- A December Parliamentary Budget Officer report estimated the country’s deficit at $26.1 billion for 2018-2019, and predicted it could reach $31.1 billion next year. Justin Trudeau’s campaign promise of a balanced budget was for October 2019.
- The same report also found the oil price decline could reduce Canada’s GDP by billions of dollars annually, potentially leading to a worse deficit.
- However, Justin Trudeau has publicly said he isn’t concerned the deficit could impact Canada’s ability to deal with unexpected events like economic downturns.
- The federal government released its latest budget on March 19, 2019 and the deficit continues to grow. There was $41.3 billion in new spending in the budget.
- The Trudeau government has increased spending by 20%, from $270 billion to $323 billion, in the fast three years, and there’s no evidence it created any growth in the Canadian economy.
- Since purchasing the Trans Mountain Expansion Project in 2019, the federal government has done little to revitalize the project. The federal Court of Appeal issued a decision against the pipeline, ordering the government to do more Indigenous consultation.
- In February, the National Energy Board released a report finding the project to be in the national interest.
- Justin Trudeau also failed to deliver promised legislation to assert federal authority over the project, and voted against Senate Bill S-245, which would have provided that authority.
- As a result of these events, American oil companies are receiving a $100 million dollar a day discount on Canadian oil because Canadian oil cannot reach international markets. This means less revenue to provinces and territories to pay for essential services and Canada’s reputation as a safe and predictable place to invest bas been severely damaged.
- Despite renewed interest in the Energy East pipeline, the Prime Minister has publicly stated that project won’t go forward because “there is no support for a pipeline through Quebec.”
- Cabinet officially approved construction of the Trans Mountain Expansion on June 18. Afterwards, the Prime Minister stated that there would be “shovels in the ground this construction season” for the project.
NO-MORE-PIPELINES BILL C-69
- This bill was tabled by the government in February 2018 to create a new federal impact assessment process and will replace the National Energy Board with the new Canadian Energy Regulator.
- The bill was passed in the House of Commons by the Liberal majority government
- With this new bill, resource projects will need to pass a number of obstacles before approval is given to the projects, including:
- Taking into account Indigenous knowledge and consulting Indigenous groups on decision-making;
- Ensuring projects assess how groups of “women, men and gender-diverse people may experience policies, programs and projects.”
- Many industry groups have voiced concerns that this bill will slow down an already-rigorous approval processes.
- The Senate then recommended some 229 amendments to the bill. Sixty-two of these amendments were accepted by the government, most of which pertained to limiting politicians from making final calls on energy projects, and maintaining timelines.
- Conservative senators recommended amendments attempting to deal with investor confidence concerns, but only seven percent of their amendments were accepted by the government.
- The bill was passed into law following its third reading in mid-June.
- A federal carbon tax was introduced by the Liberal majority government. The tax is currently set at $20 a tonne and is scheduled to rise to $50 a tonne by 2022.
- The carbon tax raises the cost of living for Canadians through higher gas prices, home heating costs and grocery bills. The federal government issues a carbon tax refund once a year to Canadians who file taxes.
- Alberta previously had a carbon tax under former NDP Premier Rachel Notley. Premier Jason Kenney passed legislation to repeal the carbon tax after being elected in April 2019.
- The Liberal government intends to impose their federal carbon tax on Albertans beginning January 1, 2020.
- The Liberals passed Bill C-71 in May, which changes Canada’s firearms regulations.
- Changes to firearms laws under Bill C-71 require the RCMP to conduct a background check on a person’s entire life before issuing a firearms licence and requires gun retailers to keep sales records for 20 years. The government is also considering a ban on handguns and assault weapons. They’re currently in consultation stages.
- The legislation aims to correct firearms crimes, but doesn’t address the root causes. Bill C-71 targets law-abiding firearms owners; the word “gang” does not even appear in the bill.
- Multiple associations have said this bill will create a back-door gun registry.
- The Liberals have also earmarked $327 million for police to fight gun and gang violence, but nothing yet has made it to the front lines.
- In December, Canadian officials arrested Meng Wanzhou, the chief financial officer of Chinese communications company Huawei, after a request from the United States. She was later released from Canadian custody and is on house arrest at her Vancouver home.
- In retaliation, the Chinese government detained some Canadian citizens and sentenced Canadian Robert Schellenberg, who has been in Chinese prison since 2015, to death on drug charges.
- On January 22, John McCallum, the former Canadian ambassador to China, held a press conference with Chinese media to say Meng Wanzhou had a good case to avoid extradition to the United States. After repeating similar comments to another reporter later that week, Prime Minister Justin Trudeau fired McCallum.
- After a month of indecision, Trudeau has acknowledged the detentions of Canadians in China are “completely politically motivated” but still has not called the Chinese president to address this escalating diplomatic dispute.
- On Monday, January 28, the United States Department of Justice announced they are seeking the extradition of Meng Wanzhou and charged her with bank fraud, wire fraud and conspiracy to commit bank and wire fraud. The Department of Justice is also charging Huawei with fraud, IP theft and sanctions violations.
- On March 3, Meng’s lawyers filed a lawsuit against the RCMP, the Canada Border Services Agency and the federal government, alleging “serious violations” of her constitutional rights. The case will return to court on May 8.
- On March 4, the Chinese government accused the detained Canadians or conspiring to steal state secrets. The Prime Minister responded by saying it is “unfortunate that China continues to move forward on these arbitrary detentions.”
- Meng remains on house arrest in Vancouver.
- In late June, the Chinese government halted all pork and beef imports from Canada, claiming that there are “obvious safety loopholes” in our export system. This was due to the discovery of ractopamine, a feed additive illegal in China, by Chinese customs inspectors in a shipment of pork products.
- The Canadian Food and Inspection Agency investigated the shipment, and found “an issue involving inauthentic export certificates” affecting Canadian pork and beef exports to China.
- This is not a completely new development, as China has banned imports of pork products from individual Canadian producers twice in April and once in June. This ban encompasses all exports of our pork and beef products.
CANADA INFRASTRUCTURE BANK
- Prime Minister Justin Trudeau established the Canada Infrastructure Bank after coming to office in 2015.
- The bank cost taxpayers $35 billion to establish and its role is defined as attracting “private sector and institutional investment to new revenue-generating infrastructure projects that are in the public interest.”
- The bank has announced just one project in the last three years, an electric rail system for Montreal. However, that same project was already promised by Trudeau a year earlier.
- Despite only announcing one project, the Canada Infrastructure Bank has requested more than $11 million in additional funds to cover salaries, legal services, travel and expenses for its board of directors.
- In late July, the bank’s head of investments, Nicholas Hann, stepped down due to concerns with “the direction” the bank’s leadership was taking it.
- I’ve written more about the lacklustre performance of the Infrastructure Bank in the Financial Post.
SNC-LAVALIN AFFAIR (JODY WILSON-RAYBOULD)
- In January 2019, Minister of Justice and Attorney General Jody Wilson-Raybould was shuffled out of her cabinet role and made the Minister of Veterans Affairs. She later published an unusual statement on her website saying it was her “view that the Attorney General of Canada must be non-partisan, more transparent in the principles that are the basis of decisions, and, in this respect, always willing to speak truth to power. This is how I served throughout my tenure in that role.”
- On February 7, the Globe and Mail published allegations that the Prime Minister’s Office had attempted to get Minister Wilson-Raybould to intervene in a corruption and fraud trial involving SNC-Lavalin, a Montreal-based engineering company. The company is alleged to have bribed officials in Libya to secure government contracts.
- When asked by media if he influenced Wilson-Raybould to intervene in this matter, Prime Minister Justin Trudeau responded that he had never “directed” her to do such a thing.
- Conservative and NDP members of the House of Commons Justice Committee have put forth a motion to have Minister Wilson-Raybould and several other key players appear before the committee by the end of February.
- On February 12, Wilson-Raybould resigned from Cabinet. A week later, Gerald Butts, the Prime Minister’s Principal Secretary, also resigned from his position.
- The Prime Minister and the Clerk of the Privy Council, who is the head of Canada’s public service, confirmed they discussed the SNC-Lavalin matter with Wilson-Raybould when she was the attorney general, reminding her jobs would be affected if the company’s court case continued.
- On February 27, Wilson-Raybould testified for more than four hours in front of the Justice Committee, detailing more than 10 meetings, emails and text messages from the Prime Minister, the Finance Minister, the Clerk of the Privy Council and senior political staff to pursue a deferred prosecution agreement for SNC-Lavalin.
- In one instance, she said the Prime Minister reminded her of the importance of keeping SNC-Lavalin in Quebec, citing the upcoming Quebec provincial election and adding “I am an MP in Quebec – the member for Papineau.”
- On March 4, President of the Treasury Board Jane Philpott resigned from cabinet, stating: “Unfortunately, the evidence of efforts by politicians and/or officials to pressure the former Attorney General to intervene in the criminal case involving SNC-Lavalin, and the evidence as to the content of those efforts have raised serious concerns for me.”
- On March 6, the Prime Minister’s former principal secretary Gerald Butts testified in front of the Justice Committee, confirming the events but saying “two people can experience the same event differently.” Butts resigned from his job on February 18, 2019, but remains involved with the Liberal Party’s re-election campaign.
- The Justice Committee voted down a motion to have Wilson-Raybould testify before them a second time.
- Trudeau addressed the allegations on March 7, saying an ‘erosion of trust’ sparked the controversy.
- Beginning on March 20, Parliamentarians voted for more than 30 hours after the Conservatives asked the government to waive privilege and confidentiality and allow Wilson-Raybould to fully tell her version of events. The Liberals would not agree to this, hence triggering the marathon voting session.
- In the midst of voting, an interview Jane Philpott gave to Maclean’s Magazine was released, in which she says “there’s much more to the story that needs to be told.”
- On April 2, 2019, Prime Minister Justin Trudeau expelled both Wilson-Raybould and Philpott from the Liberal caucus. They are both running for re-election as independents.
- On August 14, 2019, Ethics Commissioner Mario Dion released a 63-page report that found Trudeau violated ethics laws for his attempt to interfere with the justice system. This is the second time Trudeau has been found to violate ethics laws during his tenure as Prime Minister. He is the first Canadian Prime Minister to have been found to breach the Conflict of Interest Act while in office.
- Trudeau spoke to media on the same day, saying he disagreed with the Ethics Commissioner’s conclusions. Trudeau told media he “can’t apologize for standing up for Canadian jobs.” However, Dion wrote the Prime Minister should not have used his position to put forward “any arguments involving public or private interests to the attorney general.”
- On August 19, 2019 Conservative Party leader Andrew Scheer wrote to RCMP Commissioner Brenda Lucki requesting she use all resources at her disposal to investigate the matter.
- Vice-Admiral Mark Norman, former Vice-Chief of the Defence Staff of Canada, was suspended from his duties two years ago and charged in 2018 with breach of trust for allegedly revealing, on 12 occasions, Liberal government secrets to Davie shipyard in Quebec pertaining to the government’s plan to lease a navy supply ship from Davie.
- The resignation of former Treasury Board President Scott Brison, a member of Trudeau’s cabinet, is alleged to be in relation to the ongoing court case. Norman’s lawyers argue Brison tried to sabotage the Davie contract for rival Irving Shipbuilding in Brison’s home province of Nova Scotia. Brison is alleged to have close ties to the Irving family. He has since left the government and accepted a position with the Bank of Montreal.
- Norman’s legal team has subpoenaed emails and other communications from Prime Minister Justin Trudeau and senior staff members, alleging Norman has been a victim in political games and the government interfered in the case.
- On May 8, 2019, the Crown Prosecutor involved in the case announced the charges would be stayed, cancelling the high-profile trial that was set to start in August.
- On the same day, Defence Minister Harjit Sajjan announced the federal government would cover Norman’s legal fees, estimated to be hundreds of thousands of dollars. The government maintains they did not interfere in the prosecutor’s decision to stay the charges.
- In late June, the Department of National Defence announced that Vice-Admiral Norman had reached a confidential settlement with the Crown, and would be retiring from the military.
MEDICAL ASSISTANCE IN DYING
- Late last year, the Council of Canadian Academies presented the Liberal government with three reports advocating for extending the medical assistance in dying program to include people under the age of 18, people with psychiatric conditions and people making advance requests.
- During the election campaign, Justin Trudeau pledged to pass more legislation to expand the current assisted death program.
- An advisory council formed by the Liberal government recommended the establishment of a universal pharmacare program in a June 2019 report.
- The report called for the government to fully implement the new system by 2027, at an estimated cost of $15 billion annually.
- The Liberals promised to expand pharmacare during the recent election campaign. In December, the Prime Minister sent mandate letters to his cabinet ministers and instructed Health Minister Patty Hajdu to begin to implement “national universal pharmacare.”
- Both the NDP and the Bloc Québécois support expanding pharmacare. In our minority Parliament, the governing Liberals will need the support of at least one other party in order to pass its legislation.
- The Conservative Party does not support the implementation of a national pharmacare program, which will have huge cost implications for taxpayers. Research shows 98% of Canadians already have or are eligible for private or public drug coverage.
MORTGAGE STRESS TEST
- In January 2018, the federal government introduced a “stress test” for homebuyers to pass before being granted a mortgage. Under the rules, those seeking a mortgage must be able to prove they can carry a mortgage at a rate two percentage points above the actual mortgage rate offered.
- While the government promised this stress test would prevent homebuyers from getting in over their heads with mortgage debt, it lowered borrowing power for many Canadians and industry critics said it disproportionately impacted first-time home buyers, preventing them from entering the housing market.
- The Prime Minister has recently asked the Finance Minister to “review and consider recommendations from financial agencies” to make the to mortgage stress test “more dynamic.”