Despite abandoning debt vow, Canada's Trudeau safe over budget

By David Ljunggren
| OTTAWA, March 22

Although Canadian Prime
Minister Justin Trudeau abandoned a debt-cutting pledge in a
budget on Wednesday, the cautious nature of the document and an
unsteady opposition means he is unlikely to suffer much damage,
say analysts and insiders.

The stay-the-course budget targeted export growth and some
measure of tax reform and unveiled little extra spending, but
did promise more money for social housing.

Although Trudeau’s Liberal government last year promised to
keep cutting the debt-to-GDP ratio, the budget shows the ratio
will increase slightly. That said, deficits for the next three
years will be a shade smaller than forecast.

“I don’t think there’s much for the opposition to grab on to
… if the Liberals had created either a bigger deficit hole, or
spent money, they would have been targets,” said Nik Nanos, head
of polling firm Nanos Research.

“A no-news budget is just much more difficult because the
opposition parties are basically shadow-boxing,” he said in a
phone interview.

Trudeau is in no immediate political peril, since the next
election is not due until October 2019 and he is still popular.

A Nanos poll on Tuesday put the Liberals on 41.9 per cent
support, the official opposition Conservatives at 28.5 per cent
with the left-leaning New Democrats at 17.1 per cent. If an
election were held now, the results show Trudeau would win a
comfortable majority.

A government source, who declined to be named because he was
not authorized to speak to the media, said the budget’s promises
of long-term fiscal responsibility should appeal to the
political right while the plans for social housing would placate
the left.

The Conservatives said the lack of tax relief would hurt
Canadian businesses once U.S. President Donald Trump followed
through on promises to cut taxes.

Liberals though said it was impossible to judge what exactly
would be in Trump’s budget, which could yet be many months away
from final adoption.

The challenge for the opposition parties is that both of
them lack permanent leaders and will be holding contests later
this year to fill the position.

“It allows the Liberals to get away with a budget that is
really not going to address a lot of crucial questions,” said
Kathy Brock, a political science professor at Queen’s University
in Kingston.

“If there were strong opposition parties with permanent
leaders I think they’d be hitting this budget pretty hard.”

(Reporting by David Ljunggren; Editing by Bernard Orr)