Canada’s Trudeau Pushes Policy to the Left Amid Covid Pandemic – The Wall Street Journal

OTTAWA—Amid the pandemic, Canadian Prime Minister Justin Trudeau is betting his political future on a shift further to the left.

Before the global public-health crisis, Mr. Trudeau positioned himself as a progressive, with an emphasis on promoting gender equality, combating racism, and fighting climate change. He ran some deficits to support infrastructure projects.

Now he is shifting his agenda into a higher gear, marking one of the biggest leftward moves in Canadian federal politics since the mid-1960s, political analysts and historians say, when the Liberal government of the day introduced universal health care and a national pension plan.

“We can choose to embrace bold new solutions to the challenges we face and refuse to be held back by old ways of thinking,” Mr. Trudeau said in August, when he first began making promises about a wider social safety net and more aggressive environmental policy. “This is our chance to build a more resilient Canada.”

He appointed a new finance minister, Chrystia Freeland —who steered Canada’s negotiations with the Trump administration on a revamped North American free-trade pact—to oversee development of this new policy road map.

Polls indicate there is an appetite among voters—rattled by the fallout from the pandemic—for an interventionist, big-spending government.

“Canadians are feeling very insecure right now,” said David Coletto, chief executive at Abacus Data, an Ottawa-based polling firm. “There was already a prevailing view—on both the right and left—that those with access to resources were doing much better than those struggling to keep their heads above water. That’s only been confirmed over the past year.”

Canadian Prime Minister Justin Trudeau speaking with President Biden on Jan. 22.

Photo: prime minister’s office/Reuters

Other analysts say Mr. Trudeau’s push might get a boost from the Biden administration, given the U.S. president’s similar agenda focused on the environment and social programs. Mr. Trudeau was the first world leader Mr. Biden called when he moved into the Oval Office.

President Biden and Mr. Trudeau “clearly have a shared vision,” said Stewart Prest, a politics lecturer at Simon Fraser University in Burnaby, British Columbia. “They may reinforce each other as well, especially on the world stage.” To be sure, there will be differences and setbacks, such as President Biden’s move to halt construction of the Keystone XL pipeline extension.

The Trudeau administration spent aggressively to mitigate the pandemic’s hit, with Canada’s budget balance in 2020 deteriorating the most among major developed and emerging economies on an adjusted basis. The deficit is on course to hit a record 18% of gross domestic product in the fiscal year ending March 31. The bulk of the cash was directed toward households and businesses.

Mr. Trudeau has said more government stimulus is on the way, roughly 5% of gross domestic product, to jump-start a recovery, and rebuild and extend a social safety net that targets additional day-care spaces, better care for the elderly, and a national plan to help subsidize drug costs.

“We are not simply aiming to get back to where we were before Covid-19,” Ms. Freeland, who is also deputy prime minister, told reporters this past week. “The pandemic has exposed critical gaps in our social safety net. And the virus has hit certain sectors, certain groups of people, harder than others—seniors, women, low-wage workers, young people, people of color, Indigenous people.”

U.S.-Canada Energy Tensions

But the push is also raising concern. Robert Asselin, a former senior aide in the Trudeau government, points out costs are pushing the budget deficit toward half a trillion Canadian dollars, or the equivalent of $390 billion, and said the government lacks focus when it comes to generating longer-term economic growth.

“I find that a bit troubling. It’s mostly about the redistribution of wealth,” said Mr. Asselin, now senior vice president at Business Council of Canada, a lobby group representing the country’s chief executives. The approach from the incoming Biden administration, in comparison, is also moving the policy agenda to the left but has detailed strategies in place aimed at fueling growth in certain sectors of the economy, he said.

Among the tasks Mr. Trudeau has handed to Finance Minister Freeland, according to a letter released by Mr. Trudeau’s office that outlines her mandate, is introducing new taxes that target “extreme wealth.” Prior to politics, Ms. Freeland was a journalist, and wrote a book about the world’s wealthy elite and income inequality.

The Trudeau government’s measures come at a time of heightened anticipation that Mr. Trudeau will seek an election as early as the spring, to capitalize on solid public support for his response to the pandemic and try to trade in his minority government for a majority mandate.

Mr. Trudeau returned to power in the fall of 2019 with a minority mandate, punished in part because of a scandal over his office’s role in trying to intervene in the prosecution of a Montreal-based engineering company. While Canadian election laws indicate the next vote is set for October 2023, the prime minister has the authority to dissolve parliament and trigger an election at his behest.

Mr. Trudeau’s calculation that Canadians want more government appears to be paying off. Polling from Abacus Data and other public-opinion firms generally indicate Mr. Trudeau’s Liberals hold a stable lead over their biggest rival, the Conservative Party, as most Canadians approve of his government’s response in fighting the pandemic.

The Liberal Party of Canada has been the dominant force in Canadian politics in the country’s 150-year-plus history, in part because of its ability to gauge the public mood and move the policy agenda as appropriate, political analysts say. For instance, the Liberals in the 1990s largely governed from the right, as they cut spending on government programs to deal with budget woes and cut taxes to fend off conservative opponents.

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Kathy Brock, a political scientist at Queen’s University in Kingston, Ontario, said Mr. Trudeau’s leftward shift—which also includes more aggressive measures on fighting climate change, such as a proposed sharp increase in the carbon tax—is meant to persuade progressive voters who park their votes with the left-wing New Democratic Party or elsewhere. In the last federal election, in 2019, roughly a third of voters cast ballots for progressive parties, whereas two-thirds voted either Liberal or for the Conservative Party.

Mr. Trudeau has played down talk of an election, arguing his focus is on the pandemic and overseeing a vaccination rollout.

Ms. Brock said signs point toward a spring vote but that could be upended, especially if the vaccination rollout in Canada faces further delays and badly lags behind the U.S., U.K. and other Group of Seven nations.

A poll published Friday from the Angus Reid Institute indicated public approval of the government’s vaccine-rollout plan dropped sharply in January to 45%, versus 58% in the previous month. Yet Shachi Kurl, the institute’s president, said vaccination frustration has yet to weigh on Mr. Trudeau’s popularity.

Write to Paul Vieira at paul.vieira@wsj.com

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Canada’s Trudeau Pushes Policy to the Left Amid Covid Pandemic – The Wall Street Journal

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