Former finance minister Morneau 'worried' about country's economic future

Former finance minister Bill Morneau says the Trudeau government focused too much on wealth redistribution and let politics get in the way of economic growth policies and progress on social programs like pharmacare.

Morneau says politics got in the way of progress on growing economy, pharmacare

Former federal finance minister Bill Morneau seen here in the House of Commons on July 8, 2020. In a speech Wednesday night, Morneau said he's much more concerned about Canada's economy now than he was when he took office. (Adrian Wyld/The Canadian Press)

Former finance minister Bill Morneau says he's worried about the country's future, criticizing the government for not focusing on economic growth and letting politics get in the way of progress on issues such as pharmacare.

In a candid keynote speech at the CD Howe Institute's annual directors' dinner, Morneau — who was finance minister for the Trudeau government from 2015 to 2020 — said a lack of emphasis on long-term economic growth means the country will have some difficult times, and face difficult choices, in the years ahead.

And Morneau didn't hesitate to criticize the government he was once part of.

"So much time and energy was spent on finding ways to redistribute Canada's wealth that there was little attention given to the importance of increasing our collective prosperity — let alone developing a disciplined way of thinking and acting on the problem," Morneau said in prepared remarks.

"There is no real sense of urgency in Ottawa about our lack of competitiveness. It's like we're the proverbial frog in the pot, not realizing what happens to us as the heat gradually rises."

Morneau said slow productivity growth is the main reason Canada's economic growth is lagging, which in turn has been caused by low levels of capital and investment in research and development.

Politics versus economic progress

But when it comes to government, he said a focus on short-term political goals hampered addressing longer-term challenges.

He cited the government's failure to implement recommendations from the federal advisory council on economic growth, a group he convened in 2016, as an example of this.

"The recommendations — even the excellent ones that could and should have been acted on — became politicized," he said.

"And the net result is pretty predictable. I struggled to get our government to focus on the need for sustained economic growth, because it was constantly crowded out by other things that seemed more politically urgent, even if they weren't truly as important."

Morneau also criticized the government's approach to pharmacare, saying the government rejected a more practical approach he put forward.

"On pharmacare, when I suggested that we find a way to work within the current system, and focus on filling in the gaps in coverage and care, I was drowned out by the impractical voices of advocates who wanted to see wholesale change," he said.

"It's baffling to me that the government moved forward with new commitments on dental care while the pharmacare challenge remains unresolved."

Ottawa must repair relationship with Alberta: Morneau

Morneau proposed a number of solutions for what he feels ails the country, including improving the relationship between the federal government and the provinces and territories.

He cited intergovernmental relations as a failure of his.

"I wasn't able to get our government to work collaboratively with the provinces and territories on some of the most important issues facing our country: health care, business investment, the energy transition," Morneau said.

The relationship between Alberta Premier Jason Kenney and the Trudeau government has been prickly. It's a rift the prime minister must repair with Kenney's successor, Morneau says. (Dave Chidley/The Canadian Press)

He singled out the political rift between the federal government and Alberta as an issue, and urged the prime minister to immediately meet with outgoing premier Jason Kenney's successor.

"The ideological differences are real, but they're not insurmountable. The prime minister and the new premier should sit down together, ideally without a room full of political staff, and try to develop a real working relationship, one based on personal trust," he said.  "And then do it again. As often as it takes. It's in our national interest to do so, and it's in Alberta's interests, too."

Morneau remarked further that he'd like to see a permanent commission focused on improving economic growth and a fiscal anchor to government spending, among other things.

"The bad news is that the years ahead will not be easy," he said in conclusion.

"The good news is that we're up to the challenge."

Trudeau defends record

At a land claim settlement announcement in Siksika First Nation east of Calgary, Trudeau defended his government's record when asked about the criticism from his former finance minister.

"When we got elected in 2015, we made a commitment to grow the middle class, and help people working hard to join it, and that's exactly what we did," he said.

Trudeau pointed to his government's approach to taxes — raising them on those in the top one per cent of earners and cutting them for those in lower tax brackets.

He mentioned the Canada Child Benefit, which he said "lifted hundreds of thousands of kids out of poverty," as well as the child care deals his government negotiated with the provinces and territories.

But Trudeau didn't appear to want to fire back at Morneau.

"We continued to move forward in a way that ensured that Canadians were at the centre of the growth that we're creating," he said.

"Bill was a huge part of that and an important member of the team."

Trudeau also pointed to the economic disruption caused by the COVID-19 pandemic, economic support programs the government introduced in response and the economic recovery after COVID-19 lockdowns.

"We know that through supporting Canadians — through making sure that everyone has a real and fair chance to succeed — that's how you create the best growth," he said.


Richard Raycraft

Web writer and producer

Richard is a web writer with CBC News and an associate producer with CBC Radio. He's worked at CBC in London, Ont., Toronto, Windsor, Kitchener-Waterloo and Ottawa.


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