The Top Line
The House of Commons resumes sitting on Monday for the last sitting of the 41st Parliament. MPs will sit in the newly-built West Block chamber, marking the first time since 1919 that Parliament will not be located in Centre Block. Due to last minute alterations to the temporary Senate chamber at the old Ottawa train station, Senators will not return until February 19, though Senate Committees will hold hearings beginning next week.
Expect the election to loom over proceedings, notably through amplified partisanship in the House as the Government and opposition parties test campaign themes and messages. The Government has much to accomplish between now and late June, including delivering Budget 2019, passing legislation that reflects key commitments from the Liberal Party’s Election 2015 platform (notably Bill C-69 on the regulatory approval process for major natural resources projects), and managing several contentious issues (the economy, pipelines and immigration) that will play a key role in the Election 2019 narrative.
Outside of Parliament, NDP leader Jagmeet Singh is contesting the by-election in Burnaby-South, where voters go to the polls on February 25. If he wins, Singh will join the NDP caucus in the House and solidify his position as party leader. If he loses, the NDP will enter a period of uncertainty as a party leader has not lost a by-election since 1940.
The House will sit for just 14 weeks over the course of the next five months, and, once Parliament rises at the end of June, MPs are not expected to return until after the election on October 19. Below is a breakdown of key issues and challenges for the Government that will play out over the coming months.
Government Priorities
Budget 2019
The Government is expected to deliver the final budget of its current mandate in February or March. The themes of the Department of Finance’s pre-budget consultations indicate that the Budget will continue to build on the Government’s priority of offering support for the middle class. Look for the Government to use the Budget to highlight how government programs and initiatives can improve the lives of everyday Canadians. Possible areas for action include retirement security and incentivizing better job creation. Prime Minister Trudeau and Finance Minister Morneau can also be expected to use this budget to demonstrate what the Government priorities will be for a second term, so stakeholders should pay close attention to the elements prioritized in the first Budget Implementation Act, which the Government will push to have passed before Parliament rises at the end of June.
Pharmacare
The Advisory Council on the Implementation of National Pharmacare, led by former Ontario Health Minster Eric Hoskins, is expected to deliver its final report to the Government in the coming months. How the Government addresses the report could, in the longer term, significantly impact the business and healthcare sectors. Expect the Government to announce its next steps for the pharmacare file prior to Election 2019, because the issue is key to persuading left-of-centre voters to stick with the Liberals instead of voting NDP this fall.
Trade and Tariffs
The ratification of the so-called Canada-United States-Mexico-Agreement – the new NAFTA or CUSMA – is the single biggest economic priority for the Government. Expect the Government to formally table the agreement in Parliament very soon, followed by implementing legislation. Political processes in the U.S. and Mexico will impact when the treaty is fully ratified, but the Liberals will feel pressure to wrap up the Canadian implementation process prior to Election 2019, an accomplishment which would then play a large role in their re-election narrative.
Meanwhile, the Government will also continue to negotiate with the Trump administration in hopes of bringing an end to U.S. import tariffs on Canadian steel and aluminum products, which were not covered by CUSMA.
Challenges
By-elections and Jagmeet Singh
Three Federal by-elections will take place on February 25, including Burnaby-South, where the Liberals have faced recent candidate controversies in their effort to block NDP leader Jagmeet Singh from getting a seat in Parliament. This by-election is crucial for Singh to maintain control of his party. If successful, Singh will have an opportunity to mount a left-of-centre critique of the Trudeau Government in this Fall’s election, in hopes of attracting back left-of-centre voters who are critical to the Liberal’s re-election efforts. If Singh is unsuccessful in his attempt to win the Burnaby-South seat, questions about his ability to carry the NDP into an election will significantly intensify.
Provincial Premiers and Carbon Taxes
The Prime Minister’s difficult relationship with his Provincial counterparts could prove troublesome over the next few months. While Trudeau has had a good relationship with the NDP government in B.C., Premier Horgan’s Government could be in trouble depending on the outcome of a crucial by-election in Nanaimo. In Quebec, while some common ground on environmental policies can be found with the new business and populist-friendly CAQ Government, that relationship will be unpredictable and likely unhelpful to the Federal Government on the hot button immigration and pipelines file.
Conservative Governments in Ontario, Saskatchewan, New Brunswick, and Manitoba continue to call the Government’s carbon pricing plan unconstitutional and are actively challenging it in the courts and with the public. An expected change in Government in Alberta this spring will also add more Provincial opposition to the Federal Government in the key months leading up to the election.
Pipelines
The Government has frequently stated that getting oil to tidewater is a priority and, along with a price on carbon, part of its balanced approach to resource development and climate change that sets them apart from the Conservatives and NDP. However, the TransMountain expansion pipeline – the only pipeline that the Government has yet approved – is now tied up in legal and regulatory challenges. Without a solution to the current impasse, some of the Liberal seats in Western Canada could become difficult ‘holds’ in the next election.
Immigration
The immigration file has the potential to become a significant wedge issue in 2019. The Liberal Government prides itself on being open and welcoming, but the perception of an inadequate response to increased illegal border crossings has divided public opinion. The Conservative Party has used this issue, as well as the decision to sign on to a non-binding United Nations Migration pact, to criticize the Government’s approach to immigration. The Conservatives feel the UN agreement could allow foreign entities to influence Canada’s immigration policies. The issue, along with opposition to the Government’s environmental policies, has fueled recent protests, some echoing the ‘yellow vest’ protests that originated in France.
China
Canada’s diplomatic dispute with China has the potential to dominate the political agenda for the remaining session of Parliament. The Government is in active conversations with allies, looking for support in its opposition to China’s recent retaliations against Canada for arresting Huawei Chief Financial Officer Meng Wanzhou on a U.S. extradition request. China’s harsh response has included arresting two Canadian citizens, including a former diplomat, and a decision by a Chinese court to sentence another Canadian to death for an earlier drug trafficking conviction. The Government is fighting back against China, criticizing its treatment of the Canadians in custody, but Canada may be in the challenging situation of having to de-escalate the dispute without giving in to China’s tactics, all while ensuring that Canada’s obligations to the U.S. under our extradition treaty are honoured.
What’s Next
As the Government transitions to full budget preparation, Ottawa is expected get very busy. Stakeholders looking to make in-roads on their issues should understand that their window is closing by the week. The Legislative agenda will be crowded as the Government looks to push some remaining legislation through Parliament before dissolution. The Government will be hesitant to make any significant changes to its 2019 plans after the budget is tabled. Once Parliament rises in June, all parties will be in full election mode. Stakeholders should be looking at how they can make an impact over the next few months and if and how they want their issues to feature in the election discourse, as there are both risks and opportunities to being a part of it.
