Vincent Duhamel, a former global president of Montreal-based asset manager Fiera Capital Corp., is being touted as a potential finance minister for the federal Conservatives.LA PRESSE
When Vincent Duhamel stepped down as global president of Montreal-based asset manager Fiera Capital Corp. last year, he entered semi-retirement expecting to spend more time on the fairway near his home in Quebec’s Eastern Townships.
“I was trying to see if I could ever love golf. But I was not going anywhere with that,” explains, only half-jokingly, the 57-year-old when asked about his decision to drop golf for politics as the Conservative candidate in the Quebec riding of Brome-Missisquoi.
Now, Mr. Duhamel, whose three-decade career in money management took him to New York and Hong Kong before his return to Canada in 2017, is being touted as a potential finance minister if the Tories win the Sept. 20 federal election – and if he can win an Eastern Townships riding that has not elected a Conservative MP since 1988.
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Those two big “ifs” did not deter Mr. Duhamel from jumping into the political arena. After months of complaining to his wife about Liberal fiscal management, he decided to take the plunge.
“What bugged me most was the lack of fiscal responsibility that is the mark of the Liberals and Justin Trudeau, who have no appreciation of the importance of respecting a budget or of the impact of deficits and debt accumulation for the long-term [interests] of the country,” says Mr. Duhamel, who witnessed first-hand the Asian financial crisis of 1997 as the Hong Kong-based head of State Street Global Advisors’ Asian operations. He later did stints at Goldman Sachs and SAIL Advisors before becoming Asia chief executive officer at Lombard Odier & Co. in 2011.
In 2017, Mr. Duhamel returned to Canada to take on the No. 2 job at Fiera Capital, under founder and CEO Jean-Guy Desjardins. Former BCE Inc. chief Jean Monty, a Fiera board member, credits Mr. Duhamel for plotting the firm’s recent global expansion.
“He’s a good acquisition for the Conservative Party,” Mr. Monty says. “He is someone who really knows finance. I can only congratulate [Conservative Leader] Erin O’Toole for wanting to attract people like him to politics.”
The Asian financial crisis, in which the currencies of several countries in the region collapsed as they struggled to repay foreign debts, helped shape Mr. Duhamel’s views about sustainable fiscal management. The COVID-19 pandemic has only strengthened his convictions.
“We could have another pandemic. We could have another crisis. So, we need to put in place the structure to allow us to get to a better position to face the next crisis,” he says, adding that the Trudeau Liberals benefited from the fiscal discipline of previous Conservative and Liberal governments in Ottawa, which reduced federal debt during periods of economic growth, to ramp up spending as the pandemic took hold.
The Conservative platform, released Monday, does not provide a detailed plan for balancing the federal budget, a goal the party promises to achieve by 2031. The party has referred its platform to the Parliamentary Budget Officer, but it remains unclear whether the PBO will be able to provide a full costing of the program before Canadians go to the polls next month.
April’s federal budget projected the deficit would decline from $154-billion this year to $30.7-billion in 2025-26, after hitting a record $354-billion last year on the heels of a surge in pandemic-related spending. The PBO this week predicted the deficit is on track to be $66-billion lower (on a cumulative basis) over the next five years than the budget projected, although it stressed that its baseline projections are highly uncertain.
Indeed, much depends on the future course of economic growth and interest rates. Even small fluctuations in growth and borrowing costs can have an oversized impact on the deficit, especially with the federal debt already projected to surpass $1.3-trillion by 2025.
“A slightly lower growth track with slightly higher interest rates eliminates the positive [budget] gap and sends the debt burden projection trending up over time. We believe such assumptions are realistic and the prospects they depict are worthy of policy correction through a combination of less spending and tax increases once the pandemic is decisively behind us,” a C.D. Howe Institute study last month warned.
Whoever wins power next month will likely face excruciating tax and spending choices, particularly as financial markets shift their focus to excessive debt levels accumulated during the pandemic. The federal debt-to-gross domestic product ratio has already risen 20 percentage points from its prepandemic level of about 30 per cent. The C.D. Howe study, which Mr. Duhamel referenced, pointed out that a mere 25-basis-point (or 0.25 percentage point) increase in the effective interest rate on the federal debt adds 4.5 percentage points to the debt burden by 2055.
Mr. Duhamel insists he is comfortable with the Conservative plan to eliminate the deficit over 10 years. What markets will be looking for, he stresses, is a credible plan from the next government for reducing debt levels and a commitment to stick to it.
For now, winning a seat in Parliament is Mr. Duhamel’s first priority. Brome-Missisquoi, where Mr. Duhamel has had a home for two decades, is a swing riding that flipped from the Bloc Québécois to the New Democrats in 2011. The Liberals won the riding in 2015 and narrowly held onto it in 2019. The incumbent Liberal MP, Lyne Bessette, is not running for re-election, leaving the riding wide open.
Although Brome-Missisquoi has not elected a Tory since Brian Mulroney was prime minister, the riding has historically had a deep blue streak. Under Heward Grafftey, it was a rare Tory stronghold in Quebec from the 1950s through to the 1980s. Mr. Duhamel can also count on many of his influential friends in Quebec business and finance to endorse him.
“I will obviously vote for him,” says Mr. Monty, a Brome-Missisquoi resident. “But if he wins, he will have no chance to improve his golf game for the next four years.”
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