Canada's Trudeau faces populist headwinds as economic slump looms

G20 summit in Bali

By Steve Scherer and Nia Williams

OTTAWA (Reuters) - Canada's Prime Minister Justin Trudeau is coming under pressure from populist conservative rivals as the country veers toward a possible recession, with provinces vowing to oppose some of his Liberal government's key policies.

Provincial opposition to carbon pricing and a promised assault-rifle buyback could be used to rally conservative opposition to the government ahead of what would be a third re-election bid for Trudeau, who took office in 2015.

New federal Conservative Party leader Pierre Poilievre is leading the charge, blaming Trudeau for skyrocketing inflation and laying responsibility for a housing shortage on "gatekeepers" in Ottawa.

Alberta's new right-wing populist premier, Danielle Smith, wants to pass a law that would allow the province to ignore federal laws it does not like, and neighboring Saskatchewan, also led by a conservative government, is also planning on seeking greater autonomy from Ottawa.

"The rise of the populist right, and the resistance to Ottawa from the provinces reinforce each other," said Tom McIntosh, a politics professor at the University of Regina in Saskatchewan. "It's going to create some choppy waters for Trudeau."

Most polls have shown the federal Conservatives leading the ruling Liberals since Poilievre took over as leader in September, but the left-leaning New Democrats' parliamentary backing of the Trudeau government means the next vote could be as far off as 2025.

That gives Trudeau's rivals considerable time to reinforce their narrative of him as a disconnected elitist - the son of former Prime Minister Pierre Trudeau - who commands from Ottawa with little regard for provincial concerns.

Trudeau's government plans to focus on the initiatives it was elected on, despite provincial criticism, a government source said, noting the political landscape could change in at least one province next year with Alberta's elections.

Some 58% of Alberta's conservatives say the province should have more sovereignty and independence from the federal government, according to a Trend Research/Janet Brown Opinion Research poll published by the CBC last week.

The Alberta-Saskatchewan oil patch is already a stronghold for Conservatives. The Liberals elected only two members of parliament in Alberta last year, compared with 30 for the Conservatives. Saskatchewan elected only Conservatives.

Trudeau's climate change policies, and the carbon pricing scheme in particular, are a wedge issue with his populist rivals in the Prairie provinces and likely to face increased resistance in the lead-up to the next election. Canada is the world's fourth-largest oil producer.

"The carbon tax is not a climate plan; it is a tax plan," Poilievre said in the House of Commons earlier this month. Both Alberta and Saskatchewan have lost court bids to overturn federal carbon pricing already.

Alberta, Saskatchewan and other conservative-led provinces also oppose an assault-rifle buyback the Trudeau government is promising for next year.

"We're a federation, and in this federation there are absolutely perceptions that some provinces are more equal than others," said Shachi Kurl, president of polling company Angus Reid Institute.


Quebec is a prime example of historical tension between Ottawa and the provinces. The mostly French-speaking province had a sovereignty movement long before Western Canadians caught onto the idea, and held referendums in 1980 and 1995 seeking to secede from the Canadian federation. Federalists won both votes, though their margin of victory in 1995 was extremely narrow.

Quebec last month re-elected a center-right leader who bristles at federal oversight of immigration and what he sees as unwarranted restrictions to badly needed healthcare funding transfers from Ottawa.

The latest round of talks between the provinces and the federal government to increase transfers failed last week.

The prospect of an economic downturn resulting from the Bank of Canada's aggressive interest rate hikes to fight inflation, which recently peaked at 8.1%, also has added to tensions between Trudeau and provincial premiers.

Jared Wesley, a politics professor at the University of Alberta, said the friction with Ottawa is partly meant as a distraction to the economic problems.

"It's the old trick of externalizing your opponent," he said.

(Reporting by Steve Scherer in Ottawa and Nia Williams in British Columbia; Editing by Paul Simao)