Trudeau of Canada plans gliding change of social welfare, sources say

OTTAWA (Reuters) – Canadian Prime Minister Justin Trudeau is considering sweeping changes to the country’s social welfare system and a series of economic measures that will align Canada with ambitious climate goals, according to people familiar with the matter.

The economic recovery plan to support the social safety net will especially help those most affected by the pandemic and come after Trudeau replaced a fiscally prudent finance minister.

“The prime minister wants to grow up,” a government source said, adding that Trudeau, 48, sees the movements as part of his legacy.

Trudeau replaced former Finance Minister Bill Morneau, who resigned on Monday, with close ally Chrystia Freeland on Tuesday. Morneau dropped out amid friction with Trudeau over spending plans, sources told Reuters.

Trudeau said the pandemic had unmasked “fundamental holes” in society and the country needed a long-term recovery plan that would address the issues “head on”.

“This is our opportunity to build a more resilient Canada, a Canada that is healthier and safer, greener and more competitive, a Canada that is more welcoming and fairer,” he said on Tuesday, following the cabinet change.

“This is our moment to change the future for the better.”

Trudeau took office in 2015 and was re-elected last year, with a minority government. The son of former Prime Minister Pierre Trudeau, Trudeau has focused on stimulating social programs, levying taxes on the highest earners and stressing the need to combat climate change.

Trudeau said he would seek a vote of confidence in parliament on his plan when the body re-emerges in September, which, if lost, would trigger a new election.

Canada’s economy has been plagued by the COVID-19 pandemic, and the Trudeau government has spent billions on support and other measures to minimize pandemic containment. But Ottawa has so far not mapped out a sweeping economic strategy.

“The taps are really going to be turned on,” said a fiscally conservative liberal who fears spending could get out of hand. “That’s the biggest risk ….”

Freeland, a former journalist who as Secretary of State was the chief negotiator for a new North American trade campaign, said Tuesday she wanted a new start-up plan that was green, honest and inclusive.

“She is a social interventionist activist, so she believes in the power of government and also believes in diverting funds to those who need it most,” said one liberal who worked closely with Freeland.

Canada’s fiscal deficit this fiscal year is projected to reach C $ 343.2 billion ($ 253.4 billion), the largest since World War II.

Trudeau said the government will not abandon the fiscal sense even if it tries to balance economic inequality “because we know the government must be responsible for building the future.”