A Cabinet Shuffle, A Prorogation and Speech from the Throne to Redefine the Mandate of this Minority Government 

At a time when many Canadians have seen their lives change dramatically – with priorities, concerns, budgets and timelines for projects shifting in a major way – it could be argued that the last 24 hours in Ottawa is merely a reflection of these larger trends. Yet the contention that there is a strong, stable government managing an economy still very much in crisis mode is ultimately the basis for all announcements following Finance Minister Bill Morneau’s resignation from cabinet.

What began with Morneau’s statement and press conference last night has led to a shuffle within cabinet and to a major political, parliamentary and economic reset. The government will prorogue parliament – suspending it less than a year into this minority government – hoping for a fresh start in October with a Speech from the Throne and fiscal update to outline the government’s priorities and plans for pandemic recovery.

All of this plays out, significantly enough, days before the Conservative Opposition chooses its new leader and begins its own major reset.

Given how volatile the last day might seem outside of Ottawa, the paradox is that most of what has occurred overnight has been about restoring stability, “safe hands,” and sound economic stewardship for a government that has experienced a worrying drop in support and approval for their handling of the WE charity issue. There were revelations before and during finance committee meetings on WE that called into question the transparency, accountability and ethical probity of not just Morneau but the Prime Minister himself. Those qualities are integral for the survival of a minority government with so much money getting out the door for stimulus measures over the last four months.

Carney’s Role the Precursor to this Shake-up 

To “staunch the bleeding,” or restore the sense of public trust, the first reactive measure was the recruitment of the former Governor of both the Banks of Canada and England, Mark Carney, to take on an “informal” advisory role for the Prime Minister.

It has been widely reported that Morneau was “blindsided” by this announcement. Given the decision-making powers invested in Morneau, the implications were significant; how much “advice” would consist of directives for the Finance Minister? More significantly, how much influence would Carney have on the Prime Minister’s ultimate choice of action?

The only salient truth was that Mark Carney’s name resonates strongly for any Canadian who has vivid memories of the financial crisis of 2008. Then Governor of the Bank of Canada, he worked with Harper’s well-regarded Finance Minister, Jim Flaherty, to steer a steady course to recovery. Safe hands.

A New “Minister of Everything” with the Deputy Prime Minister taking on Finance 

The choice for Finance Minister was inevitable, given this imperative of restoring trust. Chrystia Freeland makes history as Canada’s first female Finance Minister, a title she adds to her role as Deputy Prime Minister.

Freeland is regarded as a strong policy thinker who can stay on message and communicate clearly. In her role as Foreign Affairs Minister, Freeland frequently delivered in-depth policy responses on complex international relations issues, like Russian aggression, alongside her American counterpart Mike Pompeo. Throughout the COVID-19 pandemic, it was Freeland who led daily televised news conferences alongside government officials, responding to a range of policy questions from fiscal to health policy.

And for many inside government, the story of how Freeland ably steered a course through the most precarious turns to the USMCA negotiations has yet to be told to Canadians, given how confidential those talks had to be. Yet it would only burnish her reputation if Canadians knew how much was often at risk for our economy through the worst of those months when the steel sanctions were in place, and President Trump and his cabinet were at their most unpredictable. Notably, her particular talent at the negotiating table is acknowledged not only by Liberals but Conservatives who were involved, either at the provincial level or as representatives of industry interests.

During the crucial conversations with the provinces over the last few months for front line supplies of personal protective equipment (PPE), and the able management of supply chains, those negotiating skills were largely responsible for the most congenial – and surprising – working relationships. Premier Ford in Ontario has been particularly effusive about Freeland’s work and the support she provided to his government.

A superior talent for consensus building, an “always-on” communications style where Premiers, CEOs and her own cabinet colleagues feel they can text or call and get her directly, and an unparalleled ability to transcend partisan considerations to reach shared objectives: this is the skill set the new Finance Minister brings to this minority government during the worst economic crisis of this generation.

And on the world stage, in addition to her official roles in cabinet, Freeland also serves on the executive committee of the prestigious World Economic Forum. This global affairs experience positions her well to take on the demanding slate of international conferences required of a Finance Minister, including the G7, G20 and APEC among many others.

A Trudeau Favourite Returns 

Dominic LeBlanc returns to his post as Minister of Intergovernmental Affairs, a position he held at the close of the Trudeau government’s first mandate. LeBlanc is an experienced cabinet voice in Ottawa, having served as an MP since 2000 and working as a staffer in the PMO before that. He is a close member of the Prime Minister’s inner circle and has been a personal friend since childhood when his father served in Pierre Trudeau’s cabinet. Well known for his affable style, LeBlanc will no doubt strive to build on the excellent working relationship that has developed amongst provincial governments and the federal government as partisan considerations have been put aside during the pandemic and governments of all stripes sought to assist their citizens during a crisis.

Intergovernmental cooperation will be key as the federal government seeks to achieve many of their key commitments that also touch upon provincial jurisdiction, including infrastructure spending, employment insurance reform and pharmacare. There could conceivably be a role to play for Leblanc, along with Deborah Schulte, the Seniors Minister, in bringing the provinces to the table on seniors and long term care as well – where there is a stated need for federal leadership, given that some of the worst numbers for reported cases of deaths from COVID 19 were concentrated in these facilities.

The big takeaways with both new roles: consensus builders, seasoned performers on the world and provincial stages provide the Prime Minister with confidence his reset will weather the challenges of the next parliament.

Buying Time to Reset  

The Prime Minister will seek permission from Governor General Julie Payette to prorogue parliament until September 23rd.

In ending the parliamentary session, the government will no longer have the ability to expeditiously legislate additional emergency measures related to the ongoing pandemic or other urgent issues like major labour disruptions.

Pending government legislation – including bills on civilian oversight of the RCMP and CBSA, sexual assault law training for judges, medical assistance in dying and conversion therapy – will all die on the order paper and require reintroduction when parliament returns. All private members’ bills, however, will be automatically re-instated to the last completed stage prior to prorogation.

Further, all committees will be dissolved and will not meet again until parliament returns. This will give the government a reprieve from hearings related to investigations into the WE Charity controversy at the Ethics and Finance Committees, although the Ethics Commissioner’s work will continue.  New committee memberships will have to be re-constituted in the fall, which will inevitably delay pre-budget consultations.

The Next Cabinet Retreat and Putting Pen to the Speech from the Throne 

In opting to put forward a Speech from the Throne, the Prime Minister is setting his government up for a crucial vote of confidence. What he will outline and affirm, first among his cabinet and caucus colleagues and then in the Speech itself in parliament, will aim to quell the concerns about a government still struggling to emerge out of crisis response, focused on issues management rather than substantive policy development. The challenge will be to show that the time away from parliament has been used wisely and that the larger vision for economic recovery has been articulated clearly.

A longer timeline will inform the government’s strategic thinking at its Cabinet retreat. Many around the table might take consolation in the fact this reset gives them a chance to re-establish the trust and the strong approval numbers they had enjoyed before the WE issue surfaced.

Strategically, the government must be assured that there is nothing too contentious in the Speech that would compel the NDP, Bloc and Conservatives to bring down the government and that strikes the right balance between brinkmanship and strong economic management. Despite Blanchet’s sabre rattling that he will bring the government down if the Prime Minister and his Chief of Staff Katie Telford do not resign, there will likely be very little appetite for the confidence vote on the Speech to bring down this government. The Conservative Opposition, with its new Leader, will work to get its bearings first with a new team of staffers and a refreshed shadow Cabinet. And if Peter MacKay wins the leadership contest, he will need to run in a by-election to get back in the House.  

By then, many Liberals will hope, this last month of WE headlines and Morneau’s resignation will be a distant memory.