Trudeau’s re-elected minority government to face demands from Bloc, NDP

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Prime Minister Justin Trudeau will face demands for new taxes and billions in additional spending as he negotiates support from the NDP and Bloc Québécois, following an election in which voters denied the Liberal Party the free rein of a majority mandate.

Mr. Trudeau kept a low public profile on Tuesday while the federal parties absorbed the consequences of his snap election call, which resulted in voters electing a new parliament with roughly the same party makeup as the previous one.

Mr. Trudeau appeared at an early morning photo-op on Tuesday, during which he met commuters in Montreal, but did not hold a news conference. Cabinet ministers also weren’t available for interviews, and the government has not yet said when Mr. Trudeau will select a new cabinet or recall Parliament.

The Prime Minister spoke with U.S. President Joe Biden on Tuesday. Mr. Trudeau’s office said he will attend a virtual summit on Wednesday, hosted by the White House, on ending the pandemic.

Because the Liberals are just a handful of seats short of a majority, Mr. Trudeau will only need to rely on one of the three main opposition parties to pass any government bill. In the last Parliament, the Liberals often turned to the NDP for key confidence votes.

NDP Leader Jagmeet Singh and Bloc Leader Yves-François Blanchet are Mr. Trudeau’s most natural allies in the new minority Parliament, although the Conservatives could also support some bills.

At a news conference in Vancouver on Tuesday, Mr. Singh said he hoped to work with the Liberals on shared areas of interest, including child care and pharmacare. The NDP Leader said he didn’t discuss policy details with Mr. Trudeau during their call on election night.

In the last days of the campaign, Mr. Singh said a wealth tax would be his priority issue in a minority government. When asked about that comment Tuesday, he said the cost of the pandemic should be offset by new taxes on high-wealth individuals and corporations.

“We remain resolute that it should be the ultra-rich, the billionaires, that pay their fair share,” he said.

In its platform, the NDP proposed a slate of measures to raise taxes on wealthy Canadians. Among those measures was an annual wealth tax of 1 per cent on families with net worth in excess of $10-million. Net worth would be measured as the total estimated net value of a family’s assets, including property and investments.

A cost estimate of the policy prepared by the Parliamentary Budget Officer found that, even accounting for efforts by affected individuals to avoid the tax, it could still bring in more than $10-billion a year in new revenue. The budget watchdog cautioned that there is uncertainty in the revenue estimate because of the challenges in predicting how high-wealth individuals would respond.

Several countries, including France, have abandoned wealth taxes in recent years, after concluding that they were ineffective because high-wealth individuals found ways to avoid them.

During the campaign, the NDP also proposed raising the capital gains inclusion rate to 75 per cent, raising the top marginal tax rate by two percentage points and imposing a luxury goods tax.

Mr. Blanchet said his party will prioritize two spending requests in exchange for its support in Parliament. The Bloc will push the government to support demands from Quebec and other provinces for a major increase in federal health transfers. The party also wants changes to the Liberal government’s plan to boost Old Age Security benefits by 10 per cent. The planned increase would only apply to seniors 75 and older. Mr. Blanchet says it should be extended to all seniors 65 and older.

Acceding to Mr. Blanchet’s request for more health care funding would cost $28-billion in the first year alone, according to his party’s platform. His proposal to extend seniors’ benefits would cost $1.6-billion next year and $6.6-billion or more in subsequent years.

The Bloc leader restated those priorities in his election night speech, and said his party will also push for action on the environment and advocate for issues raised by Quebec’s National Assembly. But he also struck a conciliatory tone.

“Over the coming days, I will contact all of the other party leaders in the House of Commons. I think we have the responsibility to have a good faith discussion so that Parliament can function,” he said. “We are still in a pandemic. This Parliament needs to have an acceptable length. And I say with candour, we will need to leave some of our disagreements in the past. Because that’s clearly the wish that has been stated by Quebeckers and Canadians.”

The minority result also means that Liberal MPs will remain outnumbered on House of Commons committees. Over the last year, the opposition increasingly used its advantage on committees to force investigations that the Liberals opposed, and to demand extensive document production from the government.

The initial election results showed that no party had changed its footprint in the House of Commons by more than two seats. However, the results in 26 ridings were still too close to call. For the second election in a row, the Liberals lost the popular vote to the Conservatives.

As of Tuesday evening, the Liberals were leading or elected in 158 ridings, the Conservatives in 119, the Bloc Québécois in 34, the NDP in 25 and the Greens in two. The People’s Party of Canada did not win any seats. Green Party Leader Annamie Paul lost her bid to become the MP for Toronto Centre.

With 99 per cent of polls reporting, Elections Canada said that 58.8 per cent of eligible voters cast a ballot. That number will rise as more votes, including mail-in ballots, are counted. The lowest turnout in the history of Canadian federal elections was in 2008, when 58.8 per cent of voters went to the polls, according to Elections Canada data.

The results of the election left few happy. Conservative Leader Erin O’Toole, whose party is now projected to have two fewer seats, will be thrust into a fight for his leadership just one year after he took the helm. Mr. Singh told reporters on Tuesday that his position as NDP leader is secure, despite the fact that he was unable to turn voter anger against the Liberals and a collapse in Green Party support into meaningful seat gains for the New Democrats.

New Brunswick Liberal MP Wayne Long said in an interview on Tuesday that he was disappointed in his party’s performance. “I didn’t want to go into an election,” he said, adding that the Liberal campaign “got off to a sluggish start.”

“It is disappointing, certainly, to be back in a minority situation when we expected, or hoped, for a majority,” he said. The three-time MP said he wants to see the government work with the opposition, in particular the NDP, to push ahead its agenda, including the Liberals’ promise to create a $10-per-day national child care program.

In his post-election press conference on Tuesday, Mr. O’Toole faced a stream of questions over his future. He will be subject to an automatic leadership review following the election loss but was adamant that he would stay at the helm of his party.

“I am very confident that we will be there for a victory next time,” Mr. O’Toole told reporters.

His predecessor, Andrew Scheer, also vowed to stay on as party leader after his 2019 election loss, but he resigned less than two months later.

With a report from Menaka Raman-Wilms in Vancouver

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