Justin Trudeau Wins 2015 Canada Election: Creating a Blue Ocean in Politics

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This case study was written by Fares Boulos, Affiliated Professor of Practice in Strategy at INSEAD, with the support of the INSEAD Blue Ocean Strategy Institute. It is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.

Additional material about INSEAD case studies (e.g., videos, spreadsheets, links) can be accessed at cases.insead.edu.

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“…And I look forward to debating that with Justin Trudeau in 2015, and I know exactly what’s going to happen: I’m going to wipe the floor with him.”

Tom Mulcair, leader of the New Democratic Party, in a speech on 13 November 2013

“…[expectations for Trudeau] have never been lower for a leader going into a debate. I think that if he comes on stage with his pants on he will probably exceed expectations.”

Kory Teneycke, senior Conservative Party of Canada spokesman, 4 August 2015

“…There’s an awful lot of people who sort of shrugged and said [I] was nothing but a name to go on, and found themselves slightly bewildered as I left them in the dust.”

Justin Trudeau, newly-elected Prime Minister, interviewed by the BBC, 25 November 2015

Around 23:00 EST on 19 October 2015, broadcasters announced the outcome of Canada’s federal election. Justin Trudeau, 43-year-old son of the legendary Pierre Trudeau, had been elected with a majority as Canada’s 23rd prime minister.1 Three months earlier when the election was called, the odds were heavily against a Liberal Party of Canada (LPC) win.

Elected leader of the LPC in 2013, Justin Trudeau had inherited a party in disarray and in debt, running third in parliamentary seats behind the Conservative Party of Canada (CPC) and the New Democratic Party (NDP). In fact, some pundits had predicted the end of the once powerful LPC that had ruled Canada for much of the 20th century. Yet less than three years later, Trudeau took the party from 36 to a comfortable majority of 184 out of 338 seats, more than doubling its share of the vote from under 20% in the previous election (2011) to almost 40%. It was a stunning victory that virtually no one saw coming.

In seeking to explain Trudeau’s triumph, commentators cited the voters’ thirst for change after almost 10 years under Stephen Harper, 56, leader of the CPC. Some said Canadian governments came with a 10-year expiry date – incumbent PMs were rarely able to extend their mandates beyond a decade. Even so, Trudeau’s ascension was an incredible achievement. In winning he leapfrogged over the NDP, the leftist party that had been the official opposition since 2011, led by Tom Mulcair, 61. A respected parliamentarian and experienced politician, Mulcair, it was generally agreed, looked far more ‘prime ministerial’ than the young pretender.

In short, there was nothing preordained about Trudeau’s victory. Even coming second was a long shot. How had Trudeau done it? What was the strategy that delivered this win?

Conventional Strategic Logic of Political Campaigns in Canada

The conventional strategic logic in Canadian politics had started to take shape as far back as the early 1990s. Over a long period that saw the LPC in power from 1993 to 2006 and the

1 Canada has a parliamentary system similar to the UK. Voters in each of 338 ridings elect a Member of Parliament (MP) to represent them in Ottawa. The party that wins the most seats in parliament gets to form the government and its leader becomes Prime Minister.

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CPC since then, the rules of engagement had become well established, notwithstanding some variations between the two main parties. Politicians running for office portrayed deficits as evil to be deployed in exceptional circumstances only (like the 2008 global crisis); otherwise they preached the virtues of balanced budgets and controls on government spending. Canada enjoyed the best balance sheet of all the G-7 countries thanks to the efforts of successive LPC and CPC governments to keep the debt-to-GDP ratio below 50%.

Politicians also displayed some skepticism about the capacity of government to do good, so the pendulum had gradually swung toward the non-activist end of the spectrum. As much as possible, government should stay out of the way of business in order to let the free market weave its magic. Similarly, the federal government set the ground rules and presided over a decentralized federation, delineating the respective roles of the centre and other levels, letting each do their thing with minimum interference.

During election campaigns, parties deployed negative attack ads as a way to lower the ‘Willingness-to-Vote’ (WTV) for rival parties while driving their ‘Cost-of-Voter’ (COV) acquisition higher.2 Political strategists focused their efforts intensively on the party’s core voters, citizens who would vote for the party no matter what, and then worked to acquire as many swing voters as necessary incrementally to reach the finish line.

Both the LPC and CPC had acted on this strategic logic to varying degrees, starting with the 1993 election that had swept the LPC to power. Harper had fought four elections by perfecting and pushing this logic the furthest, losing his first election in 2004 but winning the next three from 2006 onwards, each time increasing his share of the vote and culminating in a comfortable majority in 2011. By the time he called the 2015 election, these rules of engagement were firmly established. Moreover they resembled in many ways what was happening elsewhere in the English-speaking world, in the UK, Australia and the US.

‘Boutique’ Policies Address Voter Segments

Established business strategy dictates that companies should identify the needs of discrete market segments so as to deliver tailored products/services aimed at serving each segment. Political campaigns in some parts of the western world tend to emulate this approach by identifying specific voter segments based on ethnicity, demographics or value beliefs and addressing them via ‘boutique’ policies aimed, first, at the core segment, and then at swing voters as necessary. For example, Harper’s foreign policy appeared to be tailored to address specific ethnic segments.

Trudeau Lags Far Behind on 2 August 2015

Harper called the election on 2 August 2015, 78 days ahead of polling day, a marathon by recent standards. Political junkies immediately surmised that the long run-up was designed to undermine Trudeau in two ways:

2 We have seen similar tactics in the corporate world, e.g., the well-known TV ads by Apple mocking Microsoft, aimed at lowering Microsoft customers’ Willingness-to-Pay (WTP).

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• It would maximize the odds of Trudeau putting his foot in his mouth with some unguarded off-the-cuff statement, something the less-experienced Liberal leader had done in the past. Caught on camera, this would provide fodder for his rivals’ negative ads.

• It would drain the LPC’s financial resources (as well as the NDP’s) as the CPC’s fund-raising capacity far outstripped the other parties. A long campaign would allow the CPC to spend up to $54 million, the maximum allowed under the rules, far surpassing the resources of the LPC and NDP. Its financial muscle would be deployed in attack ads, extensive polls both nationally and at the riding level, and fine-tuning the organizational capabilities of the party for the all-important ground operation ahead of 19 October.

In fact, Harper did not wait to call the election before attacking Trudeau. Using the CPC’s vast resources, soon after Trudeau’s elevation to leadership of the LPC, he began what some observers called ‘carpet bombing’ the former Math and Drama teacher with TV ads depicting him as a dilettante, a little on the goofy side, who was ‘just not ready’ to assume the highest office in the country, while mocking his Hollywood looks: ‘Nice hair though’. The ads were so ubiquitous that even school children could recite its tag line. The results of the attack campaign were devastating. A poll of polls on the eve of the election call revealed the size of the challenge ahead for the LPC, putting it in third place, with only 25.9% saying they’d vote for the party, vs 30.9% for the CPC and 33.2% for the NDP.3

• Only 21.3% of voters polled named Trudeau as their ‘Preferred Prime Minister’ vs 26.8% for the NDP’s Tom Mulcair, and 31.0% for Stephen Harper.4

• Party Power Index (PPI) ratings: 49.6 for the LPC, 52.5 for the CPC and 54.7 for the NDP.5 That the LPC’s PPI numbers were not lower was more a testament to the enduring power of the party’s brand than what Canadians seemed to think of Trudeau at that point.

Battered by Harper’s ‘just not ready’ ads, Trudeau seemed to lack gravitas as well as financial resources. Going into the election campaign, trend analysis indicated that he was going downward on most issues of importance to voters, although he was viewed as a charismatic leader who made a good emotional connection with voters.

In contrast, Harper had little emotional connection with the public. He often appeared dour, distant and not interested in ‘retail politics’ – shaking hands and kissing babies on the hustings were not his thing. That said, having governed for over nine years Harper enjoyed a great deal of credibility with the public. Even people who did not like him conceded that he was a capable and competent PM.

3 Source: CBC News website, Éric Grenier’s Poll Tracker, 02 August 2015. 4 Nanos Research report on 08 August 2015 5 Ditto. “Nanos Party Power Index Tracking for Canada is based on a composite of the following public

opinion measures: the national ballot, which party individuals would consider voting for, the top two choices for Prime Minister, and whether each party leader has good leadership qualities.”

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The NDP’s Mulcair was seen as equally well qualified to be PM, and arguably favoured by the ‘Anybody But Harper’ change movement. While not as charismatic as Trudeau, Mulcair was respected by the public and appeared to connect with people in a different, more sober way. On the whole, he looked like a prime minister-in-waiting.

All three parties were using social media and gearing up to do more in what was emerging as a key distribution channel, especially to reach the under-35 segment of the population.

As the campaign went into gear, Harper’s relationship with the media was adversarial, to put it mildly. Coming from the right wing of the political spectrum, he was deeply suspicious of left-wing reporters, whom he believed were out to sabotage his efforts. He had a policy of keeping reporters away from his campaign (and more generally from his government over the preceding nine years). The PM’s press conferences were few and far between, and when access was granted he limited the number of questions reporters could ask. Trudeau and Mulcair enjoyed a reasonably good relationship wth the media, though as yet untested in a campaign context when things could heat up quickly.

In summary, on the one hand the CPC enjoyed a considerable advantage as the incumbent government, with a leader who was ‘best qualified to be PM’; on the other, Harper was vulnerable. In one poll, only 39.2% of voters said they’d consider voting CPC vs 46.1% for the LPC and 49.0% for the NDP.6 As such, Harper would have to defend his position. On Day 1 of the campaign, Mulcair was much better positioned than Trudeau to inherit the mantle of PM.

Trudeau Wins a Majority 78 Days Later

On 19 October, Canadians elected Justin Trudeau as their 23rd prime minister, entrusting him with a comfortable majority in the House of Commons. Votes for the LPC went up from 2.8 million in 2011 to 6.9 million, an increase of more than four million. Harper’s share of the vote dropped by just 200,000, from 5.8 to 5.6 million votes. The NDP’s share went down from 4.5 to 3.5 million. Overall votes cast increased from 14.7 to 17.6 million, an increase of nearly three million.

The Three Parties Make Their Policy Choices

As he embarked on the campaign trail and over the next 78 days, Trudeau made some important policy choices. He announced his intention to go into deficit of up to $10 billion for each of the next three years in order to fund ambitious infrastructure investment.

Trudeau painted himself as the champion of the middle class, vowing to reduce their taxes while simultaneously increasing taxes for the ‘1%’ of Canadians earning in excess of $200,000 per year.

Trudeau made a number of other policy announcements. For example, he promised to decriminalize marijuana (a measure that was strongly opposed by Harper). He announced that Canada would return to the environmental table that Harper had conspicuously abandoned.

6 Nanos Research report on 08 August 2015

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And he declared his intention to call regular federal-provincial-territorial conferences to discuss ways to collaborate between the federal government and the provinces and territories (Harper had last met with the premiers in 2009 and seemed to have no intention to call another meeting anytime soon).

Harper stayed very close to what had worked for him before: keep taxes low (vowing not to increase them), balancing the budget by keeping government spending under control, and a strong foreign policy and law and order agenda to keep Canada secure from external and internal threats. While all parties resorted to ‘boutique’ policies, Harper appeared to go the furthest to appeal to specific segments of voters.

Mulcair’s platform incorporated a number of progressive policies; e.g., a national childcare program rolled out over several years. Rather than taxing the rich as Trudeau advocated, he opted for a 2% hike in corporate tax. Mulcair favoured an activist role for the federal government on the environment, but on spending he aligned with the CPC, announcing his intention to balance the budget. Both Harper and Mulcair ridiculed Trudeau for proposing to embrace a deficit for three years.

As the campaign unfolded, Trudeau refused to deploy negative ads against his rivals, despite the prevailing wisdom in Canada that negative ads ‘work’. (Attack ads are a staple of electoral campaigns in Australia and the UK, and are taken to another level in the US, where vicious personal attacks on candidates of all stripes is the norm).7 From the time he was made LPC leader, Trudeau campaigned by appealing to the ‘…better angels of our nature’ (to quote Abraham Lincoln), preferring ‘sunny ways’ and the rallying cry: ‘…This is Canada, and in Canada better is always possible.’ Harper’s tag line was ‘Let’s protect the economy’. Mulcair started with ‘Proven leadership’ and added ‘Change that’s ready.’

Trailing Harper and Mulcair early in the campaign, some in the LPC brain-trust reportedly recommended he ‘go negative’; advice that he rejected for the entire 78 days. Meanwhile Harper continued to deploy negative ads, and Mulcair later resorted to the same tactics against both rivals. Trudeau resolved to meet the the ‘just not ready’ ads head on, going on air with his own ads that started with: ‘Stephen Harper says that I’m not ready. I’ll tell you what I’m not ready for…’ – going on to declare he was not ready to abandon the middle class and stating what he was ready to do to improve their lives.

Youth and First Nations Citizens were Non-Voters

In the 2011 election, only 61% of eligible voters had bothered to cast their ballots, a far cry from the 80% levels seen in past decades. Much of the analysis indicated that the non-voter segment was predominantly made up of young people under 35 who were cynical about the negativity of modern-day politics and had little emotional engagement with the main parties. Non-voters also included Canada’s aboriginal communities, who traditionally boycotted elections because they did not respect the ‘nation to nation’ relationship between the federal government and the aboriginal nations.

Trudeau visited school and university campuses frequently, was extremely active in social media and spent 78 days diving into crowds, shaking hands and taking selfies with voters of all ages. One LPC candidate remarked on how students and young people seemed to identify

7 Even Barack Obama’s 2008 ‘Yes we can’ campaign featured negative ads aimed at the GOP’s John McCain.

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at a deeply personal level with Trudeau, even though at 43-years old he was not of their generation. Both Harper and Mulcair, much older and less comfortable with ‘retail politics’, did not enjoy the same level of connection with the younger generation.

Harper in particular had an adversarial relationship with the aboriginal communities, who resented his refusal to call for an enquiry into the disappearance of more than 1,000 aboriginal women over the years. Trudeau made a point of visiting ridings with a significant aboriginal population.

Financing the Campaign

It’s axiomatic that the party with the most funding has a significant advantage over those with less. With the changes in Canada’s fund-raising laws in 2011, the LPC’s base shrank dramatically, putting the party in dire financial straits, while the CPC’s fund-raising machine had become more effective, and the NDP perhaps even surpassed the LPC in fund raising. Initial spending reports indicate that the LPC spent around $40 million, well under the $54 million allowed, whereas the CPC may have spent close to the limit. It’s unknown how much the NDP spent on their campaign, yet clearly it ended up being a very expensive election for the party given its low share of the vote (20%) and relatively few seats (44) compared to Trudeau’s 40% share and 184 seats, and the CPC’s 32% and 99 seats).

One illustration of the LPC’s efforts to spend efficiently was its ability to devise and execute ‘guerrilla marketing’. 8 Two examples stand out. First, Trudeau opposed Harper’s policy of income splitting, whereby a married couple with one spouse earning significantly more than the other spouse could pool their earnings, thereby lowering the household’s income tax burden. Trudeau vowed to reverse it on the grounds that it benefitted higher income households, but promised to keep income splitting for seniors.

However, in the rough and tumble of politics, Harper saw an opening by staging ads implying that Trudeau would oppose income splitting for all citizens including seniors. Trudeau had to find a way to counter these ‘scare tactics’.

Enter 94-year old Hazel McCallion, former mayor (for 36 years) of a suburb of Toronto, and a popular political figure. Trudeau convinced McCallion to support him and his team shot a short video clip in her office, in which she left no doubt about his commitment to seniors, ending with a close-up shot, snarling: ‘Stephen, do I look scared to you?’ The clip was made into a TV ad and posted on the LPC’s Facebook page, where it garnered over one million views almost overnight.

Another TV ad was shot on the fly late in the campaign as Trudeau was gathering momentum, when over 7,000 supporters came out to hear him speak at a rally in Brampton, a town outside of Toronto. Flying high on connecting emotionally, Trudeau gave one of his most inspiring speeches. Within a day, a TV spot capturing a few key moments of the rally was aired, as well as posted on Facebook and Twitter.

8 Guerrilla marketing refers to inexpensive, sometimes in-house, quick-and-dirty yet highly effective marketing done on the fly in response to fast-moving events in the marketplace. Easyjet is often described as a model of guerrilla marketing.

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What’s Next?

Both Harper and Mulcair had dismissed Trudeau when the election first got underway. A senior official in the CPC campaign had remarked prior to the first leaders’ debate that if ‘…[Trudeau] comes on stage with his pants on he’ll probably exceed expectations.’9 Mulcair was said to have vowed that he would ‘wipe the floor with [Trudeau].’10 In the aftermath of Trudeau’s victory, both losing parties engaged in some soul searching to digest their defeat and start the process of renewal for the next elections in 2019.

It is said that imitation is the sincerest form of flattery. Of note, then, was how both the CPC and NDP converged toward Trudeau’s strategy. The NDP, who had lost their Official Opposition status and were relegated to third place, bemoaned the fact that they had ceded the progressive space to Trudeau, vowing to regain this position next time by ‘out-progressing’ Trudeau.

The CPC, meanwhile, had to deal with Harper’s resignation and engaged in selecting an interim leader over the next two years to allow time for a comprehensive leadership campaign. Eight candidates came forward for the interim job. They all said that the principal reason for the CPC’s loss was the ‘tone’ of the party, which had come across as the antithesis of ‘sunny ways’ – more like harsh, and sometimes downright mean and nasty.11 All pledged to change the tone to essentially emulate Trudeau’s ‘sunny ways’.

As the Cabinet was sworn-in on 4 November, it was revealed that Trudeau had appointed himself Minister of Youth in addition to his duties as PM, and that his first action a few hours after being sworn-in as PM was to hold a Google Hangout with students from five schools across Canada. A couple of weeks later, he appeared in a huge rally dubbed ‘We Day’, attended by 16,000 students and teachers, organized by two well-known youth activists. In his address to the crowd, Trudeau urged them to engage with civic society. Shortly afterwards, he invited students (in another Google Hangout) to attend a briefing by climate change scientists, prior to holding the first federal-provincial-territorial meeting in seven years to discuss how Canada could become a more responsible player on the environment.

9 CPC’s Kory Teneyke speaking to the media on 04 August 2015 10 Mulcair speech on 13 November 2013 in anticipation of debating Trudeau in the next federal election. 11 This negative tone came to the fore when Harper came out publicly against one woman who wanted to

wear her Niqab in taking her oath of allegiance in a Canadian citizenship ceremony, despite the fact that the courts had thrown out Harper’s challenge on the basis of his own citizenship rules. Knowing that the majority of Canadians were uncomfortable with the Niqab, Harper doubled down by proposing a snitch line whereby ordinary citizens would report on their neighbours’ ‘barbaric cultural practices’. Even those who agreed with Harper’s stance on the Niqab started to feel that this was going too far in the pluralistic and diverse society that Canadians take pride in. Harper’s move backfired tactically by hurting Mulcair primarily in his stronghold, the French-speaking province of Quebec, which drove the ‘change’ voters to Trudeau en masse.

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Questions

1. Can Trudeau’s strategy be described as ‘Blue Ocean’? In answering this question, apply the BOS framework and tools to flesh out Trudeau’s strategy and assess to what extent and in what ways it may have been ‘Blue’.

2. Post election, do you agree with the CPC that the main reason they lost the election was due to ‘tone’ and that by emulating Trudeau’s ‘sunny ways’, most of their problems would disappear?

3. What advice would you give to each of the three parties from this point onward culminating with the next election in 2019?

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Appendix 1 Poll of Polls August 2 – October 18, 2015

Source: www.cbc.ca/news2/interactives/poll-tracker/2015/ accessed on 01 December 2015

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Appendix 2 Voters’ Perception of the Three Main Parties’ Ability to Deal with Issues

Appendix 3 Voter Participation by Age Group in 2011 Election

Source: Elections Canada website http://www.elections.ca/content.aspx?section=res&dir=rec/part/estim/41ge&document=report41&lang=e accessed on November 24, 2015

Voter value driver: 'which party would do a better job of dealing with…'' CPC LPC NDP CPC LPC NDPRepresenting Canada on the world stage 29% 25% 23% 30% 33% 18%The economy 30% 22% 23% 32% 29% 18%Protecting the middle class 20% 23% 32% 22% 36% 22%Having a vision for the future 23% 22% 26% 24% 32% 20%Understands the needs of people like me 20% 21% 27% 21% 29% 23%Creating jobs 24% 22% 24% 25% 32% 18%Health 20% 20% 32% 20% 25% 25%Environment 14% 16% 32% 14% 21% 24%Responding to unique needs of my province 18% 21% 21% 18% 25% 18%Dealing with Syrian refugees 27% 24% 18% 27% 24% 17%

Source: Innovative Research Group, Wave 6, October 2015

Oct-15Jul-15

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Appendix 4 Voter Intentions by Age Group and by Gender

Source: Mainstreet Research poll conducted on October 14-15, 2015

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