HOW OTTAWA SPENDS 2016 - 2017 THE TRUDEAU LIBERALS IN POWER EDITED BY: G. BRUCE DOERN AND CHRISTOPHER STONEY THE SCHOOL OF PUBLIC POLICY AND ADMINISTRATION AT CARLETON UNIVERSITY IS A NATIONAL CENTRE FOR THE STUDY OF PUBLIC POLICY AND MANAGEMENT Photo by: Adam Scotti Photo provided by the Office of the Prime Minister © Her Majesty the Queen in Right of Canada, 2016 i CONTENTS Page Preface ii CHAPTER 1 -The Trudeau Liberals in Power 1 -G. Bruce Doern and Christopher Stoney CHAPTER 2 - Infrastructure Policy and Spending: An 30 Initial Look at the Trudeau Liberal Plan -Fanny Demers and Michel Demers CHAPTER 3 - Canada Needs an Entrepreneurship Policy, Not 85 A Small Business Policy -John Lester CHAPTER 4 - Are Sunnier Days Ahead? Liberal Plans for the 111 Canadians With Disabilities Act -Michael J. Prince and Pamela Moss CHAPTER 5 - A New Government and its “New Innovation Agenda” 141 -David Castle and Peter W.B. Phillips CHAPTER 6 - Liberal Energy and Climate Change Governance: The Energy/Environment Domain Post-Harper 167 -Glen Toner, David Cherniak and Kevin Force CHAPTER 7 - The Inter-Executive Activity of Ministerial Policy Advisors in the Government of Canada 191 -R. Paul Wilson CHAPTER 8 - A Targetted Federal Transfer for Mental Health: Are Prospects Better Under the Trudeau Liberals? 216 -Mary Bartram CHAPTER 9 - How Ottawa Mends: Renewal and Support to Registered Charities Under a Liberal Government? 240 -Karine Levasseur CHAPTER 10 - Canada Pension Plan Enhancement: Issues and Unexpected Outcomes 267 -Ian Lee Contributors- 287 ii PREFACE This is the 37th edition of How Ottawa Spends. As always we gratefully thank our roster of contributing academic and other expert authors from across Canada and abroad for their research, their insights and for their willingness to contribute to informed public debate in Canada. This edition is our second digital on-line publication rather than the normal book version of its 35 years from 1980-81 to 2014-15. And it is also the second volume where contributing chapters have been assessed under normal academic anonymous peer review processes. We thank these peer reviewers as well. Very special gratitude is owed to Sheena Kennedy for her skill in helping us launch an on-line peer reviewed process and to Mary Giles , the Special Projects Administrator in the School of Public Policy and Administration for her work and expertise in the on-line publication and distribution process. We also extend our deep appreciation for the scholarly stimulation and encouragement provided by our colleagues at the School of Public Policy and Administration at Carleton University. G. Bruce Doern and Christopher Stoney Ottawa September 2016 1 Chapter 1 THE TRUDEAU LIBERALS IN POWER G. Bruce Doern and Christopher Stoney INTRODUCTION In this 2016-17 edition of How Ottawa Spends, we examine key aspects of the Liberal agenda as both the defeated main opposition parties, the Conservatives and the NDP, now look for new leaders and take their time in choosing successors who would be capable of taking on Prime Minister Justin Trudeau. As last year’s How Ottawa Spends illustrated, the Liberal election campaign platform and its later first Speech from the Throne revealed a Liberal Party with a massively ambitious socio-economic agenda on offer, characterized by its effort to be in as many ways possible, the quintessentially opposite of the controlling one-man Harper Conservative government it had defeated (Stoney and Doern 2015, Chapter 1). In the immediate aftermath of the vote and of the dynamics of taking power, Canadians witnessed the dominance of Justin Trudeau’s own outgoing persona and style and how he was being seen positively both nationally and internationally. Trudeau had initially spent most of his time abroad on a series of meetings with massive positive media coverage in Washington, and in Europe but also in social media coverage. This included coverage of his government’s support for the admission of 25,000 Syrian refugees including Trudeau personally greeting the new arrivals at Toronto airport. At home, Canadians, both those who voted for him but also many who did not, were presented with an expressive and outgoing leader in sharp contrast to the often severe and sombre 2 shadow cast by Stephen Harper’s persona and modus operandi during the previous decade. Trudeau and his Cabinet were now meeting publically with provincial leaders and with organizations representing city mayors and municipalities in ways that Harper had not and did not want to. Ten months after his election and well past the honeymoon stage of most freshly elected governments, the Trudeau Liberals were still riding high in the opinion polls. In reflecting on and covering the so-called shift to Trudeau’s self-declared “sunny ways” it is often difficult to keep track of what more significant policy and agenda changes are and have been, something that How Ottawa Spends has done for almost 4 decades. In the editors’ lead chapter therefore we cover four aspects of the Liberal agenda. We look first at the inaugural Liberal Budget including its large deficit infrastructure focus and early comments about it. We then examine the Liberal strategy on democratic institutions centred on electoral reform to replace the current first-past-the-post system. Third, we probe the complex agenda links and content regarding pipelines, interest group democratic pluralism and indigenous peoples. Fourth, we draw attention to three agenda events and pressures, national and global, that were not in the frame at the time of the election, the Speech From the Throne (SFT) and the Budget, but which are now emerging as important factors in politics and policy. These include the Fort McMurray Alberta fire and ecological disaster; the UK’s Brexit referendum decision to leave the European Union and its initial impacts, and “Trumpism”, the unprecedented chaotic, divisive and verbally abusive US election battle being waged by Donald Trump in the name of the Republican Party. In both the Brexit and Trumpism developments, there is new uncertainty for Canada and the world, to which Trudeau will have to react both with words and actions. These appear to be coalescing around changing views of the excesses of globalization and stronger concerns about free trade and free 3 trade agreements. Much depends of course on whether Trump wins the November 2016 US Presidential election against Hilary Clinton, a prospect that at time of writing seems unlikely but not impossible. The final section of this chapter also highlights some of the important insights, arguments and findings of our contributing authors in their chapters on other key policy and agenda features of the early Trudeau era. Some of these are also referred to briefly in the main earlier sections of this chapter. THE LIBERAL AGENDA: BUDGET SPEECH 2016. Finance Minister Bill Morneau presented the first Trudeau Liberal budget on March 22nd, 2016 (Department of Finance, 2016). It built on the earlier first Liberal Speech from the Throne (2015) tabled early in December 2015 and perhaps even more on the Liberal 2015 election platform where planned deficits anchored around infrastructure investment demarcated the Liberals from the Harper Conservatives and the NDP opposition which opted for balanced budgets, and by implication, more austerity. This was pivotal in gaining the Liberals a resounding and in many ways unexpected majority government (Stoney and Doern 2015). The Budget Speech developed 15 themes and realms for political-economic action and discourse, beginning with “help for the middle class” and ending with “a strong voice” on the international stage. Help for the middle class highlighted the already announced Liberal tax cuts for the middle class, paid for partly by “raised taxes for the top 1 per cent” (Department of Finance 2016, 3). Announced in the budget is the “introduction of the new Canada Child Benefit” cast as a “plan to help families more than any other social program since universal health care” 4 (Ibid, 3). Not mentioned in the budget speech, though it was in the earlier SFT, was the promise of Canada Pension Plan (CPP) reform and renewal (see Ian Lee’s detailed analysis in Chapter 10). The middle class was also central in the “long term growth for the middle class” theme that followed but which otherwise was de facto the government’s commitment to “new investments in infrastructure from coast to coast to coast” (Ibid 4). This was the core of the deficit spending and investment macro budget strategy and would amount to “$11.9 billion over five years” and more than $120 billion over the next decade (Ibid, 4). The investments would “focus on long- term value” and would focus initially on “public transit, water and wastewater systems, provide affordable housing, and to protect infrastructure systems from the effects of climate change” (Ibid 5). Fanny Demers and Michel Demers in Chapter 2 provide a detailed early look at the Liberal infrastructure plans and agenda, including their underlying economics but also governance challenges. It is worth keeping in mind that the Harper government had also promised in its budgets long multi-year infrastructure investment plans both when it was running deficits and when it was aspiring to be a responsible balanced budget government when and if it was re-elected (Doern and Stoney 2014-2015; Doern, Maslove and Prince 2013). These lead-off commitments in the Budget Speech were followed by measures more broadly aimed towards an “innovative and clean economy” and then in more detail for measures on “post-secondary education” (including increased Canada Student Grant amounts) and “investments in world-class institutions and research” including $95 million per year through Canada’s granting councils, but also $2 billion over 3 years for a new Post-Secondary Institutions Strategic Investment Fund “to modernize on-campus research, commercialization and training facilities” (Department of Finance 2016, 6).