Trudeau Catches Flak From West Coast Ally’s Reelection Bid

(Bloomberg) -- A few months ago, David Eby appeared to be cruising toward an easy reelection win in British Columbia, the west coast Canadian province that’s been enjoying a robust economy, with newcomers flocking to its scenery, schools and jobs.

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It’s less comfortable for Eby now. In a case study of how inflation-battered voters are turning toward new political options around the world, BC’s progressive premier suddenly faces a challenge from a conservative provincial party that hadn’t won a seat for decades. They’re going after him over a growing deficit as well as housing, culture, drug and Indigenous land issues.

His problems echo those faced by many established politicians in wealthy countries. Voters – exhausted by a pandemic and cost-of-living pressures – are taking out their frustrations on incumbents. In Eby’s case, with less than four months until a province-wide vote, and his lead shrinking, it’s useful to have someone to blame.

That person is Justin Trudeau.

“The federal government has just been really reluctant to put money into infrastructure that’s desperately needed to keep up with this population growth,” Eby said in an interview last month at his office in Vancouver, which overlooks its busy harbor. “It’s really hard for us to keep up with what’s going on right now.”

Thanks to an open-door federal immigration policy, BC’s population is rising at its fastest pace since 1971. There are twice as many British Columbians as there were in 1980. But there are mounting signs the province hasn’t added the houses, doctors, buses, sewers or power supply to keep up. Some 10,000 newcomers arrive every 37 days, mostly settling in a handful of places and concentrating pressure on services, Eby said.

His remarks come amid multiple signs that Trudeau’s election-winning coalition is fraying. In a June by-election, the Conservative Party pushed Trudeau’s Liberals out of a Toronto seat they’d held for more than 30 years. Polls now consistently suggest the Liberals face a thumping defeat in a national election expected next year.

“There’s no reason to tie your line to a sinking ship, if you want to be brutal about it,” said Gerald Baier, an associate professor of political science at the University of BC. “In part, it’s just a tried-and-true electoral strategy for provincial premiers to deflect some of the blame for what might be perceived as policy failures,” such as limited access to family doctors.

The coming vote in BC, a diverse province of 5.6 million people, will indicate how closely they want to hew to the Trudeau model, which alongside immigration has featured more government spending and interventionism than Canada has seen for a generation.

Despite BC’s population growth, Eby claims Ottawa has shifted the cost to the province’s books, hitting its credit rating. The province, which for a long time enjoyed a rare AAA appraisal from S&P Global Inc. – higher than the US – has suffered three downgrades from the agency in three years.

BC’s economic growth has outpaced other provinces over the last decade. In 2023, it was 1.6%, still slightly faster than Canada overall.

Like many Canadian politicians, Eby is pro-immigration. But he wants more control over it so he can pull newcomers into occupations where there are worker shortages – a power Quebec has, he said.

An immigration ministry spokesperson pointed to the Provincial Nominee Program, which is designed to help in “distributing the benefits of economic immigration across all provinces and territories.”

“There’s still broad support for immigration, certainly in BC — and the challenge is just the rate,” Eby said. “The schools, the roads, the transit system, the hospitals are packed. And despite record capital investment, we’re just struggling to keep up — and you can see it in the rents too.”

In news conferences, he has continued his remonstrations — claiming that Canada’s Strategic Innovation Fund, used to back national goals like electric cars or pandemic prevention — gives double to Ontario and Quebec what it gives to BC, and that he’s considering joining a court challenge from the eastern province of Newfoundland and Labrador over “equalization” funding distributed to provinces from central government.

Finance Ministry spokeswoman Katherine Cuplinskas said “it is disappointing to hear Premier Eby make those comments.” She added that the government has “a strong record of working collaboratively with Premier Eby” and BC, with a list of investments including nearly C$11 billion ($8.1 billion) on infrastructure like light rail since 2015, and C$3.2 billion on early learning and childcare.

BC has also “struggled to get attention” on tightening port and border controls to tackle a toxic drug crisis, Eby said.

“Premier Eby has been a constructive, collaborative partner with our government on a number of big files” like housing and health care, said Jean-Sébastien Comeau, spokesman for Dominic LeBlanc, the minister of public safety and intergovernmental affairs, which handles federal-provincial relations.

Eby had been a rare ally premier for Trudeau on his controversial carbon tax, and the men appeared side-by-side as recently as February for a back-slapping press conference on housing. Nationally, his New Democratic Party supports the Liberals to keep them in power.

So the blame cuts both ways. In his downtown Vancouver office, one of Eby’s rivals, BC United leader Kevin Falcon, said Eby is “late to the story” and blamed him for working “hand-in-hand with Justin Trudeau to create the mess that we’re in here today.”

Political Pressure

Eby took power in 2022 when then-Premier John Horgan retired for health reasons. He has spent on schools, transport and health care to try keep BC’s fast-growing yet aging population healthy and productive, while rolling out tax credits to blunt the impact of inflation, and measures to boost housing supply.

Although Eby and the BC NDP’s ratings are faring far better than Trudeau’s, polls show a narrowing gap between them and the right-leaning BC Conservatives.

Who runs BC will have ripple effects around the world. The province has sought-after lodes of critical minerals, while new pipelines and terminals are making it the gateway to Asia for Canada’s huge oil and gas reserves. Vancouver is a magnet for startup and research talent, and it draws some of the world’s wealthiest to invest hundreds of millions of dollars in ultra-luxury property. It also attracts US media and tech giants, being the third-largest film and TV production center in North America outside of LA and NY, and is home to major offices for the likes of Microsoft Corp. and Inc.

But the rush to capitalize on these opportunities has come with costs. Vancouver is already one of the world’s least affordable large cities. Years of inflation and immigration have squeezed wallets, services, and maxed out infrastructure, which now needs expensive upgrades if ambitious new projects are to be realized.

A national tripling of foreign students was meant to boost the economy, but has sharpened a housing shortage and spawned a network of colleges — many in BC — which Trudeau’s ministers have conceded can be exploitative.

Although newcomers continue to land in BC, tens of thousands of existing British Columbians are upping sticks for lower-cost Alberta, which is often dubbed the “Texas of Canada.”

“We need to ensure we have that critical infrastructure in place to support sustainable growth, otherwise our whole value proposition as a province is pretty challenging,” Eby said. “This is not the easiest place to live — and if you couple really substandard services like sitting in traffic, and you can’t get the health care you need, and your kids aren’t getting a teacher, it’s just not a way for a province to go forward.”

That means the spending will continue. Eby said his two main rivals to the right are threatening “significant budget cuts that would compromise those services.”

--With assistance from Jay Zhao-Murray and Marisa Gertz.

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