GRITS LOSE GRACE UNDER PRESSURE

There is usually a time-lag before economic problems become political problems.

The Canadian economy’s performance has been disconcerting for months; now, it is the Liberal government’s turn.

In the wake of Bombardier’s announcement it would cut its workforce by 2,830, interim Conservative leader Rona Ambrose said Canadians are losing confidence in Justin Trudeau’s ability to manage the economy.

The Opposition’s case, one that is building by the day, is that he has undermined his, and his finance minister’s, fiscal credibility by breaking promises made during the election campaign: the pledge to introduce a revenue-neutral, middle-class tax plan; the commitment to keep deficits below $10 billion; and, now, the guarantee to balance the books by the end of the current mandate.

Being back in black by 2019-20 will be “challenging,” Bill Morneau admitted, saying the plan now is to return to balance “over the long term.”

What does that mean? A decade of deficits?

The problem for the Liberals is that many of the promises they now say they won’t be able to keep were designed to win an election, not govern a Group of Seven economy.

They can’t be blamed for growth that has slowed to a crawl because of low global commodity prices — the consensus of private-sector economists for 2016 is 1.2 per cent, down from two per cent in November.

But other wounds have been self-inflicted.

Carolyn Bennett, the indigenous affairs minister, admitted the $40 million allotted for the missing women inquiry “was a placeholder in a platform.” When she talked about the number of missing and murdered women being more than the 1,200 identified by the RCMP, it became clear that she envisages the cost of the inquiry will grow commensurately.

There were any number of “placeholders” in the Liberal platform — such as the cost of resettling Syrian refugees, pegged at $100 million during the election, now estimated at $1.2 billion.

In the last 100 days, Ottawa has been besieged by unsolicited requests for cash, such as Bombardier’s investment pitch, the aerospace equivalent of the promise of West African riches from a Nigerian prince for minimal initial outlay. The Quebec government has offered a $1-billion injection and made it clear it expects the federal government to pony up, too.

Marc Garneau, the transport minister, said Ottawa is doing its due diligence, but “wants Canada to carry on its tradition of being a global leader in aviation and aerospace.”

In other words, the cheque will be in the mail as soon we can figure out how to appease those crazy cowboys in the oilpatch.

How is this likely to play out politically? Trudeau overturned a generation of aversion to deficits during the campaign, portraying himself as a confident, stylish Mac to the stodgy Conservative PC: “The choice in this election is clear — smart investments, jobs and growth or austerity and cuts that will slow the economy even further.”

Voters bought the comparative advertising the Liberals would generate the growth that would eliminate “Harper’s debt” and result in balanced budgets in 2019.

Now, they expect those pledges to be met.

One recent poll suggested a majority of Liberal voters said the party should stick to its campaign promises on deficits. Another showed there is majority support for smart spending, but suggested backing for deficits falls below 40 per cent, as these rise to $20 billion. Many economists now suggest the Liberals are likely to blow through $20 billion.

The public appears to know by intuition that we are in a period of slow growth, rather than recession, and a full-blown stimulus package is not yet needed to protect jobs.

There are broader concerns about the economy — nearly half are worried about their jobs. They appear ready to accept deficit spending that is “smart,” and yields jobs and growth.

But the aversion to runaway deficit financing has not disappeared.

In question period, Conservative finance critic Lisa Raitt said Canadians care about balanced budgets and deficits “because they pay for them at the end of the day through loss of jobs and higher taxes.”

Morneau responded that the Liberal plan will grow the economy and make a difference to the middle class.

But it was telling that the previously unflappable finance minister took the bait when Raitt dangled the prospect of a $30-billion deficit in front of him.

“I will take no advice from the member across the way, who left us with an additional $150-billionworth of debt. What we have to show for it is the slowest growth since the Great Depression, a couple of gazebos and a fake lake,” he said.

It was a good line, but it suggests the Liberals are struggling to maintain their grace under pressure.