Stanley HarttAs with every new majority government, Justin Trudeau’s Liberals were elected with high expectations, writes Stanley Hartt. But as all governments discover, it isn’t long before events require reversals on key promises.

By Stanley H. Hartt, Dec. 11, 2015

The honeymoon which follows the election of a new majority government is a dangerous time for anyone to attempt to analyze the results and make predictions about the consequences. Until the euphoria over the substantial changes in the political landscape turns into the inevitable disappointment brought about by actually governing, an observer, particularly a notoriously partisan one, runs the risk of being out of step with conventional wisdom.”

These words were not written on October 20, 2015. They were part of an address I gave to the Empire Club of Canada in Toronto on November 25, 1993, shortly after Jean Chrétien’s Liberals had swept Prime Minister Kim Campbell out of office with a humiliating defeat, leaving the party which had held a substantial majority in the House of Commons with only 2 seats.

One commentator noted that the remarks seemed like “sour grapes”, but events soon proved that, at worst, they were a statement of the obvious.

The Chrétien Liberals almost immediately reneged on two important pledges, to reject NAFTA and repeal the GST, which would have made some of their more ideological supporters terribly unhappy, but which nevertheless wisely paved the way for the spurt of economic growth which enabled them to balance the federal books.

Mr. Chrétien did manage an impressive series of successive electoral victories, largely because of the split on the right of the political spectrum which only ended in late 2003. Actually governing meant bearing the opprobrium for the near miss in the 1995 Quebec referendum on sovereignty and for a series of scandals related to Liberal Party fundraising.

But the essence of my thesis in 1993 was, and is again now, that a victorious political campaign can gain office for its candidates by promising a change in mood and style, but the inexorable pressure of the problems facing the nation, and the range of remedies available to deal with them, remain relatively static. So, for example, a small tweak to a forecast model can turn a $1.4 billion surplus (left by the Conservatives)  into a $3 billion deficit (announced by the incoming Liberals) but political philosophy cannot change the fact that a significant drop in world commodity prices has left Canada’s oil and gas and metals and mining sectors in a most challenging environment for its resource exports, impacting the value of our currency and producing a bleak outlook for our mid-term economic prospects.

It should not be a revelation that political bravado on the hustings often ignores the fact we live in a complex, interdependent world where problems are caused (and solutions lie) beyond the range of our government’s writ and authority. Whether modest deficits of less than $10 billion in each of the next two fiscal years (“to fund historic investments in infrastructure and our middle class”) will have any stimulative effect at all on our two trillion dollar economy in the face of  flat world-wide economic prospects is doubtful. Confronting the painful slowdown in international economic growth will be the real test for our newly-elected leaders.

All past administrations have learned, as former British Prime Minister Harold MacMillan is said to have observed, that the most carefully designed platform can be driven offside by events. In Brian Mulroney’s case, it was his 1984 commitment to generate substantial new employment (“jobs, jobs, jobs”) by reducing the massive federal deficit as a way to drastically lower interest rates from the double digits experienced during the previous four years. He was thwarted by an economic downturn which ended an historic boom period. Not enough was done during the good years to build in the fiscal flexibility to combat the automatic stabilizers (declining tax revenues with increasing expenditures for employment insurance, welfare etc.) which produce deficits in time of recession. And no one remembers any longer the important inroads in deficit reduction achieved before circumstances caused a deficit at the end of the Mulroney years roughly as large as at the start.

In fairness, Mulroney spent his political capital consciously, doing things that he believed needed to be done regardless of their impact on his popularity, which completely changed the face of Canada: free trade, tax reform and the GST, and the valiant attempt at constitutional reform known as Meech Lake.

In Stephen Harper’s case, many promises ended in the dust bin with the attendant  price in terms of his poll numbers, the best example of which would be his commitment to Senate reform, beginning with the so-called “Triple E” (“elected, equal, effective”) Senate and ending with the unanimous rejection by the Supreme Court of Canada of his more modest changes proposed in the Reference Re Senate Reform. The Conservative promises about cleaning up government after the sponsorship scandal led Canadians to believe that patronage appointments and expense abuses would be a thing of the past, but the Senate expenses scandal haunted them right to the end. And control of the operations of government from the “centre” was taken to have deprived MPs of their independence and handed too much power to unelected political staffers in the PMO.

The point is that either failure to achieve promised policy planks or actually succeeding in making momentous changes both erode political good will and generate opposition and disenchantment among voters and the honeymoon comes to an end.

The 2015 Trudeau Liberals packed their platform document with numerous promises that were intended to be refreshing and to delight the folks who were yearning for change. But the old saw that “the devil is in the details” is certain to apply here.

This platitudinous truth was amply demonstrated as the newly-sworn-in Ministers grappled gamely with the generous but over-the-top promise to land 25,000 Syrian refugees in Canada by the end of the year. As logistics, selection and security issues piled up with the clock ticking, a variety of compromises were reached: 25,000 yes, but not by year’s end; 25,000 originally intended to be government initiated newcomers in addition to any sponsored by private families or groups became 25,000 from all sources combined, and only by Spring, with the remainder trickling in by the end of 2016. Selection criteria excluding single men as a rough and ready proxy for enhanced security has come under criticism. Ultimately, the best evidence of policy-making on the fly were the back-to-back contradictory statements, first, from the Ministerial Committee tasked with this enormous endeavour that it was logistics, not security, that had caused the push-back of the deadline and, second, from the Prime Minster himself while in London to the effect that it was the Paris terrorist attacks that had resulted in the timing changes.

There are a series of social policy issues on the horizon whose solutions will likely please some and leave others quite unhappy. Take, for example, the promise to “legalize, regulate and restrict access to marijuana”.  The idea would be to decriminalize the incidental use of pot but provide for more severe sanctions for operating a motor vehicle while under the drug’s influence, providing it to minors, or selling it outside the “regulatory framework” to be established (which will include two levels of governmental excise taxes).

Sounds easy, but don’t expect experts in public health, substance abuse and law enforcement to be equally enamoured of the concept. It will be difficult to ensure that a little freedom does not lead to a lot of excess or that the product does not make its way into the hands of criminal elements to avoid the fiscal revenue bonanza represented by the new taxes (as has happened in the case of cigarettes). The proposed measures may be popular until the first incident occurs that wasn’t supposed to happen (i.e. an accident involving a motor vehicle driven by a stoned minor who got his stash in a schoolyard from a thug).

Then there is physician assisted suicide to deal with. The government has asked for an extension (six months) to the one year granted by the Supreme Court of Canada for the federal government to come up with a new law to replace the one the Court found unconstitutional banning the practice. The Court has set a trap for the new Cabinet by deciding to leave to a physician the determination of whether the decision to end the life of an incurably ill patient, in pain, without any prognosis for improvement or effective treatment options, is in fact fully informed, and free and voluntary. The potential for undue influence on the patient is not one that is within the ordinary physician’s expertise to detect. No doubt the Court did not wish to build in a more robust process to establish the patient’s consent for fear that an elaborate procedure would offend Section 7 Charter rights in the same way as the hospital committees on abortion that were struck down in the Morgentaler case.

Then there is the Trans-Pacific Partnership, the massive trade deal agreed to in principle in the dying days of the Harper administration. Mr. Trudeau wisely avoided making any electoral promise on the subject, preferring to have the formal text and the advice of senior officials available to him before deciding whether or not to endorse it. He had to endure the indignity of US President Barack Obama declaring that he was certain that “Justin” would affix Canada’s signature before Mr. Trudeau had had time, after his whirlwind world tour of summits, to make that determination. Again, some will rejoice if the TPP is ratified, and some supporters will be dissatisfied.

Perhaps the most likely issue to generate serious controversy will be electoral reform. Having promised that “2015 will be the last federal election conducted under the first-past-the-post voting system”, yet having won a significant majority in the House with only 39.47 percent of the vote, the Liberals are a classic example of how our system was designed to work. Majority government creates stability and predictability in the political environment. If the Liberals do indeed keep their platform promise, it would mean an end to their ability to produce “Real Change”, since they would forever be condemned to make compromises with the NDP or the Greens.

Moreover, it would likely mean that there would never be another Conservative government in Canada, so, on this issue, look for the Conservative majority in the Senate to create some significant roadblocks. Foreseeing this, and being understandably reluctant to render impossible any replication of the remarkable results of October 19, Mr. Trudeau might choose to study this issue to death in the promised Parliamentary Committee. He could then blame the complexity of the issue and the multiple options to be considered for breaking the vow to introduce legislation to enact electoral reform within 18 months of forming government.

The joy of accession to office is balanced by the burdens of power. Actually making choices erodes the initial elation which, sooner or later, starts to show up in the polls. Opposition leaders would be wise to allow the honeymoon process to run its course and avoid getting in the Liberals’ way as they engage in actually governing. They will inevitably disillusion some electors on one policy or another until the initial period of apparent harmony and goodwill dissipates and Canadian politics are once again ready for alternative ideas and approaches.

Stanley Herbert Hartt, OC, QC is a lawyer, lecturer, businessman, and civil servant. He currently serves as counsel at Norton Rose Fulbright Canada. Previously Mr. Hartt was chairman of Macquarie Capital Markets Canada Ltd. Before this he practised law as a partner for 20 years at a leading Canadian business law firm and was chairman of Citigroup Global Markets Canada and its predecessor Salomon Smith Barney Canada. Mr. Hartt also served as chairman, president, and CEO of Campeau Corporation, deputy minister at the Department of Finance and, in the late 1980s, as chief of staff in the Office of the Prime Minister.

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