Cabinet and caucus retreats are set to kick off in the next couple of weeks, unofficially spelling the end of summer in Ottawa as political parties sprint to align messaging and policy positions ahead of what is sure to be a hectic fall.
The issue set that will kick off debate in the House of Commons next month hasn’t changed all that much since last year’s federal election, barring a few exceptions. Rather than debate forward facing policy, the power players in Ottawa will be stuck navigating the fallout of the summer’s failed negotiations with the United States.
While a deal was already unlikely ahead of the U.S. midterms, the abrupt sidelining of discussions for the foreseeable future will have direct consequences for consumer pocketbooks and the broader job market.
Politically, it limits the Carney government’s ability to deliver a fall budget that outlines much beyond the immediate support needs for businesses exposed to the trade war. Since talks collapsed late last month, the government has already announced a $7.5 billion support package. If President Donald Trump makes good on his threat to take further retaliatory measures against Canada, this will be the beginning of a steady drip of subsidies to keep trade exposed sectors from collapse as the trade war drags on.
According to recent Abacus Data polling, seven in ten Canadians support the Carney government’s decision to suspend talks rather than accept the terms on offer. And much like the COVID-19 pandemic, there has been a rally call to wrap the country in the flag. Buy Canadian is back in the spotlight and country of origin labelling has re-emerged in many major chains.
The question is the extent to which the economic pain will impede ordinary households. At least in the short-term, Canadians will be absorbing at least some of the shock of the price shock on tariffs on everyday goods from shampoo to clothing and furniture.
Even worse than the affordability challenges is the impact on those who rely on a paycheque from trade-exposed sectors like forestry, manufacturing, automotive and agriculture. These industries have ridden out uncertainty for more than a year and a half, hoping a deal could be struck in the short term. Even with government subsidies, job losses are on the table.
Premiers at some point will also face no choice but to sharpen their swords as they fight for airtime to draw attention to their regional industries and corresponding responses to the trade war at large. They will be hamstrung by the same financial restraints as the federal government, in turn forcing them to turn to the federal government for additional resources.
They don’t call it a war for nothing. While the conflict requires immediate attention, it will inevitably relegate other federal and provincial priorities to the wayside. The machinery of government is poorly equipped to manage competing crises simultaneously, a limitation that will surely expose operational vulnerabilities.
The next federal budget is sure to be significant in the context of the current trade dispute, but it will likely fall short for everyday Canadians expecting big-ticket affordability measures or solutions to the many challenges that fall outside of the narrow immediacy of Canada-U.S. relations. If the Opposition Conservatives can sheath their knives long enough to recognize the opportunity before them, there may yet be a chance to start laying the track for an alternative vision to that posed by the current government.
Josie Sabatino is a Senior Consultant at Summa Strategies, focused on providing strategic insight and helping clients meet their objectives in an ever changing and complex political and regulatory environment. Prior to joining Summa, Josie spent nearly a decade in political communications and most recently served as the Director of Communications to the Hon. Erin O’Toole, former Leader of the Official Opposition.
