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Columbia River Gorge
Hard Numbers: A river runs through US-Canada talks, Indian hackers hit CAF, Swedes supercharge Quebec investment, Unifor sets sights on GM, Canada emits mixed picture on climate progress
40: The US and Canada are in an eddy of difficult negotiations about water use from the shared Columbia River, whose dams provide half of British Columbia’s electricity and 40% of all US hydropower. Time is running out — the 1964 treaty that governs the two countries’ use of the river expires next September.
2: Canada’s bad blood with India is now spilling into the cyber realm. The website of the Canadian Armed Forces was knocked offline for two hours on Wednesday in an operation carried out by a pro-Indian hacking group called Indian Cyber Force. The group had threatened to attack Canada just days after PM Justin Trudeau accused New Delhi of involvement in the murder of a Sikh separatist leader in British Columbia.
7 billion: Sweden’s Northvolt, a major battery supplier to Volkswagen and BMW, has chosen a site in Quebec for a new $7 billion factory that will manufacture EV batteries. The company had been scouting locations on both sides of the US-Canada border. The deal will be the largest-ever private investment in Quebec and is the latest in a slew of EV battery production deals reached with US and Asian manufacturers.
3: After reaching a last-minute strike-averting deal with Ford, Canada’s Unifor, a trade union, is now targeting the Motor City giant’s crosstown rivals at GM. Unifor wants a 3-year contract based on the one they inked with Ford, which increased worker’s wages and pensions, while also providing more support for labor during transitions to EV production. Across the border, the UAW’s unprecedented strike against all three major US automakers continues.
2.1: Canada’s emissions rose 2.1% in 2022 compared to the year before, according to data released on Thursday. While that seems like a red flag for the country’s aim of cutting 2005 emissions in half by the end of this decade, the larger picture is greener. Emissions are down more than 6% since 2005, driven largely by the power sector, where the shuttering of coal plants has halved emissions. Still, oil and gas sector emissions are up more than 20% since then, driven largely by the boom in oil sands production over the past two decades.The logo of Amazon is seen at the company logistics center in Lauwin-Planque, northern France, November 15, 2022.
The FTC takes on Amazon, Canadian investigation ongoing
The FTC says the online mega-retailer has engaged in a “pattern of illegal conduct” that includes blocking competitors, inflating prices, crushing innovation, and reducing market quality.
In essence, the FTC claims that Amazon traps consumers and sellers in its orbit, dominating market share and exploiting its position to undermine independent sellers and reduce choice for consumers while also using its position to drive up prices. It also alleges that Amazon games its search results to push its own products.
Amazon denies the allegations and says the lawsuit would hurt businesses and consumers alike, sending prices higher and slowing delivery speeds. It’s ready to fight back, and as a company valued at roughly $1 trillion, it has the resources to do so.
Anyone looking for a quick resolution is going to be disappointed. Canada launched an antitrust investigation into Amazon in August 2020. That probe is ongoing, and the Competition Bureau has not said when it expects to complete its work, which would precede any further action.
In 2022, the Canadian government amended its Competition Act to introduce stiffer fines and penalties for businesses that violated the law. Under the new rules, businesses like Amazon could be on the hook for as much as 3% of their annual gross revenues worldwide if found to be abusing their dominant market position, which is a lot more than the previous cap of CA$10 million.
We’re keeping an eye on how the FTC and Competition Bureau lawsuits and investigations proceed, and whether Amazon adjusts any of its practices in the meantime. It’s doubtful they will. In 2022, in Canada, the company threatened to shutter Marketplace if the government strengthened competition regulations, though it didn’t go through with the plans.
Migrants share space at a makeshift shelter in Denver, Colo., on Friday, Jan. 13, 2023.
Migrant and housing crises hit both sides of border
The city has more than 1,868 migrants in shelters – a big jump from July and August, when numbers were in the 400-500 range.
In May, Title 42 expired. US officials expected a sharp, sudden rise in the number of immigrants entering the country from the southern border, and that is exactly what happened, though numbers later declined. The immigration policy had been in place since the Trump years, keeping hundreds of thousands of would-be newcomers, including some asylum-seekers, from entering the country.
The change prompted some states to ask the Biden administration for funds to help house migrants, but support has been insufficient. Now, as Politco reports, a broader battle over “NIMBYism” (not in my back yard) is playing out. Some officials, including Democrats, worry about how a rise in migration is affecting housing – many cities and states are already in crisis as shelters exceed capacity – and whether it might produce a local backlash. Massachusetts alone has upwards of 22,000 people in shelters, roughly half of whom are migrants. That’s a 100% rise since January.
National, state, and local support has been unable to keep up with the rise in newcomers, and migrants are finding themselves caught in the middle of a partisan political struggle ahead of the 2024 election. This comes as the US faces a growing housing crisis.
Meanwhile, in Canada, government under-funding and finger-pointing in this summer led to an emergency in which civil society groups and churches stepped up to feed and shelter migrants who were sleeping on the streets of Toronto. In September, the migrants moved to a shelter. The federal and Ontario governments eventually stepped up to offer funds to supporting asylum-seekers, refugees, and at-risk people. But the money won’t be enough for long, especially since Canada’s housing crisis shows no signs of abating.
With elections around the corner for both countries, leaders on both sides of the border will be under pressure to speedily address housing prices and growing shelter occupancy, particularly as migration picks up. We’re watching to see how national and local leaders navigate this growing crisis and fight to resist a local backlash.
Speaker of the House of Commons Anthony Rota during Question Period on Parliament Hill in Ottawa, Ontario, Canada September 25, 2023.
A tale of two speakers
It’s been an extraordinary few weeks for speakers in both the House of Representatives and the House of Commons.
One is fighting to keep his job; the other just resigned.
US House Speaker Kevin McCarthy is trying to navigate between the shoals of the Democrats and far-right Republicans. His hold on the speakership was tenuous from day one, but with a government shutdown looming, and a continuing resolution to keep it operating seemingly out of reach, at least for now, he’s facing a tough struggle to hold onto the gavel.
North of the border, House of Commons Speaker Anthony Rota resigned on Tuesday after welcoming Nazi war veteran Yaroslav Hunka to parliament, calling him “a Canadian hero” and “a Ukrainian hero” and thanking him for his service.
Hunka was in the visitor’s gallery during Volodymyr Zelensky’s speech to the joint session of parliament. Rota introduced Hunka as having fought against Russia during World War II, apparently unaware this meant he had fought for Nazi Germany. Rota apologized and took responsibility for the invitation before resigning.
On Wednesday, PM Justin Trudeau offered his own apology for the harm caused by Hunka’s visit. The House of Commons will choose a new speaker next Tuesday by secret ballot.
We’re watching to see if a new Canadian speaker can restore trust and authority to the speakership – and maybe a bit of decorum in the raucous House. Meanwhile, McCarthy will be working to get his far-right caucus on side to pass a bill to fund the government and end the shutdown that is set to begin Sunday. Could this blow up and cost McCarthy his role as speaker?
Clayton Allen, US director for Eurasia Group, doesn’t think so. He says McCarthy “hasn’t lost his ability to govern the House,” though he’s facing the worst internal divisions and narrowest margin of control in “at least a decade.” While it’s “a bit of a parlor game in Washington to speculate about McCarthy’s downfall … the risk is somewhat overstated,” since his removal would require majority support, including all Democrats.
Is the clock ticking on Biden and Trudeau?
It’s worse in the US, where every elected official seems to be raising money and running for reelection all the time, but leaders north of the border feel the pressure, too.
With President Joe Biden set for a reelection bid in November 2024 and Prime Minister Justin Trudeau due to meet voters by October 2025 at the latest, the already frenetic pace of electoral politics is picking up in both countries.
A pendulum swing may be in the works
Right-wing candidates in both countries aim to unseat the progressive incumbents, which means Biden and Trudeau face stiff competition. Biden’s chances, at the moment, seem far better than Trudeau’s despite some recent polling that may be giving the Democrats cause for pause – or maybe not.
Earlier this week, an ABC/Washington Post poll showed Biden’s approval rating at just 37%. What’s more, it found Donald Trump, the probable Republican nominee, leading Biden 51 to 42.
The poll, however, was such an outlier that even the pollsters who ran it recognized it as such. Criticism followed, and it’s safe to say that it is almost surely not an accurate representation of the electorate. Most polls show a much closer race, with Trump and Biden tied or within a few points of each other.
The picture in Canada is clearer. Trudeau is gunning for his fourth election win in a row – something that hasn’t been done by a prime minister in Canada in over a century – but opposition leader and head of the Conservative Party Pierre Poilievre leads by a lot. Poilievre stood out in a recent poll that found 40% of Canadians think he’d be the best prime minister compared to 31% who chose Trudeau. Canada is a multiparty democracy, so hitting 40% with several leaders on option is a strong showing.
Federal polls in Canada have the Conservatives up by four points on average, with some individual polls showing them up by double digits. According to 338 Canada, which tracks polls and models electoral projections, Poilievre’s side currently would stand to win 174 seats compared to 105 seats for the Liberals, which is enough for a majority government. The Conservatives are currently showing a 96% chance of winning the most seats.
Economic, aging, and legal matters
In the US, voters are expressing concern about both Biden and Trump – they aren’t exactly thrilled with their presidential options. A recent NBC poll echoes the ABC/Washington Post poll’s assessment of Biden’s flagging approval rating. It also shows that fewer than 40% feel Biden is handling the economy well despite job growth and the country heading for a soft landing. People are still feeling significant economic pressure.
Nonetheless, Biden might be safer on the economy than a quick glance suggests, especially since economic hopes are on the upswing. Clayton Allen, US director for Eurasia Group, says “The economy is doing just well enough for Biden.” He points out there’s just enough optimism out there with people’s personal economic outlooks that there’s “some positive sentiment among voters around the economy.” If things keep improving, such as the declining probability of a recession and the Fed’s ability to hold interest rates steady, that will boost Biden’s chances in 2024.
But any recent good news for Biden on the economy has to be tempered by the risk that economic sentiments take a turn. Recent numbers show optimism softening.
Beyond pocketbook issues, however, the electorate is also concerned by the candidates’ ages. According to NBC’s poll, a combined 74% have major or moderate concerns about the president’s “necessary mental and physical health to be president for a second term.”
Biden is 80 years old. Trump is 77.
Trump is also facing multiple indictments and was just found to have committed fraud in New York state. The NBC poll found that 62% of respondents had major or moderate concerns about Trump’s many legal woes.
Media coverage of the two is shaping a 2024 election narrative that is priming voters to evaluate each candidate on particular metrics. “The narrative around Biden has been for quite a while that his age is the most important factor for assessing his fitness for office,” Allen says. The one about Trump “has focused on his legal challenges and his position in the party.” The looming showdown for 2024 seems to be Biden’s age and fitness versus Trump’s (un)lawfulness.
In response, the White House has crafted a plan – parts of which pre-existed recent polling – to keep Biden fit and, just as importantly, looking fit. Of note, Democrats have had a recent run of favorable election results, which could serve as a proxy for the upcoming presidential race, suggesting an edge for Biden over Trump.
Canada focuses on affordability
Canadians are expressing their own fatigue with the current leadership and economic frustrations, particularly on housing and affordability. In recent weeks, the Trudeau government has gone all-in on the housing file, removing the sales tax from the construction of purpose-built rental units. They’ve also made a push to “stabilize” the cost of groceries – which grew 8.5% year over year in July. Food prices have been a significant issue in the country.
The government seemed to be gaining some traction on affordability issues of late – concerns that will determine the outcome of the next election. But events conspired last week to shift the national focus and some of the government’s attention.
Trudeau’s allegation last week that India assassinated a Canadian on Canadian soil shocked the country and the world. Days later, during a visit to address parliament by Ukrainian President Volodymyr Zelensky, the speaker of the House of Commons, Anthony Rota, welcomed a World War II veteran in the gallery who “fought for Ukrainian independence against the Russians.” He noted the man was a “Canadian hero” and a “Ukrainian hero” before the chamber, including Trudeau and Zelensky, and the chamber gave him a standing ovation. But it turns out that the veteran in question was in a Nazi SS division.
Rota has since resigned, and while Trudeau had nothing to do with the scandal, Conservatives are blaming him for the debacle – and there’s a good chance some voters will, too. This was the last thing Trudeau needed, particularly since questions about whether he can even last until 2025 are already circling. An August poll found a majority of Canadians thought he should go ahead of the next election.
With more than a year to go before the presidential election and as many as two years before a Canadian contest, no outcome is guaranteed. Elections matter, and the time ahead of them leaves plenty of opportunities for events and shifting fortunes to do their thing. Plus, not everyone has made up their mind.
“Polling this far out from the general election is inherently compromised,” notes Allen. “People are still very much deciding what their position is going to be, especially voters who are persuadable to either side.” This is true on both sides of the border, but current numbers suggest that by 2025, we’re more likely to see Biden in the White House than Trudeau in the prime minister’s chair.
The pendulum may end up swinging, but Biden stands a better chance of holding on for another term.
The Graphic Truth: Indians hold 40% of Canadian student visas
The fallout from allegations that India was behind the assassination of Hardeep Singh Nijjar has thrown Indo-Canadian relations into the lurch. Each side has expelled a diplomat from the other, and India’s Embassy in Canada stopped processing visas – a serious diplomatic gesture, no doubt, but the material impacts are likely to be small. Only around 80,000 Canadians visited India in 2021 out of more than 1.5 million foreign tourists.
But if Canada responds in kind, it will be a very different story. Indian students represent a staggering 40% of the 807,000 foreign student visa holders in Canada, more than every other nationality combined save China. The number of Indians studying in the Great White North skyrocketed from just 2,210 in 2000 to 171,505 in 2018 — also the year Indian students first outnumbered Chinese students. Their population has since nearly doubled, and Indian students now represent approximately 0.8% of the entire population of Canada.
Here’s the twist: Even before the row over Nijjar’s murder, Canada was seriously considering capping student visas. The country is in the midst of a severe housing shortage, and efforts to alleviate the situation are falling short. The province of Ontario needs to build around 150,000 new houses every year for the next several years to rectify the situation — and they’re managing around 40,000. Capping the number of foreign students competing for limited housing might be politically expedient, but it would be a devastating blow to the Canadian universities that depend upon international tuition rates.
India-Canada standoff heats up while US seeks a compromise
Hi, everybody. Ian Bremmer here. And a Quick Take to kick off your week.
India and Canada. Not the two countries that you expected to be getting into a big public fight. But that is exactly where we are. And the Americans are uncomfortable. And sort of in the middle of it, though I'm about clearly on Canada's side. Give you a little background.
So largest Sikh population in the world outside of India is in Canada. They are politically active and relevant. They're concentrated in a few key voting areas. And while they tend to vote conservative, all three parties interested in being aligned with them. Most of them, of course, perfectly fine from a political perspective. But there also is a small group of radicals who support secession of their homeland from India. Radical organizations, some of which have been supportive of and engaged in terrorist activity in India. The Indian government has been public and very critical that the Canadians are allowing big Sikh demonstrations. Canadians say, “Hey, we have, you know, sort of freedom of speech. What do you want us to do, close down these demonstrations?” Indians, “Yes, we would actually appreciate that.” And also that they've been harboring radicals and terrorists and they need to take action against them. Then the Canadian government found out that one of the leaders of a radical Sikh institution, who is a Canadian citizen who was assassinated in Canada, found out from the Americans that the Indian government was behind the assassination. And indeed, there were recordings of Indian agents talking about this apparently before and after.
And that was shared with all the five eyes. So the UK and Australia and New Zealand, I'm not privy to this intelligence. I don't have those clearances. But leaders that I've spoken to in those countries tell me that this evidence is rock solid. So look, Trudeau very concerned about this. I mean, imagine if Khashoggi was an American citizen and gunned down in New York, right? I mean, this is clearly a big deal domestically for Trudeau wants to find a way to find an off-ramp. So back in August, he sent his national security and intelligence advisor to Delhi. She's the equivalent of Jake Sullivan in the United States. The meetings go absolutely nowhere. Indian government takes no responsibility, refuses to talk about it. Then when Trudeau himself goes to Delhi for the G-20, I had heard that the meeting between Trudeau and Modi was shockingly bad. I heard that read out from a number of people. I was very surprised because the topics they were discussing weren't so chippy. And that's because Trudeau was actually bringing this up. And Modi said, “Absolutely not. We have nothing to do with it and how dare you bring this up? And you're, by the way, harboring all these extremists and we're really angry at you.”
At that point, Trudeau decides to go public because this information is going to end up public in the criminal case around the murder and, you know, now you've got a problem. So the Indian government is, you know, taking no prisoners on this issue. They're condemning the Canadians. They have, you know, gotten rid of a Canadian envoy. They've suspended visas from Canada to India. And clearly, the trade relationship, which isn't huge, it's actually pretty small, but nonetheless would be at risk. And so too, Canada's Indo-Pacific strategy, which they announced a great fanfare a year ago, spent a lot of time writing it up. It's pretty thoughtful because their China relationship is easily as bad as America's China relationship. Frankly, it's worse and the Canadians don't have as much leverage and well you can scratch the Indo from the Pacific strategy right now. Meanwhile, Modi is enormously popular for telling off the Canadians.
First of all, it is not making all that much news. It's mostly below the fold in Indian newspapers in Canada, of course, has been leading all the coverage. In India itself, yes, big Sikh population. But those Sikhs are primarily affiliated with a political party that is in alliance with Modi's own BJP. And they strongly oppose these secessionist movements and the radicals and the terrorists that have been involved in it. In fact, you know, informally you hear people when they find out that the Indians might have actually done this such an assassination, they're kind of proud. They're like, wow, we're like Israel. Who knew that, you know, we defend our national security so well? And the Congress party, which is the main opposition party to Modi strongly supporting Modi on this issue. So it's a serious impasse. It is one that is not going to get resolved any time soon.
The Americans are trying to work a compromise because what the Canadian government wants is, you know, not for Modi to say, “I'm personally responsible and I'm really sorry,” wants to do an investigation, find out who was responsible for it,have a head or two roll, even if they're junior and then put this behind them. Modi has absolutely zero interest in doing that, especially with the Canadians. And it's unclear how public the Americans are going to get on this issue precisely because the India relationship has been a big win for the United States. And indeed, Biden was planning on going to India for their national day coming up in a couple of months as the principal guest. This could put a spanner in that. So watch it all very carefully. But that's where we are in India-Canada. A lot to pay attention to and not easy to resolve.
Hope everyone’s doing well. I'll talk to you all real soon.
- Hard Numbers: Iran cracks down on women, bestsellers sue AI, Venezuelan migrants get right to work, India suspends Canadian visas, Turkey jacks up rates ›
- Does Canada have a foreign policy? ›
- Trudeau’s assassination allegations put Canada’s allies in a bind ›
- Canada accuses India of assassination ›
- India and Canada expel diplomats, US treads carefully ›
- Canada-India relations strained by murder allegation ›
- What the G20 summit revealed about the Modi Trudeau relationship ›
- Ian Explains: Biden-Trudeau summit well worth the wait ›
- Trudeau lays out plan to grow Canada’s clean economy ›
Fragmented Canadian maple leaf over map of the world
Does Canada have a foreign policy?
Protected by three oceans and the hegemony of the United States, Canadian foreign policy has long been shaped by geographical accident and proximity to power. The trade-off has been that while Canada doesn’t have great power preoccupations it remains stuck within the orbit of its most important ally, the US, which does.
But now, the Canadian government is facing a series of foreign policy challenges that put it in an awkward position. Ottawa suddenly needs to clarify its goals and refine its tactics. Can it?
Earlier this week, after years of mixed-results attempts to get closer with India as part of its Indo-Pacific trade and relationship-building strategy, Canada accused India of playing a part in the murder of a Canadian citizen on Canadian soil – Sikh activist Hardeep Singh Nijjar.
While Canada’s closest allies, particularly the United States, denounced the murder and called for India to cooperate in an investigation, neither the U.S., nor the U.K. or Australia seem willing to risk their relationship with India over the affair, particularly as Western powers court New Delhi as a crucial counterweight to China. The episode reveals a lot about the challenges, and weaknesses, of Canada’s foreign policy.
Job One: Staying close to the U.S.
Over the past century, Canada has fought along the US in every major American war except Vietnam and the 2003 invasion of Iraq. As an essential security partner in several relationships, including Nato and Norad, Canada has largely kept in step with U.S. geopolitical goals and objectives.
The Trudeau government has also, importantly, sided with the U.S. in Washington’s rivalry with China, even when that has produced major political headaches at home. The 2018 arrest of Huawei executive Meng Wanzhou in Vancouver – at Washington’s request – led to Beijing kidnapping two Canadians in China. While the affair was eventually settled, it damaged Sino-Canadian relations.
More recently, after pressure from opposition parties, the Trudeau government launched a full public inquiry into foreign interference in Canada’s democracy, with China, among others, targeted as a major culprit.
Since Russia’s invasion of Ukraine, Canada has backed Kyiv with cash, training, and arms. In June, Trudeau announced a CAD$500 million fund for military assistance to the country, and this week committed $33 million worth air defenses. All told, Canada has spent $8 billion as part of its pro-Ukrainian efforts. On Friday, Ukrainian president Zelensky will speak to the Canadian Parliament.
Still, despite all of this, Canada’s Nato allies, particularly the U.S., have long complained that Ottawa underspends on its military, coming up short of the alliance’s target of 2 percent of GDP. Canada, for its part, argues the 2 percent target is less important than making critical investments such as the purchase of F-35 jets and investment in NORAD upgrades.
Canada has also, on occasion, found itself decidedly on the outs with its major allies. When the U.S. launched a new security partnership with Australia and the United Kingdom (AUKUS) last year, Canada was sidelined. While Ottawa has expressed interest in playing a role in AUKUS, the White House says there is no plan to invite Canada into the partnership. Ostensibly, Canada has been left out because it has no intention of investing in nuclear submarines, which are a central pillar of the AUKUS strategy.
Under-planned and under-resourced.
What are Canada’s strategic goals, and is there a coherent plan for achieving them? Experts are skeptical.
Graeme Thompson, senior analyst at Eurasia Group says “Canada’s foreign policy seems to be very much disjointed,” which is to say “There isn’t an overarching strategic framework.”
Canada hasn’t published a National Security Strategy, for example, since 2004. Nor has it undertaken a formal Foreign Policy Review. Without a conceptual anchor like that, Canada’s foreign policy is unmoored. The country has lost two separate bids for a rotating seat on the UN Security council over the past 15 years.
That lack of coherent strategy, according to Thompson, is the consequence of two problems. First, Canadian political leaders struggle to prioritize issues and regions, and second, they don’t adequately fund a truly global approach. So, Canada ends up spreading itself too thin to exercise significant influence on the global stage, which leads it to overpromise and under-deliver.
Attempting to cover nearly every region of the globe, he says, Canada is trying to balance trade relationships, embassy and consulate presences, security and defence commitments, development assistance, and leadership on environment, climate change and human rights.
No wonder there isn’t enough money – not to mention time, attention, and human resources – to go around.
Problems coming home to roost.
Years of subpar Canadian foreign policy are now catching up with the Trudeau government. The return of great power rivalries, fresh external meddling in Canada’s diasporas and elections, and some unusual – if small – cracks in the US-Canada alliance are now forcing Ottawa to develop a more robust foreign policy than it is used to having.
Can it manage? Canada may be a middle power, but it shouldn’t have a middling foreign policy.