Many Canadians are already sour on the Trudeau government due to worsening economic conditions. Add a serious scandal on top of that, and it will be difficult for the Liberals to maintain their political support.
“It’s the economy stupid.”
That phrase – uttered by U.S. Democratic Party strategist James Carville – is as close as the political world gets to universally accepted conventional wisdom.
And, it is often true.
A government can survive many scandals if the economy is strong, and an ethical government can lose if the economy is weak.
But few governments can survive if there is both a sense of economic decline and a perception that the governing party is deeply unethical.
With that in mind, it’s easy to see how the Trudeau government is now in a very difficult and politically precarious position.
If Trudeau wants to deflect from the growing China interference scandal, turning to the economy won’t really work for him.
Wages have been lagging inflation for quite some time.
Per capita GDP has fallen for six consecutive months.
Consumer and business insolvencies are rising.
A majority of Canadians say we are already in a recession.
If Trudeau tries to push some sort of line like “don’t worry about scandals, just focus on our economic management,” it will fall flat with many Canadians, since it won’t match reality.
Running out of distractions?
Justin Trudeau has had a significant amount of political luck when it comes to the economy.
Near the time of the 2015 election, the economy had been through a mild downturn, creating a sense of economic uncertainty just as people voted. The economy quickly returned to growth soon after the election, and had likely already been growing prior to voting day (economic data on GDP growth is always delayed).
Trudeau was handed a balanced budget, and quickly began to run budget deficits – breaking his ‘three small deficits’ promise.
In 2019, interest rates were still incredibly low, making it easy for governments to juice growth with easy money.
In 2021, the economy had been through a massive dislocation, but Canadians didn’t directly blame the PM, since a global pandemic had occurred. The government had also borrowed immense sums of money and given out payments directly to Canadians, something that is often popular in the short-run.
But now, the impact of all that spending and printed money is being felt, and many Canadians feel they are falling behind.
Thus, there is a much smaller reservoir of goodwill towards the federal government, and people will be less likely to look the other way when it comes to ethical issues and questions surrounding the legitimacy of our core institutions.
There’s another factor that puts the Liberals in a difficult position:
Conservative Leader Pierre Poilievre.
The CPC has a more media-savvy leader, and they have risen in the polls since his leadership race victory.
As a result, the Liberals won’t have it easy when it comes to rhetorical battles going forward, meaning their ability to distract and deflect from scandals, ethical issues, and economic problems has been reduced.
There are no guarantees or sure things in a democratic systems. But what we can be certain of is that Justin Trudeau faces the most challenging political environment since he took office in 2015, and many of his political problems are entirely self-inflicted.
Spencer Fernando
