A Tightrope Walk in a Blizzard

4 minute read

Finance Minister Chrystia Freeland heads into tomorrow’s federal budget with a big ‘to do’ list. From fixing a fractured healthcare system to managing market instability, from maintaining economic competitiveness to practising fiscal restraint, it’s akin to walking a tightrope in a blizzard. But what makes crafting Tuesday’s budget even tougher is the return of raw politics to the nation’s capital.

Whether we like it or not, the proverbial gloves are off. From now on it is black or white, right and wrong, kill or be killed. The Opposition has embraced this new posture, even if the political payoff has yet to materialise. Conversely, the government seems unable, or unwilling, to join the fray. Whether distracted by a Presidential visit or being blindsided by ongoing leaks from the intelligence community, they seem locked in a defensive crouch. 

Tomorrow’s budget offers them an opportunity to start fighting back.

The response began late last week after a productive and well-timed visit from President Biden. On top of some concrete wins for the government, sharing a stage with a friendly U.S. President doesn’t hurt. And for Trudeau, the hope is he can ride that momentum into this week. 

At its heart, the federal budget is an opportunity to communicate political priorities to voters. Historically, this is the one event outside of an election campaign where the government can cut through the noise and connect directly with Canadians. 

So, what would they like Canadians to hear?

The rumblings have been there for weeks now. In event after event, the Prime Minister and Finance Minister have been stressing four main budget themes: tackling healthcare, targeted financial support for those who need it most, seizing the clean economic opportunity, and demonstrating fiscal responsibility. It’s no accident the government has chosen to focus on these themes since each one matters a great deal to key sets of voters.

First, healthcare often ranks near the top of Canadians’ list of priorities. Every Canadian experiences the country’s healthcare system, either directly or through a loved one, friend, colleague, or neighbour. And it’s evident that they are concerned with the shape it’s in today. Shoring up the system by investing billions of federal dollars over the coming decade, with hard benchmarks that provinces must meet, shows leadership on an issue that matters to a lot of Canadians.

Likewise for supporting people during tough times. There’s little doubt that today’s economy has been enormously rewarding for some. But between food price hikes, mounting energy costs, and soaring mortgage rates, more and more Canadians are struggling. Acknowledging those challenges and targeting support to help ease the burden not only aligns with the government’s social policy but its electoral strategy as well.

And while last week’s visit from President Biden was a good reminder of the bonhomie between our two countries, one can’t ignore the fact that we are also engaged in intense economic competition. Canadians understand this and expect their government to deliver a plan. Investing in the clean economy through a mix of tax credits, grants, and innovative financing mechanisms that seek to match U.S. efforts and is a good start towards securing Canada’s place in the clean economy.

But is the political tightrope too narrow to avoid falling? Can the government realistically spend billions of dollars on shoring up the country’s cracking healthcare system, make a genuinely competitive downpayment on the country’s economic future, and support companies and individuals with direct fiscal help, all while maintaining fiscal discipline?

A smarter political play may have been to go for broke and put all their eggs in one of the two baskets – investment or saving. Instead, the government is sticking with the strategy that brought them here in the first place – all of the above. And while that strategy has more or less worked out so far, even the most partisan of supporters would admit striking that balance is becoming harder. With that in mind, expect Minister Freeland to double-down on the fiscal restraint messaging in tomorrow’s Budget, helped along by a bump in 2022 tax revenues.

As is always the case, a budget’s success comes down to effective communications. Can the government retake control of the political narrative after being on its back foot for weeks? Can they effectively remind their voters that on big issues like healthcare, the economy and being there when help is needed, they get it right? 

With tomorrow’s budget, we’ll find out whether the government is ready to fight back and practise some cold, hard politics. But remember, don’t hate the player, hate the game.

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