Liberals take back Canada

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


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 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.

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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".

Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.