For Canadians, 2019 will be a significant year as they head to the polls and elect a leader in the next federal election.
Prime Minister Justin Trudeau formally confirmed in August he is seeking re-election with the Liberal party. Since then, a number of economic concerns have come to the forefront, including the country’s battered energy sector amid record-low oil prices and lack of pipeline capacity, tax rates and mounting competitiveness concerns.
Below, five prominent Bay Street voices tell BNN Bloomberg what they expect will be the top economic issues that Trudeau, Conservative Leader Andrew Scheer and NDP Leader Jagmeet Singh will need to address on the campaign trail leading up to the October vote.
(Some comments have been edited and condensed for brevity)
“I am concerned that rising rates and too much regulation has/will hurt Canada’s housing market and we may need some stimulus for first-time homebuyers. I also am concerned that Canada isn’t doing enough to be competitive in terms of taxation. Our stock market hasn’t gone anywhere, maybe our home prices have peaked and weak oil prices could have an impact going forward. Corporate tax cuts should be on the table. Finally, it is embarrassing that our government spent billions on a pipeline and then can’t get it approved. This is absolute nonsense. Canada should be open for business, and at the moment, the person watching the store has gone out for lunch.”
-Barry Schwartz, chief investment officer and portfolio manager, Baskin Wealth Management
“The energy issue is absolutely huge. And it’s going to emerge, I think, as a very important election issue over the next 11 months when you consider how important it is from a capital spending standpoint, job creation, and all the spinoffs it has in other sectors all the way to real estate and banking. The energy issue is going to be very important, and alongside a bunch of other things ... which is, how do we make our tax system more competitive in the upcoming budget? And, for better or for worse, the U.S. has undergone in the past 12-to-18 months huge moves to deregulate industry. Again, what’s Canada going to do on that score because that’s also – the excessive red tape and bureaucracy – another impediment to growth here.”
-David Rosenberg, chief economist, Gluskin Sheff & Associates
“I just think living in this country, doing business here, being an investor here, the number one thing I think everyone alludes to is the tax rate. Many of the investors I talk to, they’re constantly complaining about personal tax rates. I think that it’s huge. We need to have more of a pro-business agenda here in this country. I think for Mr. Trudeau – and whoever runs in the next federal election – I think for me and my clients, that’s going to be top of mind.”
-Allan Small, senior investment advisor, Allan Small Financial Group, HollisWealth
“While I like some of the things Trudeau has done (NAFTA negotiations, signed CETA, legalization of marijuana, etc.) I think he’s dropped the ball on the broader economy and energy sector. Basically, he’s been too focused on selfies and social issues (not a bad a thing but at the expense of the economy) which could come back to haunt him. So 2019 should really be about focusing on the economy, which could include pushing for more trade agreements, working out a trade deal with China, getting Trans Mountain approved with shovels in the ground by late 2019 or early 2020. Overall, the focus should be on the economy in 2019 and fixing the issues with our energy sector, manufacturing and overall the regulatory environment. I doubt Trudeau will do this, but this is what he and other parties should be focused on.”
-Ryan Lewenza, senior vice-president and portfolio manager, Turner Investments, Raymond James
“On the energy side, I believe that Alberta and Saskatchewan and their problems are being deliberately ignored by the government. They’re basically writing the West off and concentrating on what’s important in Eastern Canada and B.C. because that’s where the votes are. And they’re basically letting the energy industry wither … I’d like to see that being a major issue in the next election.
“Number two is competitiveness. Canada is basically not open for business because of the rules or regulations that are increasingly being added to any projects that need to be done in Canada. Our competitiveness continues to decline, net foreign direct investment in Canada continues to decline. Companies and people are looking to invest elsewhere. The [federal government’s] hit earlier this year on small businesses and the taxation issues there are going to be a major thing in the election campaign too, because small businesses are not going to sit down and let themselves be hit compared to everybody else.”
-Norman Levine, managing director, Portfolio Management
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