Justin Trudeau's chaotic India trip and next week's federal budget
Justin Trudeau must distance himself from the Khalistani extremist movement and focus on trade if he wants to beef up Canada's economic relationship with India, according to a Canada-India expert.
The prime minister's trip this week was supposed to focus on trade, but instead produced a series of controversies.
News sites around the world posted mocking articles about his decision to wear traditional Indian clothing at many of the events he attended.
Those problems escalated when CBC News discovered Jaspal Atwal, a convicted attempted murderer, received an invitation to an official dinner for Trudeau. The invitation was quickly rescinded.
While that incident doesn't have a direct bearing on trade, it could play into the larger conversation.
"It has been damaging because it just reconfirms the fear and the nagging suspicion [of Indians]," Vivek Dehejia, a political economist at Carleton University, told The House.
The Canadian delegation leaves India with no tangible trade accomplishments, he added.
One deal emerged from the visit. On Tuesday, Canadian and Indian companies signed 66 new contracts worth $1 billion in total — a deal expected to create 5,800 jobs in Canada.
In order to move forward from the negative attention that followed this trip, Dehejia said, Trudeau must find a way to shake Canada's ties to Sikh nationalist controversies.
After that is done, it will be time for the Liberals to go back to trade basics, he said.
India, he explained, is a challenging partner to negotiate with, but Trudeau's rhetoric about wrapping gender, human rights and Indigenous issues into potential trade deals is making the work more difficult.
Now's the time for Canada to "roll up our sleeves and work on the trade deal," he said, adding he's decidedly more pessimistic now than he was at the outset of the official visit.
What experts, advocates and critics want to see in Budget 2018
Before this year's budget is released on Tuesday, we asked politicians and policy experts what they are hoping to see included in its pages.
The Liberals have been hinting the budget was passed through a gender-based analysis to test the impact it would have on both men and women.
On top of the new focus on gender equality, there have been strong calls for more funding for Indigenous children.
There were also rumours that a new paternity leave plan could be announced this year.
Balancing the budget
Revealing their plan for eliminating the deficit in a timely manner should be the Liberals' priority for this budget, according to Aaron Wudrick, federal director of the Canadian Taxpayers Federation.
"What we would like to see is, first of all, a plan to get back to balance," he told The House.
As part of that plan, Wudrick said, this budget needs to introduce shifts in the tax system.
The Department of Finance estimated Canada won't be able to run a balanced budget until 2050, with the deficit peaking at $38.8 billion in the 2035-36 fiscal year.
Finding a faster route to balance would be a daunting task, but Wudrick said one specific area needs attention soon: the carbon tax, which — along with other current tax policies — hurts Canada's ability to compete with the United States.
"If we do everything we're supposed and other countries don't, it's not going to stop climate change," he said.
"If you were an investor with a choice between putting money here or south of the border, the big tax rate advantage that Canada used to enjoy is gone. So the government at the very least needs to start thinking about other ways to increase their advantages."
Tax cuts
Using the budget as an opportunity to stabilize taxes will be a key factor in determining Canada's ability to compete in the global economy, according to the Conservative finance critic.
The mounting federal deficit and the uncertainty caused by high household debt levels will worry investors, Pierre Poilievre told The House.
Household debt levels in Canada are higher than those in any country included in a new OECD report — something that Stephen Poloz, the governor of the Bank of Canada, admits keeps him up at night.
Poilievre agreed it's a concern.
"Today's deficits are tomorrow's taxes," he said.
Asked where the government could cut back taxes, Poilievre answered: "Almost everywhere."
By increasing taxes, you give a "major advantage" to Canada's southern neighbour, he said.
If the government fails to focus on reducing debt and keeping tax rates low over the next few years, Poilievre said, Canadian companies will suffer.
"It will make it harder for our businesses to create jobs and compete on a world stage," he said.
"I'm overall very worried about the amount of debt that governments in general are adding."
Parental leave
This budget could give us our first look at paternity leave at the federal level.
Prime Minister Justin Trudeau has been toying with the idea of creating a use-it-or-lose-it funded leave for new dads, but few details have surfaced.
Even with the limited information being made public, the Liberals could finally put a plan into action, said Kate Bezanson, a social policy expert at Brock University.
All the indicators point to a comprehensive strategy on parental leave, she told The House.
"I expect that this budget will probably emulate the Quebec model," Bezanson said, adding that the availability of five weeks leave at 70 per cent of normal income has proved effective in the only province with dedicated paternity leave.
But it's not just new fathers the Liberals will be targeting. The budget was passed through a gender 'lens' to evaluate its effects in terms of gender parity.
The budget, Bezanson said, likely will begin to address "longstanding issues" such as how to increase the number of women in the labour market and address the gender wage gap.
Attaching other social policies to the plan for parental leave, as was done in Quebec, will help it be effective, she said.
"I'm remaining hopeful that childcare will still be significantly on the agenda," Bezanson said.
"We know that parental leave and childcare go hand in hand in terms of women's economic equality."
Economic equality
Budget 2018 likely will include policies to tackle inequality in various forms, but economic inequality still worries Peter Julian, the NDP's finance critic.
One of the most significant factors contributing to that inequality is the existence of loopholes that allow for offshore tax havens, he told The House.
Canadians have billions of dollars tucked away in accounts overseas, according to news reports based on leaked confidential investment documents such as the Panama Papers and the Paradise Papers — but the government so far hasn't been able to reclaim a penny of taxes owed.
Julian said the NDP thinks taxing those billions would provide enough funds to begin to tackle inequality issues such as housing and pharmacare.
It's not a perfect plan, but he said it's a place for the government to start.
"We expect that they will do a reality check and actually respond to Canadians' needs," he said.
And what is Julian himself hoping to see in the budget?
"What I would hope to see, what is absolutely necessary, is a significant investment in affordable housing."
Indigenous services
The fight to further close the funding gap between Indigenous and non-Indigenous communities in Canada could finally show results in the 2018 budget, after years of consultations and meetings between the government and Indigenous officials.
That gives Perry Bellegarde, national chief for the Assembly of First Nations (AFN), cause for hope.
Good progress has been made, especially in the past few months, he told The House — but there's still a need to push the government and "hold their feet to the fire."
He said he's expecting a proper investment to end discrimination against Indigenous children, as well as money to end more boil-water advisories and build more housing.
In its pre-budget submission to Finance Canada, the AFN made a plea for funding for things like education, housing and infrastructure.
While almost $12 billion has been promised for Indigenous services in the last two federal budgets, how the money gets treated as it trickles down the bureaucracy will be the real test, said Bellegarde.
"Are the departments looking at more effective and efficient ways to make sure that these precious resources are having an impact on the ground where it really matters?"
The Insiders
It was a busy week in international politics as Justin Trudeau made headlines with his trip to India, but it was also a busy week in domestic politics as the 2018 budget will be announced on Tuesday.
To help put these events into perspective, we asked our expert political panel, the Insiders, to weigh in.
Question: The prime minister's trip to India was supposed to be a trade mission, and yet it made headlines around the world for entirely different reasons. How did this play out and what impact do you think it has as the Liberals look ahead?
David Herle: I don't know that it has lasting impact. I sort of divide the trip into two components, one of which is the pre-Atwal situation and post. Pre, people ... criticized what he was wearing. I think that there was a little bit of a pile-on on that part of the trip. The thing took a turn the other day with the convicted Sikh man that was invited and was seen photographed with the prime minister's people. That's just sort of an inexplicable error.
Kathleen Monk: International travel for prime ministers and elected officials are high risk, but they can also be high reward. We've seen different prime ministers over the decades approach these trips differently. It's the first time this prime minister has suffered from some really bad international press. I think frankly coming back to Ottawa and going into budget week next week I think is going to be a welcome relief for this prime minister and his communications team.
Jamie Watt: It reminds me of the old adage about the faults of your strengths and I'm wondering if something is at play here. It's a little early to say, but all of a sudden all of the things that Trudeau not only got a free pass on but worked well for him, are now causing him problems. And all the things that would have been just swept aside are all of a sudden starting to cause problems. One wonders if what has been Teflon is turning into Velcro and these things are actually beginning to attach to him.
Question: The statement from the budget seems to be that this is going to be a gender-analysis budget, that they will make inroads on parity and equality. What do you make of that?
Kathleen Monk: First, I think before they need to get to those specific policies, they also have to do three other things. They have to grapple with the uncertainty this government is facing surrounding NAFTA, around the tax changes in the U.S. and how they might affect us here in Canada. They also have to grapple with growing inequality in the country and people feeling a bit more uncertain about their futures. They also have to check a lot of boxes, they have to get that 'deliverology' stuff right. Thirdly, they really have to manage the communications rollout to avoid the blowback they've had on other policy rollouts.
Jamie Watt: The extent that something has been telegraphed with this budget, it's a pretty thin gruel. That's not to say that some of these issues aren't important — important they are, but they are a pretty thin gruel and I don't see anything that's been telegraphed that is going to be muscular enough to reassert the government's dominance of the agenda. I think they've been very lucky with the state of the opposition thus far.
David Herle: They should not get distracted from middle class economics. They were elected because they convinced people, middle class and working class people, that they would be in their corner. They'll get re-elected if those people still believe that, but if those people think they've taken their eye off that ball and are off on a number of what might be more downtown urban liberal agendas, they might be in trouble.
Answers have been edited for length and clarity.