Tag Archives: CRA

Roundup: A big economic week ahead

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It’s going to be a very big week in Canadian economics: Today is the day the Bank of Canada has their mandate to target inflation between one and three percent at an average of two percent gets renewed, with some additional language around employment in there (but not a dual mandate). Then Tuesday will be the government’s fiscal update, which isn’t expected to announce too many new things because there simply isn’t time for a budget implementation bill to accompany it. And then Wednesday, Statistics Canada will release the inflation figures for November, and it there remains a possibility it could go higher still before being expected to cool down by mid-next year. Because it’s largely about supply chains, and as the former governor of the Bank of Canada keeps reminding us, it’s not about the political situation or fiscal policy. The counterfactual is that if the government didn’t spend on pandemic supports and the Bank didn’t engage in quantitative easing, we would be in a deflationary depression cycle, and that would have left us all worse off.

With this in mind, here is economist Kevin Milligan with some added context:

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Roundup: Senator Batters blindsides O’Toole

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There is much intrigue within the Conservative ranks, and it just got a lot more interesting. First thing yesterday morning was the story that Bert Chen, the member of the party’s national council who was suspended for circulating a petition to call for an early leadership review would be suspended indefinitely, rather than for just sixty days. But a short while later, another petition started circulating to call for a leadership review, and this one was one they couldn’t ignore – from Senator Denise Batters.

Batters laid out a fairly devastating line of attack in her video – noting that O’Toole is the one that is growing the “rift” in the party, and that he is responsible for the election loss because of what voters perceive to be his character flaw – that he is not trustworthy. “You can’t come back from that,” Batters stated. And as a senator, Batters has latitude to lead this petition drive on behalf of grassroots members that others don’t, given that she doesn’t have nomination papers that need the leader’s signature, and if O’Toole boots her from caucus, she will only get even more vocal from outside, and she has a parliamentary platform. There have been some talking heads who are insinuating that she is perhaps a catspaw for Peter MacKay, given that she supported him in the leadership, but I sincerely doubt that’s the case – as partisan as she can be, Batters isn’t a fool, and she’s not a puppet for anyone. The party president tried to dismiss her petition, saying it goes against the party’s constitution, but the section he cited was only in relation to the leadership process, whereas she is initiating a party-wide referendum, which is different. (And again, Batters isn’t a fool, and she’s a lawyer who was once chief of staff to Saskatchewan’s minister of justice). Some talking heads have also stated that this goes against the process from the (garbage) Reform Act, but as a senator, Batters is excluded from the Act, and she is leading a grassroots movement, not one from caucus. It’s also being stated that this is just one part of a multi-stage movement within the party to call for this leadership review, so we’ll see where this develops, but O’Toole’s problems are not going away anytime soon.

Meanwhile, a parallel drama is playing out in Alberta, where more than a quarter of UCP constituency associations passed a special motion that will force an early leadership review of Jason Kenney than the April date he had managed to negotiate with his caucus earlier – and they also want an outside auditing firm to ensure the security of the voting system for this review, so that there isn’t a repeat of the alleged shenanigans that coloured the initial leadership vote that got Kenney into power in the first place (which are still part of an ongoing investigation last I checked). Things are not looking up for Kenney either, and he and O’Toole suddenly have a lot in common.

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Roundup: Handwaving about tax loopholes

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The narratives about “closing tax loopholes” never really die, and lo, they have come back yet again on the campaign, as Jagmeet Singh hopes to use this as a campaign plank, and to basically start extracting a dollar figure from them. The problem? Well, that’s basically misunderstanding the problem with these “loopholes” – they’re a game of whack-a-mole. It doesn’t mean that you shouldn’t tackle them, because you should, and successive governments have been doing that for decades, but as soon as you close one, the well-funded tax preparation industry finds another that they can exploit, and all of that money that a government may have been hoping to recoup doesn’t appear.

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Additionally, Singh alleged that Justin Trudeau was somehow directing the CRA to not go after large corporations, and that he isn’t charging the “super rich” tax evaders. But again, this distorts reality – the CRA is an arm’s length agency from government, and free from political direction, and don’t direct audits or collection activities. Yes, the current government has provided more funds for CRA to undertake those activities, but they can’t tell them who to audit. Additionally, when CRA finds a file that they deem suspicious, they forward it to the RCMP, and if they feel that there is criminality, they forward it to the Public Prosecution Service – which, again, is arm’s length and not subject to political direction – and they decide whether or not to lay charges. Thus far, they have not with some of the high profile investigations into the Panama Papers, or other such leaks, likely because they know their chances of a successful prosecution are slim because these particular practices wind up being legal in the long run, no matter how often governments try to crack down on them. Regardless, Singh trying to portray this as either cronyism or a lack of political will is not reflective of reality.

Also not reflective of reality – some of the hand-waving he’s been doing in other interviews, such as this one where he says he’ll “get it done” on ending the deferral period for blood donations for men who have sex with men – never mind that Canadian Blood Services is arm’s length from government and not subject to their orders. You can’t Green Lantern your way through government. Implementation of your ideas matters – a lot.

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Roundup: The July job numbers

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The Labour Force Survey results for July were released yesterday, and while there was positive job growth, it wasn’t quite as robust as had been expected. The recovery remains uneven, but some of the narratives and commentary aren’t really helping when it comes to adjusting to the reality of this stage of the pandemic (which isn’t even post- yet).

A lot of the narratives are still being driven by the likes of the Canadian Federation of Independent Business, which continues to rail about CERB and its successor suite of benefits that they claim are providing a “perverse incentive” for people to stay home, but that doesn’t seem to fit the reality, which is that the market is shifting. A lot of people who were in these service-industry jobs either moved on during the pandemic because it (and the government benefits) afforded them the opportunity to do so – which is why you have people complaining that their favoured servers at their local watering holes didn’t come back, and you have nineteen-year-olds who just got their Smart Serve certification replacing them. But another narrative is also bubbling up, where we also have a cohort who aren’t willing to go back to what existed beforehand, with the low wages and mistreatment, and a lot of those business owners haven’t made the cognitive leap yet that they can’t keep operating the way they did before. Of course, this is one reason why the CFIB is so up in arms about these benefits – they have a vested interest in things returning to the old normal where labour can be exploitative without consequence, but the current reality is changing that. This could be change happening that will be better for us all overall, if it’s able to take hold – and chances are, this government more than others are more willing to let it happen.

The Conservatives, meanwhile, are insistent that the federal government is “killing job creation,” which is a novel argument considering that they’re not the level of government responsible for the maintenance of public health measures (which has been one of the biggest determinants of economic activity over the course of the pandemic). They’re also keeping up the fiction that a pre-third wave job recovery projection was a “promise” about job creation, again, which was derailed by more public health measures because provinces screwed up their own recoveries by re-opening too soon. All of which is to say that we don’t seem to be capable of having a reasonable conversation about what is happening in the labour market, to the detriment of all of us.

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Roundup: Just the Speaker doing his job

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We got our first glimpse at the court documents related to the challenge of the House of Commons’ order demanding the production of secret documents related to the firing of the two scientists from the National Microbiology Lab. The Speaker, Anthony Rota, put in his submission that the case should be tossed because of Parliamentary privilege, and there was no explicit waiving of parliamentary privilege under the Canada Evidence Act, which is what the Public Health Agency is following in refusing to turn over unsecured documents. As a reminder, they have turned over the documents, both in redacted form to the committee that requested them, and in unredacted form to NSICOP, which has appropriate security clearances and safeguards, so it’s not like this is a blanket refusal to defy Parliament – it’s that they have their own obligations to follow. It’s also somewhat problematic that the committee wants the Commons’ Law Clerk to then redact the documents on his own, without appropriate training or context, so they ultimately claim they’re not looking for unredacted documents – only for someone else to do the redacting, at which point this is just becoming absurd.

The way this is being spun is also somewhat irritating – because this was a Canadian Press wire story, outlets who ran the piece sometimes did so with altered headlines that stated that it was the Liberals interfering with the “exclusive jurisdiction” of the Commons rather than the government, which is not really true. This isn’t a partisan issue – it’s different parts of the government acting according to the laws that Parliament passed. When the demands were made, PHAC was bound in legislation to inform the Attorney General, and while it is the same physical person as the minister of justice, under his Attorney General hat, he had obligations to follow the law and test these demands in Court.

The other commentary that is somewhat maddening is people pointing out that the Speaker is somehow going against his party in doing his job as Speaker in defending the Commons’ privileges. Again, this isn’t actually a partisan issue on either side (well, the Conservatives making these demands for the documents, with the support of the other opposition parties, are behaving in an extremely partisan manner and trying to embarrass the government, but that’s neither here nor there for the purpose of what we’re discussing). Trying to make it a partisan issue when everyone is doing their jobs is just degrading the discourse and muddying the understanding of what is going on (which is what certain parties would like to happen because it makes it easier for them to lie about the state of play). We shouldn’t be doing their dirty work for them.

Programming Note: I’m taking the next week off (as much as I am able), because it’s probably my only opportunity in advance of the possible election, and I really don’t want to have to deal with election coverage while battling burnout. Take care, and I’ll see you on the far side of the long weekend.

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Roundup: Carney out, no need to panic

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To the dismay of the bulk of the pundit class, Mark Carney says he has other climate-related commitments and won’t be running for a seat in the next election. In response, Pierre Poilievre tweeted that Carney is afraid of running because Trudeau will cause a financial meltdown, and Carney will try to blame it on Freeland. It’s just so stupid, and yet this is the state of public discourse in this country.

To be clear, there is no financial meltdown going to happen. Yes, there are challenges that need to be addressed, but let’s be real here.

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QP: One last kick at the hybrid can before summer

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For the final sitting day of the spring, the Liberal benches were once again empty save for Mark Gerretsen, the prime minister planning to appear by video from quarantine. Erin O’Toole led off in person, script on his mini-lectern, and he worried that over five years the government has grappled with Operation Honour, and wanted the prime minister to confirm that the defence minister had never hired someone who was found to previously dismissed from an employer for sexual misconduct — obviously laying a trap because he has something he plans to unveil. Trudeau gave praise to Sajjan for his service. O’Toole noted that Trudeau didn’t really answer and gave him another opportunity, and Trudeau praised their work in changing the culture in the military. O’Toole gave him yet another opportunity in French, and Trudeau repeated that they were taking concrete action make this culture change. O’Toole then raised the contracts to Tom Pitfield’s data services company, and wondered if he had been given any other contracts, and Trudeau noted that the casework database their MPs use, it has strict separation from the party database, and warned against cheap attacks. O’Toole raised two other contracts to Pitfield, noted that they were going to crack down on corruption, and wanted the same from the prime minister. Trudeau dismissed the “baseless personal attacks,” and raised the work they were doing for Canadians.

Yves-François Blanchet, in a somber tone, asked the prime minister to reflect on their choice to create two classes of seniors by giving additional benefits for those over 75, and Trudeau recited that they are always there for seniors and that older seniors have greater needs. Blanchet then wanted the prime minster to increase health transfers to promises, and Trudeau reminded him that they have sent billions to the provinces for help in the pandemic, and that eight out of every ten dollars of assistance were federal dollars, but discussions on increasing transfers were coming in the future.

Jagmeet Singh complained that the ultra rich were not being prosecuted for tax evasion while the government was cutting pandemic benefits, for which Trudeau praised the actions they have taken to help Canadians. Singh then decried that the remaining boil-water advisories on First Nations could take five more years and accused this of not being a priority to the government, and Trudeau reminded him of how many advisories they have solved, and that pretending they did nothing was just misleading and cynical politics.

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Roundup: The Ombudsman demands independence

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The military ombudsman put out a position paper yesterday that called for his office to be made fully independent, and he criticized the minister’s office and the Department of National Defence for trying to interfere in investigations and ignoring recommendations for change. In particular, he cited that turning a blind eye to his office’s recommendations advances political interest or has to do with self-preservation or career advancements within the defence community.

Readers may know that I have issues with the demands for yet more officers of parliament. The proliferation of these officers has become acute in the last decade, and while there is a need for an independent ombudsman for the military, I also have not been blind to some of the previous holders of that office, and some were very much unsuited for an office that has no accountability. I’m not sure what kind of a structure the ombudsman’s office should need to be, but again, making him unaccountable and completely insulated opens the role up to the kinds of abuses of authority we’re seeing with the last officer of parliament that was created (being the Parliamentary Budget Officer, who has become completely unmoored from his legislative mandate). Anyone who doesn’t share this concern obviously isn’t paying attention (and I can guarantee you that the media is not paying attention, because they like it when these unaccountable officers try to turn themselves into media darlings, as the PBO is doing right now).

When asked about this, Justin Trudeau said that he would put it to Justice Louise Arbour as part of her comprehensive review, so that the ombudsman’s office can be part of the solution to reforming the military, but I fear that she may recommend the officer of parliament route. Part of the problem right now is that the minister isn’t responsive, but I think the solution needs to be that the minister needs to go rather than the ombudsman needing additional powers. Would that we actually hold ministers accountable for their failures, but this government doesn’t seem to be too keen on that.

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QP: Why are you sending cheques?

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It’s the beginning of the last week of the sitting calendar, and none of the leaders were present, in person or virtually. The Liberal benches once again remained virtually empty, save Anita Vandenbeld, who swapped with Mark Gerretsen a short while later. Candice Bergen led off in person, raising the story that Liberal MPs have been sending cheques to Tom Pitfield’s company, given his friendship with the prime minster. Pablo Rodriguez responded that this was for a system to help manage constituency files. Bergen tried again, and this time Rodriguez insisted that the Conservatives were obstructing the agenda. Bergen, after starting off with the wrong script, then demanded that the government demand that the president of PHAC turn over documents related to the National Microbiology Lab firings, for which Patty Hajdu admonished her for playing games with national security, given that the documents were given to NSICOP. Gérard Deltell took over in French to repeat the demand, and Hajdu warned that the Conservatives were playing a dangerous game with national security, and quoted Thomas Juneau about his concerns. Deltell tried again, and Hajdu quoted Stephanie Carvin this time.

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Alain Therrien led for the Bloc, and demanded that EI reform better cover people in the cultural sector, and Carla Qualtrough assured him they were working to do just that. Therrien couldn’t take yes for an answer and demanded again, and Qualtrough insisted that the best thing they could do was to pass the budget.

Rachel Blaney conflated the bodies at residential schools with the court case challenging the Human Rights Tribunal ruling on First Nations children, for which Mark Miller stated that there were competing concerns in class action lawsuits, which is why they we negotiating compensation for them. Leah Gazan raised a Black Lives Matter protest about police state violence, and Bardish Chagger stated that they take the calls to action seriously, which is why they took measures in the budget to address this work.

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Roundup: Ford turns to the Notwithstanding Clause – again

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The sudden comfort with which premiers are deciding to invoke the Notwithstanding Clause is getting a bit uncomfortable, as Doug Ford decided he needed to invoke it after a court struck down his attempts to limit third-party spending in provincial elections in a somewhat arbitrary fashion (given that unions get together to form American-esque political action committees in this province). While you can find a great explainer on Ford and his particular legal challenge in this thread, the more alarming part is the apparent need to reach for the “emergency valve” of the Clause before even appealing the decision to the Court of Appeal or the Supreme Court of Canada.

There is a perfectly legitimate reason why the Notwithstanding Clause exists, which as to do with keeping a certain amount of parliamentary supremacy in lawmaking, and it gives governments an avenue of recourse if there is a fundamental disagreement with a court’s interpretation of legislation. But lately, it’s being invoked by premiers who know they are trying to push through objectionable legislation – François Legault did it with Bill 21, which the courts have essentially said blocks their ability to strike down any portion of the law, and he’s doing it again with his Bill 96 on trying to obliterate any bilingualism in the province (the same bill that seeks to unilaterally amend the federal constitution). Ford had threatened to invoke it to ram through his unilateral changes to Toronto City Council while they were in the middle of an election, but ultimately didn’t because of a court injunction, and his decision this time is similarly dubious. This willingness to invoke the Clause at the first sign of court challenge or on the first defeat is a very big problem for our democracy, and we should be very wary about this abuse of power, and punish these governments appropriately at the ballot box during the next elections for these decisions.

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In the meantime, here’s Emmett Macfarlane with more thoughts on the court decision that led to this turn of events.

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