For the first time in nearly 100 years, a political newcomer is stepping into the high-stakes, pressure-cooker position of federal finance minister. Multi-millionaire Toronto businessman Bill Morneau takes over the file at a critical time, as the economy struggles to rebound from the steep drop in the price of oil and other commodities.
Morneau, sworn in Wednesday as a key member of Justin Trudeau’s new Liberal cabinet, is the first political rookie to take on Finance since 1919, but he brings considerable experience from the business world.
Until recently, he was executive chairman of Morneau Shepell, the country’s largest human resources consulting firm. He resigned from his post at Morneau Shepell a week after last month’s election, but his holdings in the company will likely come under scrutiny now that he’s finance minister. Morneau still owns nearly a five per cent stake in the company, Canada’s largest administrator of pension plans.
Pension enhancement is just one of many economic campaign promises on which Trudeau’s Liberal government will now have to make good. Indeed, Morneau—a member of Trudeau’s economic advisory group—will have a number of pressing files to juggle.
Trudeau has promised that his government’s first piece of legislation would be a tax cut for middle-income earners, to be paid for by making Canadians in higher brackets pay more. Morneau will also have to produce a fiscal update and then a budget. The documents will have to account for a growth outlook that has dimmed since the last time the government’s projections were made public. The Liberals have also vowed to replace the Conservative government’s income-splitting program for families and its increase to the contribution limit on tax-free savings accounts.
The laundry list of promised changes would be imposing for any incoming finance minister, even a seasoned parliamentarian. William Robson, president of the C.D. Howe Institute think tank, said he expected someone with more experience to get the job.
But Robson believes Morneau, who served as C.D. Howe’s chairman until last year, is a good choice particularly because his background will reassure the business community. “I didn’t expect this,” Robson said of his former colleague’s appointment. “It had been often talked about, but if I had been putting money down, I don’t know if I would have won anything.”
One of the biggest challenges for Morneau, who has excellent people skills, will be keeping Trudeau’s promised deficits from ballooning out of control, Robson added. He said Morneau will likely be forced to say “no” to many groups and provinces that will pressure him to crack open the public purse.
The Liberals pledged to run shortfalls of no more than $10 billion in each of the next three years. Trudeau plans to use the deficits to help fund investments like infrastructure, which he argues will stimulate the economy and create jobs.
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