Trudeau Job #1: fix the economy

While polls consistently said 2015’s election was about values more than the economy, expect that focus to change shortly after the new parliament forms.

Prime Minister-designate Justin Trudeau inherits an economy in mild recession, and will need to take steps to ensure it doesn’t worsen on his watch.

During the 11-week campaign, Trudeau promised to provide stimulus by running deficits to fund large-scale infrastructure and other projects, which will create jobs.

At a time when monetary policy is a less potent tool, and borrowing rates are hovering around historic lows, that approach has some merit. But the new PM will have to watch how accumulating debt impacts the value of our dollar, since a diving loonie will make any foreign-denominated loans harder to pay off.

The change of government will also alter how Canadians approach their personal finances. Promises to expand the CPP will impact retirement planning and could potentially shift conversations to how RRSPs and non-registered investments will become more of a lifestyle play – rather than being necessary to merely fund basic expenses for retiring Canadians.

Further, promises to cut TFSA contribution room didn’t hurt the Grits, who tailored their message to people who couldn’t take advantage of the additional savings threshold anyway. But advisors will have one fewer planning option for clients.

Likewise, a Liberal promise to raise taxes on the wealthiest Canadians played better with voters than the NDP pledge to more heavily tax corporations. In the end, that populist move allowed Trudeau to harness voter frustration with the Conservatives. When the dust settles, it’ll likely come to be seen as the deciding factor.

The Maritimes called it

Last night’s Atlantic red sweep set the tone for a night filled with upsets for both NDP and CPC incumbents.

Many Tory cabinet ministers, including finance minister Joe Oliver, couldn’t hold onto their ridings as Canadians told the Conservative party its nearly 10 years in power were at an end.

Nightly news commentators, who’d figured Trudeau would get a minority at best, seemed genuinely surprised by the way the red steamroller chugged across the country – handing the Grits a healthy majority and creating the first genuine political dynasty in Canadian history.

Not surprisingly, there was much talk of Trudeau’s charm standing in stark contrast with the prickly, wealthy-centric politics of the outgoing government. Further, his vision of a big-tent Canadian nation that accepts and integrates newcomers played well against the politics of fear.

While long, and largely serious, the campaign had its lighter side. But the jibes and serious miscalculations toward the end of the campaign are more likely to echo in voters’ minds in the weeks and months following the formation of a new Parliament.

Oh, and in case you went to bed before the party leaders gave their speeches:

NDP concession speech

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Conservative concession speech

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Liberal victory speech

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Philip Porado is a veteran Toronto-based journalist who specializes in financial and business topics. Prior to immigrating to Canada in 2004, he covered brokerage compliance, real estate, housing policy, architecture and technology for several U.S. publications.