After nine stormy years in power, Justin Trudeau leaves Canada in a difficult economic situation, particularly due to political choices that are too “scattered,” according to experts.
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In the fall of 2015, the Canadian economy was struggling despite the recent return to balanced budgets under the government of Stephen Harper, and Justin Trudeau came to power promising Canadians to return to growth, even if it meant losing temporary deficits.
“It is clear that there were deficits, and they were higher than expected,” says the chief economist at Desjardins, in the wake of Mr. Trudeau’s resignation on Monday morning.
Remember that the federal deficit increased from $40 to $61.9 billion in 2023-2024, during the economic update presented in December.
If Mr. Jean admits that there has indeed been economic growth under Justin Trudeau’s governments, he nevertheless considers its record “disappointing”, particularly with regard to the addition to the capital stock and investments in businesses.
“On this level, I don’t think there have been any notable improvements [pendant les années Trudeau]especially if we look at the productivity record in Canada. We have seen the population grow, and households fall into more debt,” he adds.
Whose fault is it?
The economist is therefore not surprised that Canadians grimace when asked if the economy is going in the right direction. According to the Bloomberg Confidence Index, 60% of the population believes that the country’s economy will weaken in the next six months.
-“The morale of Canadians, at the economic level, is really at its heels,” notes Mr. Jean. “When you look at the job market, it’s not so bad. It’s really the question of the rising cost of living…”
After pausing, the expert specifies that only “a small part” of this problem can reasonably be attributed to the federal government. “There are a lot of things that are out of his control and that we have seen everywhere else, like inflation, rising interest rates, the pandemic, the war in Ukraine. All this hit everywhere,” he notes.
“It would have been anyone in power, we would have had exactly the same problems,” opines economist Mario Seccareccia, who teaches at the University of Ottawa.
“And when people are in a difficult situation, it’s human nature to look for those responsible,” adds Jimmy Jean.
“Scattered” choices
But as head of government, Mr. Trudeau necessarily retains some responsibility for the economic situation in which the country finds itself today.
“In terms of political choices, we were very scattered, in my opinion,” says Jimmy Jean. “We wanted to respond to all the crises and all the issues, whether climate change or reconciliation. The government was also dependent on the NDP, and had to put in place programs for dental care and support for seniors.”
“In all of this, we have lost focus on the essential: generating wealth to be able to afford these services,” concludes the economist.
More details will follow…
