mandate and four years ahead of it, and despite the initial urgency attached to a long list of campaign promises, it is moving very deliberately, whether on refugees, electoral and Senate reform, national security or foreign policy.

First, the economy.

Trudeau has little choice at the moment but to promote the three-Cs - calm, control and confidence - while all those around him are seemingly running around with their hair on fire.

The opposition demands a meeting. Journalists demand an earlier budget. Editorial boards demand faster, deeper stimulus spending.

Budgets are best delivered when they are ready, not expedited because there is bubbling panic in the land. The prime minister is a communicator and if times are troubled, his message has to be “we have a plan, we’ve got this.”

It’s not as if Trudeau and Finance Minister Bill Morneau are not aware of what has transpired in the 92 days since the Liberals celebrated their majority.

Here’s a reminder.

On the day Trudeau was elected, the Canadian dollar was worth 77.2 cents (U.S.).

Tuesday it traded at 68.6 cents.

A barrel of oil was at $45.89 (U.S.) last Oct. 19. Midday Tuesday it sat at $29.04.

The loonie and oil were at 12-year lows.

On election day, the Toronto Stock Exchange composite index stood at 13,756.81. Tuesday, it opened at 11,942.17.

The International Monetary Fund has downgraded its growth outlook for Canada in 2017.

Perhaps most troubling, the Parliamentary Budget Officer says Canadians now owe $171 for every $100 of disposable income. Household debt is at its highest level in 25 years and we have grown more debt than any other G7 country in the past 15 years.

Trudeau cannot raise the price of oil or boost Chinese economic growth but by showing alarm or an unseemly urgency - or, perhaps suggesting this is a “buying opportunity” - he could risk making the situation much worse.

“The priority that the Canadian government has is to grow the economy in meaningful ways for middle-class Canadians and for those working hard to join the middle class,’’ he said. “That means putting Canadians to work.’’

That is nothing more than campaign boilerplate, but it is a statement from a man who will not be pushed off course.

He and a handful of cabinet ministers are off to Davos, Switzerland with the message that Canada is spending, it is a welcoming environment for investors, and is much more than a resource-based economy. This is the anti-Stephen Harper message. The former prime minister used Davos as a backdrop in 2012 when he called his effort to get crude oil to Asia a “national priority.’’

But a lot has happened on another front in 90 days since the election.

There have been terrorist slaughters in Paris and San Bernardino, Calif. Seven Canadians have been killed in terror attacks.

Our allies are stepping up the fight against Islamic State but the Trudeau government has dithered, not backing away from its pledge to withdraw six CF-18s from the coalition, but offering ever-shifting rationales and timelines, without announcing any commensurate contributions on the ground to counter the perception it is retreating from the fight.

Meanwhile, Canadian planes have flown 2,038 bombing, refuelling and reconnaissance sorties.

Late last week two CF-18 Hornets struck an ISIS fighting position east of Mosul and another pair of CF-18s hit an ISIS fighting position north of Tikrit.

The current mandate for the fighters expires in March, but here the Trudeau government’s deliberations are seen as inaction and 90 days of indecision. That has become costly.

It has cost Ottawa a seat at the table at a Paris meeting of “significant contributors” to the anti-ISIS coalition chaired by U.S. Defence Secretary Ashton Carter.

Snub or not, it is a barometer of where our allies see Canada. Our standing ebbs the longer it takes to make a decision on a training commitment.

A leader can go a long way resisting pressure for a knee jerk response to a discouraging domestic economic ledger. But the Trudeau Liberals are learning the same luxury of time may not exist on the international front.