Former finance minister Morneau 'worried' over Canada's economic trajectory

In his first speech since leaving federal politics, former finance minister Bill Morneau painted a blunt picture of his time on Parliament Hill and voiced concern with Canada's economic trajectory.

Morneau, who held the post from 2015 to 2020, said he was and still is deeply concerned that Ottawa is spending more time finding ways to redistribute wealth across the country than focusing on the importance of enhancing collective prosperity.

“I can tell you that there's no real sense of urgency in Ottawa, about our lack of competitiveness. It's like we're the proverbial frog in the pot and not realizing what's happening to us as the heat gradually increases,” he told the C.D. Howe Institute on Wednesday evening.

“This is our fundamental problem. Nothing else is solvable if we don't put this one first.”

The former executive chairman and CEO of Morneau Shepell – now Lifeworks – adds that he’s “much more worried” about Canada’s economic prospect of today than he was seven years ago.

“Simply put, we're living off our past success, and it goes back a long way,” he said.

Morneau pointed to a study from the Organisation of Economic Co-operation and Development (OECD) detailing Canada’s decline in gross domestic product growth since 1982 and another that painted a bleak picture of the country’s economic outlook over the next 40 years when compared to other countries.

“The contrast in potential is startling. Australia and the U.S., they're expected to rise by about 45 per cent, Denmark and Japan, about 50 per cent, Hungary 60 per cent. The country with the lowest projected GDP increase over the same period, Canada. And it’s not even close, our real GDP is projected to grow by only about 30 per cent,” he said.

He cited an “anemic level” of capital investment as a primary source of the problem, attributable to poor collaboration between government and the business sector.

Morneau never made explicit reference to his successor Chrystia Freeland or his former boss, Prime Minister Justin Trudeau, but did spend time offering advice to current and future leaders.

That included suggestions on staffing decisions, and ensuring that “important relationships” get the time and attention they deserve with specific reference to needed collaboration with provincial and territorial premiers; a call to make the U.S. a central focus as it relates to trade and economic prosperity; a pitch to de-politicize big policy moves; and a demand to get serious about Canada’s energy transition.

Asked about the speech on Thursday, Trudeau touted several Liberal initiatives that Morneau was involved in implementing and argued that the government’s investments in Canadians is good economic policy.

 

“We continue to invest in citizens because we know that the best way to ensure a healthy economy is to ensure that Canadians can contribute, can live the way they want to live, and attain their potential,” he said, speaking in French. 

 

In his speech, Morneau also took issue with “extreme partisanship” exhibited in Canadian politics today and with those undermining longstanding federal institutions – an apparent jab at his former rival in the House of Commons, Conservative MP Pierre Poilievre, who is now vying for the leadership of the party.

Poilievre has made attacking the Bank of Canada a key pillar of his campaign to date, questioning its independence, vowing to have it audited, and committing to bar it from using its own digital currency.

“We’re in a country with political institutions that are in many cases, the envy of the world. Yet there are politicians, who absolutely do know better, who are not only taking those institutions for granted, they’re willing to actively undermine them if it gives them the slightest political advantage,” Morneau said.

“That might help you sell a few more memberships, it might even help you win an election. But when you put exciting the base ahead of crafting good policy, when you cynically pander to conspiracy theorists, you’re doing incalculable harm to the country you claim to love.”

Morneau called on all parties to publicly condemn this kind of behavior.