Canada Lurches to the Left

Canada’s election on Monday was something much bigger than a local Canadian story. It’s another indicator of how Bill Clinton/Tony Blair-style liberalism is veering sharply to the left across the English-speaking world. Along with the surge of Bernie Sanders in the Democratic presidential primary in the United States and the nomination of Jeremy Corbyn as Labour leader in the United Kingdom, must now be reckoned Canada’s election of a Liberal government under Justin Trudeau.

Of all the neoliberal parties during the Clinton-Blair 1990s, the Liberal Party of Canada qualified as the neo-liberaliest. Under the double-headed leadership of Prime Minister Jean Chretien and Finance Minister Paul Martin, the Liberal government elected in 1993 cut federal spending to the lowest levels since the early 1950s. It steeply cut the top rate of corporate taxes, and hiked contributions to the federal pension plan. It reneged on a promise to repeal a consumption tax on goods and services introduced by its Conservative predecessor. Canada attained a balanced budget in 1998 and recovered its triple-A bond rating in 2002.

That Liberal Party lost power in 2006 and wandered deep into the political wilderness over the next decade. In 2011, it finished third behind the avowedly socialist New Democratic Party (NDP). Defeated and desperate, it turned to Justin Trudeau in 2013. The young leader in turn made a desperate gamble of his own: to steer his centrist party hard left, mobilizing resentments and outflanking the NDP.

Trudeau bears the most famous name in Canadian politics, but a name loaded with multiple meanings for his party and his country. His father, Pierre Trudeau, dominated Canadian politics from 1968 to 1984. Cerebral, tough, and openly contemptuous of his intellectual inferiors—who numbered more or less the entire human race—Pierre Trudeau plunged Canada into ultra-statist experiments and massive debts from which his successors struggled for more than a decade to rescue her. He resigned in 1984, just months before voters handed the Liberals the worst defeat in the party’s history.

Justin Trudeau has reshaped his father’s legacy. He has styled himself as winsome where his father was chilly, as approachable where his father was aloof. In unscripted remarks that have appalled critics and unnerved even some of his admirers, he praised China’s “basic dictatorship” for leading the way on combating climate change and derided Canada’s contribution to the anti-ISIS military campaign as “whipping out our CF-18s.” He was conspicuously absent from press briefings on his economic policy, explaining that he was vanishing from the campaign trail a month before election day to spend “quality time” with his family. NDP leader Tom Mulcair taunted Trudeau on this front: “You don’t like debates because your staff has to write all your lines for you. I write my own.”

But scripted and unscripted, Justin Trudeau has conveyed a consistent message: The government he leads will repudiate the legacy not only of the incumbent Conservative prime minister, Stephen Harper, but the neoliberal Liberals of the 1990s.

Chretien-Martin balanced budgets. Trudeau has committed himself to a policy of deliberate deficits in an attempt to stimulate growth. Chretien-Martin eschewed redistributive taxes. Trudeau campaigned on a promise to increase taxes on wealthier Canadians to a new combined federal-provincial top rate above 50 percent. Chretien-Martin signed the North American Free Trade Agreement. Trudeau has squirmed to avoid committing to the Trans-Pacific Partnership.

The turn to the left is as much cultural as economic. Trudeau has vowed to cancel the Harper government’s F-35 jet contract, insisting that Canada does not need such an advanced fighter plane. He has pledged full legalization of marijuana. He’s pledged to increase Canada’s intake of Syrian refugees from 10,000 by next year to 25,000 annually effective immediately—and to spend an additional $250 million a year to resettle them.

Harper brought Canada and Israel closer. Trudeau has signaled greater distance to come. In the most important and memorable speech he gave in his pre-prime ministership, he repeatedly downplayed the uniqueness of the Jewish holocaust—and characterized the demand of some Muslim women to cover their faces during Canadian citizenship ceremonies as the moral equivalent of the doomed voyage of German Jewish refugees on the St. Louis in 1939. (Tellingly, one of the very few seats in the greater Toronto area to remain Tory blue last night was the heavily Jewish riding of Thornhill.)

The immediate predicate of Trudeau’s success is the downturn in the Canadian economy following the collapse of the price of oil and other commodities. Canada suffered comparatively less than other advanced economies from the made-in-USA financial crisis of 2008, but it is suffering more than most from the sharp slowdown of the Chinese economy that began last year. The Canadian dollar has lost almost 20 percent of its value against the U.S. dollar in the past 24 months. That depreciation will in time stimulate Canadian exports, but its immediate effect is to cut deep into purchasing power in a heavily trade-dependent economy.

Even before 2014-15, however, the populist anger expressed by Sanders and Corbyn could be heard in Canada, too. Canada has done a better job than the United States of sharing the proceeds of economic growth. Yet even in comparatively egalitarian Canada, rewards have tended to concentrate at the top of the income distribution. Earlier in the decade, resentment among middle-income Canadians toward the more affluent was offset by relief when Canadians compared themselves to Americans. As time has passed, however, the relief has waned and the resentment has intensified. It was those feelings that Trudeau harnessed, by condemning many small-business owners as tax cheats and telling Canadian business leaders that if they didn’t accept higher taxation now, they’d face even more radical claims in the future.

Trudeau’s strategy succeeded brilliantly, at least in electoral terms. His Liberals have won at least 40 percent of the popular vote, in their best performance since 1997. Leaders of other center-left parties around the world will note the success. Imitation and emulation will follow—across the Atlantic and across the 49th parallel.