A former deputy prime minister of Canada says the federal New Democratic Party’s (NDP) decision to pull its support for Justin Trudeau’s minority government was influenced by the Liberals’ handling of a number of hot-button issues, including the recent national rail strike.
“The NDP has been increasingly uncomfortable with some of the decisions the government has had to take; most recently the rail strike, which they have been very critical about,” John Manley, chair of Jefferies Canada and former Liberal finance minister told BNN Bloomberg in an interview.
“They are anticipating an Air Canada pilots’ strike coming up in the next few weeks, and the NDP doesn’t want to be accused of talking out of both sides of their mouths by criticizing the Liberals on one hand and yet supporting the government on the other.”
Manley said that the NDP’s surprise announcement Wednesday afternoon to pull out of the supply and confidence deal it entered into with the Liberals in 2022 does not necessarily mean a federal election will be held ahead of schedule.
“That would only happen if the government decided to call (an election), which would seem to be manifestly against their own interest, or if the NDP actually voted in the House of Commons on a confidence motion that brings down the government,” he explained.
“That may not happen between now and next June, in which case we’re staying on the same timetable.”
Manley added that the NDP’s decision to distance themselves from the Liberals was likely made with long-term political strategy in mind, as current polling suggests that the federal Conservatives would win handily if a national election was held today.
“The politics are not in favour of either (the Liberals or NDP) desiring to have an early election,” he said.
“I think this is actually way more about the NDP feeling that they’ve got to start staking out independent ground of the Liberals so that when the election comes, they can fight it on their own merits.”
Fiscal implications
Manley said that for investors, entrepreneurs and business owners, it may be difficult to glean what a government led by Pierre Poilievre would look like from a fiscal policy perspective, if the Conservatives were to take power in the next election.
Poilievre has been critical of countless Liberal economic policies, including the carbon tax scheme and the recent rise in the capital gains tax inclusion rate, but Manley said the Conservative leader hasn’t been eager to commit to many specific policy alternatives.
“Mr. Poilievre has been playing a very defensive political game… when you’ve got a big lead, you try not to make any mistakes, you don’t do anything that’s too risky, and he’s been doing that,” he said.
“So, he hasn’t articulated a position on some of these policies; if he takes on the capital gains issue then he’s got to talk about some other taxation issues, and I think he’s happier to just let the government be on the defensive on that and not make any commitments or promises on it.”