The economic policy legacy of the Justin Trudeau Liberal Government, 2015 to 2024

I confess: I was disappointed when the Justin Trudeau Liberals won the fall 2015 election.  I was hoping for an orange break-through.

So, it comes with some irony that I find myself defending the economic policy legacy of the Justin Trudeau Liberal government nine years hence.

The acute drama that unfolded in December with the Finance Minister’s resignation ahead of a Skip-the-Dishes delivery of the 2024 Fall Economic Statement has been commanded by daily obituary writing by columnists and influencers seeking to consign not only the Prime Minister and his Liberal government and party to the dustbin of history, but their policy legacy as well.

This is a scandal.  This is a shame.

I contend that since taking power in 2015, the Justin Trudeau Liberal Government*, has delivered the most important progressive economic legacy for Canadians in over forty years.

*with the support of the Jagmeet Singh NDP through the confidence-and-supply agreement that began in March 2022.

There has been sunshine from Centre Block.

I demonstrate this below by citing a selection this government’s economic policy achievements.

That I have not encountered more defenders of the Trudeau government’s economic record is highly alarming.

For what is at stake is not only these institutions established by the Trudeau government but the appetite of Canadian voters for progressive economic policy.  The uninterrupted “everything is broken” mantra of the Pierre Poilievre Conservatives is cultivating a willingness to allow the delay, distortion and reversal of important economic policy actions needed for a just transition to a low carbon economy.

Climate and environment

Right up front, I begin with efforts to maintain the integrity of the Canadian and global ecosystem, in which the Canadian economy is embedded.

On climate change:

• Returned Canada to the Paris Agreement on climate change
• Developed a strategy, the Emissions Reduction Plan, to decarbonize Canada’s economy, featuring targets for 2030 (40% below 2005 levels) and 2050 (net zero)
• A suite of funds, tax credits and regulations, to support the transition: a green industrial policy
• Flagship policy instrument: a price on pollution (carbon tax), giving households an incentive to reduce fossil fuel consumption.

On protecting biodversity and reducing pollution:

• Committing 25% of Canada’s land and marine space for conservation by 2025
• Oceans Protection Plan: to protect our oceans and coastlines from the potential impacts of marine shipping, and to ensure the health of our oceans.
• Ban harmful single-use plastics

Production

The Liberal Government has been chided for not begin serious about economic growth, focusing instead on distributive polices.  This would ignore their important public investments as well as tax policies to enable private sector growth.

• An infrastructure investment strategy
• Established the Canada Infrastructure Bank
• Supporting over 1,300 public transit projects across the country, including in Toronto, Montreal and Calgary
• Funding road and bridge construction

• National Housing Strategy: to ensure more people living in Canada have access to safe, affordable and inclusive housing.
• Features the Housing Accelerator: helping to boost housing supply, while supporting affordable, diverse and climate-resilient communities.

• Incentives to business investment: the Accelerated Investment Initiative, allowing businesses to write off more of the cost of their depreciable property in the first year of purchase.

• Tax policy: lowered the small business tax rate from 11% to 9%.

Distribution and Participation

These are not only about transfers but also about reducing barriers to fair participation, to being a more inclusive economy.

Indigenous

• In working to advance reconciliation and renew the relationship with Indigenous Peoples, the federal government has led a national conversation on Economic Reconciliation.
• Economic reconciliation means economic self-determination, such as in:
  • equitable access to opportunities for economic development
  • ability to make long term revenue and govern usage
  • ability to pursue and ensure economic viability of Indigenous communities
  • opportunity to participate fully in Canada’s economy, both domestically and internationally.
• To meet these ends, the government pledged new support for housing and water infrastructure, and schooling.

Women

• Advanced pay-equity legislation so women get equal pay for work of equal value.

People with disabilities

• Passed the Accessible Canada Act to advance the rights of and accessibility for Canadians with disabilities.

Children

• Tax-free Canada Child Benefit for children in low-income families
• $10 a day childcare program
• EI Parental Sharing Benefit to provide 5 extra weeks of benefits when parental leave is shared.

Seniors

• Expanded the Canada Pension Plan
• Increased by 10% the Guaranteed Income Supplement (GIS)
• Restored eligibility for Old Age Security and GIS to 65, from 67.

Access to affordable health services and products

• Canadian Dental Care Plan for residents that meet a certain income threshold
• Framework for a National Pharmacare system, that will help reduce prescription drug costs for Canadians.

Low-income workers

• Introduced the Canada Workers’ Benefit, a refundable tax credit to help individuals and families who are working and earning a low income
• Launched the new Canada Training Benefit, a refundable tax credit available to help Canadians with the cost of eligible training fees.

Tax policy

A “middle class tax cut”, which reduced the personal income tax rate from 22% to 20.5% on taxable income in the second tax bracket.

Introduced a new top tax bracket, which included a tax rate of 33% on taxable income above $200,000.

Monetary Policy

The 2021 agreement with the Bank of Canada on the renewal of the monetary policy framework for the 2022-2025 period shifted away from a singular focus on inflation to include consideration of the maximum sustainable level of employment when conditions warrant, and to report to Canadians on how labour markets outcomes have factored into the Bank’s monetary policy decisions.

Budget Policy

Sidestepping a commitment to balanced budgets gave the government the flexibility to fund these policies and programs above.

International

In response to the disruptions to trade regimes by the first Trump presidency:

• Renegotiated NAFTA (now the Canada-United States-Mexico Agreement).
  • It included key gains for Canadian workers, including the elimination of Chapter 11 Investor-State Dispute Settlement provisions, progress on labour rights and gains for Canada’s auto and energy sectors    
• Following the US’s departure, Canada and other remaining Pacific Rim countries negotiated a new trade agreement called Comprehensive and Progressive Agreement for Trans-Pacific Partnership

Response to the COVID-19 Pandemic, 2020-2022

In less than a week after the country lock-downed for the first time, the federal government announced a $82 billion aid package on March 18, 2020.  Much of the aid package was in the form of income support and financial aid programs, often in the form of taxable benefits.

Income support programs

At least six programs, including:

• Canada Emergency Response Benefit (CERB): provided a taxable benefit of CA$2,000per month for Canadian residents facing unemployment due to the COVID-19 pandemic.
• Canada Recovery Benefit (CRB): designed to support those who do not normally qualify for EI (for example, the self-employed).

Employer/business support

At least five programs, including:

• Canada Emergency Business Account (CEBA): provided emergency interest-free loans to small businesses and nonprofit organizations during the COVID-19 pandemic. The aim of this program is to ensure that these businesses have access to sufficient capital to remain solvent during the pandemic.
• Canada Emergency Wage Subsidy (CEWS): a program created to provide financial support for businesses during the COVID-19 pandemic and prevent large layoffs.

Do you agree with my list? Have I missed anything that should be included? Are these economic policies progressive?