The budget that wasn’t

Just about everything a minister says is a signal to somebody. In Step 1, Trudeau seemed to be telling his own party the sunny ways were over. In what is known in Ottawa as the “Hamburg speech,” Trudeau told a German audience two days after his Washington visit that governments need to address the alienation felt by ordinary people everywhere as the digital economy passes them by.

People are tired of watching governments serving special interests instead of those who elected them while corporations are making record profits on the backs of workers consistently being refused stable, full-time employment.

“Citizens across the political spectrum are looking for guidance. They’re looking for leadership. They’re looking for a voice,” Trudeau said. “And, so far, they’re feeling a little let down.”

During the 2015 election campaign, Trudeau used much brighter language to talk about building and protecting the middle class – while still appealing to people’s better angels. The Hamburg speech marked a shift toward a more populist and angrier campaign narrative. It still was addressed to the middle class, but in a very different tone.

The next step in the narrative shift came a week before the March 22 budget, when Finance Minister Bill Morneau spoke before a meeting with his G20 counterparts.

Morneau said he would urge his fellow ministers to follow his government’s lead and increase taxes on the rich and adopt policies that benefit the middle class.

And he added his government “will be taking steps to create a culture of lifelong learning, helping people develop the skills they need at every stage of their life to succeed in this new economy.”

It was one thing when artificial intelligence and other economic forces were displacing the lower rungs of the labour force. But now that algorithms and software are displacing lawyers and other professionals, Morneau is telling a panicking middle class that his government will not abandon them. That is another gesture toward populism, possibly to pre-empt any Conservative Party strategy in that vein before the 2019 election.

A week before Trudeau began the rebranding exercise in mid-February, his government’s advisory committee on economic growth chaired by Dominic Barton of McKinsey & Co., released a report that stated middle-class anxiety would be addressed.

The report talked about “building a skilled and resilient workforce” with the creation of a “FutureSkills Lab.” It also discussed getting the underrepresented into the workforce – low-income and lower-skilled Canadians, older citizens, indigenous peoples and women with children under 16.

In 2019, the baby boomers will be replaced by the millennial generation as the largest voting bloc. Poll after poll show the millennials are frightened about everything from future employment to housing costs. And they should be. Because of this emerging generation, the Liberals picked up four million votes they didn’t have in the 2011 election. Obviously, the government wants to keep those new supporters.

But then came the March 22 budget. It may have addressed the middle class’s anxiety with an emphasis on career retraining and reinventing oneself in the job market. But the tough talk on taxing the rich turned out to be just that. This budget will be remembered as much for what wasn’t in it as what was.

Deficit projections remain high. But the budget contained little immediate spending, and turned out to be little more than an economic update with lots of promises to be delivered later – as if the Trudeau government had been wedded to a certain tough-talk strategy, then got cold feet. Perhaps the prime minister is not so confident about Donald Trump. Or maybe he knows something the rest of us don’t.

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