On Wednesday, Prime Minister Justin Trudeau said his government will swear in a new cabinet on Nov. 20 and move ahead with a promised cut to personal income taxes as its first order of business.
Monday’s election returned the Liberals to power, but with a minority government.
In his first public comments since his Monday night “victory” speech, Mr. Trudeau indicated he will govern on an issue-by-issue basis rather than negotiate a formal arrangement with a smaller party to win confidence votes in Parliament.
“I intend to sit down with all party leaders in the coming weeks to talk about their priorities, about how we can work together to respond to the preoccupations that Canadians have from one end of this country to the other to the other,” he said. “It will be various and varied conversations, but I can tell you it is not in our plans at all to form any sort of formal coalition, formal or informal coalition.”
That Mr. Trudeau rejected a formal coalition government (which by definition requires members of an opposition party in cabinet), comes as no surprise. However, Trudeau’s comments also indicate he has rejected the option of having a B.C. type “confidence and supply agreement” which would have outlined an agreed upon governing policy agenda with a smaller party – without the need for opposition representation in cabinet.
This is what is in place in B.C.
On May 29, 2017, the BC NDP and the BC Greens agreed that the three Green MLAs would support the 41 NDP MLAs on important budgetary and financial matters, in exchange for consultation and consideration of Green Party ideas. The deal gave the newly dubbed “GreeNDP” partnership the votes to topple Christy Clark’s Liberal government on June 29, 2017.
There were 50 policy items in the BC NDP-Green agreement and almost all have either been completed or are underway. The agreement lasts 4 years.
In a pre-election announcement regarding what he expected from a minority government, NDP Leader Jagmeet Singh said his party was open to all possibilities: a formal deal to prop up the Liberals as in BC, a coalition government with NDP members in cabinet, or simply pressing them on the NDP policy wish list on a vote-to-vote basis.
However, in that pre-election announcement, Mr. Singh did not express a preference for any one of the three approaches. Post-election, this left Trudeau in the driver’s seat in determining how government business will be conducted in the newly elected minority government. By choosing the issue by issue approach, Trudeau may have denied Mr. Singh the leverage over the government agenda that he would have had with either of the two other possible governing options.
For example, on Wednesday, the Prime Minister indicated that his positions on some of the most heated issues of the campaign have not changed. As an example, he said the Liberal government will continue to support the construction of the Trans Mountain pipeline as quickly as possible.
Mr. Singh opposes the Trans Mountain pipeline.
Mr. Trudeau also said he will be counting on “progressive” parties to support key parts of the government agenda.
“I expect them to be able to vote with us on things like the very first thing we will do, which will be putting forward a bill to lower taxes for the middle class,” he said.
The Liberal Party promised to increase the basic personal exemption so that – once fully implemented – Canadians do not pay taxes on the first $15,000 they earn. The current exemption applies up to $12,069 of income in 2019 and the Liberal platform promised to increase that gradually over four years, starting in 2020.
The party said this will save the average family nearly $600 a year.
It is not clear why Mr. Trudeau expects progressive parties to support his tax cut. No personal tax cuts were promised by the Bloc Québécois, the NDP or the Green Party.
However, in his pre-election list of minority government expectations, Mr. Singh did indicate that his “wealth tax” on individual assets over $20 million was an NDP priority. Clearly, Mr. Trudeau and Mr. Singh are entering this minority government with very different approaches to tax policy.
Ironically, the Conservatives did promise a personal tax cut that was similar in size to the one proposed by the Liberals with a few small differences. However, there is no reason to think that Conservative leader Andrew Scheer would be willing to support the Liberals in a confidence motion even if it is on a tax measure similar to one of his own platform proposals.
What comes next
The Prime Minister did not indicate when Parliament will be recalled. After the 2015 October election, the Trudeau government released a fall fiscal update in November that included the party’s promised tax changes. The House of Commons then sat for seven days in December to pass those measures in time for the 2016 tax year.
It is possible that Trudeau will stick to his 2015 playbook and introduce the first stage of his increase in the personal tax exemption in December.
The difference this time is that he needs more than Liberal votes to get his tax cut passed and securing those additional votes depends on his government having a workable approach to minority government – which it is not clear it has at the present time.
But then it is not clear that the NDP, Bloc or Greens know how they are going to approach this minority government either.
Such is politics in the age of the perpetual campaign. The truth is that the so-called “brain trusts” in our political parties are really just election strategists that give very little thought to actual governing and getting things done.
In a majority government, this is often hidden from public view.
In a minority situation, it is there for all to see.
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Seems an improvement! Watch and see…