Roundup: False narratives about the Q2 GDP

The figures for second quarter GDP were released yesterday, and they weren’t as good as had been expected. There was a surprise contraction of 1.1% annualized, which caught economists off-guard (and perhaps Statistics Canada as well, as their flash estimate a month previous had still shown growth). The majority of these declines were in the months of April and May because of the third wave, as June had shown robust growth in nearly all sectors as economies around the country re-opened – and those declines were largely in the areas of home resales and exports. To an extent, the home resales was a bit of a correction – after giant increases in previous quarters, most especially Q3 of 2020, the market slowed down.

For Erin O’Toole and Pierre Poilievre, however, these figures were a cataclysmic sign that Trudeau can’t “manage” the economy, and that it’s deficits that are leading to inflation, which is insane. A lot of the weakness is attributable to the Third Wave and its associated lockdowns, and that is squarely the fault of premiers who opened up too soon, reduced restrictions too fast, and then were too slow to re-impose them (and we’re going to get more of that in the oncoming fourth wave). More than anything, it’s reflective that O’Toole and Poilievre aren’t even bothering to read the data beyond the headlines, and are slotting it into pre-arranged talking points which are so divorced from reality that it should be concerning to anyone paying the slightest bit of attention. The fact that Poilievre is goading the Bank of Canada over Twitter is a Very Bad Thing. He’s continuing to politicise them, and feeding into a bunch of poisonous populist narratives, and O’Toole is joining him for the ride. This is a very bad thing for our economy, and it doesn’t matter that they’re doing it all for show and that they probably will keep things status quo should they form government – the fact that they are polarising the debate and riling up these same toxic mobs that have been following Trudeau’s campaign around is absolutely a problem. This kind of rhetoric should be disqualifying for anyone who seeks higher office in this country.

Meanwhile, as you may have heard, Erin O’Toole reiterated his promise to balance the budget without making any cuts (in spite of promising earlier to cut things like the CBC) because he’s going to grow the economy enough. Why does that sound familiar?

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Roundup: Handwaving about tax loopholes

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: O’Toole’s tacit endorsement of conspiracy theories

At another campaign event yesterday, Justin Trudeau faced another angry mob in the background, and this time they included signs that showed doctored photos of Trudeau at the gallows about to be hanged. Trudeau carried on throughout, but did call out Erin O’Toole to actually denounce this kind of thing, and O’Toole…didn’t really. Not in any meaningful way.

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It was pointed out that this particular image of Trudeau at the gallows was also part of one of Conservative incumbent Cheryl Gallant’s videos, wherein she peddled the conspiracy theory that Trudeau was going to call a “climate lockdown” to exert control and that climate change is just some fiction cooked up for these kinds of nefarious plots. And wouldn’t you know it – O’Toole refused to condemn Gallant or her continued attempts to push conspiracy theories. The party ensured Gallant scrubbed her YouTube channel, but their excuse when asked was that the image in question was “out of context,” which is bullshit that nobody should believe.

This isn’t the first time Gallant has been in the media for such things, and O’Toole has been aware of them in the past, and refused to do anything about it – in essence, endorsing the behaviour. And hell, Gallant is one of the reasons why Stephen Harper became so hard line about message discipline – because Gallant’s batshit media utterances about protecting sexual orientation from hate crimes helped to sink the Harper campaign in 2004. That O’Toole has been letting her run free with her accusations that the Liberals want to normalise sex with children, or this “climate lockdown” is a plot – and he knows she’s doing it, because it’s been brought to his attention before and he refused to say anything about it then either – it’s a tacit endorsement. Just saying “I’m the leader and what I say goes” both delegitimises the whole point of having MPs in the first place, and presents the party as monolithic, which it’s not. But to not say anything about Gallant or her conspiracies at all, and to consciously avoid saying anything about it at all is a choice, and it’s a choice that should be pointed out loud and clear as to what kinds of behaviours that O’Toole is willing to tolerate in order to achieve power.

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Roundup: A lack of self-awareness in the face of a violent mob

The cancellation of Justin Trudeau’s planned rally on Friday evening because of the growing number of angry protesters has given some pause to members of the media about how things got so bad, but there doesn’t seem to be a whole lot of self-reflection on too many people out there. While both Erin O’Toole and Jagmeet Singh have denounced the violent protesters, and O’Toole and local candidate Kyle Seeback kicking their volunteers who were part of the mob off of their campaigns, there remains a complete lack of self-awareness on their part. O’Toole not only endorses the kinds of shitposters that fuel this toxic outrage, but he has gone so far as to hire them, both for his leadership and for the campaign. The actively contributes to this discourse through winking and nodding to them, repeating their conspiracy theories in the House of Commons either directly or indirectly, and he directly contributes to this kind of poisoned discourse. Likewise, Conservative Michelle Rempel Garner is speaking out about being accosted and harassed on her campaign, but there is nary a word of acknowledgement about how she has fed this crowd, or the fact that she sends her own army of trolls and flying monkeys against those she disagrees with (and I know people who have been on the receiving end of this).

Most galling, however, are the media figures like John Ivison, who have essentially blamed Trudeau himself for this state of affairs.

There are others who have been bringing up the testimony of former Clerk of the Privy Council, Michael Wernick, during the hearings into the Double-Hyphen Affair, when he sounded the alarm about the rising incitements to violence that were happening on social media – statements that were roundly ridiculed by members of the media. I’d say that perhaps we should be looking for some self-awareness out of this, but I have serious doubts that it’s even possible among the majority of them. But maybe I’m just getting cynical.

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Roundup: Singh needs to start giving details

We have seen plenty of coverage thus far in the election about how popular Jagmeet Singh is, and how authentic he seems to his audience, and plenty about his personal likeability, but I am not seeing a lot that is pushing back against the things he is proposing. We have a couple of such examples yesterday, first with his pharmacare proposal. Essentially, the current government has put in the work, and established the Canada Drug Agency transition office, and thus far has signed up one province – Prince Edward Island. The other premiers have all balked at this, including the NDP premier of British Columbia, John Horgan, which I find mighty interesting in the current context. So, just what would Singh do differently? Well, he won’t say. Per the CBC:

When pressed by reporters on how he would get the provinces to sign onto his plan, Singh was light on details but committed to partnering with provincial and territorial governments. “We’d work with provinces and territories, I know it’s going to be hard work, but it’s going to save families money,” he said.

Great. He’ll “partner” with provinces that have thus far said no, and lo, he’ll do it by next year when it’s going to take years to negotiate a national formulary for said programme – something that seems to be a surprise to Singh, if you go by their stunt of a private members’ bill in the previous parliament, where they essentially proposed a framework where the provinces pay for prescription drugs and the federal government will then sign over a cheque. Yeah, it doesn’t really work like that. But I haven’t seen this being hammered home – you can’t just keep handwaving promises, particularly promises in areas of provincial jurisdiction, and not provide details on how you’ll accomplish it, and no, just promising to “work with” those provinces is not good enough. The current government has been doing that, and if you’re going to complain that they haven’t moved fast enough, then you need to explain how you’re going to do it differently. And no, the fact that you’re not Justin Trudeau is not an answer.

But he didn’t stop there. No, he also opined on vaccine passports, saying that the federal government should just go ahead and implement it federally – but again, didn’t say how they should, given that they don’t control the vaccination data because the delivery of healthcare is a provincial jurisdiction. These particular details matter, and you can’t just handwave them away. We need to start pressing Singh for details, because his answers aren’t good enough, and if he’s going to present himself as a serious contender for government, he needs to be asked the implementation questions so that he can answer them – and be made to answer them.

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Roundup: Considerations on the private delivery debate

The accusations and sanctimony from that video continued to reverberate around the campaign yesterday, with the Liberals defending the video and its edits, while the Conservatives wrote to the Commissioner of Elections to have it taken down, and really, we’re all the dumber for it.

It did keep the debate on healthcare going throughout the day, and while I do have a column on this coming out later today, I’ll make a few additional observations, which is that there are nuances to the debate around private delivery, and one of them is how stringently the federal government enforces the Canada Health Act when it comes to that enforcement. There are concerns that the Conservatives’ pledge to increase health transfers with no strings attached is a signal that they are willing to allow more private delivery, whereas the Liberals are starting to resume clawbacks of health transfers in proportion to fees collected from private delivery, as they paused those clawbacks during the pandemic so as to give provinces as many resources as possible (though one could argue that the federal government could have played harder ball). An example is Clinic 554 in New Brunswick, which is a private abortion clinic as the province won’t pay for its services, citing that the province is already sufficiently covered with the three hospitals that provide the service (which is disputed as the Clinic is in Fredericton, where the service is not provided publicly). The federal government was clawing back health transfers related to fees that people paid to the clinic, but stopped when the pandemic hit. It looks like this is going to start in Saskatchewan and Manitoba with private delivery of services in those provinces.

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Roundup: A GST holiday gimmick

For a campaign platform chock full of gimmicks, Erin O’Toole spent the day touting one of them – a proposed “GST Holiday” in the month of December, ostensibly as a way to stimulate economic activity. It’s a hugely expensive proposition, but also a hideously complicated one – by promising to make this come off at the till rather than as a rebate from CRA, he is loading all kinds of complication onto businesses, who may not be able to easily disentangle the federal GST from provincial sales taxes, particularly if they are harmonized in an HST as they are in most provinces. (It also won’t make those purchases “tax free” as O’Toole says in his video, unless you’re in Alberta). And even the Canadian Federation of Independent Business thinks this is a dumb idea that is more complicated than it’s worth.

We also should call out the fact that this is not only a gimmick, but O’Toole keeps trying to message around the cost of living and food prices, which a GST holiday would do nothing about because the vast majority of food items are GST exempt. O’Toole keeps trying to make inflation an election issue, never mind that it’s the domain of the Bank of Canada and not the federal government, and if he thinks the Bank’s mandate should be changed to target deflation instead of slow and steady 2 percent inflation growth, he needs to come out and say so rather than this posturing about rising prices. Prices are supposed to rise – inflation is not a bad thing when it’s low and predictable, because that helps the economy to grow. But this is populist noise, and for the so-called “party of the economy” to mislead people about this is telling.

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Roundup: We have a date for dissolution

This is not a drill – the election call will be coming on Sunday, for an election date of September 20th – a thirty-six day campaign, which is the bare minimum and technically will take place entirely in the summer. But until that happens, you can expect a flurry of announcements later today – a child care agreement with Saskatchewan, probably a few more Senate appointments, possibly some more judges, and any other senior bureaucrats who need to be repositioned before the government goes into caretaker mode.

Of course, as this is taking place, case counts are once again starting to rise across the country, and we are officially at the start of a fourth wave – because of course we are. While we can expect to hear a lot of hand-wringing about this over the next week or so, I would expect that the bulk of rallies or events will be held outdoors over the course of the campaign, plus a lot more virtual events – after all, Erin O’Toole is renting out that studio space with its big screens to do just that, and I wouldn’t be surprised if other leaders have similar plans that they have not yet unveiled.

Also, because this will drive me insane for the next week, the phrase “drop the writ” is completely wrong. There is no single writ, and it does not drop. Once the Governor General signs the proclamation to dissolve parliament, the Chief Electoral Officer will draw up 338 writs – one for each election being held (because remember, an election is not a single event – it’s 338 separate but simultaneous elections). So don’t use a wrong phrase, and save yourself a scolding from me.

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Roundup: Questioning the housing numbers

The Parliamentary Budget Officer released a report yesterday on the federal government’s programme spending on housing affordability, and I have questions, both on the report, and on the responses to it. On the report itself, I’m having a hard time seeing how this is necessarily within his remit, and not that of the Auditor General. This is not exactly fiscal or macro-economic analysis – it’s evaluating programme spending, which is the Auditor General’s job. (Once again, the PBO is not a “budget watchdog” or a “watchdog” of any kind, per his enabling legislation). This doesn’t appear to have been at the request of any MPs in particular, though this updates his 2019 report which was requested by an unnamed MP at the time, but again, not really his wheelhouse. “Providing economic and financial analysis for the purposes of raising the quality of parliamentary debate and promoting greater budget transparency and accountability” is being taken a little too broadly.

The findings of the report are that the funds allocated to housing are being underspent, but doesn’t really delve into why, other than noting that some of the spending was related to having to renew bilateral agreements with provinces that were allowed to lapse in 2015, and that CMHC’s programmes have both faced “implementation delays” and that their shift toward funding capital contributions instead of affordability supports spread that funding out over the life of projects. Those “implementation delays” probably deserve a lot more exploration – the fact that municipalities in particular aren’t spending the dollars available fast enough because the projects are bottlenecked in their own jurisdictions (and Vancouver is most especially guilty of this) – and that’s a lot of what this report seems to be light on details about. Housing is largely a provincial responsibility, and aside from providing money, the federal government has very few levers at its disposal, and when municipalities can’t get their acts together, that’s not really a problem the federal government can solve.

As for opposition reaction, it was predictable in that it read the PBO’s topline and not much else. The Conservatives complained that the housing plans haven’t met their targets and that they need a plan that “gets homes built,” which again, is pretty hard to do with the very few levers available at the federal level. The NDP, meanwhile, accuse the government of dubious accounting and broken promises, as per usual, again based largely on topline figures and not the fact that many of the problems exist at the provincial and municipal levels. Federal dollars only go so far and can only wield so much influence, and these are details that matter when it comes to implementing promises.

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Roundup: What open nominations?

Do you remember when the Liberals considered themselves the party of open nominations? And how they were always going to uphold the democratic right of riding associations to run fair, open and transparent processes to select the candidates that would appear on the ballot for them? Because apparently the party has put this particular bit of democracy, openness and transparency down the memory hole as they continue to acclaim candidates from across the country. In two of these cases, the acclamations came a mere day after the incumbents announced that they weren’t running again, and in one of those ridings – Kanata-Carleton – there was the making of a contested nomination as rumours swirled that Karen McCrimmon wasn’t going to run again, and the riding association was frustrated that they couldn’t get any kind of answer from the party on how and when to run said contested nomination.

Now, the party is going to defend its honour by pointing out that their rules state that they can declare a state of “electoral urgency” to bypass the nomination process, but this is more of the Liberals’ penchant of letting the ends justify the means. They created the rules that were easily gamed, and frankly, the “electoral urgency” clause is a load of bullshit because they were using it in 2019 in the months before the election when they knew they had four years to have this process ongoing because there was a fixed election date under a majority parliament, so there were no surprises. Yes, the pandemic has made nomination races tougher because of public health restrictions, and the party has come under fire for using a verification system that includes facial recognition technology (which BC’s privacy commissioner is investigating, per that province’s laws), but again, these were things that the party should have been cognisant of and dealing with rather than simply wringing their hands and pulling the “electoral urgency” alarm to fast-track their hand-picked candidates, thwarting local democracy, and accountability.

Open nominations are one of the most important and fundamental building blocks of our democratic system. When parties flout those rules, it hurts the entire system – especially as it cements even more power in the leaders’ offices. That the Liberals are so blatantly ignoring their own supposed values in this crucial stage of the democratic process is a sign that the way the party rewrote their constitution to fit the Trudeau era is a very real problem that they are going to have to do a lot of soul-searching to address, especially when that age comes to its inevitable end.

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