QP: Deception about deflation

For the final Question Period of 2021—which was still undetermined as things got underway, as the House Leaders were engaged in a game of chicken—neither the prime minister nor his deputy were present, but the latter would appear virtually. Erin O’Toole led off, script in front of him, and he immediately started off with a lie about deflation, which did happen, and he was presuming it to be a good thing because it would lower prices, when in fact it would have led to a spiral that turned into a depression as businesses couldn’t service their debts. Chrystia Freeland, by video, called this out as misinformation, and noted that Stephen Poloz cited that the government’s actions averted a second Great Depression. O’Toole railed about Freeland’s alleged misinformation during the election campaign and compared her to Donald Trump, and Freeland called O’Toole the leader of flip-flops, and noted that in the election the Conservatives promised even more spending while they were currently railing against it, and that a consistent position might be nice. O’Toole repeated his first question in French, and Freeland repeated the Poloz comments in French. John Barlow got up and railed about the export ban on PEI potatoes and wondered why the agriculture minister was not currently in Washington resolving the situation. Freeland assured him the federal government was working to resolve if and noted she was next to the prime minister when he raised it with Biden, while Conservatives advocate capitulation. Barlow insisted that this has basically destroyed PEI, and Freeland dismissed this as scaremongering, and reassured farmers they were working on it like they did with previous disputes they won on.

Alain Therrien led for the Bloc, and blamed the Quebec teacher who was reassigned for wearing a hijab, railing that she knowingly broke the law and saying otherwise was Quebec bashing. Freeland calmly recited that they stand with Quebeckers who stand up for individual rights and freedoms. Therrien railed that mayors are funding court challenges, accusing them of not understanding secularism or democracy, and Freeland gave some fairly disarming reassurances that the federal government works well with Quebec and the Bloc shouldn’t pick fights.

Peter Julian rose for the Bloc, and in French, he worried that omicron could lead to lockdowns with no supports, to which Freeland made a pitch for MPs to pass Bill C-2 to provide necessary supports. Julian shouted the same question again in English, and Freeland repeated her response in the other official language. 

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Roundup: The inflation stats and what’s behind them

Rounding out the big economic week was the Consumer Price Index report yesterday (made all the more difficult because Statistics Canada’s website is largely offline as they seal the cyber-vulnerability identified on Friday). The top line figure is that inflation remains at 4.7 percent for a second month in a row, meaning that it hasn’t accelerated into the much higher territory that places like the US are sitting at, and several of the price indicators were flat, which could mean that some prices are starting to stabilise. But it’s still early days, though when you drill down into the numbers, there are really three things that are driving inflation: gasoline, housing costs, and meat.

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To be clear, as noted by StatsCan:

  • Oil production continues to remain below pre-pandemic levels though global demand has increased
  • Prices for fresh or frozen beef increased 15.4% year over year in November. Poor crop yields resulting from unfavourable weather conditions have made it more expensive for farmers to feed their livestock, in turn raising prices for consumers

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So what is the takeaway here? That these are issues that the federal government has very little control over, and that the Bank of Canada raising interest rates won’t tackle either. And yet, we keep hearing demands for “concrete action” from the federal government on this, as though they could wave a want to fix it. Or if not a magic wand, then wage and price controls? Do we need to bring “Zap, you’re frozen!” out of retirement?

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QP: A scattershot of unfocused sound and fury

While both Justin Trudeau and Chrystia Freeland were in town and had press events earlier in the morning, neither were present for QP, but neither were any other leader. Candice Bergen led off, script on her mini-lectern, and she demanded a personal apology from Harjit Sajjan for not dealing with sexual misconduct in the Canadian Forces, and Anita Anand, fresh from giving the official apology, stated that said apology was one example of the steps they were taking to work toward a place where there was a safe workplace in the Forces. Bergen then pivoted to the planned CPP premium increase, declaring that it would kill small businesses. Randy Boissonnault shrugged that the Conservatives don’t like the CPP, and he praised it. Bergen accused the government of hating small businesses, and Boissonnault praised the strong economic recovery. Gérard Deltell took over in French to also worry about the CPP increases, and Boisonnault repeated praise for the CPP in French. Deltell specifically raised tourism and hospitality sectors, and demanded the government split Bill C-2 to immediately pass those supports, and Boissonault didn’t bite, and wanted support for the whole bill.

Alain Therrien led for the Bloc, and declared that Bill 21 was democratically passed, and declared that it doesn’t target anyone, to which David Lametti said that nobody should lose their job for wearing a hijab. Therrien demanded that the government declare it would not support court challenges, and Lametti said that there are currently court cases being fought in the province.

Peter Julian rose for the NDP, and in French, demanded an immediate solution to the clawbacks of GIS payments. Kamal Khera declared that they were working on it. Rachel Blaney took over in English to declare that seniors were homeless because of these clawbacks, and Khera read some good news talking points about supports for seniors before repeating that they were working on the clawback issue.

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Roundup: Swift passage, but not for the better

In another surprising move, the Senate passed the bill to ban conversion therapy at all stages yesterday, with no committee study, meaning that it only needs royal assent now, which can happen at any time. But while this is a relief to many, it’s also a tad irresponsible.

The lack of study of the current bill in the House of Commons was a political gambit designed to keep the Conservatives from being trapped by their own social conservative members, and to avoid giving any more media clips about people supposedly overcoming “lesbian activity” and so on. The fact that this version of the bill is different from the one that passed the Commons in the previous parliament is relevant, and there are changes that deserved some actual scrutiny because there were live constitutional questions around them (and yes, I asked the minister about it during the press conference, and I asked other questions about the bill during the not-for-attribution technical briefing, but those are not on the parliamentary record). And yes, this matters because the Senate should have done the work that MPs opted not to do out of political expediency. That’s one of the reasons why the Senate is the chamber of “sober second though”—because they don’t have to deal with the political repercussions and ramifications when the politics wins out in the Commons.

Unfortunately, politics also won out in the Senate (which should be an indictment of its supposed more “independent” existence these days). Acting Conservative leader in the Senate, Senator Leo Housakos, in his speech to give the bill swift passage, said that this issue shouldn’t be made into a political wedge like the Liberals were doing. Which is ironic because it wasn’t the Liberals who were holding up the bill previously by slow-walking it, refusing to let debate collapse, and by putting up speaker after speaker to offer the same concern trolling. That wasn’t the Liberals being political—it was 100 percent on the Conservatives for that, and now they’re trying to shift that blame. Yes, passing this bill at all stages was the expedient thing to do, but from a process and a parliamentary perspective, it was not the right thing to do, and it’s going to make the courts’ jobs that much harder when this inevitably gets challenged and they have little on the record to go by.

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Roundup: A newer, worse compromise

The Speaker engaged in a bit of procedural housekeeping after Question Period yesterday, and ruled that the Board of Internal Economy’s vote on a vaccine mandate for MPs in the House of Commons was in fact a violation of MPs’ privileges—which most of us expected, because that’s pretty much what it was. It’s a moot point, however, because the motion passed that re-authorized hybrid sittings included the vaccine mandate for the Chamber, so there remains a vaccine mandate regardless of this outcome. It sounds like the Conservatives are satisfied with this ruling in that it doesn’t create a precedent for expanding the BoIE’s powers, so that’s not necessarily a bad thing in all.

At the same time, the government house leader proposed a compromise for the Winnipeg Lab documents, which had been floated before dissolution but is back on the table now—which is procedurally dumb because the committee that requested those documents is non-existent, as is the order to produce those documents. If said committee were reinstated and they vote on a new motion to produce documents, then the government should have floated this compromise then, but no, they’re going ahead with it unbidden, which is silly. This compromise would see the creation of a new committee that would be advised by a panel of three former senior judges who would vet materials—but again, this is stupid.

The compromise was the National Security and Intelligence Committee of Parliamentarians. That was the point. It was the right venue for these documents to go to, and that’s where those documents were sent, before the Conservatives decided that theatre was more important (and the other two parties decided that embarrassing the government was also the point). All this is doing is muddying the waters even further, duplicating efforts, and making MPs even less trustworthy to Canadian security and intelligence services. Because our MPs are not interested in actual oversight or accountability—they are only interested in theatre, and that diminishes our Parliament for everyone.

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Roundup: A plan hatched in caucus

Events yesterday bring to mind the 76th Rule of Acquisition, which states “Every once in a while, declare peace. It confuses the hell out of your enemies.” It almost feels like that was the tactic at play when the Conservatives decided to move a motion regarding Bill C-4—the conversion therapy ban— that would pass it at all stages. It did not receive any objections, and it went through, so the bill sailed through the House of Commons with no debate, and is now off to the Senate.

As I outline in my forthcoming Xtra column, the truth is that this wasn’t about confusing their enemies – it was about trying to take the heat off of Erin O’Toole and the social conservatives in caucus. After O’Toole’s office told the media that it would be a free vote, like it had been the last time around. Nine of those MPs didn’t survive their election, and O’Toole was being called a hypocrite for labelling himself an ally of the queer community without doing anything meaningful on proving it, like whipping his caucus so that they wouldn’t vote against the rights he said he respected. Thus, a plan was hatched in their caucus meeting where O’Toole basically laid down the law and said this was the route they were going to go, so that they could put this behind them.

I will fully admit that I didn’t expect things to turn out this way. The Xtra column was originally written to say that I expected them to drag out the debate on this bill again because it removed the loopholes around “consenting adults,” which many of the Conservatives were insisting on focusing on given how they couched their support for the ban under the weasel words of “coercive conversion therapy” instead of all forms, and a number of their MPs praised “counselling” that helped constituents deal with same-sex attraction of “lesbian activity.” I’m a little surprised that O’Toole exerted his authority on this particular bill given how much pressure his leadership is under – but there were also a lot of sour faces when the motion passed, and plenty of MPs who resolutely sat down and did not participate in the standing ovation that others in the caucus were visibly seen to participate in (chief among them former leadership candidate Leslyn Lewis). So I had to rewrite part of the column to reflect this change—even though it was a welcome change. But let’s not kid ourselves. This wasn’t a magnanimous gesture or one that showed true allyship—it was a pretty cynical ploy to avoid a recorded vote and further embarrassment of the party.

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Roundup: Who they gave succour to

Cast your minds back to summer of 2018, when prime minister Justin Trudeau attended a Liberal rally in rural Quebec and encountered a woman heckling him about refugees crossing the border at irregular points of entry. As part of this, she demanded to know when Trudeau would support “Québécois de souche,” a term tinged with racism as it applies only to those who descended from the early French settlers, essentially considering anyone without those particular roots to be some kind of contagion upon the state. Trudeau called out her intolerance, and she tried to sue for defamation.

A Quebec Superior Court judge dismissed her case, and pointed out the fact that she had tried to use the incident to make a name for herself among far-right circles, all while claiming that she has empathy because she’s a nurse, and will treat anyone. More to the point, the judge pointed out that she was deliberately trying to provoke the prime minister, and was thus the author of her own misfortune, and in dismissing the case, ordered her to pay legal fees.

So why bring this up? Because if you also think back to when the House of Commons returned shortly after this incident, the Conservatives all rushed to give succour to this woman, and tried to frame her aggressive questions and demands as though she was “just asking about the budget.” No, seriously. Conservative after Conservative stood up in the House of Commons to whine that “if Trudeau doesn’t like your questions, he calls you a racist.” Because in their minds, being called a racist is a worse crime than the actual racism that the woman was displaying. And it goes to show what the party is willing to stand up for, and who they are willing to protect if they think they can score points from it.

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Roundup: Some more inflation fact-checking

Because you know it’s going to come up yet again during Question Period today and through the rest of the week, here are a couple of reality checks around inflation, first from former Bank of Canada governor Stephen Poloz, who will give you all of the reasons why the pandemic spending and stimulus is not what is causing the current bout of transitory inflation.

Next, from economist Stephen Gordon:

So when Erin O’Toole and Pierre Poilievre start sounding off on inflation again, I know whose economic judgment I’ll be listening to (and it won’t be theirs).

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Roundup: Three Amigos without much outward progress

Well, that was the Three Amigos summit, and it doesn’t sound like there was any outward progress on Canada’s biggest request, which is getting rid of that electric vehicle tax credit that would essentially crater Canada’s auto sector (and the nascent electric vehicle industry) in spite of decades of cross-border integration of our supply chains. But that progress may yet happen because the Canadian delegation was not solely focusing on the White House – where Biden was non-committal – but also engaging congressional leaders who have the real power in this situation, so there remains time to see if that credit will survive the tortuous and nonsensical budget bill process in their system.

Meanwhile, the Conservatives have declared that Trudeau’s approach to relations with the American administration “isn’t working,” and I’m not quite sure what they’re really on about, because there is a massive power imbalance here, and we can’t forget that we are largely an afterthought to the Americans, who are far more concerned about their southern border than the northern one. Softwood lumber has been an irritant for decades, and I distinctly recall the sector was unhappy with the agreement that the Harper government signed (which has since expired). Buy American? Again, this happens under every administration, and is not unique to the current government. Measures targeting agricultural exports? Erm, some of us recall the problems with country-of-origin-labelling that the Conservatives couldn’t make any progress on. Action against pipelines? Seems to me that Harper didn’t have any luck there either, even after plastering Washington DC with billboards and posters declaring that Keystone XL was a “no brainer.” Yeah, that didn’t work.

So what exactly does Chong propose? Performative temper tantrums for the benefit of the media? That seems to be the Conservative demand for most files, but there were two former diplomats on Power & Politics last night who basically said that if you want progress with the American government, you need to do it behind closed doors and not be seen to be pinning someone down, because they don’t respond to that well at all. But we also need to remember that the Conservatives also seem to think that diplomacy is the cookie you get for good behaviour rather than how you deal with problems, so it’s not unsurprising that this demand for performance is how they think this needs to be dealt with.

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Roundup: Demands to take action on transitory inflation

Inflation was the word of the day again yesterday, as it was the monthly release of Statistics Canada’s Consumer Price Index, and lo, it was once again high – 4.7 percent, which it hasn’t been since February of 2003. But the factors behind it are largely global – energy demand versus supply on the market, the shortage of semiconductor chips that is driving up the cost of vehicles, and locally, labour shortages (much of it because of COVID) is driving up meat prices. Not that these factors matter much to Erin O’Toole.

Here’s the thing – there’s not a lot that the federal government can do about the causes of this current bout of inflation, which, let’s be clear, the Bank of Canada and the majority of analysts still believes is transitory given what’s driving it, so the last thing you want to do is overreact and create more problems in the economy. When it comes to food items, the rising costs of dairy are from supply management reflecting an increase in input costs; meat is being driven up by labour costs; other foods are impacted by droughts and supply chain issues. There’s very little that the federal government can actually do about this, not that it’s stopped O’Toole from demanding that something – anything – be done. But what is that anything? Price controls? Do we need to start practicing “Zap, you’re frozen!” again? Because it feels a lot like we’re heading back to that territory.

In the meantime, Kevin Carmichael puts the figures into context for what the Bank of Canada is likely to do about upcoming interest rate decisions. Mike Moffatt and Ken Boessenkool call on the Bank of Canada to give a clear explanation of what is happening with inflation, because otherwise the Bank will lose its credibility for allowing inflation to run hot when using their tools could do further economic damage if employed at this point. Heather Scoffield worries that the floods and washed-out roads and railways in BC will further drive inflation – though that fear may be somewhat misplaced, as the macroeconomic damage may be limited to a few days.

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