Wry & Dry

Canada: déjà vu all over again?

Wry & Dry takes the 'never send to know for whom the bell tolls' [1] view of life.  That is, everything matters.  Even Canada and Venezuela (more, below).

Walk with W&D a while on this.


Three months ago Canadians tossed out the Conservative government of Stephen Harper and elected the Liberal government of Justin Trudeau [2].

A W&D word of explanation here.  In Canada the Conservative Party might be roughly aligned with the economic and social right wing of the Australian Liberal Party.  Whereas the Canadian Liberal Party sits sort of in the centre of Canadian politics, to the left of the Conservatives, but to the right of the New Democratic Party.  By way of analogy, Tony Abbott would be a Canadian Conservative and Malcolm Turnbull a Canadian Liberal.

(There is no Palmer United Party in Canada.  W&D urges Mr Palmer to capture the Canadian opportunity and move there.  Bonus: there are nickel mines in Canada...)

Trudeau gave three economic commitments during his successful election campaign: (1) a budget deficit of no more than C$10 billion; (2) to balance the budget by 2019 and (3) to keep reducing the national debt as a share of the economy.

Sound familiar?  

Well, on all estimates, those promises are toast.  His 22nd March budget is likely to show a trebling of the deficit to C$30 billion, blowing the other two election promises out of the water.

But his party's popularity is up 10 per cent points since the election, helped by there not being an official Opposition Leader (former Conservative PM Harper resigned three months ago, and, bizarrely, the party election for a successor is not until late May).  

Readers should note that Trudeau inherited a virtually balanced budget and relatively low government debt of 31% of GDP (Australia's is about 34%).  He has fiscal room to move.  And he has promised to spend more on infrastructure to crank up an economy belted by the crash in commodity prices.  He is actively pursuing fiscal expansion.

The comparisons with Australia are obvious.  Budget crisis; commodity price downturn; charismatic centralist PM and a virtual empty Leader-of-the-Opposition chair.

But PM Turnbull and his government seem to have lost their way (and their mojo) - more later.   

So W&D might move to Canada.  Unless Clive gets there first.