NEW NARRATIVE NEEDED TO INSULATE HARPER’S AGENDA FROM ECONOMIC STORM

As MPs return from their summer recess, a number of storylines—from Nycole Turmel’s political inexperience to Bob Dechert’s flirtations to turmoil at National Defense HQ–are coming into focus and will bear following.  None will be as important for the future of the government however, as how Prime Minister Harper stickhandles his deficit reduction agenda through a fall sitting that will likely be dominated by sour global economic news.

The Prime Minister has a lot going for him at the start of this session. He enjoys a healthy majority in both the House and Senate and is in the enviable position of being the only non-interim leader of a major party in the House.

With the stronger legislative engine the May 2 election gave him, some observers suggest that the road is clear for an ambitious agenda that includes a massive overhaul of Canada’s crime legislation and policy, Senate reform and a markedly slimmer federal government.

That is far from certain.

While rent-a-cops may be pulling traffic duty on the Opposition benches, they are still in a position to slow the government’s legislative plans, particularly if their arguments gain traction in public opinion.

Majority or not, the Prime Minister runs the risk of seeing his agenda of institutional change run aground if Parliament becomes gridlocked because of worsening economic conditions and political opportunism.

After all, who wants to see their government push Senate reform when the economy is tanking?

For the Prime Minister, how well he finesses this will be measured less by the level of short term political pain than by how well he safeguards his ability to implement key planks of his non-economic platform and lay the foundations for a lasting conservative legacy.

The challenge for Prime Minister Harper and his government this fall will be to craft a narrative and a policy approach that balances political and economic imperatives.

As currently crafted, the dominant story—going from funding roads and bridges to cutting government workers and programs–won’t be an easy one to explain or sell to Canadians.

First, the public can be forgiven for not “getting” this coming policy shift as the same conditions that are now creeping into daily newscasts–a stumbling economy and flat jobs growth–were cited as the reasons for the 2009 stimulus-laden Economic Action Plan.

Second, the story coming from the U.S. is all about stimulus, as president Obama is taking one more kick at the Keynesian can. His massive economic package, unveiled last week, aims at recovering jobs and boosting consumer demand.

While Obama’s approach sets his administration apart from many European governments that have opted for austerity measures, the news from Washington has more immediacy and impact for Canadians than stories from Berlin or Paris.

The task for the Prime Minister and his front bench lies less in attacking the Opposition–of whom the public care little about–than in reassuring Canadians that they have a plan and explaining how it will work to safeguard jobs of which the public cares a great deal about.

With the economic news continuing to be gloomy–the Toronto Dominion bank revised its 2011 growth forecast from 2.8 to 2.2 percent and its 2012 forecast from 2.5 to 1.9 percent—in the next few days look for a subtle shift in the government’s narrative away from strict deficit reduction toward a balanced approach that includes protecting jobs.

If there is no marked improvement in the economic outlook by early November, expect the government to take a page out of Jean Chretien’s 1994-95 playbook and push a new government narrative revolving around cutting unnecessary expenditures—getting our house in order–while spending on public infrastructure and jobs.

While we are not likely to see the stimulus spigots opened to the extent they were under the Economic Action Plan, we might see the renewal of elements of the Building Canada Fund, the government’s flagship infrastructure program.

Although the government’s deficit reduction action plan may be temporarily sidelined as a branding narrative, every indication is that all federal departments and agencies will continue to have all of their spending—program and operations—placed under a microscope, and a scalpel.

A subtle shift in tone and policy will provide political cover for the government’s austerity plans, and more importantly, help keep Prime Minister Harper’s transformative legacy agenda on the rails.

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