Tag Archives: Transfer Payments

Roundup: Deficit is coming in lower than expected

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It is on or about day ninety-four of Russia’s invasion of Ukraine, and Russian forces are claiming that they have captured a rail hub in Donestk, while they continue to pound Severodonetsk, with some 90 percent of the city’s buildings damaged. Ukrainians are calling for Western allies to deliver weapons faster, though there is talk that it looks like this aggressive push by Russia has depleted their arsenal.

The invasion is also not accidental in terms of location or timing—the eastern part of the country are a trove of natural gas and critical minerals, and when Russia invaded, it cut off Ukraine’s exploration of natural gas reserves in the Black Sea, which could have been used to help wean Europe off of Russian oil and gas. Because aren’t all wars really about resources?

Closer to home, the Fiscal Monitor was released, and the deficit figure is coming in much lower than anticipated, because in large part the economy is overheated which is generating a lot of revenue (and inflation does help in terms of collecting higher taxes on higher prices). But as Kevin Milligan points out, this means that the obsession by the Conservatives with the deficit is becoming really misplaced—the massive spending in 2020 to get us through the pandemic is behind us, and we’re not in that situation anymore. Not that facts matter—this is really an exercise in people’s feelings about the deficit, and the perceptions that are not grounded in facts.

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QP: Tough on Black and Indigenous people

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In between events with the Prince of Wales and the Duchess of Cornwall, the prime minister was present in QP, as were all other leaders. Candice Bergen led off, script in front of her, and she declared that the stated reason for invoking the Emergencies Act was “falling apart” as the interim Ottawa police chief said he did not request it, and she insisted there was a cover-up. Justin Trudeau quoted another witness at the committee who praised the efficacy of the measures. Bergen blamed Trudeau for the blockade with a litany of dubious accusations, and Trudeau retorted that the opposition doesn’t want light shed into their role in prolonging the occupation. Bergen insisted this was “misinformation” before she pivoted the complaining about airport delays and demanded a return to “pre-COVID normal.” Trudeau reminded her that COVID is not over, and that they are identifying ways to help bottlenecks. Bergen started ranting that Trudeau got to go maskless in other countries while Canadians are tired of doing everything being asked of them (erm, which they haven’t been). Trudeau again reiterated that they are following the science. Bergen then launched into a tirade about COVID measures affecting youth, and Trudeau somehow hating youth, and Trudeau listed all of the help they gave young Canadians over the course of the pandemic.

Yves-François Blanchet led for the Bloc, and he gave a bizarre rant about the “British monarchy” and the Anglican Church, and demanded to know how much this would cost. Trudeau, bemused, said that Ottawa must really be delivering for Quebec if the Bloc had to dig to reach this. Blanchet continued to complained that royal tours cost money, and Trudeau took the opportunity to praise our system and its stability at a time when democracy is under threat around the world.

Jagmeet Singh rose for the NDP, noted the inflation headline number, and repeated yesterday’s demand to cut oil and gas subsidies and to give that money to people in a GST rebate. Trudeau listed that they have been cutting subsidies, that they are going “line by line” on emissions cuts, and that they have affordability measures. Singh repeated the question in French, and got the same reply.

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QP: Border crossings and gun control

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Even though the prime minister was mere steps away, concluding a press conference with this Latvian counterpart, he was not in the Chamber for QP today, though his deputy was, and most of the other leader didn’t bother to show up either. Luc Berthold led off in French, and he worried about Roxham Road, accusing the prime minister of creating a “gap” in the safe third country agreement, and he echoed François Legault’s demand to suspend the agreement and close the crossing. Chrystia Freeland read that they respect the immigration system, and that they work closely with the Americans on the shared border including with the agreement. Berthold then pivoted to gang violence in Montreal (and for a moment, it sounded like he was drawing a comparison because it was such a clumsy transition), and Freeland agreed with him that as a member from a big city, there is a problem with firearms, which was why the government was taking steps to limit them, and invited the Conservatives to support them in that. Berthold insisted that the prime minister was turning a blind eye, and targeting innocent people, and Freeland repeated her same response. John Brassard took over in English to decry gun violence and noted that in one arrest, the accused had been arrested on an unrelated charge 48 hours earlier. Freeland insisted that as a mother of Toronto teenagers, she was well aware of the problem of firearms, which was why they were banning military-style assault rifles. Brassard listed other gun incidents and insisted the prime minister was protecting violent criminals and not families. Freeland assured him that farmers and hunters do not use military-style assault rifles, which is why they were being banned.

Alain Therrien led for the Bloc, and he worried about the escalating cost of the Trans Mountain expansion, as it gets another $10 billion (loan guarantee, not actually new funds), and Freeland assured him that they did not intend to be the long-term owners and that it was a responsible investment that created jobs. Therrien bellowed louder on the matter, and Freeland repeated her response.

Jagmeet Singh rose for the NDP, and he worried that oil and gas companies got government money and is now raking in massive profits. Freeland listed efforts on eliminating subsidies and imposing emissions caps. Singh repeated the question in French, and got much the same response.

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QP: Panic at the passport office

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While the prime minster was in town, he was not present for QP, though his deputy was. No other leader was present either, for what it’s worth, and we did learn later in the day that Candice Bergen tested positive for COVID earlier in the week, and has been isolating. Before things got started, the Deputy Speaker returned to what happened yesterday regarding unparliamentary language, and said that reviewing the tapes found no definitive proof if the prime minister actually said anything amidst the noise, but he did hear unparliamentary things on both sides, and he cautioned MPs that it was not acceptable. He also noted that the question on abortion from Sophie Chatel did not have to do with the administrative responsibilities of the government, and such questions will be disallowed in the future. (Famous last words…) He also asserted that for those whose blood pressure is running a little high, it was a beautiful day outside and they should go take a walk.

Luc Berthold led off, worrying about delays at passport offices, and asserted the solution was to have civil servants back at work in their offices. Chrystia Freeland noted that they understand their responsibilities to Canadians, but she could not agree that everything was going wrong in Canada, and the IMF praised our growth. Berthold carried on with the complaints about delays, and again demanded civil servants go back to their offices. Freeland thanked civil servants for their efforts, and that she knew they worked diligently. Berthold insisted that Canadians expected service from civil servants, and once again demanded that civil servants return to their offices. Freeland again repeated that civil servants do exceptional work. Michael Chong took over in English, and worried about another court challenge against Line 5 in Michigan—ignoring that the challenge is coming from Indigenous groups—to which Freeland assured him that they understand the importance of Line 5 and that the government was standing up for our rights including treaty rights with the US. Chong wondered why Canada was in court to fight this challenge, and Freeland repeated the assurances that the government was on the case.

Claude DeBellefeuille led for the Bloc, and she repeated this week’s demand that the federal government turn over the responsibility for immigration to Quebec. Freeland recited the government’s lines that Quebec sets their own targets and that the federal government supports them. DeBellefeuille was not mollified, and repeated the demand, and Freeland repeated her assurances, with a few added figures to quote.

Jenny Kwan rose for the NDP, and she cited the MMIW inquiry listing housing as a contributing factor, blasting the government for not having a dedicated housing strategy for Indigenous women and two-spirit people. Freeland first recognised that today is Red Dress day, and that they agreed that housing is a problem and part of the solution, which is why it was a central part of the budget. Niki Ashton took over, and demanded immediate action in the MMIW inquiry’s calls to justice, and insisted it wasn’t in the budget. Freeland repeated her initial acknowledgment of the day in French, before returning to English to correct that there were investments in this budget.

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QP: An amazing amount of revisionist history

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While Justin Trudeau was away at Guy Lafleur’s funeral, none of the other leaders showed up in the House of Commons either, never mind the brewing political storm and promise of some mischief after QP. Luc Berthold led off, and he accused the prime minister of doing nothing about the Ottawa occupation before he pulled out the Emergencies Act, whereas this past weekend, those same “protesters” came back and left, and wondered what was different. Marco Mendicino talked about how police were better prepared, but the measures were needed at the time. Berthold tried to downplay the occupation and insisted that if it wasn’t safe, MPs should not have been able to cross it, and Mendicino talked about how Parliamentarians’ experience was not necessarily that of other residents of the city, and and they looked forward to the inquiry. Berthold tried to be cute and wondered how many people were arrested for sedition in relation to the blockade, and Mendicino waved it off, and said they government would cooperate with the inquiry. John Brassard took over in English, and raised that RCMP memo—ignoring that the memo stated there was no evidence to support a charge—and wanted to know if the prime minister was above the law. Mark Holland stood up to sermonise about the opposition was concerned with personal attacks and not the business of the nation. Brassard gave it another go, and Holland pleaded with them to let Bill C-8 pass.

Alain Therrien considered it arrogant that the government wouldn’t devolve powers to Quebec to deal with their own immigration files, and Marie-France Lalaonde cited some figures about the province not managing to fill their entire quotas as it is. Christine Normandin got up next, and gave a paean to a woman’s right to choose, and Chrystia Freeland assured her this government would protect a woman’s rights, and she expressed shock at the news coming out of the United States, and gave a clear defence of a woman’s rights, to an ovation from most of the Commons, but not all.

Jagmeet Singh railed about an alleged tax agreement achieved with a corporation, to which Diane Lebouthillier said that this allegation was examined by a third party and determined there was no wrong doing and that the CRA came out ahead in the arrangement. Singh switched to French to decry the profitability of the oil and gas sector while getting subsidies, and Jonathan Wilkinson gave a bromide about working with sectors including the oil and gas sector.

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Roundup: First leadership deadline passes

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We are now on or about day fifty-six of Russia’s invasion of Ukraine, and Russia has been pouring more troops into their offensive in the Donbas region, and they are making a bunch of unverified claims about their strikes on Ukrainian targets (which should be taken with a salt lick’s worth of scepticism). As well, there were more missile strikes on the western city of Lviv, and Russia has given another ultimatum for the Ukrainian defenders of Mariupol to leave, but thus far there has been no sign that they will take them up on it.

Closer to home, the first deadline for the Conservative leadership contest has passed, and eight of the declared candidates have crossed the threshold of the $50,000 entry fee and the completed questionnaire. They have ten days to reach the next deadline of $300,000 in fees and 500 signatures, and thus far, only three of the candidates have crossed that threshold so far (and judging from the names of the eight remaining, most won’t make it either). Meanwhile, Pierre Poilivre’s camp claims that they have sold memberships in all 338 federal ridings, in order to claim that they have broad appeal, for what that’s worth.

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Roundup: Trudeau confirms that there are to be strings attached

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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: Sour premiers wanted more money

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We’re not on or about day forty-five of Russia’s invasion of Ukraine, and yesterday’s particular war crime of note was an attack on a train station in Kamatorsk that killed fifty-two Ukrainians fleeing to safer parts of the country. More chilling was the fact that the remains of the rocket had “For the children” spray painted on its side. Meanwhile, an international organization formed in the 1990s to identify the dead and the missing in the Balkan conflicts is preparing to send a team of forensic experts to Ukraine to help identify their dead as a result of Russian atrocities.

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Closer to home, there is more reaction to this week’s budget, and in particular, some of the sour notes coming from provinces. It’s not just the current bit of confusion around just what the dental care programme is going to entail, because we don’t have any implementation details yet, and it sounds like the federal government may try to leverage existing provincial programmes for low-income earners. But more to the point, it’s about health transfers, and the fact that premiers aren’t getting their way with their demands for increased unconditional transfers, ostensibly to ensure that the federal government pays 35 percent of the share of health costs—a figure which is distortionary because since the 1970s, provinces were given tax points instead of direct transfers, so the true cost to the federal government would be far, far higher than the 35 percent figure they like to float. Not to mention, we saw that when federal transfers were higher for a decade, provinces used much of that money on other things, as certain provinces also did during the pandemic. So frankly, I wouldn’t expect the federal government to just hand over more unconditional money in the budget, particularly as they are negotiating with provinces for specific outcomes around mental health and long-term care.

Those demands for higher transfers are also raised in this op-ed by economist Trevor Tombe and professor Daniel Béland, which accuses the federal government of being uninterested in reforming those health care arrangements. I would dispute that because they have made it clear, during the election and since, that they are very interested in reforming those arrangements, and that those reforms mean strings attached to federal dollars, and those negotiations are ongoing. I’m also troubled by the notion that the federal government should be doing something about provincial debt, which is far more unsustainable than the federal government’s. Is the suggestion that the federal government upload more costs or programme responsibilities? Because I don’t see premiers clamouring for that (though they do want more money). Is the suggestion that the federal government simply pay for everything? Because that’s absolutely not sustainable either. It also ignores that most provinces have the ability to raise revenues the old-fashioned way—raising their own taxes. (Some provinces are admittedly screwed demographically, but again, what levers are we proposing the federal government employ?) Tombe and Béland want an open and collaborative process to rethink the fiscal relationships between levels of government, but we’ve all seen this movie before, and it always winds up with the provinces demanding the federal government give them more money. I’m not sure how that helps.

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QP: Pre-budget and pre-Bay du Nord

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It was to be prime minister Justin Trudeau’s first Wednesday QP in weeks, and all of the leaders were present once again. Just before things got underway, reports started going out over Twitter that the Bay du Nord project was going to be approved after 4 PM, and that certainly factored into some of the questions that were asked. Candice Bergen led off, worrying about “David,” a young person who is worried he will never be able to own a home. Trudeau stated that they promised to have Canadians’ backs, which is why they have been there for them. Bergen insisted that the Liberals have no plan for the housing crisis, and Trudeau noted that there is no one solution, which is why they are working with a broad range of actors to help Canadians. Bergen worried that the budget would be “high tax, high spend,” and would make inflation worse (no, that’s not what is driving inflation), and insisted that Canadians were worse off than six years ago. Trudeau noted that the first two questions were about doing more, and this one was about doing less, which is why the Conservatives were incoherent. Luc Berthold took over in French to blame the government for inflation, and Trudeau insisted that they were being fiscally responsible while supporting Canadians. Berthold quoted a Liberal backbencher who was hoping for a “responsible budget,” to which Trudeau returned to the line that Conservatives want them to do less for Canadians while they were there to support them.

Yves-François Blanchet rose for the Bloc, and he gave some fairly confused statements about Bay du Nord, and demanded the government not approve it. Trudeau noted that they have shown that the economy and the environment go hand-in-hand and gave a few more bromides to accompany it. Blanchet insisted it was incoherent to support Bay du Nord and the emissions reduction plan, and Trudeau recited some rehearsed lines about the environment and the economy.

Jagmeet Singh led for the NDP, and he denounced the carbon capture tax credit in favour of green jobs. Trudeau took up a script to list projects they have undertaken to reduce emissions at home and abroad. Singh repeated the question in French, and got many of the same bromides.

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QP: Exasperation with housing talking points

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A bright and sunny Tuesday in the Nation’s Capital, and Prime Minister Justin Trudeau was present for QP, and for the first time in weeks, so was every other leader, all together. Candice Bergen led off, script in front of her, and she complained that the Liberals had moved away from “moderates” like John Manley and Anne McLellan—because it’s 1995 and will always be 1995—and she worried the budget would be an NDP document. Trudeau recited that they made the choice two year ago to support Canadians through the pandemic, and that led to the economic growth that we are seeing now. Bergen complained that out-of-control spending led to out-of-control prices and insisted that Canadians were worse off than six years ago—which I’m pretty sure doesn’t actually track. Trudeau insisted that they made the choice to prop up Canadians in the pandemic, and were working to make their lives better. Bergen again insisted that every budget made Canadians worse off, and demanded that Trudeau listen to “moderate” Liberals and produce a “responsible” budget, to which Trudeau produced a list of supports that they introduced or enriched, which the Conservatives opposed entirely. Luc Berthold took over in French, and he too insisted that these big-spending budgets led to inflation (never mind that we know the cause of the current bout of inflation and it’s not government spending), and Trudeau recited that they would be there for Canadians, which is why the economy has boomed. Berthold quoted Paul Martin to demand that they cut spending now that the economy is growing, to which Trudeau countered that they enhanced supports for Canadians to help them with rising costs, where the Conservatives wanted austerity.

Yves-François Blanchet led for the Bloc, and he insisted that nobody believes in the emissions reduction plan, and wanted the prime minster to admit that his plan failed. Trudeau took a script and read off that the Montreal and Quebec City mayors supported their plan. Blanchet insisted the plan was “scientifically unacceptable” and listed fossil fuel subsidies as proof, and demanded the Bay du Nord project be cancelled. Trudeau instead lamented that Blanchet badmouthed the mayors.

Jagmeet Singh rose for the NDP, and after reciting a lamentation about rising prices, he wanted assurances that their shared priorities were in the budget. Trudeau responded with a rehearsed paean about how their investments in Canadians have grown the economy. Singh switched to French to demand that the ultra-rich pay their fair share starting with big banks—which was a Liberal platform promise—but Trudeau merely repeated his same paean in French.

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