Tag Archives: Equalisation

Roundup: Encana and illogical anger

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The big news yesterday was that oil and gas company Encana decided to decamp their headquarters and head to the US under a new name to try and attract more investors there, and Jason Kenney and his ministers freaked out. They railed that this was Trudeau’s fault – despite Encana’s CEO saying otherwise, and despite the fact that there are to be no job losses in Alberta or loss of existing investments – and Kenney upped his demands on Trudeau (including the ludicrous demand that Trudeau fire Catherine McKenna as environment minister). And while the Trudeau blaming gets increasingly shrill and incoherent, there are a few things to remember – that Encana’s stock price has hewed pretty closely to the price of oil, that it lost more value under Harper than it did Trudeau, and that even bank analysts are mystified by the move. Perhaps Kenney’s blame is misplaced – imagine that.

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There have also been a number of voices making the absurd comparison that governments are quick to help companies like Bombardier and SNC-Lavalin but won’t offer it to oil companies – which ignores that the Harper government also helped those same kinds of companies, while Trudeau bought a pipeline in order to de-risk it and ensure that it gets completed, not to mention that other companies usually asking for loan guarantees and aren’t reliant on oil or commodity prices. There is a lot of false comparison going on in order to nurse this sense of grievance, because that’s what this is really all about.

Meanwhile, here is some additional context on the economic situation in Alberta and Saskatchewan that we shouldn’t overlook as part of this conversation.

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Roundup: Brad Wall’s basic nonsense

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Former Saskatchewan premier Brad Wall penned an op-ed for the National Post yesterday that, amidst quoting some classic rock lyrics, repeated a bunch of debunked mythology about pipelines that never happened, the federal price on carbon, Bills C-48 and C-69, and even pulse exports to India. (Seriously – does Wall not read anything?) But amidst this pile of false narratives, Wall decided to make a few “suggestions” about how to mollify Alberta and Saskatchewan, which included the non-starters of letting the provinces set their own carbon price on heavy emitters (effectively ignoring the whole point of the national price is to ensure that provinces don’t undercut one another in a race to the bottom), an “equalization rebate” which is not actually equalization – and worse, wants to offload the environmental liabilities of orphan well clean-up to the federal government under the guise of said “equalization rebates.” (Seriously, the Supreme Court just months ago said that the responsibility for orphan wells can’t just be offloaded because of bankruptcy, and companies need to be responsible for remediating them, because we have a polluter pays principle in this country). Wall also demanded that Trans Mountain be completed and privatized with a significant portion going to First Nations interests (why the privatization matters to him I’m not entirely certain), and amendments to C-48 and C-69 to ensure that pipelines can get to the West Coast – even though that would seem to undermine the fact that all projects need to undergo a proper assessment. Suffice to say, the demands for a “fairer deal” with the federation are generally built on false premises, such as lies about how equalization works, and a sense of grievance that no amount of capitulation will actually solve. (Ask Brian Mulroney about that one).

For a reality check, the Hill Times consulted with professor Andrew Leach about all of the claims that Trudeau single-handedly destroyed Alberta’s economy – complete bunk, of course – but it has some good facts in here about the context of the oil price crash, and the demands for MOAR PIPELINES! when there won’t be enough production capacity to build yet more pipelines once the TMX expansion, Enbridge Line 3 and Keystone XL all finish construction.

Meanwhile, Wall’s successor, Scott Moe, is warning that the separatist talk is “alive and happening.” I’m going to call bullshit – only a few loudmouths and swivel-eyed loons are talking about it, and not seriously. Ordinary people simply vent frustrations because they’re being fed a diet of lies and snake oil, which is what Jason Kenney and Moe want – people to be angry at Justin Trudeau, so that their attention can be safely elsewhere.

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Roundup: Considerations on Trudeau’s Alberta problem

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Talk about what Justin Trudeau is going to do about his Alberta/Saskatchewan problem continues to swirl, with few answers so far. Alison Redford says she’s willing to help in some capacity – not that she’s been asked yet – but I guess we’ll see if there has been enough time and space from her aura of power problem that led to her ouster. Meanwhile, here’s Philippe Lagassé with some important thoughts about the issue:

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Meanwhile, Carla Qualtrough says all options are on the table which can include some changes to equalization, but as this piece explains, there is so much misinformation about how equalization works that it’s important we separate facts from lies about it – and there are a whole lot of bad actors, Jason Kenney chief among them, lying about the programme in order to stir up anger that he hopes to use to his advantage.

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Roundup: Demands from the losing side

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It took absolutely no time for the premiers – particularly the western ones – to start laying down markers now that Justin Trudeau had walked away wounded but still standing from Monday’s election. While Blaine Higgs of New Brunswick struck a more conciliatory tone and decided to back down from his carbon price rhetoric, and Doug Ford even striking a more workable tone (though no word yet if he’s going to abandon his fight against the carbon price), it was up to Scott Moe and Jason Kenney to try and flex their muscles and start howling about the prospects of separation because they lost at politics when it came to fighting the aforementioned carbon price.

To that end, Moe presented a letter with a list of three demands for a “new deal” for the province in the federation – scrapping the federal carbon price, reforming equalization to be “fair,” and new pipeline projects – plural. This after the same chuckleheads that put billboards across Alberta and Saskatchewan demanding that the Liberals in those provinces be voted out to “send a message” only to realize that they no longer had any representation in Cabinet. Oops. As for Moe’s demands, the carbon price is not going anywhere – if anything, this election was a confirmation that the country was in favour of carbon pricing, if you look at the seats won by parties who support it. Moe has already tried to propose a reform to equalization that was not actually equalization, but some per capita funding allocation that, again, had nothing to do with what equalization is or represents. As for pipelines, there are several already in process, Trans Mountain chief among them, but if you look at the market, there is no actual future demand for expanded capacity once the current projects are online. We are in an era of a global supply glut and we can expect demand to start diminishing as more low-carbon measures increasingly come online both in Canada and abroad. Not to mention, all of Moe’s demands involve the other provinces in some capacity, and are not things the federal government can do unilaterally (and in fact, his demand to scrap the carbon price is an implicit demand that he doesn’t think provinces should have a level playing field when it comes to carbon pricing, which is the whole point of the pan-Canadian framework). And with all of these demands, Moe claims he’s offering a “fire extinguisher” to the “prairie fire” of regional alienation. Not likely.

And then there was Jason Kenney, not only creating a panel to consult with Albertans about ways to secure our role and fairness in Canadian federation,” before he presented his own laundry lists of demands, such as the “national energy corridor,” Trans Mountain (already in progress), killing Bill C-69 (because the previous system of constant litigation was apparently better), exempting the mortgage stress test for Alberta (which isn’t the government’s call and is really dumb), but he’s threatening a (non-binding) referendum on equalization over this (which will accomplish exactly nothing). And while he started his press conference with the veneer of being statesmanlike, it quickly degenerated to this kind of raving that showcases that Kenney’s real goal, which is simply about stoking more anger at Trudeau because that suits his political purposes.

It’s worth noting that Manitoba premier Brian Pallister is having none of this talk (possibly because he sees where the wind is blowing, and Paul Wells has called him “Canada’s tallest weather vane).

But in all of this bluster, we’re getting all of these hyped up warnings about “Wexit,” which is the moronic label that some swivel-eyed loons have started applying to the notion of Alberta separation, which is the dumbest political movement going. But I do worry that Moe and Kenney are playing with fire, because they’re goading the nebulous populism that is building to such a force that will be hard for the either of them or the federal Conservatives to contain. Stop adding fuel to the fire. It will blow up in your faces.

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Roundup: Competence, communication, and the Commissioner

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Yesterday was political theatre in the extreme, as the Ethics Commissioner, Mario Dion, released his report into the Double-Hyphen Affair. His conclusions were damning for Trudeau (but suspect – more on that a little later), and there was some genuinely troubling revelations in there, such as the fact that it seems that it was lobbyists from SNC-Lavalin who were the ones who suggested putting the Deferred Prosecution Agreement legislation in the budget, and seemed to be attempting to stage-manage the whole thing – right up to dreaming up elaborate schemes to try and bring former Supreme Court of Canada Chief Justice Beverley McLachlin into the fold, only for her to tell them that she’d wait to hear from Jody Wilson-Raybould. (Reminder: DPAs are not an invention of SNC-Lavalin, but have been a tool in other countries for over a decade, and Canada was a laggard in adopting them, and even then, we didn’t do a very good job of it, and yes, there is a lengthy paper trail of the consultations undertaken by the government on this. Also, they’re not a get out of jail free card – they do involve penalties, but would enable the innocent employees and shareholders of a company to not suffer for the actions of a few). As troubling as this is, my biggest takeaway is the absolute crisis of competence within this government – officials in different ministers’ offices who didn’t communicate with one another, which was compounded by Wilson-Raybould not offering any explanations for her decisions so that they could be communicated to either SNC-Lavalin or even the other departments. Recall that the infamous Wernick call that Wilson-Raybould was prefaced by Wernick that he was looking for an explanation, and ended when Wilson-Raybould said that she turned over a report to PMO weeks previously, to which Wernick responded “That’s news to me.” If Wilson-Raybould was being continuously bombarded from all sides, it’s because there was a lack of clear communications from all sides. Was that improper interference? Well, that’s a bit of a judgment call, though Dion argued that it was. You can take that for what you will.

With the release of Dion’s report came the release of Anne McLellan’s own report into the structure of the Minister of Justice and Attorney General’s office, which ultimately concluded that the roles didn’t need to be separated, but that clearer guidelines needed to be established – including better communication from the Attorney General on decisions that were of interest to the government.

(Meanwhile, here are some primers on the Shawcross Doctrine, who Mario Dion is, and a timeline of events).

As for reactions, Andrew Scheer was predictable in saying that this was “unforgiveable,” decried that this was the first prime minister in history to have been found to have broken ethics laws (laws that only applied to two prime ministers, so that history is pretty short), and that he wants the RCMP to investigate…something. We’re not quite sure what. Unsurprisingly, Wilson-Raybould issued a statement shortly after the release of the report, saying that she has been completely vindicated. Trudeau himself said that he doesn’t agree with all of the conclusions – particularly that you can never debate an issue with the Attorney General – but said he accepted the report and took responsibility, and that they would learn from it – and lo, they have the McLellan Report to draw more of those lessons from as well.

What virtually nobody actually made any mention of, save a handful of lawyers, was the fact that the Commissioner’s findings resulted from a very large overreading of that section of the Conflict of Interest Act – so much so that it was hard to see how his understanding of “private interest” fit in with the definition of a conflict of interest. In fact, in the report, Dion stated that the initial complaint was under Section 7 of the Act, and while found that was not violated, he then decided on his own volition to see if Section 9 wasn’t a better fit, and then showcased how he jumped through a number of hoops to arrive at that conclusion. He also complained that he wasn’t given access to documents that fell under Cabinet Confidence, and argued that his mandate made that access “implicit” rather than explicit, which should be a warning sign of an Officer of Parliament that is trying to claim more powers than Parliament originally allocated to him. That should be concerning – as is the fact that everyone credulously cherry-picked the damning paragraphs from the report rather than looking at it in context, and the fact that the basis for those conclusions are actually problematic. This doesn’t mean that wrongdoing didn’t occur – just that the report itself was arrived at by a great deal of overreach, which should colour the conclusions, but nobody in the media did any of that critical thinking.

In hot takes, Chantal Hébert was first out of the gate, to wonder if this would be a fatal wound for Trudeau given how scathing the report was. Robert Hiltz castigates Trudeau’s inability to apologise because that would mean that the government was acting in SNC-Lavalin’s interests and conflating it with that of the country. John Geddes wonders why SNC-Lavalin never took Wilson-Raybould up on her offer to pass along their public interest arguments to the Director of Public Prosecutions (and the answer is fairly unsurprising). Andrew Coyne says the problem is not any conflict of interest, but the possibility of an abuse of power. Paul Wells notes the report is another reminder to Trudeau that his is a job where he makes decisions that have consequences, which he may not seem to grasp.

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QP: Torquing the Leslie issue

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Despite it being a Monday, many of the seats in the Commons were vacant, and neither the PM nor the leader of the opposition were present. Candice Bergen led off, and tried to make hay of Andrew Leslie being a character witness at the Mark Norman trial. David Lametti assured her that the department of Justice has cooperated and released all documents. Bergen disputed this, and repeated the demand to turn over documents, and Lametti repeated that all obligations were being upheld. Bergen trie a third time, got the same response, and then Alain Rayes took over in French to ask the same question,impressing upon the Chamber that this had to do with Davie Shipyard. Carla Qualtrough stood up to list the contracts that Davie was getting, and when Rayes tried again, Lametti gave the French assurances of cooperation. Jagmeet Singh led off for the NDP, and he demanded an end to fossil fuel subsidies, fo which Jonathan Wilkinson repeated that they were phasing them out by 2025 and would meet their international obligations. Singh repeated the question in French, and read the French version of his response. Singh wants more action on climate change, got more bland assurances from Wilkinson. In English, Singh demanded a return to 30-year mortgages, and Kirsty stood up to praise the national housing strategy. 

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Roundup: $1.6 Billion instead of a magic wand

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Yesterday, the federal government announced $1.6 billion in help for the Alberta energy sector – but insisted it’s not a subsidy. $1 billion of it was in loans for exporters to invest in technologies and address working capital needs or exploring new markets; $500 million from to help smaller oil and gas businesses weather the uncertainty, $50 million from the Clean Growth Program, and $100 million in economic diversification projects. It wasn’t something like federal funding for companies to remediate orphan wells, for example. And predictably, Rachel Notley and various other Conservatives immediately dismissed this as not asking for money but wanting “the handcuffs removed,” which seems to me to be code for waving a magic wand to get pipelines built immediately, despite the fact that unless they plan to bulldoze through the Indigenous consultation process, is something the government can’t do. And Andrew Scheer? He went full drama queen with a petulant press release that accused Trudeau of trying to destroy Alberta, sounding very much like a jealous suitor wailing “He can’t love you like I will!”

More to the point, the federal government can’t just ram through the approvals for Trans Mountain, given that the last time they tried to cut corners, the Federal Court of Appeal objected and rescinded their approvals and would do so again, hence why they’re going the route of doing what the court laid out, and that takes time. There is no magic wand. Killing Bill C-69 won’t solve anything because the current system isn’t working, and while the bill is flawed and open to amendment at the Senate, Conservative senators have not consented to any committee hearings before the Senate’s slated (late) return in February (and I have heard various reasons for this, both in opposition to the bill, and because they are pushing back against the committee chair, who they accuse of doing the bidding of Senator Peter Harder). The tanker ban on BC’s north coast? That’s demanded by many of the coastal First Nations. Scrapping the carbon tax? Won’t change anything because it has nothing to do with the oil price differential and oil companies have been asking for a carbon price so that they can have predictability when it comes to climate demands. And then there’s the bogeyman about foreign funded “paid protesters” that the Conservatives blame for everything, despite the fact that they don’t control the courts or the economics of projects. That won’t stop Scheer or Jason Kenney from offering the people of Alberta another vial of snake oil, promising quick approval on pipelines that they can’t actually deliver on.

Meanwhile, amidst more lies and grievance narratives around the federal equalisation programme, Trevor Tombe drops a reality bomb about how the system works and why. Because amidst the demands for magic wands and offering snake oil, the Jason Kenneys of this country will continue to lie about how equalisation works to keep people angry in the hopes of getting electoral advantage for it. We need more people to tell the truth about the system if we’re to keep a lid on the anger and try to do something meaningful to address it rather than simply bow to grievance culture and fabrications.

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Roundup: Closer examinations of Canadian populism

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The topic of populism has been coming up a lot lately, in a variety of contexts, and there were a couple of interesting discussions around it in the Canadian context over the past couple of days. One is an examination by Frank Graves and Michael Valpy that looks at some of the demographic factors in Canadian populist sentiment, and digs out some interesting things like broader support among male millennials, and even some immigrant communities (though I would note that it’s not that difficult to get immigrant communities to turn against other newcomers – particularly asylum seekers – a technique that Jason Kenney tried very hard to exploit when he was federal immigration minister. The piece is worth digging into, and I had to read it a good two or three times before I started to appreciate a lot of what was contained within.

Another interesting piece was a look at the construction of Alberta conservatism, which goes beyond fiscal and social conservatism – indeed, when polled on values, much of the province actually skews toward fairly centrist values – and yet they disproportionately gravitate toward conservative parties out of a sense of brand identity, which is particularly curious, though one should note that political parties have been losing their ideological bases in favour of left-and-right flavoured populism over the past number of years. And populism is very much a factor in the Alberta voting populace, as the examination shows, which includes the distinction of populism as something that appeals to the “pure” homogeneity of a “people.”

To that end, here’s a good thread that digs into what sets populism apart from democracy, and why it’s something we need to pay attention to as this becomes an increasingly important part of the Canadian discourse.

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Roundup: It’s Statute of Westminster Day!

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Today is the anniversary of the Statute of Westminster, which you should be very excited about. Why is it important? Because in 1931, this is not only the Act of Parliament that gave Canada its sovereignty in terms of setting our own foreign policy – essentially meaning we were now a real country and no longer a glorified colony – but more importantly, it also created the Canadian Crown. In fact, this is where the Crown became divisible, and suddenly the Crown of the United Kingdom split off to become the Crowns of Canada, New Zealand, the Irish Free State, South Africa, Newfoundland, and Australia. The realms have changed since then, but the principle remains – that the King (now Queen) was no longer just the King of the United Kingdom, but that each realm had their own separate legal Crown as well. This is an important milestone in Canadian history, and we should pay much more attention to it than we traditionally do – particularly if you’re a fan of the Canadian monarchy because this is where it all began for us.

With this in mind, here’s Philippe Lagassé explaining the consequences of the Statute with regards to royal succession and the compromises that resulted from it.

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Roundup: Complaints without suggestions

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In the wake of the First Ministers’ meeting last week, we’re still seeing a lot of narratives in the media about how the prime minister hasn’t yet taken any steps to help the province in the short term – a take that is ignorant because it fails to comprehend what the situation about the price differential is. At its core, it’s a supply and demand problem, with too much supply and not enough demand, which drives prices down. Nothing the federal government can do will fix that in the short term. Buying rail cars is medium-term at best, but may simply being throwing money away given that once the Line 3 pipeline is up and running, it’ll outstrip the capacity of those trains right away – and I can’t stress enough that we are again in the midst of a global supply glut, so putting more product into a full market isn’t going to help matters.

And while this happens, we see more nonsense like this column from former Alberta MLA Donna Kennedy-Glans, which incoherently rambles about Trudeau not respecting the nation and inciting Western alienation. Which is ridiculous, because there is not a single fact in the piece, nor is there any suggestion of anything Trudeau could do about Alberta’s situation. It’s just angry flailing. Part of the problem that people – and Albertans especially – keep ignoring is that what’s happening with their prices right now is the result of decades of structuring their oil export market on the assumption that the Americans would be perpetual customers, which didn’t see the shale oil revolution that upended those assumptions, and they haven’t managed to pivot to overseas markets on a dime because obviously pipelines take a long time to build, and people don’t necessarily want them going through their backyards. It’s hard to blame Trudeau for that – any prime minister (or premier for that matter) would have a hard time dealing effectively with this state of affairs, and no, carbon taxes have nothing to do with this situation, nor does the desire to change environmental assessment legislation, because the current system isn’t working either. But Albertans – and I speak as one – both tend to be allergic to self-reflection (recall how they recoiled at Jim Prentice suggesting they take a look in the mirror, and elected Rachel Notley as a result), and a they like to blame Ottawa for their problems – especially if there’s someone named Trudeau in charge. We should be better than this.

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Meanwhile, the Globe posted a nonsense story about equalisation – again – in that Quebec still gets it while Alberta is in a deficit, and I can’t even. You would think that a national newspaper could get the basics of equalisation right, but apparently not. To remind the rest of us: Equalisation is about fiscal capacity, not your province’s budget balance. Provinces don’t sign cheques over to have-not provinces, but rather, this is all money that comes from income taxes. The reason Alberta pays more is because they have the highest incomes in the country. Grievance politics, along with lazy reporting that confirms narratives rather than challenges them is largely what keeps this myth alive, and it should be stamped down.

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