Tag Archives: Trade

Roundup: A primer on inflation calculation

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Bank of Canada governor Tiff Macklem testified at the Commons finance committee earlier in the week, and a whole lot of people, including a certain “Food Professor” charlatan and numerous Conservative MPs, demonstrated that they don’t understand math or inflation as they all misconstrued the numbers that Macklem gave. And they’re the same number he has given before—that the carbon price has had a 0.15% effect on inflation, and if you removed it, going from $65/tonne to 0, it would have a temporary effect of reducing inflation by 0.6%.

A whole bunch of people–said charlatan, those MPs—insisted that because 0.6% is 16 percent of the 3.8% of headline inflation, that it means that the carbon price is responsible for 16% of inflation, which is wrong and not how inflation is calculated. Removing it wouldn’t actually mean inflation would go from 3.8% to 3.2% because the carbon price is not driving it. Energy and food prices are doing a lot of the driving there (and food prices are being hugely affected by climate change), and even if it did move to 3.2%, the Bank isn’t going to start lowering interest rates until it reaches the two percent target. Essentially, you’d be killing the carbon price and undoing the work it’s doing to lower emissions on the basis of a bad lie that it has made life unaffordable.

Meanwhile, here’s economist Stephen Gordon breaking down how inflation is calculated, with the inevitable conclusion that the carbon price is just noise—it’s not driving inflation, and it’s better to focus on the things that are.

A threat to democracy

A bunch of people got the vapours yesterday when Mark Miller called Pierre Poilievre a threat to democracy. Apparently these same people have convenient amnesia, or wishful thinking that he’s only kidding in what he’s doing and saying, because nobody learned a gods damned lesson from the Trump years.

Ukraine Dispatch:

While rallying Ukrainian troops, president Volodymyr Zelenskyy counselled patience and not to expect instant success (the latter comment directed primarily toward Western allies). A UN report says that 40 percent of Ukrainians need humanitarian support as a result of the conditions brought about by Russia’s invasion.

https://twitter.com/ukraine_world/status/1719348496640200777

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Roundup: Openly pursuing creeping illiberalism

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You may have heard mention of a lavish trip that Conservative MPs took to London courtesy of a Hungarian think tank, but as you might expect from Canadian legacy media, the focus remains on the costs of the trip, and the stupid little partisan games in trying to get the ethics committee to look into it. What isn’t being mentioned is the fact that the think tank, the Danube Institute, is closely tied to the Orbán regime, and that is a worrying problem because of what it signals about right-wing parties in North America cosying up to Orbán.

Why this matters is because Orbán is undermining the rule of law and public institutions in Hungary, and is praising greater illiberalism. By cosying up to Orbán while has-beens like Stephen Harper try to sanitise his image through his IDU social club is because it creates a permission structure for right-wing parties like the Conservatives to start normalising the same illiberalism, pretending that this is all standard stuff for small-c conservative parties these days. The “don’t say gay” legislation in the US all came from Orbán’s playbook, and that is crossing over into Canada as well, with Conservatives openly winking and nodding to it, while you have conservative premiers invoking the notwithstanding clause to take away the rights of gender-diverse youth. This is the canary in the coal mine.

On the subject of creeping illiberalism, Conservatives (and MP Rachael Harder in particular) tried to get the public accounts committee to haul the CBC executives before them to “explain” why they don’t use the term “terrorist” when referring to Hamas, never mind that this is a practice shared by other news organisations like the BBC and The Associated Press. This kind of attempted intimidation is absolutely out of order, and represents political interference in the public broadcaster, which would be bad enough it Harder wasn’t the one always screaming about so-called “government censorship” with the Online Streaming Act and the Online News Act, as though that were a credible problem. It’s not, but it also seems to be both projection and an admission, that they want to control the news and programming, while accusing the Liberals of doing so (even though they absolutely are not). This is extremely dangerous for our democracy, and we should absolutely beware what they are trying to get away with.

Ukraine Dispatch:

While the attacks on Avdiivka continue, Russians struck an apartment building in Zaporizhzhia and killed two people. Ukraine has claimed responsibility for an attack on two Russian airfield in occupied areas using longer-range ballistic missiles quietly provided by the Americans, which is an unusual admission for them, but also signals that they can now hit Russian supply lines in more protected areas.

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Roundup: A backbencher breaks ranks

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There are tongues wagging because backbench Liberal MP Ken McDonald has twice now voted with the Conservatives on their performative motions to cut the carbon price. McDonald, who represents a rural riding in Newfoundland and Labrador, complains that the carbon price is making life too unaffordable for people in regions like his that have no choice but to heat their homes with heating oil and to drive trucks, but along the way he seems to have missed the rebate payments, which are enriched for rural Canadians in the provinces where the federal price is the system in place. (He also thinks that Steven Guilbeault is the wrong person to sell this policy because he’s too entrenched as an environmentalist).

I have some particular difficulty with this notion that there is a particular helplessness around rural Canadians when it comes to their fossil fuel use, because there are usually options that they simply ignore—at least there are in places like rural Alberta, where I’m from, but maybe it’s different in rural Newfoundland. In any case, the government has any number of programs to retrofit homes with better insulation, to exchange oil heaters for heat pumps, and too often, the notion that “I need a truck because I live in the country” tends to mean that people buy fuel-inefficient F-150s that are actually less useful for their needs than they like to pretend. In addition, the carbon price has a negligible effect on inflation, and McDonald was repeating some of the Conservatives’ talking points that don’t necessarily reflect reality so much as they “feel” like they could or should be true even though they’re not, and that’s a problem. Simply cutting the carbon price won’t have a real impact on prices, would mean not getting the rebates, and more to the point, would not push people to make changes to reduce their exposure to those prices where they can, and we need an all-hands-on-deck approach to emissions reduction.

As for McDonald, he doesn’t seem to have suffered any particular consequences for these votes, which is fine, and he shouldn’t because we should allow MPs to break ranks on some issues. That’s how things should work. But I do worry that the bigger issue here is an inability to communicate the programme and the solutions available to help his constituents instead of just buying into the Conservative lines.

Programming note: I will be taking the full long weekend off because oh boy do I ever need it after the past three weeks. See you Wednesday!

Ukraine Dispatch:

A Russian rocket struck a café and grocery store in Hroza, in the Kharkiv region, killing 51 people including a six-year-old, which is one of the deadliest single strikes. In addition, other strikes his grain silos in Izmail. President Volodymyr Zelenskyy was in Granada, Spain, to meet with EU leaders and plead for more aid, now that the budget showdown in the US is endangering their contributions.

https://twitter.com/ukraine_world/status/1709968477107138925

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Roundup: The credible intelligence gets a lot weightier

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At the UN General Assembly, prime minister Justin Trudeau reiterated what he said about credible intelligence pointing to Indian agents responsible for the murder of Sikh activist Hardeep Singh Nijjar on Canadian soil, and said that he is calling on India to help with the investigation. But what we have since learned is that the credible intelligence includes both human sources and signals intelligence from Five Eyes allies that includes Indian diplomats’ communications, and that is certainly lending a lot more heft to these allegations—on top of the fact that the director of CSIS and the National Security Advisory made trips to India to deal with government sources there, and sources are saying that behind closed doors, the Indian government isn’t denying the existence of this intelligence. That’s a pretty big deal, particularly as members of the Pundit Class in this country are trying to insinuate that this is really about Trudeau ginning up controversy to create a distraction (which doesn’t follow this government’s pattern at all).

https://twitter.com/StephanieCarvin/status/1705084748823961930

In the meantime, India has stopped processing travel visas from Canada under the transparently ludicrous excuse that their facilities face security threats, which affects a lot of people here hoping to visit family. Trudeau didn’t say if he would respond in kind, but it seems unlikely if he is serious about saying he’s not trying to provoke or escalate this with India, but to actually get to the bottom of this. (The fact that India doesn’t want to cooperate in public does appear to be something of a tell).

Zelenskyy Visit

Ukrainian president Volodymyr Zelenskyy landed in Ottawa last night. He will be visiting Governor General Mary May Simon this morning, followed by a visit to Parliament Hill, where he will be greeted my parliamentarians in advance of an address to Parliament that will take place around 1 PM Eastern.

https://twitter.com/journo_dale/status/1705081288808403189

Ukraine Dispatch:

While president Volodymyr Zelenskyy was in Washington, Russian forces pounded more Ukrainian cities, with more deaths being reported in the southern city of Kherson. There has been more shelling of Kherson early this morning. Here is a look at the Ukrainian soldiers fighting their way back to reclaiming Bakhmut.

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Roundup: Barely a first step

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With the excitement around Thursday’s announcement on removing HST from purpose-built rental homes, there is a lot more work to do, most of which needs to be done at the provincial and municipal level, but the federal government is starting to step up with more than some funds, which is something. I do worry that a number of provinces will decide that because the federal government is doing something, that they can step back—you know, like a number of them did with healthcare spending where they reduced their own spending by the same amount as an increased federal transfer, which defeats the whole purpose.

So yeah—I’m not popping any champagne just yet that we have some incremental moves. Meanwhile, here’s Mike Moffatt on what needs to happen next.

https://twitter.com/MikePMoffatt/status/1702652572899619115

https://twitter.com/MikePMoffatt/status/1702653469880975742

https://twitter.com/MikePMoffatt/status/1702654065715384432

https://twitter.com/MikePMoffatt/status/1702655085388452163

Ukraine Dispatch:

Russian drones attacked the central Khmelnytskyi region, likely attempting to hit the Starokostiantyniv air base, where the attack on the shipyards in occupied Crimea had been launched. Meanwhile, a Ukrainian sea drone damaged a Russian missile ship off of occupied Crimea. Meanwhile, a pro-Russian former government minister has been detained for 60 days with no option of bail for suspected treason.

https://twitter.com/defenceu/status/1702649870736105582

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Roundup: Losing faith in the justice system because of provincial choices

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The CBC has a story out about how a retired corporal from the military has lost faith in the justice system because court delays stayed the trial of her alleged attacker, and you can bet that pretty much everyone is going to take absolutely the wrong lessons from this, most especially legacy media.

The administration of justice—courts, Crown prosecutors, support staff—are all firmly within provincial jurisdiction. And for decades, provinces have been under-funding their systems while whinging that the federal government isn’t doing things like making bail harder to get (which is, frankly, unconstitutional). There is a story out of Toronto on the very same day about how staffing shortages—because of the province—have caused closures in courtrooms which led to a different sexual assault trial being tossed because they can’t get a trial within a reasonable time for the rights of the accused. And in the case of the corporal, it was because the Crown prosecutors (again, provincial responsibility) couldn’t get their shit together to push the case forward. And no, this has nothing to do with the federal government not filling judicial vacancies fast enough (which I have condemned this government for). These are all problems that are squarely within the provinces’ responsibilities.

And you can bet that people are going to try to both-sides this military issue because the provinces have been whinging that the military turning over cases to the civilian system is leaving them under-resources, even though it’s a handful of cases and the provinces have consistently made the policy choice over decades to under-fund their system. Trying to shift the blame to the federal government or whine that they’re not getting enough money is a well-worn pattern that we shouldn’t let them get away with. Unfortunately, that’s not in legacy media’s playbook, and you can bet that we’ll get more rounds of angry accusations that the federal government “let this happen” when clearly the failure was provincial the whole time.

Ukraine Dispatch:

Ukrainian forces say they have reclaimed even more territory in the east and south parts of the country, as well as off-shore drilling platforms near occupied Crimea. Ukrainian forces have also been collecting Russian bodies along the “road of death” that they retook in June, so that they can exchange them for their own comrades, living and dead. President Volodymyr Zelenskyy is calling on his country to remain focused on the war, with warnings that a “wartime budget” is coming, meaning this could go on for longer than many have hoped.

https://twitter.com/ukraine_world/status/1701223223440928994

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Roundup: A foreign interference inquiry after all

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The announcement finally came down yesterday that the government will be launching a public inquiry into foreign interference, with terms of reference that include China, Russia, and any other state or non-state actors whom they see fit, and that this will be expected to have an interim report by the end of February next year, with a final report at the end of the year. Leading the inquiry will be Quebec Court of Appeal justice Marie-Josée Hogue, who has no national security experience, but says she is “honoured” to lead the exercise (though that is not what I would be feeling). The choice of judge and the terms of reference are apparently all unanimously agreed to by the government as well as the three main opposition parties, which is in part why it took so long, but there are still a few red flags, particularly around the timeline. It doesn’t seem either remotely possible or even plausible that the bulk of the work can be completed in five months (Hogue doesn’t start until the 18th), considering how much time it will take to stand up the inquiry’s infrastructure, and for her and her staff to be properly briefed on how to read top secret information and how to contextualise intelligence. This having been said, Dominic LeBlanc says the government will turn over any Cabinet documents she needs, and Justin Trudeau says he’ll willingly testify before said inquiry when asked to, so they’re certainly making a big show about cooperation.

As expected, the opposition parties fell all over themselves to take credit for this, and chided the government for why this took so long to get to this point, as though they weren’t a big part of the problem, most especially in trying to find someone to lead this process who was willing to do the job and subject themselves to the likelihood of daily character assassination in the process (because as much as they say they’re all in favour of this, the moment they think they can score points off of what is happening, they will have zero hesitation in being ruthless in doing so). Already Twitter was abuzz with her political donation history (Conservative), who appointed her to the bench (Peter MacKay), and her previous law firm (which has Liberal and China connections), so you can bet that there will be those who won’t hesitate to move into character assassination at a moment’s notice.

In related news, LeBlanc says he’ll be meeting with MP Han Dong in the near future to discuss his future and whether he’ll be able to re-join the party given the allegations against him, which David Johnston found to lack credibility in his report. It sounds like LeBlanc hasn’t had the time to deal with this with everything else going on over the summer, so we’ll see where that leads.

Programming note: It’s my birthday this weekend, so I’m going to make it a long-ish weekend on the blog. See you next week!

Ukraine Dispatch:

Russians attacked the Danube port of Izmail for the fourth time in five days, damaging more grain silos and critical infrastructure. Ukrainian forces are gearing up air defences in preparation for another winter of attacks on their energy systems and power grid. President Volodymyr Zelenskyy has tasked his new defence minister with rebuilding trust after a series of corruption allegations in the defence forces, particularly around procurement. Ukraine is also calling for more international pressure on Russia to return the children they have taken from Ukraine over the course of the invasion.

https://twitter.com/billblair/status/1699740567435915664

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Roundup: A rate hold and inappropriate reactions

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The big news of the day was that the Bank of Canada opted to maintain their headline rate at five percent, but warned that future rate hikes are still possible, depending on how the data look with future decision dates. This was a decision based entirely on the data—and the very mild contraction in the second quarter are certainly pointing to the fact that the economy is finally starting to slow so that maybe it can start to take the air out of excess demand. Nevertheless, I’m still expecting those three premiers who sent open letters to do a victory lap as though they had any say in the matter.

The bigger problem was Chrystia Freeland putting out an official statement saying that she was pleased with the decision, and while she respects the Bank’s independence, the government will use all of its tools to help bring inflation down (though one is a bit more dubious about that part). Why Freeland’s statement is a bigger problem is because she has a much bigger stick to wield with the Bank, and she has the tools that could force the governor to resign, which we haven’t seen since the Coyne Affair in the fifties, which led to the Bank shoring up its institutional independence. Freeland should know better, but I suspect that with all of the attention being paid to those premiers and their boneheaded open letters that she felt she needed to say something, and to offer some kind of reassurance to the public about the slowly improving state—because this government loves nothing more than reassuring pabulum. To compound that, every gods damned talking head over the past few days has been saying how great it was that the premiers were grandstanding like they way they are, because messaging politics just corrodes and rots our system.

Meanwhile, Jagmeet Singh decided he wasn’t getting enough attention, so he decided to embarrass himself and insist that the federal government can order the Bank to stop raising rates, because he thinks that interfering with an independent institution and forcing the resignation of the governor (which would be the outcome of such a move) are somehow winners for the economy. Singh would also apparently rather see inflation continuing to rip through our economy rather than the short-term pain in wresting it back down, because that is the counterfactual here. His “greedflation” insistence doesn’t bear out in the data, and a windfall tax won’t solve inflation. His suggestion here is beyond amateur hour, and shows that he remains unprepared for prime time.

Ukraine Dispatch:

Russians attacked a market in the eastern city of Kostiantynika yesterday, killing at least 17 people. The UN High Commissioner for Human Rights has recorded 26,717 civilian casualties in Ukraine so far, including 9,511 deaths. US Secretary of State Antony Blinken visited Kyiv, and praised the progress in the counteroffensive to date.

https://twitter.com/zelenskyyua/status/1699405764983415077

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Roundup: A resignation that won’t solve the problem

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A couple of days after everyone declared ministerial responsibility dead for Ontario housing minister Steve Clark’s refusal to resign over the Integrity Commissioner’s report and his own gross negligence and dereliction of his duties, Clark did resign, at 9 AM on Labour Day, pointing to an attempt to take the sting out of the messaging. Ford later announced changes to his Cabinet which would put Paul Calandra in the housing file, in addition to Calandra’s existing role as House Leader.

Ford, however, insists that the tainted process for those Greenbelt lands will carry on, and while he is promising a “review” of the process, he won’t do the one thing the Auditor General and Integrity Commissioner have said, which was to cancel this process and start over. In fact, yesterday morning, Ford left open the possibility of reviewing all Greenbelt land and opening it up for development, which is unnecessary for housing needs—he hasn’t even implemented the recommendations of his government’s own housing task force, which explicitly stated they don’t need to develop those lands because there are fifty other things they should be doing instead.

https://twitter.com/MikePMoffatt/status/1699015630316360078

https://twitter.com/StephanieCarvin/status/1699103206893056279

And that hasn’t been all. As this sordid affair continues to drip out, the identity “Mr. X” from the reports has been identified as a former mayor and developer who Ford has ties with, and his operation is practically stuffed with Batman villains. The jokes write themselves, but just make the corruption all the more hard to take.

My latest:

  • My weekend column looks at how ministerial responsibility changed in the age of message discipline, but how Doug Ford and Steve Clark can’t do the bare minimum.
  • At National Magazine, I look at the number of “secret trials” that we have seen come to light recently, and what could be behind them.
  • Also at National Magazine, I get some reaction to the Competition Tribunal’s cost award to the Bureau and the signals that they are sending by it.
  • My column points out just how inappropriate it is for premiers to write open letters to Bank of Canada governor Tiff Macklem, and how it corrodes our system.

Ukraine Dispatch:

Russian strikes damaged more grain warehouses at the Danube port of Izmail. Ukrainian forces say that they have taken more ground in both the eastern and southern fronts, as president Volodymyr Zelenskyy visited two front-line areas. Ukraine’s defence minister is being replaced by Rustem Umerov, a Crimean Tatar, who headed a privatization fund. Ukraine’s parliament passed an anti-graft law that contains a loophole, and many are urging Zelenskyy to veto it as a result. A parts shortage and a dispute over intellectual property rights is hobbling the ability to repair the Leopard 2 tanks we sent to Ukraine. And Ukrainian intercepts show Russian soldiers complaining about poor equipment and heavy losses.

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Roundup: Open Letters to Tiff Macklem

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BC premier David Eby decided he needed to be extra performative yesterday, and wrote an open letter to Bank of Canada Governor Tiff Macklem, urging him not to raise interest rates next month because of the “human cost” of these interest rate hikes—ignoring of course the counterfactual of the effects of unchecked high inflation and the “human cost” that it has over the short and medium term.

What is pretty galling in all of this is that Eby knows better. He was once a pretty good civil liberties lawyer, and he fully knows that the Bank is independent, and that they have a legal mandate that they need to fulfil when it comes to keeping inflation at two percent, and that their main policy tool is the blunt instrument of interest rates. His “I know the Bank is independent but…” spiel was frankly embarrassing, and should not have merited the attention it got from the media, but here we are.

Speaking of, Power & Politics was not only true to form in giving him a soapbox to make his point, and rather than doing their jobs of pointing to the irresponsibility of this kind of move, particularly at a time when you also have Pierre Poilievre warning that he’s going to fire the Governor (with what power?) and threatening the Bank’s independence. It would be great if CBC could do a single economics story properly and not just treat it like an issue to be both-sidesed, but they apparently have zero willingness to do so, and the fact that this Eby interview was that ignorant is a sign that they cannot be bothered to care about economics stories for anything than just trying to plug them into their established narratives, and it’s doing the country an extreme disservice.

Programming Note: I’m taking the full long weekend off, so I’ll see you early next week.

Ukraine Dispatch:

Ukrainian forces have reported some success in the south and east, but I am also tickled by their latest video offering, telling all of those armchair generals to basically shut up because they’ve been doing the heavy lifting on their own. President Volodymyr Zelenskyy says that Ukraine has developed its own long-range weapons that can strike 700 kilometres away, which may have been a sly nod to the attack on Russian airbases that destroyed a number of fighters. The mayor of Kyiv wants to build more fortifications, because there always remains the threat from Russia.

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