Trudeau Borrows Obama Playbook for Election Run at Harper

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The chain-link fence running more than a mile along Montreal’s L’Acadie Boulevard marks one of the starkest examples of urban segregation in Canada.

On the west side of the fence is the leafy suburban Town of Mount-Royal and its million-dollar homes; on the east, some of the country’s poorest families who rely on government programs for one of every five dollars.

Straddling the fence is Justin Trudeau.

The millionaire son of a political icon, Trudeau, 43, wants to become Canada’s second-youngest prime minister in October elections by running on that chain-link divide -- blaming income inequality and economic stagnation.

Echoing U.S. President Barack Obama, Trudeau hopes to wrest the agenda away from Stephen Harper, the tax-cutting prime minister, and from the New Democratic Party to his left, and return his tattered Liberals to power. It may mark the biggest appearance for redistribution in a Canadian election campaign in at least a generation.

Given Harper’s perceived strength on economic issues, Trudeau won’t attack him head on, according to Darrell Bricker, a pollster for Ipsos Reid in Toronto. Instead, his message to Canadians will be: The economy may be doing well, but it’s not doing well for you.

“They’ve decided to find another way in, borrowed from the U.S,” Bricker said. “It’s the whole income inequality discussion.”

Harper, whose Conservatives have pushed federal taxes to their lowest level as a share of the economy since the 1930s, navigated through the recession without the deep collapse experienced in the U.S. and Europe and is widely admired for his economic stewardship.

Most Trusted

According to a poll by Ipsos conducted earlier this month, 45 percent of Canadians see Harper as the most trusted party leader for tough economic times, compared with 27 percent for Trudeau.

The opposition says it sees vulnerability in Harper who, in a budget released this week, held to his tax-cutting strategy even as the economy has stalled amid falling oil prices.

Polling aggregator shows the Liberals about even with the Conservatives and both ahead of the pro-labor New Democratic Party (NDP).

“The Canadian populace likes the idea of being fiscally prudent and having budgets balanced,” said Ed Devlin, who oversees about $17 billion, including the Canadian portfolios for Pacific Investment Management Co. He said it’s too early to say whether the election would affect the markets.

Trudeau has promised to release planks of his economic agenda in coming weeks although the broad outlines are discernible and reflect many of the favored themes among global policy makers on the left. They include an expanded role for the federal government in infrastructure and trade, more funding for education, and getting the well-off to pay more taxes.

Tax Cuts

Harper’s new tax measures unveiled in October would let couples with children divide their income to minimize how much they pay the government. The Conservatives’ 2015-16 budget released on April 21 proposes to almost double contribution limits on tax-free savings accounts. Trudeau said he’d reverse these moves because they mostly benefit high-income earners.

In addition, the Liberals are considering tax cuts for the middle class and working poor that would be paid in part by higher taxes for the well-off, who may also see their benefits scaled back.

“The fact is right now the Conservative government’s plan helps those who don’t need help,” Trudeau said in Ottawa after the April 21 budget.

Focusing on class and income stagnation allows Trudeau to bring more left-leaning voters to his side. The NDP, which surpassed the Liberals to become the No. 2 party in 2011 elections, is proposing new universal social programs financed by higher corporate taxes.

“Their main path to a good election is getting soft NDP voters and they need signature initiatives that make them palatable,” said Nik Nanos, an Ottawa-based pollster, of the Liberals.

Urban Voters

Like Obama, Trudeau needs a message that resonates with urban voters and manufacturing regions that have suffered most from the recession, and where resentment of Canada’s growing reliance on plunging energy prices has been highest.

The Conference Board of Canada says the country is sixth worst among 17 nations for inequality, having risen since the late 1980s, along with most major industrialized countries. It nonetheless remains unclear how powerful an electoral theme the issue will prove for Trudeau.

For one thing, the increase in income inequality took place before Harper came to power in 2006, largely while the Liberals ran the country in the 1990s, and it’s little changed in recent years. Fueled by rising commodity prices over the past decade, Canadian incomes have also done relatively well.

Unlikely Advocate

Another issue is that Trudeau’s upbringing makes him an unlikely advocate for the less wealthy. His father, Pierre Trudeau, a former prime minister and heir of a fortune built on gas stations, represented the affluent Town of Mount-Royal, on the west side of that L’Acadie fence, as a Member of Parliament for more than two decades.

When the younger Trudeau entered politics eight years ago, he chose to run for office on the other side of the fence, a move he says helped to educate him.

The Liberal party, which has held power longer than any other since the nation’s 1867 confederation, and established many of its touchstone programs such as universal health care, suffered its worst electoral defeat in 2011.

The divide between rich and poor has since became part of a widespread public debate with the World Economic Forum in 2014 citing it as the most likely threat to the global economy over the next decade.

Gatsby Curve

A Canadian economist, the University of Ottawa’s Miles Corak, became a minor celebrity in Obama’s administration for his work correlating generational mobility and income inequality. Obama used Corak’s findings, dubbed “The Great Gatsby Curve,” as a slogan.

As Corak, who became a Trudeau adviser last year, has written, if inequality affects mobility you have a “very easy agenda,” such as education policies that level the playing field.

An agenda built around narrowing the income divide and redistribution also offers an escape from the major problem with political change, which is where to find the cash, especially since the Liberals vowed to maintain a balanced budget and not raise taxes on the middle class.

Trudeau knows winning on the economy won’t be easy, particularly with the suburban families who tend to deliver election victories.

Andre Albinati, a principal at Earnscliffe Strategy Group and former adviser to Liberal Prime Minister Paul Martin, said that after running the past two elections with “pointy-headed” campaigns on parliamentary privilege and efficient climate taxation, the Liberals under Trudeau have begun to finally ground themselves “in the daily reality” of Canadians.

Trudeau’s success, however, will depend on his ability to make the issue of inequality resonate with voters. In the end, it may come down to whether his tax cuts appeal more than Harper’s.