Chequing Out
The new cross-partisan consensus on gimmick policies reflects a decline in ambition from our governments.
By Gabriel Blanc
The prime minister’s recent dust-up with now former Finance Minister Chrystia Freeland may have been because she rightfully disagreed with the premise of sending $250 cheques to all Canadians, including individuals making up to 150,000 in income last year. Zooming out a little bit, this internal conflict is part of the death throes of a government that is out of time and out of ideas. Zooming out even further, the now-cancelled “Working Canadians Rebate” reflects a broader decline in ambition from our governments enabled by the pessimism of the Canadian public.
Let me explain with an analogy: In April of 2020, during some of the worst months of the COVID-19 pandemic, the price of oil briefly reached a nadir of negative thirty-seven dollars a barrel. While crude prices as measured by the West Texas Intermediate reference have rebounded, and have never dipped below zero since, the portion of profits the oil and gas industry has reinvested has never returned to pre-pandemic levels. Shaken by “negative oil” and taking stock of the likely trajectories for fossil fuel consumption over the long run, big oil changed strategies from the perpetual growth of supply to slowly siphoning off oil at a rate that preserved existing prices. In other words, big oil no longer sees an unlimited future for their product, and is cashing out while they can.
Beyond being an interesting story with some explanatory power for high gas prices, the oil and gas industry’s transition from a growth industry to a dividend industry provides a concrete example of a more ephemeral societal malaise. As we come to the end of 2024 and are firmly in the post-pandemic era, the governments of Ontario and Canada have given us another: governance by cheque.
Justin Trudeau was far from the first head of government to attempt to deploy this strategy. Less than a month before him, Ontario Premier Doug Ford promised his taxpayers $200. With this move, Ford joins a few other Ontario premiers who have effectively used similar pre-election gimmicks. When Ontario under Mike Harris posted its first surplus in almost a decade, the premier sent every Ontarian a “dividend” in time for the election. In 2009, Dalton McGuinty delivered a message by mail to every Ontarian with his rebate, as a way of apologizing for the increased burden of the new HST. Not three years ago, Ford himself sent car owners rebates for license plate renewal fees just in time for a provincial election.
What has changed this time is the level of cynicism. Emboldened by the pervasive sense of decline and permanent crisis, the Premier of Ontario feels he doesn’t need a justification — he has no surplus to boast of, no new tax to apologize for. What reason would you need when 70 per cent of Canadians think Canada is “broken?” The prime minister seems to agree. His announcement of a $250 cheque used language almost indistinguishable from Ford’s: vaguely gesturing towards Canadians “feeling the pinch” and “needing a break.” Indeed, Trudeau’s cheques are accompanied by a GST holiday, an idea previously proposed by former Conservative leader Erin O’Toole ahead of the 2021 federal election.
Whether our heads of government will say it or not, the underlying ethos of these policies is that the taxpayer knows how to spend their money better than the government. It is at minimum a fiscally conservative move, at most it could be considered a libertarian one. But Justin Trudeau is not fiscally conservative, he’s just out of ideas. That’s why it was dismaying — if not surprising — to see NDP Leader Jaghmeet Singh jump on board with the idea as well. At a moment when Canada is in desperate need of investments in healthcare, education, and housing, we’ve transitioned from a growth country to a dividend country. The cross-partisan consensus then, from left to right, is that a sustained improvement in outcomes that benefit everyone is a lost cause, and voters would prefer leaves of bread tossed from the emperor’s palanquin. It’s not hard to imagine what a Prime Minister Poilievre might do with this consensus.
When Canadians have hope for the future, they see their taxes as an investment in the country’s growth. Taking stock of the political nihilism of the past few years (including the continued rise of the far right globally), the inevitable conclusion is that COVID-19 and its economic consequences killed our optimism. It is not a given that catastrophe results in a rise in nihilism or a decline in government ambition. The end of the Second World War triggered some of the most ambitious nation-building projects in the Western world. In Ontario, this is the period that saw the construction of beloved public works, including Ontario Place and the Ontario Science Centre — currently in the process of being sold off by the premier.
But post-pandemic, the dominant reaction to decline has been individualism, not solidarity. With little hope for growing the pie, everyone wants to make sure they get their slice. It isn’t a coincidence then that 2024 will be remembered as the year when the decades-long Canadian consensus on immigration shattered. Refrains that “Canada is full” reflect more than just frustration with the federal government’s missteps — they reflect the death of ambition for a bigger, better country.
The pandemic only accelerated the malaise felt by many young people that they would never be better off than their parents. Based on the large swing to the right among young people in Canada and the United States, it’s clear that the result of the end of optimism has been individualism, not solidarity. Like big oil, we’ve changed tack to cashing out while we still can. Canada is full, sell off the public assets, cheque please!
Gabriel Blanc (he/him) is the Editor-in-Chief of The Bell from Toronto, Ontario. He wrote for the Brown Political Review as a staff writer while pursuing his undergraduate degree at Brown University. He has since written for several online publications, including his own blog. While working at UNICEF, he contributed to human interest stories in English and French. He is excited to bring a fresh perspective and more French content to The Bell as the Editor in Chief.
Well ................
You point to the resource industry's lack of reinvestment as evidence of your thesis. I respectfully disagree.
As a resident of Alberta I am aware that the industry could and would reinvest much, much, much more if only they had confidence that a) they would be allowed to make such investments; and b) any proposal would not be held up to ransom and ultimate denial after incredibly expensive and time consuming hearings. In other words, it is the "Canada is broken" idea that is causing the industry to use it's excess cash flow to return cash to shareholders.
Put yet again differently, the government has so skewed to playing field through taxation, regulation and legal means that any large investment is so fraught with danger that ordinary economic analysis of plusses and minuses of a proposed investment is simply inapplicable. In that environment the only rational course is to invest only on a maintenance basis but no greenfield projects.