The Top Line
Federal Parliament resumes sitting this week in a much-changed context from early 2023. Over the summer, the Conservative Party opened a substantial lead in polling, the Prime Minister made a significant Cabinet shuffle, and Canada continued to see sustained inflation.
In that context, the key issues defining Federal politics this fall are cost-of-living and housing affordability. All Federal parties are set to make their plans for addressing cost-of-living – and especially housing affordability – the major political battleground of Fall 2023. Attacking the Government on those issues is especially working well for the Conservatives and, by the same token, addressing voter concerns in those areas is likely an imperative for the Liberals to recover more public support.
Conservative Leader Pierre Poilievre spent the summer focused on his two key issues, namely an ‘axe-the-tax’ (i.e., carbon tax) tour and speaking to housing affordability – including an 8-point plan to incentivize more housing construction. Meanwhile, the Liberals appointed a new Housing Minister and emphasized their Housing Accelerator Fund, while the NDP released an affordable rent plan and demanded a new national housing strategy. Expect those parties to continue to jockey for public support on housing policy through the end of the year – and beyond.
Stakeholders should brace for constant election speculation for the rest of 2023 and into 2024 – as is the norm during minority governments. But, barring a big uptick in support for either the Liberals or the NDP, an election in the next 12 months is highly unlikely.
On that note, the Liberal-NDP Confidence and Supply Agreement remains stable. Leading into the new sitting of Parliament, both parties were focussed on renewing the agreement, rather than abandoning it, which allowed the NDP to push for more Liberal commitments on housing affordability and cost-of-living supports. But for now, neither Party would fare well in an election, and the agreement suits their near-term goals.
In that context, the House of Commons will be busy through the end of the year, and federal politics over the same period will be contentious. For stakeholders, the next eight to twelve months is a key period to advance priorities with the current government, but opposition relationship-building should also be increasingly prioritized.
A Closer Look at Key Issues
The Legislative Agenda
There are 16 Government Bills before the House of Commons, notably including Bill C-48, a bail reform law, and Bill C-50, the Sustainable Jobs Act. However, stakeholders should expect the Liberals to also focus on new legislation, as they craft a narrative for renewed public support. Most notably, last week, Prime Minister Trudeau announced new measures aimed at increasing housing supply, including eliminating the GST on the construction of new rental apartments, and increasing competition in the grocery sector. Those measures require legislation to take effect, and that will be a government priority in the House of Commons beginning as early as this week. The Government is also expected to table a Bill implementing a national pharmacare plan as well as Budget Implementation Act 2, to implement the remaining legislative commitments flowing from Budget 2023.
Also of interest, Pierre Poilievre has pledged to introduce a Private Member’s Bill to codify his housing plan. While the Bill may not pass, it will offer Mr. Poilievre yet another outlet to criticize the Government on that issue, and personal profile in the House.
Climate and Environment Policy
The Liberals have long prioritized their climate and environmental policy agenda. But, in early 2023, that area of policy was more on the backburner than at any other point in this Government’s history, largely due to the Alberta General Election and competing issues that found the Liberals on the backfoot, such as rising energy prices.
This fall, stakeholders should expect the Liberals to re-focus on climate policy, which they see as a natural strength and a potent wedge issue against the Conservatives. Already, Environment and Climate Change Minister Steven Guilbeault has started that by amping up criticism of Pierre Poilievre’s climate policy.
Looking ahead, the Liberals will have two high-profile policies to work with in this area. The Sustainable Jobs Act (a federal framework for skilling the workforce in clean tech) will be debated by Parliament, draft regulations to cap emissions from the oil and gas sector are due by the end of 2023, and public consultations regarding the proposed federal Clean Electricity Standards are ongoing. All those initiatives are strongly opposed by the Federal, Alberta, and Saskatchewan Conservative parties, and are sure to be partisan battles. The Liberals will lean into that, and also know their left-leaning supporters expect progress on this file.
Fall Economic Statement
Just as in early 2023, high inflation and the possibility of a recession remains the economic context. Some forecasters believe Canada is already technically in a recession. Meanwhile, the Government faces huge pressure to spend more and/or faster on housing and the NDP is pressuring the Liberals to include a cost-of-living GST rebate in the Fall Economic Statement (FES).
Figuring out if and how to spend in politically important areas while balancing inflationary pressures will be the main challenge for Deputy Prime Minister and Minister of Finance Chrystia Freeland as she prepares the FES.
Stakeholders should also track the Prime Minister’s call on Canada’s five largest grocery companies to come up with a plan by Thanksgiving to stabilize prices. With a looming threat of tax measures if they don’t do so, it’s possible that windfall taxes in the grocery and other sectors could figure into the FES.
Foreign Interference Enquiry
In early September, the Government launched a public inquiry into foreign interference in Canadian elections, with reports due in February and December 2024. While the reports themselves are likely to be the next flashpoint for this topic, the inquiry is a major issue that could yet further damage the Liberals politically.
What This Means
The Confidence and Supply Agreement remains the key to the functioning of the current minority Parliament. In some respects, the agreement has allowed the Liberals to govern as a de facto majority, with functional committees and a smooth legislative process. That should continue through the Fall, allowing stakeholders to focus on their current priorities. In that time period, policy and funding requests that can be linked to affordability and cost-of-living issues are likely to find a more receptive audience with both the Liberals and the opposition parties.
In the longer term, if the current, substantial drop of public support for the Liberals is sustained, and especially if support for the NDP increases, the logic of the agreement for the NDP could become questionable. Notably, the agreement has provided no tangible political benefit to the NDP to-date – and that fact that will become harder for the Party to ignore the more we near the scheduled October 2025 election date.