Ottawa Citizen

Yes, dipping into deficit could hurt the Liberals

- SHACHI KURL Shachi Kurl is Executive Director of the Angus Reid Institute, a national, not-for-profit, nonpartisa­n public opinion research foundation. More informatio­n: angusreid.org.

Not since the mid-1990s — a time when our deficit represente­d nine per cent of GDP, a time of credit downgrades, when the Wall Street Journal called Canada an “honorary member of the Third World” — have Canadians identified the deficit and government spending as one of the most important issues in the country today.

In the wake of a federal budget notable for, among other things, running deficits until 2023, the Conservati­ve party has been loudly decrying the Liberals, which resonates with voters in ways that have been politicall­y damaging to the governing party. In Ontario, the outrage in many corners has been amplified after Kathleen Wynne’s Liberal government recently decided to stake its re-election chances on more than $30 billion in deficit spending over the next six years, trying to position itself in favour of “care, not cuts” in the showdown with Doug Ford’s Progressiv­e Conservati­ves.

Federally, you’ll recall, the Trudeau government was given a green light to run deficits by the electorate not so long ago. In the summer of 2015, Trudeau campaigned on a plan of so-called “modest” deficits for a period of three years, spending the money on infrastruc­ture and social programs. Stephen Harper memorably mocked them as “teeny tiny … so small you won’t see them,” but proved correct in his prediction that they would be bigger — and run longer — than promised.

Still, after years of hearing the Conservati­ves bang on about austerity and prudence, Canadians clearly wanted something else. In September 2015, nearly three-quarters — including half of CPC voters — said the federal government should spend on jobs and growth, even if it meant deficits in the short term.

It turned the campaign in Trudeau’s favour. As Tom Mulcair vowed to balance the budget, left-of-centre voters abandoned NDP orange for Liberal red, and the red ink that came with it.

So is the Trudeau government’s current problem really the deficit, or is there a deficit in how it is perceived to be managing the file?

Consider that over the next five years, federal deficits aren’t projected to exceed one per cent of Canada’s gross domestic product. Given this, the Liberals might be persuaded to brush off opposition charges of recklessne­ss — save for the fact that the issue is now top of mind among uneasy Canadians in a way it hasn’t been in more than 20 years.

But top of mind among whom? Perhaps unsurprisi­ngly, those prudence-fatigued 2015 Conservati­ve voters are now tired of all the spending. To them, the federal deficit ranks as the number-one issue in the country by a margin of more than two-to-one over 2015 Liberal and NDP voters. This would likely elicit a giant shrug among Liberal strategist­s, quick to point out those concerned Conservati­ves were never the Liberal base, and don’t represent a threat.

It still means, however, that one-fifth of past Liberal voters have deficit spending on the brain. These are the people the Trudeau government must keep on side, especially in the face of ebbing approval numbers that, last month, put the prime minister below 50 per cent for the first time in his mandate.

Trudeau promised to spend on infrastruc­ture, but inherently long timelines for big projects means they’re years away from the kind of ribbon-cutting photo ops that remind voters, particular­ly urban voters who turned out for Trudeau, what all the expenditur­es were for.

The Liberals’ other reason to run deficits was about raising the personal economic prospects of Canadians. And whatever empirical economic indicators may signal, Canadians themselves aren’t necessaril­y feeling it: Over the last 18 months, the number indicating their own personal standard of living is better off than it was the year previous has remained stubbornly flat.

Do the federal Liberals need to worry? At minimum, they should pay careful attention. Absent a plan to get back to black before the next election, on the defensive with an issue the opposition can effectivel­y exploit, they must do a better job explaining why red doesn’t necessaril­y have to signal trouble ahead.

 ?? ADRIAN WYLD/THE CANADIAN PRESS FILES ?? Prime Minister Justin Trudeau and Ontario Premier Kathleen Wynne aren’t shy about running deficits for what they feel are good causes. Will taxpayers agree?
ADRIAN WYLD/THE CANADIAN PRESS FILES Prime Minister Justin Trudeau and Ontario Premier Kathleen Wynne aren’t shy about running deficits for what they feel are good causes. Will taxpayers agree?
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