Build Back Better or Build Back Right? Trudeau vs. O'Toole on the Recovery Canada Needs

  • National Newswatch

Justin Trudeau may be proposing a recovery plan that will “build back better,” but last week Erin O'Toole countered with a promise to “build back right.” Conservatives think they not only have a better plan for Canada, but that they have the right one. Can they convince Canadians? Why Conservatives Think the Liberal Plan is Wrong According to Conservatives, the Liberals' plan to invest heavily in green initiatives is both unnecessary and misguided. As finance critic Ed Fast puts it, “Instead of focusing on creating jobs, Liberals are fixated on implementing risky, expensive, and untested economic policies.”The key word here is “untested.” It links a familiar Conservative theme – that Liberals are big spenders – with a basic principle of conservative economics: that governments shouldn't pick winners.Conservatives of course oppose “big government” and, specifically, they oppose using public funds to intervene in the market to build or shape new industries. While there have been successes, history generally has not been kind to such efforts.Too often these projects turn out to be boondoggles and/or economic failures. Politicians, we've learned, can't keep their business objectives separate from their “political” objectives – such as how to win votes. As a result, they are prone to bad decisions.The lessons have been costly and painful, leading many economists to conclude that business investments should be left to businesses: governments shouldn't try to pick winners.The phrase “build back right” aims at nailing this message to the Liberals' recovery plan. Erin O'Toole is casting Liberals as dilletantes whose spending plans are out of control and threaten to drive the economy into a ditch.A recent Ipsos poll provides some corroborating news. Eight in 10 Canadians apparently now think Liberals should balance the budget rather than launch another round of spending. Are Liberals Really Freelancing? But are the Trudeau Liberals really freelancing with the economy? There are at least three reasons to see the Build Back Better plan differently.First, the economic trend that Liberals say is coming is not based on speculation. The science around climate change is clear and the conclusion that the global economy must transition to renewable energy is now a virtual certainty – whatever the skeptics say.Second, the timelines for this transition grow shorter by the day and the longer political leaders dally, the worse the situation gets. Pushing ahead aggressively is not just an economic imperative, but a condition of our social well-being.Finally, there are huge amounts of money to be made by countries whose economies emerge from this transition with vibrant renewable energy or cleantech sectors. Liberals want Canada to be a global leader in this new economy.So, from this viewpoint, a decision to invest in building a green economy is not about picking winners. Rather, it is about responding purposefully to a scientific imperative, a looming global crisis, and a unique economic situation. And as time is of the essence, the faster the better.That said, Conservatives will argue that, even if this trend is a given, it is always possible to put money in the wrong places. So, where should a transition plan spend? What Kind of Spending is the Right Kind? According to The Star's Alex Boutilier, Conservatives will divide the Liberals' upcoming budget into three categories:
  • Category 1 includes COVID-related supports, which Conservatives agree with.
  • Category 2 includes infrastructure investments that will boost long-term productivity, such as the creation of new power grids. The Conservatives agree with these too, but they must be clearly defined and can't interfere with markets (no picking winners).
  • Category 3 includes spending that goes beyond the first two categories. These items range from spending on adventurous green schemes to new programs like child-care. While they may be part of the Liberals' Build Back Better plan, they do not meet the conditions of 1 or 2. Conservatives therefore see them as risky and/or unnecessary and reject them.
Liberals, of course, will oppose this scheme. In their view, the transition to a zero-emissions economy requires more than charging stations, new power grids, or even education and training. Progressives are inclined to define the infrastructure of the future more broadly, including new kinds of social supports, such as child-care.Who is right?We're not sure it matters. Whatever the merits of these views, a recovery debate on which policies should go into which buckets won't hold Canadians' attention for long. They're more likely to be interested in whether our society – indeed, the world – really is in transition.If they buy into this idea, the recovery (and election) debate won't be about whether to pick winners or how to define “infrastructure.” It will be about the window of opportunity. People will want to hear what the different parties think the federal government can and should do to ensure that Canada is a player in this new economy.Looked at in this light, it's hard to see the Build Back Right approach as the right choice for Canada. The country needs a plan that will lead to a successful transition. And Conservatives agree that their approach isn't designed for this.Moreover, as the debate unfolds, Canadians will realize that once the window closes, the big players, such as the US, China, and the EU, will have the market cornered. Canadians therefore must decide now whether they want to be buyers or sellers in this new economy.And that makes the stakes in this debate very clear: Act now and think big or get shut out.So, Build Back Better or Build Back Right? Your choice.Dr. Don Lenihan is Senior Associate at the Institute on Governance and an internationally recognized expert on public engagement, governance, and policy development. For more, visit his website at: www.middlegroundengagement.comAndrew Balfour is Managing Partner at Rubicon Strategy in Ottawa.