Roundup: Higher inflation than expected

It is now day fifty-seven (or so) of Russia’s invasion of Ukraine, and hope is waning for the remaining defenders of Mariupol, and the civilians still sheltering there. As the fighting intensifies in the eastern part of the country, there are also concerns that it will devolve into a war of attrition, which Russia has historically been more able to withstand. We have also learned more about what happened when Russian troops occupied Chernobyl, where staff were working at gunpoint, and sleeping three hours a night in order to safeguard the site and ensure that Russians didn’t tamper with any of the equipment there.

Closer to home, the inflation numbers were released yesterday, and they were much higher than expected, as conflict inflation brought on by the aforementioned invasion of Ukraine is hitting. And of course, most media outlets were useless in explaining the causes of it, while the parties were equally useless in their own reactions. The government keeps focusing on their talking points about things like child care and dental care, and the fact that they indexed benefits, rather than actually explaining the drivers. The Conservatives are railing about “printing money” (which, to be clear, nobody is actually doing) and insisting that the government should declare a GST holiday, which would a) do nothing for grocery prices as most groceries are GST-exempt; and b) would have a stimulative effect and just fuel even more inflation, especially as people would be likely to use said GST holiday to buy big-ticket items. And the NDP, predictably, chalk this up to greed and want higher wealth taxes, which again, do very little about the drivers of inflation.

And then there’s the Bank of Canada, who will be forced to respond with higher rate hikes, but the question becomes whether they’ll keep the increases more gradual—another 50 basis points at the next meeting in June—of if they’ll go even higher as a way of demonstrating that they are really taking this seriously and that the system of inflation control that they’ve been responsible for since the 1990s will prevail. It doesn’t directly address the drives, but it could be that the signals are more important than the actual policy at this point, because the bigger worry is the expectation that inflation will continue, which will turn it into a self-fulfilling prophecy—something they are very, very keen to avoid.

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Roundup: Chalk up another Conservative disinformation campaign

We’re now on or about day fifty-one of Russia’s invasion of Ukraine, and has been confirmed that Russia’s Black Sea flagship, the Moskva, has sunk, which is a huge loss for Russia (particularly as Turkey is blockading the entrance to the Black Sea to military vessels, so there will be no replacement for it anytime soon), and it will no longer be able to support Russian ground forces, or to shell cities from afar. In the meantime, president Volodymyr Zelenskyy continues to show that he is a master communicator for his country and his cause.

https://twitter.com/ZelenskyyUa/status/1514681561412780035

Closer to home, yet another pernicious bit of disinformation has started circulating, courtesy of the Canadian Taxpayers’ Federation, who read the Emissions Reduction Plan (which was prepared by an arm’s-length advisory panel), found a reference to a proposal to add a surtax to certain kinds of gas-guzzling vehicles, and then wrote an op-ed in the Toronto Sun that declared this was the government’s plan. Jason Kenney picked up on this and decried it, as has the Conservative Party writ-large and several of its leadership contenders. Of course, there are no actual plans for such a tax, but why does the truth matter? This was the tactic they’ve been using on the supposed plans for a capital gains tax on primary residents, which doesn’t exist and never will exist (even if it’s actually decent public policy). This also compounds with the selective quotes they’ve been using from the Parliamentary Budget Officer’s recent report on carbon pricing, which has been torqued into more disinformation.

There’s so much disinformation and lies floating about, as though there weren’t enough actual things that you could absolutely excoriate this government for, and yet they resort to fiction. Utterly boggling.

Programming Note: I will be taking a long weekend off from the blog, because I am exhausted after the past few weeks. See you Tuesday!

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Roundup: Trudeau confirms that there are to be strings attached

It’s around day forty-eight of Russia’s invasion of Ukraine, and it appeared to be a fairly quiet day. Well, as quiet as can be in a country where two-thirds of its children have been forced to flee their homes in the past six weeks, which creates plenty of problems for their safety and security as they may be exploited in the confusion. Meanwhile, Russia has tapped a new general to lead its forces in Ukraine, and he’s one with a reputation of particular brutality in leading the Russian troops that acted in support of Syrian dictator Bashar al-Assad, leaving a trail of civilian deaths and human rights violations in his wake. As well, Austria’s chancellor met with Putin, the first European leader to do so since the invasion, and tried to convince him to end the invasion, but he walked away from the meeting without any optimism that the war will end anytime soon.

Closer to home, prime minister Justin Trudeau has confirmed that he’s looking to have strings attached to future health care funds from the federal government, because he’s well aware of the history of provinces that have taken more federal dollars and used them on other things, including tax cuts, and the healthcare system has been left to suffer. Which is the way it should be—if the federal government is giving you money for healthcare, it should be used for just that, and no, that doesn’t mean they’re micro-managing, it means they want accountability for the money they send.

We also got confirmation that provinces are dishonestly ignoring the fact that the agreement in the 1970s to transfer tax points to the provinces in lieu of health transfers. They continue to insist that the federal government only funds 22 percent of their health care systems, but with the tax points, it’s over 33 percent, which is not insignificant considering that provinces are demanding the federal government fund the systems to at least 35 percent—a 35 percent that they don’t count the tax points under. They need to count those tax points, and government and media need to make that clear, rather than media just repeating the premiers’ talking points and both-sidesing it.

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Roundup: The emergency measures votes were a test

I believe we are now in day thirty-three of Russia’s invasion of Ukraine, and there are fears in the northern city of Chernihiv that they may become the next Mariupol, as the city undergoes shelling from Russian forces. Meanwhile, those Russian forces seem to be shifting away from trying to encircle Kyiv, and are instead moving toward the eastern Donbas region to try and consolidate gains there, leading to fears that Russia may be trying to split the country. Elsewhere, the International Committee of the Red Cross is asking Canada not to lump its humanitarian promises in with sanctions and military aid, as it threatens the neutrality of their organisation. Here is a look at some more actions the West could be taking to help Ukraine that aren’t a no-fly zone. It has also been announced that Justin Trudeau and European Commission President Ursula von der Leyen will co-host an international pledging event for “Stand Up For Ukraine” on April 9th.

Closer to home, the weekend saw a couple of different versions of the “inside story” of the Liberal and NDP supply and confidence agreement, from both Susan Delacourt and Aaron Wherry. The two recounting largely align, talking about how initial talks post-election quickly ended as everyone was still too raw from the vote, how Trudeau reached out to Singh after the birth of Singh’s daughter, that most of the talks happened virtually and close to the vest to avoid leaks, and that their face-to-face meeting was at Rideau Gate, which usually hosts dignitaries (but was where Julie Payette lived when she was GG rather than in Rideau Hall, along with her Secretary, Assunta DiLorenzo). What was particularly interesting was how the vote on the Emergencies Act became the test for the NDP that they could be trusted in this agreement, and how the Liberals were willing to provide security briefings to secure that support, and that when the NDP proved themselves, the deal could go ahead.

On that note, it’s interesting (but perhaps unsurprising) that Elections Canada said that they got no prior notice about the portions of the agreement that call for the exploration of three days of elections, allowing people to vote at any polling place in the riding, or improving the process of mail-in ballots. Some of those may be unwieldy or impossible, but the agreement’s language does specify that they would “work with Elections Canada to explore ways to expand the ability for people to vote,” so these ideas are not iron-clad. On the reconciliation front, there are hopes that the promise of stability that the agreement provides will help accelerate some timelines toward progress.

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Roundup: Accountability for transfers is not micro-management

We are now in day thirty-one of Russia’s invasion of Ukraine, and things are going badly enough for Russia that the Ukrainians are starting to counter-attack, not only pushing Russian forces further away from Kyiv, but also other areas, which has the possibility of making Russia pay a high enough price that they could be willing to accept some kind of negotiated settlement and withdraw. Maybe. We’ll see, but it’s a good sign nevertheless that Ukraine is able to take these measures. Elsewhere, it sounds like about 300 people were killed when the Russians bombed the theatre in Mariupol, and the city is digging mass graves, while some 100,000 people remain trapped there as the Russians turn the city to rubble.

Closer to home, the federal government announced a one-time special transfer of $2 billion to provinces to help them with their surgical backlogs as a result of COVID, but they want some conditions of a sort, and cited five areas of focus for upcoming healthcare talks: backlogs and recruitment and retention of health-care workers; access to primary care; long-term care and home care; mental health and addictions; and digital health and virtual care. And some provinces, predictably, are balking at this because they think this is federal “micromanagement” of healthcare when it’s nothing of the sort. They simply need assurances that provinces are going to spend this where they say they’re going to, because we just saw Doug Ford put some $5.5 billion in federal pandemic aid onto his bottom line, and giving out rebates for licences plate stickers in a blatant exercise in populist vote-buying rather than using that money where it was intended—the healthcare system.

https://twitter.com/journo_dale/status/1507478370300628996

More to the point, provinces are insisting that they are unanimous that hey want unconditional health transfers that will bring the federal share of health spending up to 35 percent, but that’s actually a trap. They are deliberately not mentioning that in 1977, provinces agreed to forego certain health transfers in exchange for tax points, which are more flexible, and that increasing to 35 percent will really be a stealth increase to something like 60 percent, because they’re deliberately pretending that they don’t have those tax points. On top of that, provinces were getting higher health transfers for over a decade—remember when the escalator was six percent per year, and what was health spending increasing at? Somewhere around 2.2 percent, meaning that they spent that money on other things. They should have used it to transform their healthcare systems, but they chose not to, and now they cry poor and want the federal government to bail them out from problems they created, and are blaming the federal government for. It’s a slick little game that doesn’t get called out because the vast majority of the media just credulously repeats their demands without pointing to the tax points, or the fact that they spent their higher transfers elsewhere, or that Doug Ford sat on that pandemic spending, as other provinces did to balance their budgets (Alberta and New Brunswick to name a couple). So no, they do not need these transfers to be unconditional, and the federal government would be foolish if they acceded to that kind of demand.

https://twitter.com/EmmMacfarlane/status/1507418761912983561

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Roundup: One month into Russia’s invasion

It’s now day twenty-nine of Russia’s invasion of Ukraine, or one month since it began. To that end, president Volodymyr Zelenskyy is calling on people to gather in public around the world to show support for Ukraine to mark the occasion. NATO is estimating that somewhere between 7000 and 15,000 Russian troops have been killed to date (as many as 30,000 to 40,000 if you count killed or wounded), and to put that in comparison, Russia lost 15,000 fighting in Afghanistan over the course of a decade. And on that note, here’s a look at what went wrong for Russia (beyond Ukraine’s resilience).

https://twitter.com/StephanieCarvin/status/1506790177364131846

Closer to home, many more questions are being asked of some of the plans outlined in the Liberal-NDP supply and confidence agreement, especially around the areas of pharmacare and dental care. NDP MPs like Don Davies are already talking tough, insisting there should be a “phased in” approach, but the timelines for the Canadian Drug Agency to do their work are pretty much what was already being planned through the Hoskins Report, but the biggest obstacle remains the premiers. So far, only PEI has signed on, and I keep saying this, but the NDP have not been publicly haranguing their provincial counterparts in BC to sign onto the system, so that can’t be a good sign. Likewise with dental care, the expectation seems to be some kind of national insurance plan which builds on the system used for First Nations and Inuit people, who call under federal responsibility, but there are a lot of complicating factors to extending that approach, as Jennifer Robson points out in this thread. Right now, it’s a lot of handwaving and wishful thinking, which isn’t helpful.

And then there are the premiers, who are none too happy with these proposals as they consider them to be intrusions in areas of provincial jurisdiction (which they might be if done incorrectly). Of course, they would rather the federal government just turn over more cash to them with no strings attached, which should never happen considering how many provinces just took the federal pandemic money and applied it to their bottom lines, and then praised how low their deficits were this fiscal year (while their hospitals remain overloaded, and in plenty of cases, their health care workers are leaving in droves from burnout and low wages).

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Roundup: Three new entrants for the Conservatives

I believe we are now on day twenty-six of Russia’s invasion of Ukraine, and Russia’s list of alleged war crimes continues to add up as the shelling of Mariupol continues, and it sounds like there is no immediate military solution to the crisis in that part of the country. NATO Secretary General Jens Stoltenberg is calling on members including Canada to increase spending, which we’re doing, but it’s not going to happen overnight. Indeed, as my weekend column points out, we literally can’t spend any more right now until we fix the structural problems inhibiting it. And sure, Greece is spending 3.2 percent of its GDP on the military, but how much are the contributing to NATO operations right now? Very, very little. Closer to home, HMCS Halifax departed for a six-month tour in the North Atlantic as part of NATO operations in the Baltic region.

Back in Canada, the Conservative leadership race got three new entrants—Scott Aitchison, Marc Dalton, and Joseph Bourgault. Aitchison, whose video announcing his intention to run was indistinguishable from a truck commercial, is giving the tired line that “Ottawa isn’t working” but has the self-awareness to know that his party has played a part in the divisive nature of the rhetoric. Oh, and he opposes carbon prices but doesn’t think that should be a “purity test” for the party. Dalton wants to launch a national inquiry into the pandemic response, including the supposed contracts to benefit “Liberal friends” (which has been repeatedly disproven) and on the so-called Charter breaches and apparent cover-up of vaccine injuries and deaths. *sigh* And Bourgault is a nobody businessman from rural Saskatchewan who is part of an organisation claiming the government and “globalists” are using the pandemic to “justify the great reset.” This is what the party has to offer?

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Roundup: Reaction to Russia’s further invasion of Ukraine

Russian forces have been advancing in Ukraine, but not without opposition. Shelling continues against several Ukrainian cities and into Kyiv itself, as people are taking shelter in the metro. Closer to home, prime minister Justin Trudeau announced another round of tougher sanctions against Russian oligarchs and other key leaders, and there is talk that yet more sanctions are on the way, but it also sounds like there is some difficulty in getting all of our allies on-side, and the thing about these kinds of sanctions is that everyone needs to do them so that there aren’t loopholes that Russia can slip through. (Trudeau also announced measures to help Canadians in Ukraine get safe passage to neighbouring countries, as well as expeditated immigration processing for Ukrainians).

But one of the biggest measures—cutting Russia out of the SWIFT global financial transaction system—has not yet been implemented because Europeans are balking (though Canada has reportedly been pushing for this, along with the UK). Canada is somewhat fortunate because we are less exposed to Russian trade and money than other allies, but it’s that exposure which will make sanctions harder on Western allies the tougher they are on Russia—and that’s something that a lot of the talking heads can’t seem to get their heads around. If you look at what European countries are trying to get carve-outs for, it’s because they don’t want to lose the Russian money in their economies. And that’s a tough pill to swallow, especially as all of our economies are still recovering from the pandemic recession.

https://twitter.com/LillyResearch/status/1496964138962386945

https://twitter.com/MatinaStevis/status/1496758467943866374

Where this will hurt us especially is higher world oil prices, as cutting Russia out of the market will further restrict supply at a time where energy shortages in certain countries have turned to oil to fill that gap, creating demand and limiting supply. That will mean higher gasoline prices in Canada, and while these higher prices will be good for the Alberta economy (oh, look—one more boom for them to piss away), it’s going to be felt in the inflation data, which will have more people lighting their hair on fire, demanding Something Must Be Done, but they won’t come out and spell out that they mean wage and price controls, or a new NEP. Jason Kenney, unable to read the room, is trying to make this about a new pitch for Alberta’s so-called Ethical Oil™, and we have federal Conservatives demanding a fast-tracked LNG infrastructure to export to Europe, but seriously, that’s a multi-year and multi-billion-dollar investment that is going to be short-lived the fast were decarbonise our economies.

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Roundup: Proposing to ignore the virus

In the wake of the demands by extremist-led “protests” to lift all vaccine mandates around the country, nowhere as this demand been capitulated to as fast as in Saskatchewan and Alberta, where both provinces are pretty much eliminating their mandates as soon as possible, with no consultation, and while their hospitals are still full. Federally, the Conservatives are making the same demand for this capitulation, and they’re using a bunch of specious arguments, like listing countries that are lifting their restrictions already, never mind that in most of those countries, they have better healthcare capacity than we do, and they are further along in their omicron waves than we are. Fortunately, Ontario is not rushing to join them for a change, so that’s one small favour.

What is more concerning, however, is this talking point about “learning to live with COVID,” but in abandoning all public health measures, including mask mandates, they’re not actually planning to live with COVID—they’re planning to ignore it, to let it rip, to capitulate to the virus as much as they are eager to capitulate to the extremists claiming to protest. Learning to live with the virus would mean adequate and sustainable precautions, better focus on indoor ventilation, ongoing mask mandates in indoor spaces, and so on—and the ongoing insistence on vaccination, because that’s what will save us in the long run. But that’s not what they’re proposing, because they are so keen to return to the old normal, never mind that said world no longer exists by any measure. And it’s not “following the science” to take the notion that we need to just let the virus rip at this point—it’s being intellectually dishonest and pandering to selfish instincts.

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Roundup: Bergen hopes to blame Trudeau for a “mood shift” in the occupation

Day one of Candice Bergen’s tenure as interim Conservative leader, and already the leaks have started. In particular, internal party emails have leaked that show Bergen advising Erin O’Toole not to tell the grifter convoy to leave (before it was a full-blown occupation), saying “I understand the mood may shift soon. So we need to turn this into the PM’s problem. What will he take the first step to working toward ending this?” There is no charitable way of reading this—it is beyond cynical politics, and this has far-reaching consequences.

Also starting to come to light are the behind-the-scenes dramas that led up to O’Toole’s ouster, and surprising nobody was the sense that most of the MPs lost count of the number of times O’Toole deceive them. A serial liar lying to his own caucus? Imagine that! As for Bergen’s elevation to interim leader, The Canadian Press talks to Rona Ambrose about her history with Bergen, and Ambrose’s belief that the caucus chose her because she is a “steady hand” (but apparently not enough have a problem with her courting the extremists).

Meanwhile, Matt Gurney hears from a member of O’Toole’s inner circle about what all went down. Jen Gerson despairsthat the Conservatives seem unwilling or incapable of making reasonable critiques of pandemic policies, and that they are neither as clever or politically savvy as they think they are. Althia Raj takes the optimistic route, that the party can attract social progressives and marginalise the social conservatives if they’re willing to put in the work to do so (which is true!).

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