Focusing on affordability is the new agenda

Hey there, time traveller!
This article was published 26/11/2024 (345 days ago), so information in it may no longer be current.

It is often said that you can’t buy your friends, but a growing number of Canadian politicians appear intent on proving that saying wrong.

Last Tuesday, Manitoba’s NDP government revealed in its speech from the throne that it intends to implement the one-year freeze on hydro-electricity rates that it promised during last year’s election campaign. The measure will come earlier than many expected, as many pundits thought the government would wait until the final year of its mandate to implement the freeze, hoping to bolster its re-election hopes.

Also last week, Premier Wab Kinew was vague on the future of the province’s 14-cent-per-litre gas tax holiday that has been twice extended by his government, but is due to expire at the end of December. When asked if it would be extended yet again, he did not rule out the possibility.

Two days after the Manitoba throne speech, Prime Minister Justin Trudeau announced that his government plans to deliver a two-month GST holiday on a range of goods and services, and will also send $250 payments to almost 19 million Canadians who worked in 2023 and earned $150,000 or less.

The cheques will arrive early next year, either during or prior to an expected federal election campaign.

NDP Leader Jagmeet Singh says his party will support Trudeau’s plan. Conservative Party Leader Pierre Poilievre characterizes the plan as “a trick” because it is only temporary tax relief, but would not commit to voting against it.

In a silly case of competing for credit, Ontario Finance Minister Peter Bethlenfalvy accuses Trudeau of stealing the idea from his government, which announced last month that it would be sending $200 cheques to all Ontario taxpayers and their children, as part of a package of measures to address the affordability crisis.

Why are politicians of all political stripes all over the country clamouring to cut taxes and put money into taxpayers’ pockets?

There are several factors at play. First, many Canadians are struggling to afford food, housing and other necessities of life, and a large portion of them blame their governments, provincial and federal, for those problems.

Second, interest rates have fallen recently, but many low- and middle-income Canadians aren’t feeling any relief. Many renewed their respective mortgages when rates were higher, and the cost of many items remains high.

Third, interest rates are lower but wages haven’t risen for most Canadians. The top 40 per cent of income earners in Canada have received 70 per cent of the wage growth over the past three years.

Those factors have combined to create a massive and widening wealth gap among Canadians. Low- and middle-income citizens are struggling to pay higher prices for essentials and like food and shelter, while many high-income Canadians are conspicuously living the good life and socking money away in savings accounts and investments.

That frustrating reality is fuelling resentment and anxiety among low- and middle-income Canadians, creating a huge danger for incumbent governments at the ballot box.

Indeed, incumbent governments around the world have been defeated in elections this year by angry voters who are experiencing the stress of affordability issues and feel their governments aren’t doing enough to help them. Those governments are learning the hard way that once the trust and support of “affordability voters” is lost, it is very hard to win those voters back.

Poilievre was among the first politicians in this country to understand that reality, and he has ridden Canadians’ wave of anger and anxiety to a huge lead in the polls. Conversely, Trudeau and his team were slow to recognize and respond to the affordability crisis, and that largely explains why they are likely to lose their jobs following the next election.

Kinew and his advisers have watched this happen to the Trudeau government and are working hard to avoid the same fate in the next Manitoba election. That’s why they have been so focused on affordability issues since winning last year’s election, and will very likely continue that strategy.

It’s smart politics on Kinew’s part, and a key reason why he continues to be Canada’s most popular premier. He understands that you can seldom go wrong by giving voters what they want.

Deveryn Ross is a political commentator living in Brandon.

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