Liberals are dreaming big, but dreaming is the easy part

Paul Wells: Trudeau’s Liberals sense opportunity in the current crisis. Their track record with ‘innovation’ suggests another reality: complex problems are a slog.

Prime Minister Trudeau is briefed prior to Cabinet in his West Block office. May 15, 2020. (Courtesy of Adam Scotti/PMO)

Trudeau in his West Block office in May 2020 (Courtesy of Adam Scotti/PMO)

The strange thing, as the economy contracts, millions lose their jobs and thousands die, is how excited some Liberals and their friends seem to be.

“It’ll be a good time to be a progressive government,” an unidentified senior Liberal told Le Devoir in mid-May. “There are a lot of us who are dreaming big, who have an audacious vision for this enormous social and economic challenge before us.”

Another told the same reporter: “I know that behind the scenes, this thinking is underway and I have more confidence than ever, because Justin Trudeau seems to really grasp the immensity of the moment, how important it is for his political legacy, and we’ll have a plan that will be exciting to put to Canadians at the next election.”

And in late March, only days after the coronavirus lockdown began, Michael Sabia had a remarkable opinion article in the Globe and Mail.

Sabia is a veteran mandarin and business executive who’d just stepped down as head of the Caisse de dépôt et placement du Quebec public pension fund. He’s no partisan, but he did serve on the Advisory Council on Economic Growth that Bill Morneau appointed to generate big economic ideas for the Trudeau Liberals’ first mandate. In the Globe, he said that protecting Canadians’ health and helping them pay their bills were only the first part of the challenge facing government.

The big challenge will be building the new post-lockdown economy, Sabia wrote. “Governments will need to lead on this,” he wrote. “Leaving it to chance will only make the reignition process longer, more difficult and more haphazard.”

But the risk of a shaky recovery is nothing compared to the “precious opportunity” this global pestilence now offers, Sabia said. “Remember Rahm Emanuel’s famous ‘You never want a serious crisis to go to waste.’ ”

What on earth did that mean? Well, damn near everything, apparently. Governments needed to “begin thinking now” about “a new generation of infrastructure” and “spending on education,” Sabia wrote. “About clean tech and retooling our health-care system. And about refinancing for the long term a small and medium enterprise sector that will emerge from this crisis battered but still the engine of jobs in our economy.”

Given “the scale of investments likely required,” Sabia wrote, the post-COVID world offers “an opportunity to do things faster, more effectively and more coherently to secure our future prosperity in what will likely be a changed world.”

Sabia’s message was clearly catnip to the big dreamers working on Trudeau’s audacious vision for the immense moment. Two weeks after Sabia’s Globe article appeared, Minister of Infrastructure and Communities Catherine McKenna appointed Sabia the new chairman of the board of the Canada Infrastructure Bank.

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Perhaps you’ve already forgotten about the infrastructure bank. It was the brainchild of the same Advisory Council on Economic Growth of which Sabia was a member. The growth council’s titular leader was Dominic Barton, who at the time was the managing director of the global management consulting firm McKinsey & Company. He’s now Canada’s ambassador to China. Using a $35-billion, taxpayer-funded endowment from one of Morneau’s federal budgets, the infrastructure bank was established in 2018 to attract the deepest of international investor pockets—trillion-dollar pension funds from Dubai or Sweden or wherever—to help pay for really big infrastructure projects.

Really big. Barton told Maclean’s in 2017 that he hoped the infrastructure bank would pay for transportation and power-transmission projects “that you can see from the moon, maybe.” Yet, so far, the moon people’s view of Canada remains stubbornly unmodified.

In fact, despite the best efforts of the outgoing management of the infrastructure bank, hastily dismissed in April, it’s managed to contribute so far to only two projects of any scale. The bank is paying $2 billion toward an expansion of the commuter-rail GO Transit network around Toronto. And it has put $1.3 billion into an electric light-rail network around Montreal. The Montreal rail project was conceived by the Caisse de dépôt as a high-yield investment destination for Quebec pension money when the Caisse was run by . . . Michael Sabia.

So yes. The brand-new institution Michael Sabia talked the feds into creating has put $1.3 billion into the rail network Michael Sabia conceived. And now Michael Sabia is in charge of deciding what the brand-new institution will do next.

I feel a need to emphasize, as I sometimes do when discussing the work of the infrastructure bank and the Caisse, that none of this is nefarious. If the rail network generates a decent return through transit fees, one day the infrastructure bank will even get its money back. But it’s hard to shake the feeling that if the Liberals’ enthusiasm for this shiny new world were a bit more infectious, to use an unfortunate figure of speech, then Michael Sabia wouldn’t have to keep playing every single speaking role.

Unfortunately, other potential players keep insisting on keeping a social distance. There’s been a lot going on, so perhaps you missed some news that appeared in the business pages during the lockdown. On May 7, the Google sibling company Sidewalk Labs announced it was abandoning its project to spend billions building a model smart city of the future on Toronto’s eastern waterfront.

Dan Doctoroff, Sidewalk’s CEO, made the announcement in a blog post. He chalked the withdrawal up to the economic mess caused by the COVID-19 pandemic, but the so-called Quayside project had been in trouble from the start. Before it decided to walk away, Sidewalk sank approximately USD$50 million* into the project, which would have used breakthroughs in urban design and information technology to make a clean, efficient, prototype neighbourhood of the future.

The Canadian Civil Liberties Association lined up early against the project, however, worried that it was an attempt to data-mine the city’s condo class in ways that might eventually bode ill for the data security of anyone within spitting distance of a silicon chip. Others were alarmed when the project’s proponents asked for control over a big share of municipal tax revenues as a way to fund their development scheme. The coronavirus didn’t help.

If a project sounds futuristic and ends up not working, perhaps you won’t be surprised to learn Trudeau was excited about it from the start. And indeed, there was the Prime Minister at the Oct. 17, 2017, announcement of Sidewalk Labs’ “new partnership” with Waterfront Toronto.

Watching the video of that announcement now, it’s impossible to miss Trudeau’s enthusiasm. He welcomed Doctoroff and Eric Schmidt, who ran Sidewalk’s global parent firm Alphabet. “Eric and I have been talking about collaborating on this for a few years now,” he said, beaming, in a departure from his prepared text.

The Prime Minister’s digression was a pretty big faux pas. The Waterfront development contract was supposed to be a competitive bidding process. It never did become clearer what the nature of Schmidt’s conversations with Trudeau had been.

Developing this stretch of the Toronto waterfront, Trudeau told the crowd of assembled dignitaries, had always been “in line with our government’s plan to build greener, smarter towns and cities.” But landing Sidewalk was a whole other level of awesome. “With this partnership, Sidewalk has demonstrated its trust and confidence in Canada.”

A discarded chair sits at the Sidewalk Labs proposed site in Toronto in May 2020 (Cole Burston/Bloomberg/Getty Images)
A discarded chair sits at the Sidewalk Labs proposed site in Toronto in May 2020 (Cole Burston/Bloomberg/Getty Images)

Then the Prime Minister delivered an ode to the gleaming future he had talked these smart, rich guys into building right here in Canada. “The future that our kids and grandkids are going to inhabit is one where bold, innovative thinking is the norm,” he said. “Where our complex challenges are solved by innovation and partnership.

“This announcement today is about promoting and fostering that innovation and leading the way forward. This partnership will effectively transform Quayside into a thriving hub for innovation and create the good, well-paying jobs that Canadians need.”

That’s four uses of the words “innovation” or “innovative” in 30 seconds. It was clear Trudeau was excited. And then, over the ensuing three years, the whole project fell apart.

It’s funny how some collapsed investment schemes become big political news and some don’t. When Teck Resources Ltd. abandoned its Frontier oil sands mine project in February, the news became emblematic of the Trudeau government’s inability—and perhaps its reluctance—to get large energy projects built in the country’s resource-extracting heartland. No such political uproar accompanied the Quayside project’s collapse.

That’s kind of weird when you think about it. Teck was always going to be a hard file for a Trudeau government. It set up a direct clash between oil sands development and climate virtue—in a part of the country where Liberals never win. It’s no surprise when a hard file that plays to a government’s weakness ends badly. But when a dot-com giant backs away from urban development in the heart of Liberal Ontario? To me that sounds way more symbolic.

When the Trudeau Liberals won the 2015 election—after a brutal decade in the wilderness that saw them reduced, two elections in a row, to historic-worst levels of voter support—it was easy for them to imagine that their comeback would be synonymous with Canada’s. In fact, that was pretty much their selling proposition: that a weary world would want to build great new things with a fresh-faced and energetic Canada. It wasn’t even a bad idea. If it had worked, that would have been excellent. But on file after file, the Trudeau Liberals have discovered that rich or powerful partners can be skittish, or that their partnership comes with hidden costs that come due fast. That the world doesn’t stop being a difficult place just because Justin Trudeau is running the government of Canada.

The chummy optimism that characterized Trudeau’s remarks at the Quayside announcement in 2017 was a big part of the Liberals’ tonal palette for many months after they returned to power in 2015. One such bright moment was an opulent dinner that drew a huge invitation-only crowd to the Canadian Museum of History in Gatineau, early in 2016, to welcome Ban Ki-moon, who was then the secretary-general of the United Nations.

The message of the night was that Canada was back—in world affairs in general, and in the United Nations in particular. Ban was happy to play along, and he used the happy phrase—“Canada is back!”—in his own remarks to the crowd. But two more years would go by before Canada would contribute even a modest and short-term military deployment to a UN peacekeeping mission in Mali. With that deployment over, Canada’s peacekeeping contribution is now at a historic low. Trudeau has spent much of the spring lobbying via webcam for a Canadian seat on the UN Security Council. It’s touch-and-go. The odds aren’t terrible—Norway and Ireland are the other candidates, and two of the three will win. Of course, Canada might be one of the two. But it’s hardly been the cakewalk Trudeau once imagined.

Canada’s relationship with China was supposed to be another area where Trudeau’s style and family lineage would pay big dividends. “We should be creative when thinking about what a trade deal with China could look like,” Trudeau wrote in the Financial Post when he had been a candidate for the Liberal leadership for barely six weeks. “What if our goal was to become Asia’s designer and builder of livable cities?”

Instead Canada has become a leading supplier of sleep-deprived hostages to an increasingly callous and belligerent Chinese regime, whose role in covering up the early days of the coronavirus outbreak sometimes seems as much of an embarrassment to Trudeau as to Xi Jinping.

The point of this little tour d’horizon isn’t that Trudeau has made a hash of things. It’s just to emphasize that the world is a tough neighbourhood. Partnership and collaboration, especially the kind that comes with enough money to make a difference in the Canadian economy, is not something even investors with deep pockets have much appetite for these days. A lot of the things Trudeau set out to do were going to be really hard. Sure enough, they turned out to be hard. The only big mistake was to approach them with wide-eyed optimism in the first place—the kind of glib optimism that’s making a truly weird comeback in the depth of a global health crisis.

What we’ve all been reminded this year, with brutal finality, is that complex problems actually don’t get solved with innovation and partnership that you can see from the moon. Complex problems are a slog. They’re boring. They’re no fun. As one example among many, they look like long-term care homes where the staff needs decent pay and tolerable work conditions. Getting there from here is the kind of dreary, discouraging work that self-impressed governments like to avoid while they build still more monuments to their own cleverness.

After the coronavirus, as before, the Trudeau government will quickly discover that the only simple, reliable way to keep enough Canadians loyal is to keep coming up with new reasons to give them money. Deep-pocket “partners” from far away are too likely to flake, as Sidewalk and China did. Fair-weather friends are not made for climes like ours. But a client waiting for a cheque will wait a long time.

Don’t get me wrong: the array of emergency benefits that kept misery at bay for millions of Canadians through the spring were, by and large, absolutely necessary. But will this government dare wind those benefits down as the world of 2021 turns out to be just as thorny as the world of 2020? Especially with an election looming?

The surest way to win an election that Liberals are already talking to Le Devoir about will be to establish a steep gradient between the benefits you enjoy if the Liberals stay in power and the benefits you’ll be left with if the Conservatives win.

That’s been the playbook for many Liberal re-election campaigns. It won for Trudeau in 2019. Given the utter absence of new thinking in the Conservative party, it’s got a good chance of winning again. It won for the provincial Liberal government of Dalton McGuinty and Kathleen Wynne in Ontario, until it stopped working altogether and their opponents didn’t need any new thinking. Politics after the plague won’t look much like the imaginary city of tomorrow. It’ll look like the same old hard choices.

This article appears in print in the July 2020 issue of Maclean’s magazine with the headline, “The world as they see it.” Subscribe to the monthly print magazine here.

CORRECTION, June 16, 2020: An earlier version of this story claimed Sidewalk had spent close to $1 billion on its Quayside project before walking away amid the pandemic. In fact, the company spent approximately USD$50 million.