Tag Archives: Budget 2020

Roundup: Some key differences

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There wasn’t a winner in the US election declared before this blog post was put to bed, but I will make a couple of points about why elections in this country are not such a gong show. Number one is that we have an arm’s length federal elections agency that administers elections, whereas the Americans let each state run their federal elections, resulting in an inconsistency in rules and even methods – some states using only electronic voting machines, others using paper ballots, and there being a confusion around mail-in ballots, not to mention that the fact that we have more than enough polling stations so that lines are rarely more than ten minutes, if that. In Canada, we have arm’s length quasi-judicial processes to draw riding boundaries that have virtually eliminated gerrymandering, whereas political considerations have created such skewed, gerrymandered districts in the US, and their Supreme Court refuses to do anything about them. Attempts to disqualify voters in Canada have been struck down or punished electorally, whereas it’s a voter suppression tactic in the US with hugely racial overtones. And more than anything, we have a monarch and a governor general who act as a constitutional fire extinguisher if everything goes awry in the results. We’re pretty damn lucky to live here, in a functional democracy.

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Roundup: A gesture toward pettiness

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There are a lot of symbolic gestures that politicians do that I cannot abide, but one of the most obnoxious and corrosive ones is the insistence on cutting their own pay when times get tough – and lo and behold, we have an Ontario senator who is moving a motion to do just that, asking both MPs and Senators to forgo statutory pay increases (to meet inflation) as a gesture. This is not really a symbolic or empty gesture – it is a signal to populist impulses that serve to devalue public life, and treats what they do as somehow being less valuable than people in the private sector – which is ironic considering how much less MPs and senators make than professionals and executives in the private sector.

Without entirely relitigating what I wrote on this before, I wanted to point out some of the fairly offensive characterizations of such gestures that were in the National Post piece, which describes the gesture as “important” for private sector and low-income workers, and the usual suspects at the Canadian Taxpayers Federation trying to insist that politicians aren’t making sacrifices when people are losing their businesses.

The problem with this line of logic is that these gestures don’t do anything. If anything, they come with a dose of schadenfreude, that if I’m suffering then watching politicians or civil servants being forced to suffer as well is satisfying, even if it ultimately makes things worse overall. What good does it serve to make everyone miserable or worse off? How does that make the situation better for everyone? It doesn’t. There are enough trade-offs that go with public life or public service that often make it a fairly unappealing to many people, so why pile on? Pettiness won’t solve the economic crisis or make people’s businesses reopen, and it certainly won’t make COVID go away, so why indulge it?

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QP: A minister for divination?

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Justin Trudeau was in town and on another “virtual” tour while his deputy was in the Commons in his stead. Erin O’Toole led off with his script on a mini-lectern, and he tried to tease out a contradiction in the status of the pandemic early warning system, to which Chrystia Freeland slowly and calmly stated that it was the time to focus on the second wave, but post-mortems should come later as one should not change the plane’s engine after taking off. O’Toole was not mollified, and tried again, but Freeland was not dissuaded in her calm dismissal. O’Toole tried to delve into news reporting about Freeland disagreeing on closing borders earlier in the pandemic, and Freeland calmly walked through the history of the Canada-US border closure. O’Toole switched to French to decry the terrorist attack in France earlier this morning and accused the prime minister of not taking it seriously, to which Freeland corrected him and said that all Canadians are horrified by the attack and they show solidarity with France. O’Toole wondered what happened to the promised de-radicalisation centres, to which Freeland calmly stated that they never failed to step up and show leadership, and that Canada stands with France. Stéphane Bergeron led for the Bloc, even though Yves-François Blanchet was present, and he demanded an official apology for the October Crisis, to which Freeland reminded him of the period in question and of the family of the Quebec politician who was killed by extremists. Andréanne Larouche tried again, and Freeland gave a paean to democracy and the space for disagreements. Jagmeet Singh was up next for the NDP, and in French, he decried the situation in long-term care facilities but wondered where the national standards were, and Freeland slowly explained that they need to work with provinces and territories as the second wave has hit. Singh switched to English to decry that the worst problems were in for-profit homes, and made an allusion to the falsehood that the federal government owns some of these facilities. Freeland agreed that they can’t turn a blind eye to the conditions in long-term care facilities, and that the country needs to do better.

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Roundup: The slow part of the economic recovery

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It was a big day for economic news – the Bank of Canada stating that they expect interest rates to continue to be at near-zero until 2023, as the economic recovery moves into a much slower phase as we wait for a vaccine for the pandemic. They also stated their plan to change how they buy bonds going forward. A few hours later, Chrystia Freeland gave a major speech wherein she stated that the government was going to keep spending until the pandemic was over, because they can at a time of such historically low interest rates, and because it provides businesses and households a necessary bridge through the economic turmoil until the pandemic is over. And for those of you in the back, it’s not 1995, and even with all of this added spending – which is time-limited – is not going to create a debt bomb. It’s just not.

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Of course, conservative pundits set about clutching their pearls that the government is taking on the debt instead of households, apparently not comprehending that they have more tools and levers at their disposal than households – but these are the same chuckleheads who equate government debt with credit card debt. The Bank of Canada’s Monetary Policy Report noted that much of the recovery to date has been on the back of consumer spending, which is one more reason why allowing households to go insolvent and enforcing consumer austerity would only harm the economic recovery – we saw this in the Great Depression, where consumers who had money but didn’t spend it because of the social stigma prolonged the depression for years. And yet, we keep hearing “taxpayer dollars!” and “leaving debt to our children,” as though leaving them a weak economy is any better – particularly if that debt is affordable and is treated as an investment with programmes like childcare, that creates more economic returns. This should not be a difficult concept to grasp – and yet…

Meanwhile, here is Kevin Carmichael’s parsing of the Bank of Canada’s rate decision and Monetary Policy Report, while Heather Scoffield gives her own thoughts on Freeland’s speech.

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Roundup: Nail-biter by-elections

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The Liberals won the two Toronto-area by-elections last night, but with far less comfortable margins than before. While Marci Ien won Toronto Centre, Green Party leader Annamie Paul came in a not-too-distant second place, which was a surprise showing for her considering she was a far-distant fourth in the previous election. In York Centre, Liberal Ya’ara Saks pulled ahead at the very end, but it was a constant dance with the Conservatives most of the evening, and very close (and close enough there may yet be a recount). While it’s not good to read too much into by-elections, one supposes that this should be a bit of a warning to Justin Trudeau about going to a snap election, given how close it was. There should also be a warning for Trudeau in here about engaging his own party membership – one suspects that there are a lot of angry Liberals who are incredibly unhappy about the way that Trudeau short-circuited the nomination process and simply appointed candidates in both ridings, cutting out the grassroots membership to the detriment of democracy as a whole. Erin O’Toole will crow that he made progress in the GTA with nearly winning York Centre (though the Conservative candidate was almost a non-entity in Toronto Centre), though Maxime Bernier’s entry into the race in that riding ostensibly took enough votes away from O’Toole to lose the race. Hopefully O’Toole won’t take that as a cue to go even more extreme to try to attract those voters.

Fiscal anchor

At a talk for the Canadian Chamber of Commerce, prime minister Justin Trudeau said that the government wouldn’t be setting a new fiscal anchor while the pandemic was still ongoing – but that there would soon be a “robust” fiscal update presented. This immediately gave the whole it’s-1995-and-will-always-be-1995 crowd the vapours, but there is credible economic thought that this isn’t the time for a fiscal anchor because it would simply be a signal to cut spending at a time when that spending is building resilience into the economy and is giving us a leg-up on recovery over other countries. Erin O’Toole followed up and handwaved that if his party was in charge, they would have done everything better, offering no evidence to that end.

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QP: Demanding an answer on provincial measures

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With the prime minister in town but not in the Chamber, his deputy was, which tends to be better in any case. Erin O’Toole led off, script on mini-lectern, and he decried that the government announced the appointment of a special representative for the fisheries dispute in Nova Scotia. Chrystia Freeland assured him that they want a peaceful, constructive solution, and that everyone wants to assure the rights of First Nations people as well as conservation, O’Toole then pivoted to boil water advisories on First Nations and Neskatanga in particular, to which Freeland noted that they are working hard to solve the advisories, but there was shared responsibility as the Conservatives didn’t solve the issues either – but she didn’t offer anything in the way of candour about the particularities of the situation. O’Toole then decided to thump his chest on China and their dubious numbers early in the pandemic, to which Freeland reminded him not to lecture her on authoritarian regimes because she lived in one and reported on them extensively, and she listed concerns Canada has with China’s actions and human rights abuses. O’Toole went again in French, got the same answer, and for his final question, he went on a paean about democracy and transparency versus Chinese dictatorship, and in a very slow and calm tone, Freeland cautioned O’Toole that they draw very careful lines about what is permissible in democracies, and that he is engaging in the most base partisanship. Alain Therrien got up for the Bloc to decry businesses suffering in “red zones” in Quebec, to which Freeland assured him a bill was coming in days. Therrien stated this was too little too late, to which Freeland listed measures they have provided to businesses so far. Jagmeet Singh was up next by video, and in French, decried the Neskatanga situation, and insisted that Trudeau had no intention of keeping his promise on boil-water advisories. Freeland disagreed, and stated they we working to address it and had made progress. Singh switched to English to repeat the question, and got much the same answer. 

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QP: Calling out the ramming through of bills

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Things were late in getting started thanks to a lengthy “hybrid” vote, and they skipped members’ statements in order to make up time (though Peter Julian made a valiant attempt to go through with them anyway). Candice Bergen once again led off, and she lamented that the government was “disinterested” in helping small businesses. Justin Trudeau listed assistance programmes that they had to help them, and did note that the commercial rent subsidy was not federal jurisdiction so it wasn’t working as well as they had hoped. Bergen then (correctly) railed that the government was ramming through emergency legislation without adequate consultation, to which Trudeau praised the collaboration between parties to get things right, before accusing the Conservatives of playing politics. Bergen lamented the government hiding from their scandals, to which Trudeau lashed out that the Conservatives wanted to deal with WE Charity while they government was dealing with the second wave. Gérard Deltell was up next, to quote a tweet from Andrew Leslie about the government limiting debate when it didn’t happen during the two world wars. Trudeau offered some bland reassurances about working together. Deltell lamented that debate was being limited again for C-4, for which Trudeau repeated the line about working together instead of playing petty politics, and gave a shoutout to Canadians to avoid the COVID Alert app. Alain Therrien was up for the Bloc, and he lamented that Quebec City and Montreal were back in the the “red zone” before he demanded higher health transfers, to which Trudeau pointed out that they did increase transfers and just sent them $19 billion in the Safe Restart Agreement. Therrien got shouty in his demand for transfers, and Trudeau reiterated that they did transfer billions already. Jagmeet Singh was up next, and in French, he lamented that the deficit was so high because he was afraid the government would lead to cuts, before demanding a wealth tax. Trudeau reminded him that the first thing that his government did was raise taxes on the top one percent, and that the NDP voted against it. Singh repeated the question in English, and Trudeau repeated his answer in English.

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QP: The importance of independent regulators

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The first Monday of the new session, the Prime Minister was elsewhere, leaving his deputy in his place. Candice Bergen led off for the Conservatives, worrying about people who can’t get rapid at-home COVID tests. Chrystia Freeland said that they too want rapid tests, but it’s important that we have independent regulators, because lives depend on it. Bergen said this was an example of this being too little, too late, but Freeland insisted that the government would do whatever it takes to help Canadians. Bergen raised the spectre of the WE Imbroglio, and lost time in helping people, to which Freeland chided that they were hard at work the whole time, and listed measures. Gérard Deltell was up next to accuse the government of attacking Quebec in the face of the pandemic, and Freeland insisted that there was no dispute and that they we working together with the government of Quebec. Deltell got huffy in his response, insisting that Trudeau insulted the premier, and Freeland soared to new rhetorical heights about the importance of working together. Alain Therrien led off for the Bloc, accusing the government of “withholding Quebeckers’ money” and demanded new health transfers, to which Freeland assured him that they did increase transfers, on top of the $19 billion Safe Restart plan. Therrien was not amused, and demanded higher transfers, to which Freeland insisted that they were all working together. Jagmeet Singh was up for the NDP, and in French, he demanded a commitment to introducing a wealth tax, to which Freeland said that they did mention in the Throne Speech, they did mention new taxes. Singh repeated the question in English, and Freeland was more specific in talk of taxing web giants and stock options.

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Roundup: The Energy East distraction

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After wide reporting that Jason Kenney’s poll numbers have been tanking and that he’s currently tied with the provincial NDP, it was predetermined that Kenney was going to have to start coming up with something new to blame the federal government about in order to whip his voter base into a new round of irrational anger. He also, apparently needed to provide some cover to his friend Erin O’Toole after O’Toole’s meeting with the Quebec premier, and so Kenney’s distraction of choice was going to be Energy East, and blaming the federal government for its demise. Of course, that’s not true at all, and energy economist Andrew Leach has the receipts.

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Roundup: Liberal caucus boards the BI train

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Ever since the creation of CERB at the beginning of the pandemic, the Basic Income crowd has believed that this is their chance to finally get what they’ve been asking for. Most of it remains in the realm of lollipops and unicorns, with a lot of handwaving away the difficulties associated with a basic income, but here we are. To that end, it seems that the Liberal caucus has made this their top priority for the party’s upcoming policy convention, which means that it has a fairly good chance of getting adopted as party policy. Of course, in the current day and age, a party’s policy book isn’t really worth the paper that it’s printed on because the leader’s office now controls everything, most especially the campaign platform (you know, what the party’s policies are supposed to inform), so I wouldn’t put too much stock in this, but it’s certainly an indication of where their heads are at.

To that end, economist Lindsay Tedds, who has been studying the implementation of Basic Income programmes, is unimpressed with this turn of events. Why? Because there are a lot of things in the federal government’s wheelhouse when it comes to better implementing current social supports programmes that they’re simply not doing, because of the ways in which they rely on the current tax system – which is a problem when a significant portion of marginalized people can’t access those benefits because they don’t file taxes. And if you’re going to implement a Basic Income, you would think you’d want to get these kinds of things sorted first so that it becomes easier to do any kind of BI.

Economist Mike Moffatt also makes the point that there are far more effective things that the federal government could spend money on that would get better outcomes than spending it on basic income, because of the supply side problems that adding more money into the system won’t fix, but will simply drive up things like rental costs.

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