No majority ambition in an update that stands pat on Liberal politics

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With a majority government now in hand, Mark Carney might have used the spring economic update to signal a new level of ambition.

His Liberals could have opened a new round of reviews to trim federal programs to really make good on Mr. Carney’s promise to spend less to invest more. With 2½ years till they are forced to face an election, they might have taken on the thorny task of tax reform that scares off electorally minded politicians.

But no. This was a modest economic document. It was not transformational, or generational, or any of the other big adjectives that Mr. Carney and Finance Minister François-Phillippe Champagne used to hype up last fall’s budget.

Mr. Carney could have used this economic statement to take his majority out for a spin to see what he could do. He and Mr. Champagne could have tackled more big economic challenges now, knowing they can count on a little time to manage the political fallout.

But the Liberals didn’t venture much in this economic update, and when they did, electoral politics were never too far.

Spring economic update: Ottawa announces $6-billion to boost skilled trades, smaller deficit projection of $66.9-billion

To be fair, a modest economic statement is generally a good sign. Under Justin Trudeau, the mid-budget statements (then presented in the fall) were often so packed they constituted a mid-year shift in fiscal policy, usually with a lot of additional spending.

Still, this was a choice. There wasn’t a majority-government shift to a longer-term political narrative.

The biggest new item in this statement – apart from the decision to create a debt-financed sovereign wealth fund that was announced Monday – was a program to push 80,000 to 100,000 people through trades apprenticeships over the next five years.

That’s real, theoretically valuable human resources and economic policy for a country that is supposed to be embarking on a building spree, but it’s also aimed at the Liberals’ weaker political demographics – 20- and 30-something blue-collar voters.

That new money, nearly $6-billion over five years, will top up wages and benefits for apprentices and fund expansion of union training programs. It’s not huge, but as Doug Ford’s Ontario Progressive Conservatives have found, it’s the kind of thing that can win blue-collar friends.

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There was a timely cut to contributions to the Canada Pension Plan, along with a lot of rhetoric to resell already announced affordability measures such as the temporary reduction of gasoline taxes.

The rest of the new spending measures were a hodgepodge of relatively small-budget things such as money for sports and small craft wharves in Atlantic Canada, financed out of a revenue windfall notably from higher oil prices, which reduced last year’s projected deficit.

And Mr. Champagne’s modest update still followed the pattern employed by his Liberal predecessors of the past decade: Every time the economy improves the budget forecast, the finance minister increases spending to use up the new room.

Mr. Champagne earmarked nearly every penny of higher projected revenues so his forecasted deficits for future years remained unchanged. It was a bit rich to hear him crediting the government’s fiscal responsibility for deficit reduction.

When he was asked why this statement was less chockablock with new measures than the between-budget updates issued under Mr. Trudeau’s government, in which he served, Mr. Champagne answered: “Discipline.”

Certainly, it’s not surprising that the Finance Minister was taking credit for an economy doing better than many feared a year ago, when the Liberals won the general election.

There has been no recession, Canada’s trade picture hasn’t been as hobbled by U.S. tariffs as once feared, and higher oil prices have boosted GDP. The always-effervescent Mr. Champagne talked about the resilience of the Canadian economy. Yet, there is still lacklustre growth and low productivity.

Mr. Champagne himself said there is an unprecedented fog of uncertainty. Despite that, there was no effort to use the political capital of a majority government to address structural economic problems.

Ambition doesn’t have to mean spending. The government could have exhibited discipline with, for example, another round of spending reductions through a broader review of programs in order to live up to Mr. Carney’s spend-less, invest-more promise. Or a bigger effort to attract investment and increase productivity.

This economic statement didn’t have that. It had a few measures and the same politics. The Liberals didn’t use their new majority to take political risks possible in a full four-year term. They stood pat on the minority politics of a government that could face an election sooner.