Was it really the economy, stupid? Trudeau’s record no worse than other western leaders

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John Rapley is an author and academic who divides his time among London, Johannesburg and Ottawa. His books include Why Empires Fall (Yale University Press, 2023) and Twilight of the Money Gods (Simon and Schuster, 2017).

Justin Trudeau leaves office under the darkest of clouds: epically bad approval ratings, a government that appears in civil war and an economy that is, in per capita terms, collapsing, beset as it is by a housing crisis, diminishing productivity growth and falling real incomes.

But when assessing his economic legacy, Mr. Trudeau probably deserves a little slack – not because his record was good, but because it wasn’t much worse than that of just about any other Western leader at the moment, and actually better than a few. Mr. Trudeau did some things badly and got a few things right, but many of his failings were those that have affected virtually every leader of a major democracy in the past few years. He didn’t botch things spectacularly, which is what happened with Britain’s shortest-serving prime minister Liz Truss, and he didn’t, unlike recent Korean and American presidents, attempt a coup to stay in power.

Arguably, his biggest economic failures were the housing and immigration crises. The first was a sin of omission rather than commission – his government didn’t cause it, but it did little, if anything, to prevent it. There is plenty of blame to apportion when it comes to this generational failure: the Bank of Canada’s casual disregard for the effects of its loose monetary policy on asset prices, the entrenched power of NIMBYism in the country’s municipal politics, the strength of real estate lobbies in some provincial governments. On its own, the federal government couldn’t have solved all this. But it could have done much more than it did, including borrowing in the cheap-money days to boost the country’s housing stock. By the time the government finally got serious, it was far too late.

As for the government’s misguided immigration policy, which overlapped with the housing crisis, this is arguably a case of the road to hell being paved with good intentions. The basic principle of providing a fast-track to permanent residency for foreigners pursuing tertiary studies in Canada is a good one – it’s a cheap way to keep Canada at the cutting edge of innovation. Unfortunately, its design flaws left it open to abuse, while the tactic of using it to supply cheap labour to the economy had little to commend it.

Beyond that, it could be said of Mr. Trudeau’s government that it was characterized by good vision but poor execution. It foresaw the rapid changes that were occurring in the world economy, including the energy transition and the extraordinary transformation of China’s capacity in emerging industries, and tried to respond. But its policies seemed partial – rather as if it were attempting Biden-style industrial policy with insufficient conviction. In particular, the country’s effort to develop an EV industry with subsidies to car plants may have been futile, given China’s developing dominance in this sector.

Yet the focus on flagship failures overlooks what have been some quiet achievements. In recent years, in typically Canadian fashion – which is to say, with little fanfare – the country has become a world leader in energy startups and actually outperforms the United States in the scale of investment and firm creation in the renewable-energy space.

Meanwhile when it was conceived, Canada’s carbon tax was seen as best-in-class of a new type of policy. The fact that the rebate failed to win support came as a surprise to many observers, but it’s still not clear what better alternative is on offer.

Finally, when it comes to the management of public finances, Canadians have actually fared comparatively well in the Trudeau years. Canada’s fiscal deficits are among the better ones in the OECD, the country’s tax take as a share of GDP remains in the mid-range of the G7, it has one of the world’s most successful pension plans and its national debt is at the better end of G7 countries. It’s not that Canada’s performance on any of these metrics has been good; it’s just that it’s been no worse than any developed country, and better than some.

The truth is, Western countries are beset with common structural problems, which their electorates blame on their governments, but which are inevitable consequences of their place in history: They are all going through the descent stage of an imperial lifecycle, with the challenging adjustments that involves.

So, while Mr. Trudeau leaves office much reviled, you can probably assume that whoever follows him in office, and whoever in turns follows that person, will probably suffer the same fate. Few of us are prepared to accept that, however bright our future might yet be, our glory days are behind us.