Economy

Inflation, housing woes to prompt Trudeau to shuffle cabinet as attacks mount

Here's who's at risk of being reassigned in looming cabinet shuffle

Prime Minister Justin Trudeau is expected to shuffle his cabinet soon, as a pileup of political controversies and the rising cost of living make him vulnerable to attacks by his main opposition rival.

Financial Post

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The rejig is one of his last opportunities to shake up his team before an election that’s likely to happen in the next two years. Trudeau faced a bruising first half of 2023, and observers say he needs his strongest communicators in crucial roles on his front bench.

“You want folks out there who can not only tell the government’s story or sell the government’s message, but people who can really connect with Canadians, who have that kind of authenticity,” said Jeni Armstrong, a former lead speechwriter for Trudeau who now works as an instructor at Carleton University in Ottawa.

While the headline annual inflation rate slowed to 2.8 per cent in June, many Canadians don’t feel relief: Groceries and housing costs have risen much faster. Conservative Leader Pierre Poilievre has laid the blame at Trudeau’s feet, helping the Tories capture a lead of several points in most polls.

So far, most of the cabinet-shuffle talk is centred on ministers who have struggled to effectively respond to those attacks, including those responsible for housing and public safety. Trudeau isn’t expected to change key ministers in charge of finance, industry and defence.

On housing, the country’s shortage of supply, combined with record-breaking population growth, have led to huge increases in rent and the cost of purchasing a home. Poilievre, a populist who won his party’s leadership almost a year ago, is hitting Trudeau for it.

By doing so, the Conservative leader is trying to win the votes of young Canadians, said Dan Arnold, who oversaw the Liberals’ research management program during Trudeau’s 2015, 2019 and 2021 election victories, and now serves as chief strategy officer at Pollara Strategic Insights.

Female voters in major cities were key to Trudeau’s rise to power and his ability to stay there. But his Liberal Party has seen a decline in support in its Toronto and Montreal strongholds, and it trails the New Democratic Party among women under 35, according to the polling firm’s latest data.

Younger voters are “a demographic that the government needs to think about electorally and housing is probably the biggest issue for them at the moment,” said Arnold. But it’s a challenge because the federal government only has so much power to reduce housing prices, and any radical policy that produces a dramatic drop in values would upset homeowners.

Whoever the housing minister is, they’re “not going to solve the housing crisis,” Arnold said. The minister’s job is to show that they understand what Canadians, especially young ones, are going through and to talk up what the government has done, such as introducing new tax credits and loan and savings programs, he said.

To that end, Housing Minister Ahmed Hussen may be vulnerable in a shuffle. Hussen has tried to encourage more building by offering extra cash to cities that plan to build dense housing. But recently he wrote that housing supply “is not a political issue,” sparking backlash from frustrated millennials.

Another minister at risk of demotion is Public Safety Minister Marco Mendicino. Poilievre called for his resignation after he said he wasn’t aware of plans to transfer notorious serial killer Paul Bernardo to a medium-security prison, despite numerous emails to his office from the correctional service, giving information about the move.

Labor Minister Seamus O’Regan, who appears close to resolving a strike at west coast ports, and Gender Equality Minister Marci Ien may be in line for promotions. Both have backgrounds as broadcasters and are aware that “listening is at least as important as talking,” Armstrong said.

Immigration Minister Sean Fraser is also thought to be a rising star in cabinet, while Social Development Minister Karina Gould may be rewarded for negotiating deals with provinces to provide child care for $10  a day and clearing up a backlog of passport applications.

But sometimes it’s better to leave your strong communicators where they are in order to maintain the relationships they’ve built with stakeholders, instead of starting from scratch with a new minister, Arnold said.

While Mendicino, who is responsible for national security agencies, may wear some of the blame from the simmering China election interference scandal, there’s no indication Trudeau will move his top diplomat in this shuffle. Tenuous ties with Beijing predate Melanie Joly’s appointment as foreign minister.

Bloomberg.com