Roundup: An economic vision without an economic case

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Andrew Scheer gave the second of his policy keynote speeches yesterday, this one on his economic vision, and as could be expected, it was full of hyperbolic declarations about the size of the deficit (it’s tiny in comparison to our GDP), and the state of Canadian household finances (which have been growing). He promised that any new spending programmes would have to be paid for out of government “savings,” and in his pledge to balance the budget in two years, that would mean cuts. Of course, Conservative mouthpieces say this is easily enough achieved because they did it before (forgetting of course that the previous government had a habit of booking savings that were never going to be achieved for the sake of getting to a paper balance, like Shared Services Canada, or the Phoenix Pay System). The Liberals, incidentally, were quick to put out Bill Morneau to put a price tag on those cuts and warn that they would come out of families, and with the spectre of seeing what Doug Ford is doing to those families in Ontario, well, it’ll make things harder for Scheer.

The part that everyone talked about, however, was his grand vision of an “energy corridor” across the country where pipeline projects would magically cross the country with buy-in from Indigenous communities and everyone would be happy and prosperous, and we would have energy security and would never had to import oil from Saudi Arabia ever again. The problem with this fantasy picture, however, is largely economics. Even if Energy East were to get built, by some miracle, it would not have an economic case given that it wouldn’t be used for domestic oil in the eastern provinces as it would be far more expensive than the oil they’re importing. In fact, Energy East did not make it off the drawing board because there was no economic case – it wasn’t because there was opposition in Quebec (which has already achieved some kind of mythical status), but because there was no economic rationale for the company given that Keystone XL was back on the table. Scheer’s promise (other than the fantasy of it even happening) is that Alberta will either have to take a huge discount per barrel of oil, or oil prices in the eastern provinces start taking a major jump because they’re paying a lot more for it, and upgrade it from heavy petroleum and refine it (in refineries that would have to have been refitted, likely with yet more taxpayer subsidies). But since when should logic or basic economics be part of an “economic vision”? That would be silly.

Chris Selley offers a critique of Scheer’s rhetoric, but finds it more astonishing that it’s the Liberals’ own self-inflicted damage that is putting Scheer in a position where he has a reasonable shot of winning.

Good reads:

  • Justin Trudeau warned of meaningful financial penalties for social media companies who don’t combat hate speech on their platforms.
  • Trudeau also said he was disappointed by the “backsliding” on abortion rights being seen in the US.
  • China has formally arrested the two detained Canadians for national security offences.
  • The Parliamentary Budget Officer says that a replacement for the Phoenix pay system could save billions, but Phoenix would need to be fixed before migrating.
  • Mark Norman may say he’s got a story to tell, but military regulations prevent it, and the Liberals voted against him appearing at committee, so it’ll have to wait.
  • For the first time, the Bank of Canada has listed climate change as a potential risk to the country’s financial security.
  • Supreme Court of Canada Justice Clement Gascon sat his last case before his retirement.
  • The Senate energy and environment committee passed 187 amendments to Bill C-69, including the full suite from oil and gas lobbyists. Expect this to be challenged.
  • The Senate’s internal economy committee voted to allow the expense for Senator Donna Dasko’s poll, but there are concerns about the precedent it’s setting.
  • Liberal MP Nathaniel Erskine-Smith proposes a civil remedy system for dealing with online hate rather than the criminal code, but there are free speech concerns.
  • Elizabeth May outlined the Green Party’s new climate plan, which calls for a doubling of GHG reduction targets and eliminating fossil fuel production.
  • In Newfoundland and Labrador, the Liberals were reduced to a minority but the PC leader refuses to concede defeat and is slamming the lieutenant governor.
  • Kevin Carmichael parses the Bank of Canada’s Financial System Review, and what the receding threat of a credit bust means for the economy.
  • Colby Cosh offers some thoughtful reminders about the nature of representation, while the Alberta Party begs the government for a handout.
  • Chris Selley looks at how the Conservatives are positioning themselves on foreign policy, and finds a lot of familiar hollow rhetoric on the topic.
  • Chantal Hébert says that sooner or later, Justin Trudeau is going to have to wade into the Quebec “secularism” bill debate.
  • Andrew Coyne looks to history to see how trying to be the party of cheap gas prices helped the Liberals before, and may help the Conservatives now.
  • Robert Hiltz wonders why parties are waffling about making climate change an election issue when it’s intricately tied to the economy.

Odds and ends:

Programming Note: I’m away for the long weekend, so no new posts until Tuesday. That also means no YouTube episode next week. Thanks, and have a Happy Victoria Day, and happy official Canadian birthday to Her Majesty!

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