Tag Archives: Bank of Canada

Roundup: A subdued oil price shock

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The Bank of Canada decided to hold on raising interest rates yesterday, but there were some very interesting things in the accompanying Monetary Policy Report that haven’t been widely reported on, and much of that was the whole section in the report on the state of the oil industry in Canada. (It’s pages 9 and 10 of the report – PDF here). Essentially, for all of the talk about economic doom for the current state of oil prices and the price differential, this current price shock is affecting the Canadian economy at a quarter of what it did in the 2014-2016 price shock, and there are a couple of reasons for that. One of them is that the oil sector is no longer as big of a part of the Canadian economy as it was then – it’s currently worth 3.5 percent of our GDP, while it was six percent just a few years ago. That’s fairly significant. As well, after the previous price shock, most energy firms are better equipped to handle the low-price environment thanks to innovation, improved efficiency and the fact that they already cut overhead costs. Add to that, our low dollar is providing a buffer effect because it supports non-energy exports and employment. In other words, while it’s softened the economy a little over the past quarter and the current one, this is projected to be shrugged off as the rest of the economy continues to pick up steam, and we’re likely to continue growing at a greater pace, because the rest of the economy continues to be running close to capacity. Even some of the areas of potential slack that have been identified, such as lower-than-expected wage growth, are mostly because the situation in Alberta is dragging down the national average. So perhaps it’s not all doom after all.

One other particular note from the morning was that Bank of Canada Governor Stephen Poloz made a couple of remarks around his hometown of Oshawa, and how it’s managed to weather previous plant closures and how its resilience means it will likely weather the pending closure of the GM plant as well as it did previously.

Meanwhile, Kevin Carmichael walks us through the morning’s decision, and some of the reaction to it.

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Roundup: Dishonest blame-laying

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As this so-called convoy of “yellow vest” protesters moves eastward toward Ottawa, many of them demanding magic wands to expedite pipeline approvals that won’t actually happen (seriously, trying to fast track and cut corners is what got approvals thrown out in the courts before), I find it exceedingly curious – and a bit alarming – that Jason Kenney refuses to denounce some of the elements that have attached themselves to these “yellow vests,” most especially white nationalists and racists who are trying to use these rallies to agitate against immigration and asylum seekers. Kenney simply waves them off as a “handful” of people with “kooky ideas,” while he takes the intellectually dishonest route of blaming Justin Trudeau and Rachel Notley for Alberta’s oil sector woes, never mind the global supply glut, the shale revolution, and market inertia, or the fact that capacity only became an issue in recent months when production increased – or the fact that when he was in federal cabinet, pipeline projects weren’t making any faster progress either.

Trudeau and Notley didn’t create the problems of consultations on Northern Gateway. They didn’t create the market condition problems for Energy East. They didn’t create the American regulatory issues around Keystone XL. Trudeau bears some responsibility for the consultation issues around the Trans Mountain expansion, but that also has to do with institutional inertia and how bureaucratic Ottawa and the NEB in Calgary thought of Section 35 consultations in spite of successive Supreme Court of Canada rulings. These are broad and, in some cases, intractable problems for which easy solutions don’t exist, no matter what Kenney or Andrew Scheer say. Putting the bulk of the blame on Trudeau and Notley is completely and utterly dishonest, and Kenney knows it. But why does truth matter when you’re trying to stoke anger to win points?

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Roundup: Sorry for the service interruption

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Hey everyone – sorry for the service interruption! Malware sucks. Fortunately, it’s been taken care of and I have new preventative measures to ensure that it won’t happen again in the future, but that also costs me a lot more money to run this site than it used to, so if you can, please consider becoming a patron (and you get some exclusive content to go along with your support). Thanks again for your patience with this.

Good reads:

  • This week’s first ministers’ meeting is expected to get testy, and lo, the oil and gas sector is not explicitly on the agenda (to which Trudeau insists it’ll get discussed).
  • Oh, look! Data on rural work camps and violence against women! It’s something that does happen, despite the Conservatives deriding the association made.
  • Dairy producers are the beneficiaries of import quotas under TPP rules (and lo, I wrote about this being likely two months ago based on the CETA experience).
  • Federal lawyers are objecting to the UCP trying to join the Saskatchewan court challenge on carbon taxes. (It is unusual for opposition parties to be party to a case).
  • A lot of doubt is being raised as to whether the government will actually end arms sales to Saudi Arabia.
  • Apparently Canada’s “feminist” foreign aid policy is too unfocused and spread too thin to have a meaningful effect (not to mention is underfunded).
  • The Commons foreign affairs committee was supposed to have an in-camera meeting with Chinese officials, but that has been cancelled.
  • The Privacy Commissioner is calling for tougher digital privacy laws.
  • Environment Canada is an outlier in that it generally doesn’t track the e-waste of its weather balloons (in part because it’s too costly as we’re a vast country).
  • The CFO of Hwawei was arrested in Vancouver for extradition to the United States, and that could trigger backlash from China.
  • Raj Grewal’s lawyer says that all of Grewal’s gambling loans were from friends and family, and are entirely traceable.
  • Ontario’s chief controller resigned after she refused to sign the Ford government’s attempt to sell the “true” size of the deficit as $15 billion.
  • The New Brunswick premier wants Energy East to be revived, but TransCanada isn’t interested. It’s like there are economics at play!
  • Kevin Carmichael looks at the Bank of Canada’s sudden caution on raising interest rates, in large part because of the oil price shock.
  • Colby Cosh looks into Statistics Canada’s programme of testing municipal wastewater for signs of cannabis consumption.
  • Chantal Hébert looks at the federal-provincial  battles over pipelines, that will play out well after the next election.
  • Chris Selley disputes that there’s a crisis around the French language in Ontario.
  • Andrew Coyne looks at how far Andrew Scheer is willing to go to get the far right vote on the immigration issue as he rails against the UN global migration compact.

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Roundup: A StatsCan privacy check

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While the ongoing issue of Statistics Canada looking for financial transaction data continues, the actual privacy practices in the institution aren’t being adequately explained to Canadians – and they certainly aren’t being represented accurately by the opposition. So with that in mind, here’s professor Jennifer Robson to explain just what she has to go through in order to access data for her research at StatsCan, in order to give you a better sense about how seriously they take this kind of thing.

https://twitter.com/kevinmilligan/status/1059641954021990400

This is why the complaints that the data won’t be secure as it’s being anonymized is pretty specious, and the pearl-clutching that StatsCan would have a person’s SIN is also overblown considering that they already have it – they matched up people’s tax returns with their census forms to ensure that they had accurate data regarding household incomes, and lo, nobody made a peep about that when it happened. Again, this overblown rhetoric around what is being planned about this financial transaction data is not only risible, but it’s actively mendacious (particularly when Conservative MPs keep saying things like this is a project by the Liberal Party or by Justin Trudeau himself). And yes, StatsCan has done a woeful job as to explaining what it needs these data for, and this government is largely too inept to communicate any of that information either. And yet here we are.

Meanwhile, Andrew Coyne points out that while the Conservatives have been spending years attacking StatsCan, the real privacy threat comes from the unregulated use of personal information by political parties, not the country’s statistical agency.

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Roundup: The big climate reveal

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Yesterday was the big day, where Justin Trudeau unveiled the final details of his carbon pricing plan, and how the rebates would work for the provinces subject to the carbon backstop, which are going to be Ontario, Manitoba, Saskatchewan and New Brunswick, with the Yukon and Nunavut also kicking in slightly later. (You can find breakdowns here). The Conservatives and their provincial premier allies immediately chimed in to predictably call this some kind of scam, and that nobody believed the rebates would happen, and so on, and so on. Also of note is that Trudeau’s nominal ally, Brian Gallant in New Brunswick, has also grumbled about the carbon price (but if he loses and Blaine Higgs forms government, he too is opposed to it). Manufacturers and small businesses are grumbling, despite the fact that there will be rebates for small and medium-sized businesses under the scheme. Also getting larger rebates will be people in rural communities, given that they have higher carbon costs (and it’s no secret that the Liberals have a harder time winning votes there).

https://twitter.com/davidakin/status/1054753060336078848

With this in mind, here are some noted climate economists who can put some of yesterday’s announcement into proper perspective. (Additional thread from Kevin Milligan here, and Nic Rivers here).

Meanwhile, here’s a look at whether Trudeau can escape the problems of Stéphane Dion’s Green Shift, with points to Trudeau being a better communicator (but I’d argue that journalists prefacing every explanation of the Green Shift with “it’s complicated” didn’t help either). Chris Selley notes that this is the issue that could make or break Trudeau in the next election, which is why he needs to get it right. Paul Wells drops a bit of reality on the language that Scheer and Ford are using, and wonders whether the carbon backstop rebates will start catching on with other provinces.

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Roundup: Keeping up with vacancies

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Of all the places where the current government seems to have lapsed in their basic competencies, the most obvious tends to be their appointments process, and most especially when it comes to making judicial appointments. I’ll grant you that it’s more difficult than it can seem, especially when you are not only balancing the need for new judges with specific skillsets and linguistic capabilities (because you do need a certain number of minority-language speaking judges in every province), before you get to the issues of diversity, and the laudable goals of getting more women and visible minorities on the bench. What has made it more difficult is a process that relies on application rather than nomination, and this continues to be an ongoing saga. And while the courts have been adapting in the post-Jordandecision landscape by ensuring that criminal trials are getting precedence, it means that civil trials are falling to the wayside, and that has its own set of problems.

The Star delves into this problem, with a particular focus on Toronto-area vacancies, where they are chronically behind the number of judges they should have, and where the number that just got appointed will be offset by retirements within weeks. (As an aside, there is a push to get the complement of judges in the GTA increased further, because the total number has been deemed to be insufficient by the local bar). And what is perhaps most disconcerting here is that the minister keeps insisting that there needs to be broader culture change in the court system, not just more judges (when seriously, they’re looking for a full complement to start). I’m not sure that anyone disputes that culture change needs to happen, but the appointments are a pretty low bar that a government should be able to meet. And yet.

This having been said, there is some talk now that we may see more frequent appointments being made as cabinet starts meeting more regularly as Parliament resumes, given that Cabinet needs to approve these names for appointment. So maybe that will happen. But given the pace at which these things have happened, you’ll forgive my skepticism.

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Roundup: A sudden focus on birth tourism

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So that was the Conservative policy convention. There wasn’t a lot of drama, post-Bernier, and most of the reactionary and social conservative policy resolutions got voted down in the end, including those related to abortion. What did wind up being contentious was a resolution around stopping automatic birth citizenship, which was supposedly aimed at stopping “birth tourism” but would have the alternate effect of creating stateless individuals, which is contrary to international law. Mind you, the Liberals didn’t help any when they started talking about how this meant revoking existing citizenships (which it wasn’t), and then certain Conservative partisans started complaining that this was being unfairly cast as xenophobic (I’m not sure that’s really an unfair assessment), but there you have it. Incidentally, MP Deepak Obhrai came out against this. There was a bit of other drama when opponents of supply management stole the briefing binder for dairy lobbyists and found proof therein that regardless of what was decided, Scheer would use his prerogative as leader to ensure the policy was untouched. When this hit social media, his people insisted that no, that’s erroneous information, they had it wrong, but remember that leaders’ prerogative is pretty much how every party operates since we’ve started privileging leadership over the grassroots, but people seem to keep forgetting that.

https://twitter.com/cforcese/status/1033749144689684480

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Here’s a sit-down interview with Scheer to get his thoughts on policy positions that the convention was debating over the weekend, and another where he refuses to say if the Bernier split worries him. Scheer does complain that it’s hard for ordinary people to learn his name because he’s not suave and photogenic like Trudeau (never mind that a lot of what people in other countries remark about Trudeau is regarding his stances and policies, not just his looks). That said, it’s his party now, and it remains to be seen what his mark will inevitably be on it.

Meanwhile, the first poll about how people would vote with a theoretical Bernier-led party in the mix is out, and it would take enough votes away from the Conservatives and NDP to give the Liberals a bigger margin of victory. But remember, it’s early days and it’s pretty much the equivalent of putting “a pony” as the choice in the polls and people will immediately respond to it based on what they’re projecting rather than the reality, but that’s not unexpected.

Good reads:

  • Trilateral NAFTA might resume this week, but without Chrystia Freeland as she is on a diplomatic tour in Europe until Friday.
  • There are concerns that Shared Service Canada is gearing its procurements to favour multi-nationals over home-grown companies for contracts.
  • Families of fallen soldiers want public access to the rebuilt Afghanistan war cenotaph.
  • CRA’s tax evasion tip line netted some 32,000 leads last year.
  • Kevin Carmichael doesn’t think that there will be another interest rate hike in September.
  • Susan Delacourt sees problems with the conservative coalition that Andrew Scheer should be cementing at this point in his leadership.

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Roundup: A tough day for the Alliance

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The talk of the day is NATO, as well it should be, as the alliance is in danger of falling to tatters as Donald Trump picked fights (and this is without mentioning the problems of increasingly autocratic governments in Turkey, Hungary and Poland), though Trudeau apparently managed a side-meeting with Trump to talk trade. Trump did have a point about Germany getting natural gas from Russia (a point that Canada agrees with, though he didn’t necessarily articulate the concerns accurately), but the rest of it, particularly his new demand that NATO partners start contributing up to four percent of GDP on military spending? It’s ludicrous, because he doesn’t actually understand what he’s talking about, especially when he tries to frame it as though they’re paying into some kind of NATO fund that the US pays the lion’s share of – that’s not how the Alliance works, and very little of the US’ military spending goes toward NATO operations.

Canada, meanwhile, announced that we’ll be taking on a new role in Iraq to “train the trainers,” with more personnel and helicopters in the region, something that Trudeau may be hoping will be a bit of a distraction to Trump to show that even though we’re not meeting our GDP spending targets, we’re doing more than our share in contributing (particularly if you look at a country like Greece that meets the target because of salaries and benefits, but doesn’t contribute to missions or meet its equipment goals). IT’s partially why percentage of GDP is such a poor measure of contribution, because outputs are better measures than inputs. Nevertheless, Trudeau did reaffirm our commitment to the 2 percent of GDP goal, even though we’re not going to double spending to meet it anytime soon (though on a practical level, we’re having trouble getting DND to spend the money fast enough, so more money wouldn’t help with that capacity issue). Incidentally, Trudeau elaborated on some of this in his Q&A session, the highlights of which can be found here.

Meanwhile, Andrew Coyne lists Trump’s falsehoods and insults to the alliance while keeping an eye on next week’s meeting with Putin. Paul Wells takes a careful review of how Canada’s relationship with the Trumpocalypse have progressed from good to utter meltdown, and while he looks into Trump’s psyche, Wells also notes the disturbing trend toward authoritarianism that is creeping into more Western democracies, and that Trump is on the “winning” side of this trend – something that should absolutely be alarming to everybody because it signals the decline of liberal democracies.

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Roundup: On track for a final cannabis vote

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Over in the Senate, some of the drama around the cannabis bill has resolved itself and we can look forward to some structured, orderly report stage and third reading debate leading up to the June 7thfinal vote. And yes, before you say anything, the Conservative senators are playing along and have been swearing up and down that they will respect this date and not try to play any games and delay it further. (They also know that they’ve burned a hell of a lot of political capital on unnecessary fights lately and aren’t keen to burn any more).

To recap, part of the drama has been that the Conservatives still plan to move amendments at Third Reading, which is their right. But they wanted this as part of the structured plan, and the Government Leader in the Senate – err, “government representative,” Senator Peter Harder, wasn’t playing ball, and wanted the Social Affairs Committee – which funnelled all of proposed amendments from the four other committees that studied the bill and voted on them there – to have a look at those amendments first. And the Conservatives, rightfully, refused. And then members of the Independent Senators Group started giving quotes to newspapers about how they were open to real amendments and not those that were “superficial, tactical, unenforceable, or would only serve to delay this bill.” That, and throwing more shade about how they believed the Conservatives were just playing games, because the modus operandi seems to be that anything the Conservatives do is partisan and therefore bad, but anything they do out of a shared belief is not partisan and just fine, which is a lot of bunk. And some of the Independent senators are getting downright condescending in trying to make that particular case. Suffice to say, peace has broken out after the ISG got over their issues about the amendments, and they now have a plan for debate that will carry them through to the vote on the 7th.

Meanwhile, there is talk about whether the amendments to C-46 – the impaired driving bill – will survive a full vote in the Senate after the likely unconstitutional provisions around random alcohol testing. ISG “facilitator” Senator Woo is hinting that they would vote to reinstate the provisions. I will add, however, that I am not absolutely not buying their supposition that senators were trying to simply embarrass the government by returning the omnibus transport bill to the Commons a second time because it was their own Independent senators who insisted on those amendments. Sometimes senators insist on amendments because they think they’re in the right – which is a novel concept, I’m sure.

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Roundup: On the state of federal disarray

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Yesterday, Manitoba premier Brian Pallister took to the airwaves to declare that the Canadian federation is in a state of disarray, much like Alberta’s wannabe premier Jason Kenney declared that “Canada is broken” earlier in the week. And on the face of it, one could point to places where things don’t appear to be working, where you have a nation of fiefdoms of provinces who make their own rules and who don’t talk to one another – why we don’t have proper interprovincial free trade – and all of the petty bits of provincial protectionism that still exist, 150 years later (thanks in large part to the Judicial Council of the Privy Council, which was the final court of appeal in the early days of confederation, who undermined the Founding Fathers’ goal of a more robust federal government).

But this all aside, I have to look at Pallister, Kenney, and the rest, and point out to them that they’re absolute hypocrites for saying that the country isn’t working when they’re ones who make and continue to make contradictory demands about what is and is not federal jurisdiction. In the very same breath, they’ll demand that the federal government exert its constitutional authority to get a pipeline built, while simultaneously decrying that the federal government’s imposition of a carbon price is unconstitutional – never mind the fact that the carbon price is part of the political deal that is aimed at getting that pipeline approved. In other words, exert your authority only on things that I like, but not the things I don’t. It’s so self-serving and gross, but they play too cute by half about it. Every single one of them, handily handing off responsibility to the federal government when it suits them, and using the courts as a political tool to engage in political theatre – which, by the way, is abusing the courts.

https://twitter.com/cmathen/status/989987469197131776

https://twitter.com/cmathen/status/989988567962152960

To that end, Alberta premier Rachel Notley is offering up a very real warning – that using the courts in these ways could open up much bigger problems that would cause interprovincial gridlock, all because BC premier John Horgan is looking to protect his minority government’s confidence deal with the Green Party. And as far as reasons go for trying to further exacerbate the state of the federation, it’s not a very good or noble one, no matter how much one wraps themselves in the cause of the environment or First Nations.

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