Tag Archives: Inflation

QP: Demanding a televised meeting

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Although he had not been initially scheduled to attend Question Period today, the prime minister updated his itinerary late morning to indicate that he would be here today after all, even though his deputy would not be. All of the other leaders were also present, as is usual when the PM is here. Pierre Poilievre led off in French, recited his slogans, accused the government of ramping up “generational inflation” (which is not what happened) and said the government was giving more to bankers than healthcare. Trudeau listed what they are investing in healthcare, as well as school food, and child care, but didn’t correct the disinformation about inflation. Poilievre again falsely claimed that they government’s programmes were inflationary and demanded a meeting with the premiers, and Poilievre insisted that they were there to work with the provinces, as opposed to Conservative austerity. Poilievre switched to English to once again recite his slogans, falsely quoted the PBO report, and demanded a televised meeting with the premiers. Trudeau said that if they really cared about people having a hard time, they would help to pass the rural top-up. Poilievre insisted that they could do so with the NDP’s support, and repeated his demand for the televised meeting. Trudeau noted that they did agree to carbon pricing before, and noted the upcoming the upcoming rebate payments to people. Poilievre repeated the same falsehoods as before and wondered why Trudeau wouldn’t meet with the premiers. Trudeau noted that Poilievre was spouting misinformation and disinformation and that he got an endorsement from Alex Jones.

Yves-François Blanchet led for the Bloc, and worried about interference in Quebec’s jurisdiction, and that the federal government had no competence in healthcare, child care and education. Trudeau said that even though provinces have the competence, there are gaps that people are falling through so they are investing in the help people need along with provinces. Blanchet made a remark about not going to a dentist to fix his car, which gave Trudeau an opening to praise dental care.

Jagmeet Singh rose for the NDP and railed about corporations delaying climate action, and oil and gas subsidies, to which Trudeau noted that they have eliminated those subsidies ahead of schedule and praised carbon pricing. Singh repeated the question in French, and got a paean about the costs of climate change, and the carbon rebates.

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Roundup: A trip to Kyiv

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For the two-year anniversary of Russia’s invasion of Ukraine, Justin Trudeau took an unannounced trip to Kyiv, along with Chrystia Freeland and Bill Blair, and were accompanied by Italy’s Giorgia Meloni, European Commission president Ursula von der Leyen, and Belgian prime minister Alexander De Croo, all to show solidarity and make new commitments. Included in that was Trudeau signing a security assurance package with president Volodymyr Zelenskyy, which has been in the works for several weeks now and comes on the heels of similar assurance agreements with France and Germany. Trudeau also took a couple of shots at Putin, calling him a “weakling,” who killed Alexei Navalny in order to crush his opposition.

Freeland and Bill Blair visited an Operation Unifier training facility in Poland, and found that there is a real shortage of battlefield medicine equipment on the front lines.

There were a few events in Canada to mark the same anniversary, one of which was attended by Pierre Poilievre, who stated over social media that the Conservatives stand with Ukraine, despite his not doing a very good job of demonstrating it over the past few months.

Ukraine Dispatch:

A Russian attack overnight on Sunday destroyed a train station, shops and homes in Kostiantynivka near the front lines. Russians claim they have been moving to more advantageous positions around Avdiivka and Donetsk. Ukraine says they struck a major Russian steel factory during the anniversary of the invasion.

President Zelenskyy gave the official figure of Ukrainian soldiers killed in the fighting at 31,000 thus far, which is the first time it’s been stated in over a year. He also warned that Russia is likely to attempt a new offensive before May. Ukraine’s defence minister says that delays in promised western aid is costing lives (but has anyone been pressuring defence manufacturers to ramp up their production?). The defence minister and army chief visited command posts near the front lines on Sunday.

https://twitter.com/defenceu/status/1761450921609904450

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Roundup: The wrong people taking credit for disinflation

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Statistics Canada released the January Consumer Price Index data yesterday, and lo, it shows that inflation is dipping back into the control range at 2.9% annualized, which was lower than anticipated, and fairly broad-based including food prices decelerating to just above the headline number, meaning prices are stabilising finally, and yet somehow, with carbon prices still in place, and the grocery oligopolies not having been subjected to punitive windfall taxes. Imagine that!

In all seriousness, because there were month-over-month price drops in fuel prices in Manitoba thanks to Wab Kinew’s decision to pause gas taxes, and Saskatchewan not collecting the carbon levy, we got a bunch of people who should know better saying stupid things about carbon prices and inflation. Kinew, who has economics training, should especially know better.

Inflation is a year-over-year measure. Carbon prices have a negligible impact on it because it rises at the same level every year, so it’s not inflationary. A one-time drop in prices is also not deflationary or disinflationary because it’s a one-time drop, not sustained or pervasive. If you need a further explainer, economist Stephen Gordon has resurrected this thread to walk you through it.

On the subject of things that are unfathomably dumb, it looks like the CRA has decided to buy Saskatchewan’s transparent legal fiction that the provincial government is the natural gas distributor for the province, in spite of it being against the clear letter of the federal and provincial law, which means that consequences for the province not remitting the carbon levy on heating will be borne by Cabinet and not the board of SaskEnergy. What the hell?

Ukraine Dispatch:

Russian attacks on the northern part of Ukraine killed seven on Tuesday, while Ukraine’s forces say they destroyed 13 out of 19 drones launched by Russia on Wednesday. Ukrainian officials are investigating the Russians shooting three soldiers captured on Sunday. Here is a look at the shattered ruins of Avdiivka. Ukraine’s state arms producer has signed an agreement with a German arms manufacturer to help produce more air defences domestically.

https://twitter.com/ukraine_world/status/1759942168989360468

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Roundup: Falsely framing carbon prices and inflation

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Because this is sometimes a media criticism blog, I want to point your direction to a CTV piece from the weekend, taken from an interview with Government House Leader Steven MacKinnon on CTV’s Question Period. The headline and substance of the piece, taken from the interview, is “Feds won’t pause carbon price despite inflation.” Now, if you were a casual reader who didn’t know what was going on, you might think that the carbon price is driving inflation and the government is being obstinate in refusing to deal with that driver of inflation.

That would, however, be completely wrong. We know that the carbon price contributes only negligibly to inflation because inflation is measured on a year-over-year basis, and with the carbon price increasing at the same rate every year, the impact on year-over-year prices remains negligible. The Bank of Canada figures that it works out to 0.15 percent of inflation. Is this mentioned anywhere in the story? Nope. Instead, it’s both-sides as pointing to Poilievre’s promise to “axe the tax” (which is not a tax, but a levy, and yes, there is a difference), contrasted with MacKinnon pointing out that at committee last week, food economists pointed to the fact that there’s no evidence the carbon price has had a meaningful impact on the price of food, because, again, if you pay attention, you would know that the bigger drivers of food price inflation are droughts or floods in food-producing regions, including Canada’s, which is related to climate change. (That poing is also absent from the story).

Why does this matter? Because of how the story has been framed. It frames itself that carbon prices are driving inflation, which is false and misleading. It sets up a false scenario about what is driving inflation (which has fallen over the last year and is now in a sticker place just above target), and sets about positing a false solution, while trying to look like it’s concerned about cost-of-living concerns while looking at absolutely none of the driving factors of what has caused an increase in the cost of living. This, my friends, is shoddy journalism. I get that they were trying to get a headline out of that interviews, but great Cyllenian Hermes, that was not the way to do it, and it’s a little embarrassing that this was the result.

Ukraine Dispatch:

At least three Ukrainians have been killed in Russian attacks on cities in the country’s east, near the front lines. Ukrainian forces repelled an attempted Russian advance on the southern front, as Russians move their forces forward following the withdrawal from Avdiivka. The withdrawal from Avdiivka was preceded by a change in Russian tactics designed to take advantage of the shortage of ammunition. Ukrainian forces say that Russians executed six unarmed Ukrainian soldiers taken prisoner in Avdiivka as they were fleeing, and two more in the nearby village of Vesele. Here is a look at the significance of Ukrainian drone attacks on Russian oil refineries and other infrastructure within Russian borders.

https://twitter.com/defenceu/status/1759195559272108467

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Roundup: MPP pay freezes serve no one

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There was a piece in the Star yesterday about how MPPs in Ontario have had their salaries frozen since 2008, with no plans to lift it anytime soon. This is the kind of thing that populist rhetoric engenders, and it’s terrible for the state of our politics. While nobody is in politics to get rich, particularly in Canada, we are pretty miserly about what we want to pay our elected officials, and every time there is some kind of economic downturn, we immediately demand that they either freeze or cut their salaries to “set an example” (which is ridiculous because I have yet to see any senior executives in the private sector freeze or cut their pay in response to bad economic times—they get further bonuses, especially if they manage to reduce payroll during said tough times).

It cannot be understated that we underpay our elected officials, particularly at the provincial and federal levels, for jobs that are fairly 24/7 in most instances—especially in the era of social media where they are expected to perform at all hours of the day and night, and where they can’t go to the store without being expected to be “on” and engaging with their constituents. And in a lot of cases, people take a pay cut to become an elected official, particularly if they are doctors or lawyers. We say we want to attract the best, but the longer this kind of thing goes on, the more it will only attract those who are already wealthy and can live with the pay cut. Oh, and Ontario killed their pensions for MPPs decades ago, so on top of being underpaid, they don’t get a pension out of it either, which just makes it all the worse proposition for someone.

Nevertheless, we already have the astroturfers at the so-called “Canadian Taxpayers Federation” griping that Toronto City Council and the mayor are getting a modest pay rise this year, and because legacy media laps up everything they put out, this feeds the hairshirt parsimony and cheap outrage that makes us look as petty and parochial as our worst instincts tend to be. (Tall poppy syndrome is absolutely one of our national neuroses). This isn’t good for democracy, but nobody wants to make that case, which is why we’re in the situation we’re in.

Ukraine Dispatch:

Russian missiles hit an apartment building and a medical centre in Kharkiv early Wednesday; Russia claims it was precision-targeting a building housing “foreign fighters” that included French mercenaries. Ukrainian forces also downed19 out of 20 drones targeting Odesa. The fighting has intensified near Bakhmut, as Russian forces are making more offensive assaults.

https://twitter.com/ukraine_world/status/1747574419994648962

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Roundup: Rachel Notley announces her departure

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In a move that has been expected for over a month now, Alberta NDP leader and former premier Rachel Notley announced that she’ll step down as soon as her replacement is chosen, and no, she has absolutely ambition to run federally. It’s probably a good thing that Notley has decided enough is enough, thus avoiding becoming another Andrea Horwath, and frankly, considering how she managed to lose the debate against Danielle Smith, and from there the election, well, it was probably time to call it a day and let a fresher face take over.

It’s not an exaggeration to say that Notley’s time in Alberta politics was transformational—even though her rise to government was largely accidental (voters looking to punish Jim Prentice’s PC government for having the temerity to tell them to “look in the mirror” about demanding high services and low taxes had no other options as the provincial Liberals’ leader just bailed and the Wildrose were decimated after Danielle Smith crossed the floor with most of their MLAs), she managed to run a government that was reasonably competent in a province where one-party rule had left them corrupt and unable to do things like come up with realistic budgets that didn’t involve throwing money at problems. She did what every NDP organisation dreams of and decimated the provincial Liberal party, forcing the centrist voters in the province to her banner by running more to the centre herself, and essentially turning the province into a two-party race. But it’s also notable how her success also had a lot to do with moving away from standard NDP dogma.

Here are some reactions to her announcement (and I thought Jagmeet Singh’s was especially hilarious considering how she spent most of her time in office distancing herself from him), a few biographical details, and a look at her legacy.

Ukraine Dispatch:

Unsurprisingly, the higher intensity of Russian attacks led to a sharp increase in civilian deaths over December. Meanwhile, president Volodymyr Zelenskyy is attending the World Economic Forum in Davos to drum up more support from partners, and met with Antony Blinken while he was there. (No doubt Conservatives in Canada are going to hold this attendance at Davos against him, because conspiracy theories).

https://twitter.com/ukraine_world/status/1747261931164192849

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Roundup: The inflation and population figures

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There were a couple of important figures released from StatsCan yesterday, and the first was the November inflation numbers. While some analysts were predicting it to fall, it held at 3.1% for a second month, showing that this is the part where it’s starting to get sticky, and why the Bank can’t let up measures and start reducing interest rates just yet. One of the upsides is that food price inflation continues to come down, which means that prices are stabilising, so that’s very good news (and it has nothing to do with carbon prices). And don’t forget to check out this thread from Trevor Tombe, as he digs into the numbers.

https://twitter.com/trevortombe/status/1737111583002923039

The other figures released were the population figures, and it was the fastest growth of any quarter since 1957. The thing to keep an eye on here is that a lot of this seems to be driven by non-permanent residents, whether international students (and the big problem there are a couple of colleges in Ontario turning themselves into abusive degree mills), and other temporary foreign workers, some of whom may have been hired in an abusive way. Some of this are also asylum seekers who have not yet received status (because “closing” Roxham Road didn’t really do much for this situation other than push it underground).

https://twitter.com/MikePMoffatt/status/1737106801617703236

https://twitter.com/MikePMoffatt/status/1737109349477310976

https://twitter.com/MikePMoffatt/status/1737112568286855177

https://twitter.com/MikePMoffatt/status/1737136794938884329

Ukraine Dispatch:

Russia launched an air attack on Kyiv for the fifth time this month, but this attack was intercepted and no damage was reported. President Volodymyr Zelenskyy says that Ukraine is boosting its domestic production capacity and will produce one million drones next year. Zelenskyy is also dismissing talk that there is a rift between him and the head of the army. Here’s a look at the work judges are doing to keep the justice system going in a country under fire.

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QP: Hyperventilating about Stellantis

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While the prime minister was present, his deputy was in the lock-up, meeting with reporters about the Fall Economic Statement in advance of its release at 4 PM. All of the other leaders were present, ready to demand to know what was in the update before its release. Pierre Poilievre led off in French, returns to the Scotiabank report he raised yesterday, and blamed the federal government for driving inflation, before demanding a balanced budget in the fiscal update. Justin Trudeau responded that the solution to this difficult period is not austerity, but strategic investments in helping families. Poilievre switched to English to repeat his same question, and lo, got very much the same response from Trudeau. Poilievre blamed the federal government for fast-rising rents, and demanded that the government cap the carbon price until the next election. Trudeau said the solution to rising rents is to build more units, which the government is doing, before mocking Poilievre’s assertion that the government is doing “damage” to Canada through child benefits, child care, or dental care. Poilievre then pivoted to the Stellantis plant and the overblown concern that it would use temporary foreign workers.  Trudeau noted that Poilievre would use any misinformation to denounce plans he doesn’t like, but he didn’t actually debunk the assertion. Poilievre said that no, it was Trudeau who spreading misinformation, and repeated his same overblown and false assertions. Trudeau said it was flat-out false and fear-mongering, but again, didn’t actually explain what the truth was, because of course not.

Yves-François Blanchet lead for the Bloc, and he demanded that the government include an increase in old-age security and an extension to CERB repayments in the economic update. Trudeau noted that they have been increasing payments for seniors, and that they supported those small businesses in COVID, but Blanchet would have to wait a couple of hours. Blanchet wondered if he should send his questions in advance so that he could get a real answer, before he repeated his same demand. Trudeau said he would be happy to send Blanchet a schedule that shows the update is released at 4 PM.

Jagmeet Singh rose for the NDP, and he too raised the spectre of temporary foreign workers at the Stellantis plant, to which Trudeau said that while nobody was surprised that Poilievre would fall prey to disinformation but it was disappointing that Singh did too—but again, didn’t explain the truth. Singh switched to French to demand a competition changes to target grocery giants. Trudeau patted himself on the back for their plan to summon grocery CEOs, and said that there would be competition measures in the economic update.

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Roundup: Graphing some drivers of inflation

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Just how much are the price of raw materials contributing to headline inflation? Well, the raw materials price index was released yesterday, and economist Stephen Gordon was curious, so he made some graphs.

Things I noticed: While gasoline is a big driver of headline inflation, the prices of wheat and beef are worth taking a look at because of the price spikes. What caused those spikes? Drought. Drought killed 40 percent of the wheat crop in 2021, and also meant a shortage of feed crop for livestock, which meant that ranchers had to cull herds to be able to afford to feed the remaining animals (because importing feed is expensive). This year we also saw more drought, which is having the same effect (and that drought has been persistent in southern Saskatchewan, which has to be in danger of turning into a dustbowl soon). And yes, there is a direct correlation to these more frequent droughts with climate change.

Also worth pointing out is the price of chicken also spiking, which was because of avian flu that meant culling flocks to prevent transmission. Again, that drives up prices. This is just more data to show that it’s not the carbon price driving up food prices—it’s climate change and its knock-on effects.

Ukraine Dispatch:

Ukraine’s largest private energy company says that they need more missile defences to protect power plants in advance of more Russian attacks over the winter. Ukrainian forces have confirmed that they have established several beachheads on the eastern banks of the Dnipro river, which is an important step in the counter-offensive. In Kharkiv region, the government is now building fortified underground schools because of the constant attacks. A Yale study says that more than 2400 Ukrainian children from four occupied regions have been taken to Belarus.

https://twitter.com/zelenskyyua/status/1725490287160529137

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Roundup: No, that’s not how inflation works

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Because some of you at the back still don’t get it, no, carbon pricing does not contribute 16 percent of inflation. It contributes 0.15 percent, because inflation is a year-over-year measure, and when the increase is steady and holding, the actual impact on inflation is negligible, because that’s how inflation works. But several of you you keep insisting that your math is correct when it’s not, and so here’s economist Trevor Tombe to try and get it through to you:

https://twitter.com/trevortombe/status/1720919364172697678

Ukraine Dispatch:

Ukrainian missiles struck a shipyard in occupied Crimea, damaging a Russian warship there. There are conflicting reports about the state of the counter-offensive in the Zaporizhzhia region, where Russia claims they have halted any advance, while Ukrainians say that they continue to advance, albeit slowly. President Volodymyr Zelenskyy pushes back against the notion that they have entered into a stalemate, and says they need more air defences so that Russia can no longer dominate the skies. Here’s a look at Ukrainian soldiers who have turned to jiu-jitsu after losing limbs in the war.

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