Liberals take back Canada

Does Canada's new Liberal prime minister Justin Trudeau herald the return of the bad old days?

15-10-22-Canada-634

Justin Trudeau's Liberal Party has swept into power

Canada's centrist Liberal Party, led by the 43-year-old former teacher Justin Trudeau, had been widely written off when the latest election campaign began 11 weeks ago. But last Monday it won a healthy majority, taking 184 of the 338 Seats in Ottawa's House of Commons and turfing out Conservative prime minister Stephen Harper after almost a decade in power.

What the commentators said

Trudeau's policy of running budget deficits for a few years, taking advantage of low interest rates to bolster Canada's infrastructure, proved a popular alternative to Harper's cost-cutting, said Gary Silverman in the Financial Times. The politics of austerity have taken a "beating".

Shoddy infrastructure is hardly Canada's only problem post-commodities boom, said Economist.com. Business investment and exports have yet to take over from indebted consumers as growth drivers. Consumer debt and house prices "are frighteningly high" and it's unrealistic to expect much more momentum from them. Indeed, they make Canada more vulnerable to external shocks.

Trudeau will have to tread carefully with his fiscal stimulus, however, said The Wall Street Journal. The Liberal party's "statist economics" made Canada the "sick man of the developed world" in the 1980s. But Liberal reformers in the 1990s, followed by Harper, ensured a turnaround. "Any return to a runaway fiscal policy" could scare global investors into thinking that "the bad old days are back".

Recommended

The charts that matter: bond yields slip while bitcoin tops $60,000
Economy

The charts that matter: bond yields slip while bitcoin tops $60,000

Cryptocurrency bitcoin soared to over $60,000 this week, while government bond yields fell back. Here’s how that has affected the charts that matter m…
16 Oct 2021
Whistleblower allegations – where now for Facebook?
Tech stocks

Whistleblower allegations – where now for Facebook?

The social-media giant has come in for some fierce criticism following revelations from a former employee. Just how much damage has been done?
16 Oct 2021
Inflation, energy crisis, strikes – have we gone back to the 1970s?
Investment strategy

Inflation, energy crisis, strikes – have we gone back to the 1970s?

Merryn and John talk about rising prices, productivity and the state of the labour market, plus are bond investors really the adults in the room, and …
15 Oct 2021
When will supply chains sort themselves out and what might that mean for inflation?
Inflation

When will supply chains sort themselves out and what might that mean for inflation?

Right now, congestion in global supply chains is driving inflation higher. At some point, that will sort itself out. So will that mean an end to high …
15 Oct 2021

Most Popular

Inflation is still one of the biggest threats to your personal finances
Investment strategy

Inflation is still one of the biggest threats to your personal finances

Central bankers and economists insist inflation will be gone by next year. We're not so sure, says Merryn Somerset Webb. So if you haven’t started to …
1 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021
How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021