Federal Government Reset

The Top Line

Prime Minister Justin Trudeau today named Chrystia Freeland as Canada’s Minister of Finance and asked the Governor General to prorogue Parliament until Wednesday, September 23, when the Government will table a new Throne Speech.

With those two decisions, the minority Government is resetting its policy agenda and senior leadership as it prepares its long-term response to the COVID-19 pandemic, which will in turn be a platform for any election called in the short-term. Prime Minister Trudeau emphasized that the Government’s December 2019 Throne Speech does not reflect current circumstances and said that the new Throne Speech will present an “ambitious plan” to rebuild the economy post-COVID.

The proroguing of Parliament also clears the current legislative agenda, including all of the Committee studies of the decision to award a large, sole-source government contract to WE – though those hearings are all but certain to restart in the Fall.

Minister Dominic LeBlanc – a close friend and ally of Trudeau – was appointed as Minister of Intergovernmental Affairs, re-assuming that role from Minister Freeland now that he is back to full health.

Prime Minister Trudeau and his Cabinet will keep their progressive priorities and activist approach to government leadership. But expect the execution of that vision to focus on economic and climate policy for the foreseeable future, while the deficit and social files (for example Indigenous reconciliation and pharmacare) are likely to be deprioritized due to the demands of governing during a pandemic and navigating a minority Parliament.

Direction Setting

The September Throne Speech will set a new policy agenda for the Government that accounts for both the immediate consequences of the pandemic and the potential for a changed economy thereafter. The Prime Minister said that agenda will focus on: Building healthy and inclusive communities, combating climate change, and supporting immigration.

Minister Freeland will be the driving force behind executing that policy vision. The Department of Finance will become one of the key policy arms of the Government for the foreseeable future and Freeland’s dual role as Deputy Prime Minister will further concentrate policymaking power with her and the Prime Minister.

Ministers McKenna (Infrastructure and Communities), Wilkinson (Environment and Climate Change), and Guilbeault (Heritage) were already developing policies for a “green recovery”, which both the Prime Minister and Minister Freeland emphasized will be a high priority for the new Parliamentary session.

While some commentators have expressed concerns about the growth of the Federal deficit and debt, the Prime Minister clearly indicated that those concerns will not be a priority for the Government during the coming budget cycle.

Looking Further Ahead

Any future vote on passage of the Throne Speech is considered a confidence motion, and with the Government holding a minority of seats in Parliament it must receive the support of at least one of the opposition parties. That support is most likely to come from the NDP, as both the Conservatives and the Bloc Quebecois have signaled their likelihood to oppose the Speech. The NDP will use its position to ensure that the Government’s new policy agenda includes at least some significant NDP priorities.

The Prime Minister claimed today that he does not want a Fall election, but the Throne Speech will be crafted as a de facto election platform – a set of policies that the Liberals are comfortable offering to voters if all of the opposition parties refuse to support the Speech.

In any case, stakeholders should expect all major government communications in the coming months to take on a pre-election tone. That dynamic began today, with the Prime Minister using his press conference to portray the Liberals as the party that wants to invest in Canadians and build the economy and the Conservatives as deficit hawks that would cut public services during a pandemic.

What’s Next

It is very likely that the Government will issue new Ministerial mandate letters after the Throne Speech – as signaled by the Prime Minister’s statement today that governing priorities must change to respond to the current circumstances.

The Official Opposition Conservatives will receive a boost in public profile when the new party leader is announced on Sunday night. The winner – with the odds favouring Peter MacKay or Erin O’Toole – will move quickly to restructure the party’s political leadership, hire political staff, begin election preparedness work, and consider a critic shuffle.

The Government has committed to giving an update on Federal finances this Fall, although it is unclear if that will take the form of a full budget or an economic statement. The Prime Minister pledged today that taxes will not be increased during the economic recovery.

The House of Commons Finance Committee will begin pre-budget hearings for Budget 2021 shortly after Parliament resumes sitting. Especially in light of the new Throne Speech, that budget cycle is the best opportunity for stakeholders to get new spending initiatives off the ground – particularly if they align with the Government’s vision for economic recovery.

Appendix: Selected Biography of the Honourable Chrystia Freeland

  • Began her career in journalism as a freelance correspondent, before taking on senior editorial positions at the Financial Times, the Globe and Mail, and Thomson Reuters.
  • Author of Sale of the Century, about the transition of Russia from communism to capitalism and oligarchy, and Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, about growing inequality and wealth concentration.
  • Elected as the Member of Parliament for University – Rosedale (Toronto) in a 2013 by-election, and subsequently re-elected in the 2015 and 2019 General Elections.
  • Served as Minister of International Trade from 2015 to 2017, overseeing the final negotiations for and ratification of the Canada-European Union Comprehensive Economic and Trade Agreement.
  • Served as Minister of Foreign Affairs from 2017 to 2019, leading Canada’s negotiating team for the United States – Mexico – Canada Agreement.
  • Served as Deputy Prime Minister and Minister of Intergovernmental Affairs from December 2019 to August 2020, leading Federal – Provincial cooperation on COVID-19.
  • Appointed as Canada’s first female Minister of Finance on August 18, 2020.
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