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FILE PHOTO: Elon Musk, CEO of SpaceX and Tesla and owner of X, formerly known as Twitter, attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 2023.
Atwood and Musk agree on Online Harms Act
Space capitalist Elon Musk and Canadian literary legend Margaret Atwood are in agreement …. on warning that Canadian legislation to bring order to cyberspace threatens freedom of speech, which suggests that Justin Trudeau may have to go back to the drawing board.
The Liberals unveiled the Online Harms Act last month, proposing a digital safety commission to target hate speech, child porn, and other dangerous content. Advocates like Facebook whistleblower Frances Haugen have called for governments to pass similar laws, and both the EU and the UK are doing so.
But the Trudeau government got a black eye from its last attempt to regulate cyberspace when Meta yanked Canadian news from its platforms rather than pay a so-called “link tax.”
So far, big American tech companies have not reacted as forcefully to this bill, but Atwood, Musk, and many experts have objected to the draconian laws around hate speech, which would include life prison sentences and the use of peace bonds for potential hate speech.
Given the precariousness of Trudeau’s government, the humiliating defeat of its last big online law, and the criticisms coming from even those predisposed to support the law, the government will likely have to accept amendments in the legislative process if it wants to get this passed.A "Help Wanted" sign hangs in a restaurant window.
Jobs are up, but Biden and Trudeau still risk losing theirs
January was an encouraging month for job growth in the US and Canada. The Bureau of Labor Statistics reported 353,000 new jobs stateside with unemployment holding steady at 3.7%. Meanwhile, Statistics Canada says jobs were up by 37,000 during the same period and unemployment was down to 5.7% – a modest drop of 0.1%. Both countries exceeded expectations.
You might think better-than-expected economic news would herald brighter fortunes for President Joe Biden and Prime Minister Justin Trudeau, but you would almost certainly be wrong. Both men’s polling numbers are nowhere near where they’d like them to be.
Biden’s favorables are flat with roughly 40% of Americans approving of his job performance compared to 55% who disapprove. Meanwhile, 86% of the country thinks he’s too old to run again. North of the border, Trudeau continues to trail Conservative leader Pierre Poilievre by double digits, and his party is stuck in the mud.
There’s a chance numbers will improve for the incumbents, but the December jobs report in the US also exceeded expectations and didn’t boost Biden’s ratings. The Canadian numbers were softer in December, so Liberals have some hope the latest good news will give Trudeau a boost this time.
But so far, and perhaps counterintuitively, their political fortunes do not seem directly tied to economic performance.
A pipe yard servicing government-owned oil pipeline operator Trans Mountain in Kamloops, British Columbia, Canada.
Will Trans Mountain Pipeline expansion pay off?
“It’s been quite a journey,” he says of the many weekends, nights, and early mornings he spent visiting Indigenous communities to secure their consent. By the time he retired in April 2022, more than 60 communities were on board. Barring disaster, the $23 billion project will be completed this year, and Canada will have access to tidewater for an additional half a million barrels of crude a day.
Ottawa stepped in to buy the project when Kinder Morgan pulled out in 2018, and the construction costs have increased sixfold, leading some to call it a “catastrophic boondoggle.”
Justin Trudeau’s government believed the project would add tens of billions of dollars in national revenues by allowing more Canadian oil to reach Asian markets and command a world price. Western Canadian Select crude has typically traded at a discount of up to $16 per barrel, compared to North American benchmark prices, because it all goes to the United States.
The expansion of TMX will end that stranglehold, and most analysts expect the discount to fall to closer to $10 a barrel. The upshot could be more expensive diesel in the US Midwest.
Will Ottawa get its investment back? Pipelines generally trade at around 10-12 times cash flow, which in this case could see Ottawa raise more than $20 billion. But the government, or its successor, may decide to take a lower price to ensure a material Indigenous ownership stake.
“It was not a terrible decision at all, and it was one that only the government could have seen through,” Anderson says, noting the political, regulatory, and legal risks.
Canada produced a record 4.19 million barrels of oil a day in December. The prospect of higher prices, thanks to the Trans Mountain expansion, is likely to see new records set in the future.
Dem bias in Ottawa has Trudeau targeting Trump
The most intense debate in the Canadian House of Commons of late has been about a humdrum trade deal update between Canada and Ukraine. It is being disputed by the opposition Conservatives because it contains reference to a carbon tax.
Since Conservative leader Pierre Poilievre has made “axing the tax” in Canada his number one priority, he has removed his party’s support from the deal, even though Ukraine has had a carbon tax since 2011.
But the governing Liberals say they detect an ulterior motive: the rise of right-wing, MAGA-style conservatism in Canada that has undermined the Conservative Party’s support for Ukraine.
Trudeau’s camp takes aim at MAGA bull's-eye
The Liberals ran an online ad on Monday, ahead of a Canada-Ukraine free trade deal vote in the House, that featured a photo of Justin Trudeau shaking hands with Ukrainian President Volodymyr Zelensky while claiming Poilievre’s party is “importing far-right, American-style politics and refusing to stand with our ally in their time of need.”
Conservatives say they support Ukraine and have just called on Ottawa to send surplus weapons – specifically 83,000 CRV7 rockets slated for disposal – to Kyiv. But the Liberals need to disrupt Poilievre’s momentum and seem convinced that comparing him to Donald Trump might do it.
After the former president won the New Hampshire primary in January, the Liberals made a direct comparison between the two men in an online ad, which said that Trump was one step closer to the White House and that Poilievre was ripping a page from his playbook. The ad noted that both men referenced “corrupt media,” their countries being “broken” and used the slogan “bring it home.”
Trump’s eye-for-an-eye approach
This is a dangerous game, given Trump is ahead in most polls and is an Old Testament-style politician, more inclined to take an eye for an eye than to turn the other cheek.
Why would Trudeau risk baiting the man who could be in the White House this time next year, where he would wield the power to enervate the Canadian economy?
The prime minister knows Trump takes note of every slight and pays everyone back with interest. After the G7 meeting in Charlevoix, Quebec, in 2018, Trudeau gave a closing press conference in which he said Canada would not be pushed around in trade negotiations by the US. According to Trump’s former national security adviser, John Bolton, in his book “The Room Where It Happened,” the president raged against Trudeau, calling the prime minister a “behind your back guy” and ordering his aides to bad mouth Trudeau on the Sunday talk shows.
But Trudeau’s Liberals are trailing the Conservatives by up to 16 percentage points in every public opinion poll, and this tactic may work.
An Abacus data poll from Jan. 28 suggested there is some evidence to suggest that associating Poilievre and Trump correlates with voting intentions, with those who feel that the two men are different more likely to vote Conservative. Tying the two men together in a pejorative fashion is good for the electoral fortunes of the Liberal Party, so the thinking seems to go.
That remains to be seen. Attacking a political rival is always a challenge when the target is held in more esteem than the source of the attack, which is the case here, according to another Abacus poll that found Poilievre much more liked than Trudeau.
Canada’s former man in Washington says to hold fire
The risk is amplified in that the Canadian public may well see through such a transparent tactic and decide that Trudeau is putting his party’s interests ahead of the country’s.
That was the warning issued at the weekend by David MacNaughton, whom Trudeau once appointed as Canada’s ambassador in Washington. He told the Toronto Star that Trudeau is taking a risk by taking indirect shots at Trump.
Doing so will make it harder to fight Trump’s promised 10% tariffs on US imports if he comes to power, he said.
“We used to be seen by the Americans as a trusted friend, ally, and partner, and right now, I don’t think that feeling is as strong as it used to be,” he said.
That MacNaughton has been forced to say this in public suggests he is being ignored in private.
Trudeau revives Team Canada
Trudeau has revived the Team Canada approach to relations with the US that served his government well during the renegotiation of the North American Free Trade Agreement that yielded the U.S.-Mexico-Canada deal in 2018.
The new effort will be led by Kirsten Hillman, Canada’s current ambassador in Washington, Francois-Philippe Champagne, the industry minister, and Mary Ng, the trade minister (notably not Mélanie Joly, the foreign minister, or Chrystia Freeland, the deputy prime minister who fell foul of Trump during the USMCA negotiations. “We don’t like their representative,” Trump said at the time).
Municipal mayors, provincial politicians, and business leaders will all be urged to reach out to their contacts to sell the message that the two economies are more integrated than ever. Trade statistics based on the first three years of the new USMCA show that total US trade with Canada and Mexico totaled $1.78 trillion in 2022, a 27% increase over 2019 levels.
When not criticizing “ideologically driven MAGA Conservatives” in Parliament, Trudeau has tried to sound civil.
But as professional diplomats who have worked with Republicans in the US point out, “no amount of Team Canada can overcome those ill-advised MAGA statements.”
Libs and GOP on different planets
Another problem is that the two are on different political planets.
The Liberal government is not keen on engaging with Republican politicians and officials, in part because of an aversion that dates back to the Jan. 6, 2021, attacks on the US Capitol.
The lack of readiness evokes memories of November 2016, when Trump was elected and the Canadian government was caught completely off-guard. The professional bureaucrats who are meant to advise governments had provided no contingency plan for a Trump administration and Trudeau had even invited the sitting Democratic vice president, Joe Biden, to Ottawa for a state dinner the following month. “They were so excited at the prospect of Hillary (Clinton), even better than Obama because she was a woman. They couldn’t wait for the transition,” said one person involved in the planning process. After Trump was elected, the Canadian government couldn’t even reach him to arrange a congratulatory call.
Louise Blais, a former Canadian ambassador to the United Nations, was consul general in the southeast US at the time – MAGA land – and had built up an array of contacts among Republicans that proved invaluable. Among other things, she secured a phone number for the president-elect.
As she wrote in the Globe and Mail last weekend, even the most conservative Republicans are friendly towards Canada, realizing the relationship is a net positive for them. But they value a rapport built up over the years, not arranged in a panic, and they cherish mutual respect.
Blais recalled how former House Speaker Newt Gingrich told her in 2016 that Republicans were hearing what Canada was saying about then-candidate Trump. “Be careful because you are picking sides,” he said.
Trade deal no protection against Trump’s tariffs
The long-standing Democratic bias at the official level is a luxury Canada can ill afford. Ottawa has a free-trade agreement with the US, but if the new president wants to impose a double-digit tariff on everything that crosses into America, Canada would be dragged into an expensive, retaliatory trade war.
Veteran Conservative MP Randy Hoback wrote on his Substack that the Canada-U.S. relationship is too critical to be jeopardized by domestic political concerns. “Trudeau’s actions are hazardous to our economy and national security,” he said.
Trudeau’s current emissaries don’t speak the same language as Trump’s party. A real Team Canada needs to include some people, like Hoback, who can speak Republican.
Puzzle map of Canada
Is Canada coming apart at the seams?
If Canada’s provinces weren’t squabbling with the federal government, it wouldn’t be Canada. But lately, these tensions seem to be cropping up more forcefully at every turn, and they couldn’t come at a worse time.
The Alberta factor
In recent weeks, Alberta Premier Danielle Smith has launched an effort to take half the money in the Canada Pension Plan and set up a separate, Alberta-only pension scheme. The feds, unsurprisingly, say “no way” and have warned of significant economic pain if the province splits from the national plan.
At the same time, energy-rich Alberta is threatening to use a legal loophole to ignore proposed nationwide clean electricity regulations that are part of Canada’s pledge to have a carbon-neutral grid by 2035.
Albertan grievances with the federal government are nothing new, of course. Albertans, whose natural resource wealth contributes significantly to Canada’s GDP, have always felt a little taken for granted. And now, with climate policy hitting at the heart of their economy and culture, they are in a particularly plucky mood to fight back.
But it’s not just the Albertans. As the struggle over pensions and electricity regulations plays out in the West, provinces across the country are fighting with Ottawa over carbon pricing.
Since 2019, Canada has had a federally mandated price on carbon for any provinces that don’t have their own local emissions taxes. It is one of the government’s signature climate policies. But now, with inflation high and his political fortunes in question, Prime Minister Justin Trudeau is suspending the carbon tax on home heating oil for three years in a bid to give consumers a break.
It just so happens that home heating oil is used primarily in Atlantic Canada, where the Liberals are doing particularly badly in the polls. Now, some other provinces want carve-outs for the fuels that they use too.
In the federal Parliament, Conservative leader Pierre Poilievre leveraged the broader provincial outrage over the carbon tax carve-outs to pitch a motion of his own to exempt all home heating from the tax, but the Liberals defeated it with help from the Bloc Quebecois.
Meanwhile, the premier of Saskatchewan, Scott Moe, says SaskEnergy, the provincial-owned natural gas provider, won’t collect the carbon tax on natural gas home heating at all for the federal government. That set up a direct legal challenge to the feds’ tax authority.
Even the deepening housing crisis isn’t immune from conflict between the premiers and the prime minister. In a meeting on Tuesday, provincial heads blasted the federal government’s approach of bypassing provincial governments to cut housing construction deals directly with municipalities. One premier is even considering a law to prevent the feds from making the local bilateral deals at all.
An old challenge looms. As if all of this wasn’t enough of a problem, the mother of all federal-provincial tensions is quietly stirring again. A recent poll found support for Quebec separation rising several points to 38%, a jump from the 32% support it enjoyed in 2020. One cause of the uptick could be misgivings about immigration – some Quebec nationalists say the feds are preventing the province from attracting enough French speakers to preserve the dominance of the French language there. Meanwhile, a Quebec plan to increase university tuition costs for out-of-province students, also aimed at shoring up Francophone dominance, has sparked fresh protests.
All of this couldn’t come at a worse time. The federal government is trying to tackle overarching challenges like climate change, healthcare, and housing that require comprehensive approaches. But with the Liberal government trailing in the polls by double digits, provinces may smell blood in the water and believe now is the time to strike for concessions.
Unfortunately, the people who suffer most are ordinary Canadians. Struggling with high costs for housing and health care, and worried about climate change, they’re less interested in jurisdictional squabbles than they are in practical solutions to real problems.
Danielle Smith of the United Conservative Party (UCP) gestures during her party's provincial election night party.
Populism in Alberta
The big political news of the week in Canada was the down-to-the-wire Alberta election, which pitted the ruling United Conservative Party against the left-leaning New Democratic Party. The UCP, led by controversial populist Danielle Smith, managed to defeat the NDP, whose leader, former premier Rachel Notley, managed to win most of the urban seats.
The results reveal a province more polarized than is typical for Canadian politics, where most legislatures have three parties. Alberta, which is politically influenced by Western states, now resembles them politically in a heavily polarized two-party alignment.
The reelected Smith, who spent much of the election struggling to explain controversial past comments about vaccines and lockdowns, promised to fight PM Justin Trudeau’s climate policies, including a cap on emissions from the oil industry and a net-zero electricity grid by 2035. Her election will pose a political challenge for the ruling Liberals as they try to bring down emissions in a province where the prime minister is widely despised.
Before the election, she brought in the Alberta Sovereignty Within a United Canada Act, which targets Canadian legislation in areas she sees as infringing on provincial jurisdiction. Legal experts are skeptical about the constitutionality of the law, which has not yet been used, and any attempt to use it in an area of federal or shared jurisdiction would likely end up in court.
The election outcome bodes well for Conservative leader Pierre Poilievre, who, like Smith, took over his party amid the fallout from COVID lockdowns and can expect to be attacked by Liberals for it in the next federal election. He now has less to fear: The results in Alberta suggest that right-leaning voters won’t let controversial views from the receding pandemic prevent them from voting along partisan lines.