Justin Trudeau Pivots From Scandal With Rebuild of Canadian Economy
September 23 2020 - 4:07PM
Dow Jones News
By Paul Vieira
OTTAWA -- Canadian Prime Minister Justin Trudeau laid out his
plans to rebuild the country's economy, in an effort to address
damage done by the coronavirus pandemic and turn the page on a
scandal over the awarding of a contract.
His Liberal government outlined the broad strokes of its
near-term agenda in a ceremonial speech to Parliament. The plans
include a renewed focus on social policy, with an emphasis on
increasing child-care spaces and improving care for the elderly.
The government pledged to maintain financial support for the
hardest-hit industries, target spending to foster growth in the
clean-technology sector and work toward helping the economy add
another one million jobs to reach pre-pandemic levels.
Advanced economies such as Canada "are realizing that things
should not go back to business as usual. Covid-19 has exposed the
vulnerabilities in our societies," according to a copy of the
speech, which was read by Canada's viceregal. The government said
its agenda would address gaps in its social system, invest in
health care, and create jobs. "This is not the time for austerity,"
it said.
These initiatives, telegraphed by Mr. Trudeau and officials
before Wednesday's unveiling, have stirred worries among
debt-rating agencies, economists and former officials about the
price tag and whether it will harm the country's fiscal profile.
One firm, Fitch Ratings, stripped Canada of its triple-A rating
earlier this year.
"One of Canada's strengths was that there was always a focus on
debt sustainability," said William Foster, vice president and lead
Canada analyst at Moody's Investors Service. "A shift away from
that is not credit positive," he said. The firm maintains a
triple-A rating for the economy.
Fighting the spread of Covid-19 remains a priority, with data
from Johns Hopkins University showing Canada has recorded about
8,000 confirmed cases in the past seven days, a sizable increase
compared with about 5,100 in the previous one-week period.
Mr. Trudeau was scheduled to deliver a televised address to
Canadians on Wednesday evening.
The prime minister runs a minority government in the Canadian
legislature and therefore requires the support of at least one of
three opposition parties to remain in power. The policy road map
will come for a vote in the legislature, and some opposition
politicians and political analysts have said the government would
likely survive that vote. That could change once the government
presents a budget plan this fall that includes the cost of some
initiatives, they said.
This marks a crucial point for Mr. Trudeau and the Liberals as
they attempt to frame the political debate for an election possibly
next year, said Stewart Prest, a politics lecturer at Simon Fraser
University in Burnaby, British Columbia. "They want a possible
election to be about what the Liberals are doing for the economy
and Canadians, and not a record associated with a recurring series
of controversies," he said.
Polls showed support for the prime minister and his government
dwindled during the summer following revelations that the cabinet
awarded a contract to WE Charity, a Toronto youth-oriented charity
with financial ties to the prime minister's family and other
members of Liberal administration. The scandal prompted the finance
minister to step down, and Mr. Trudeau faces his third probe by the
country's ethics watchdog for possible violation of
conflict-of-interest laws.
Mr. Trudeau has said he didn't direct officials to award the
contract to WE Charity.
The new policies show an effort by Mr. Trudeau to shift the
focus now to a public that is suffering heightened levels of
economic anxiety from the pandemic, according to David Coletto,
chief executive of Ottawa-based Abacus Data.
The government said it is focused on increasing child-care
capacity and helping women to either return to the workforce or be
more productive if working from home. Child-care spaces have
reopened, but some centers are operating at reduced capacity. The
pandemic pushed women's participation in the labor force to its
lowest level in three decades, at 55%, official data indicate. It
has since recovered, but at a slower pace than men.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
September 23, 2020 15:52 ET (19:52 GMT)
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