Rebounding economy could deliver gut punch to Poilievre

Opinion

Hey there, time traveller!
This article was published 22/05/2024 (478 days ago), so information in it may no longer be current.

It has been a week of grave disappointment for Pierre Poilievre and the Conservative Party of Canada.

Immediately following the May long weekend, Statistics Canada reported inflation had dropped to 2.7 per cent in April, down from the 2.9 per cent in March. More importantly, it was the fourth month in a row that inflation remained within the Bank of Canada’s target band of one to three per cent.

Most market watchers expect the Bank of Canada to cut interest rates this year. Some predict a reduction could come as early as next month if inflation remains within the target band. For anyone carrying debt or looking to re-finance a mortgage, that is hugely positive news.

Unfortunately, what’s good for consumers may not be good for Conservatives.

For the better part of two years, party leader Pierre Poilievre has hammered Prime Minister Justin Trudeau and his Liberal government for failing to ease “the affordability crisis.”

Every day, journalists are bombarded with emails that offer more evidence of just how much worse off Canada has become thanks to Trudeau.

“After nine years of Justin Trudeau, Canadians are seeing one of the steepest and longest falls of living standards in the history of the country,” thundered a May 16 news release from Conservative party communications.

A month earlier, more of the same. “After nine years of Justin Trudeau, Canada is experiencing a massive housing shortage that has made life unaffordable. Rent has doubled, mortgage payments have doubled, and so have down payments. Canadian cities are now among the least affordable on Earth.”

It should be noted that both of those examples — indeed most of the Conservative attack emails — feature deeply flawed logic and questionable facts.

The Conservatives claimed gross domestic product per capita is “the best way to measure how living standards are changing.” That is simply not true; GDP is a measurement of economic output, but it’s not comprehensive and not a good a measure of living standards.

As well, Canadian cities are not among the least affordable on the planet.

Mercer, a human resources and financial services consultancy that produces among the most viable measurements of the cost of living in major cities, does not consider Canada a very expensive place to live in global terms.

Echoing the findings of a dozen other rankings of the world’s cities, Mercer found that Hong Kong, Singapore and Zurich are the most expensive urban centres in which to live; Toronto was 90th on Mercer’s 2023 ranking, and Vancouver was 116th.

Notwithstanding Poilievre’s reckless hyperbole, the Conservative attack campaign has been very effective.

Opinion polls released at the start of 2024 showed that a significant majority of Canadians, and even a larger majority of younger Canadians, feel the Trudeau government has failed to address the affordability crisis. The big question for the Tories is whether the strategy of blaming Trudeau for the affordability crunch can be sustained once inflation, interest rates and consumer prices begin to drop.

Concern over affordability is not the only reason why someone might crave the opportunity to vote against the Liberals and their besieged leader. Trudeau has done more than enough to earn the disdain of voters, a reality borne out by the 20-point lead the Conservatives have over the Liberals in most opinion polls. But Poilievre’s shrill attacks over affordability are the foundation for his allegation the Liberals have broken the country and abandoned its citizens.

If interest rates begin to come down, and the millions of Canadians who were living in fear of renewing their mortgages suddenly find some breathing room, the political tables may start to turn — for some, but not for everyone.

Some of the more fervent Liberal haters are too deep into the Conservative affordability rabbit hole to escape the Conservatives’ deeply flawed, but clearly effective, attacks. Contrary to the basic laws of economics, they believe Trudeau is responsible for increasing the cost of housing and consumer packaged goods.

He isn’t, really, but that point was lost a long time ago.

Having said that, there was always going to come a time when the Conservative line of attack would wear thin.

Opposition parties that ride high in the polls should expect the race to tighten as everyone approaches election day, particularly as the Conservatives begin to put forward policies of their own.

Poilievre has been long on criticism but very short on his own ideas. The lack of detail about how he would address the problems he claims the Trudeau government has created is is testing the patience of some.

For example, Alberta oil companies recently challenged Poilievre to explain how his plan to axe the consumer carbon tax will affect the taxation of industrial carbon emissions. The Conservative leader has not offered many details on how he would lower overall carbon emissions without some form of carbon pricing.

As soon as he does enunciate a plan, you can bet his support will decline. That’s what typically happens when you begin to take a stand on pressing issues.

The improving economy, along with Poilievre beginning to stake out his own positions, won’t translate into electoral salvation for Trudeau’s Liberals.

It just means the race to form the next government of Canada isn’t quite over.

dan.lett@winnipegfreepress.com