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I’m John Schmeiser, CEO for the Western Equipment Dealers Association. Welcome to this edition of Legislative Landscape. Like past podcasts, this edition will focus on current events in Ottawa.
In late March Finance Minister Chrystia Freeland announced that the first federal budget in more than two years will be delivered on April 19.
The budget is expected to provide a full accounting of all government spending through the pandemic, which has sent the deficit for the fiscal year to almost 400 billion dollars.
It is also expected to outline the Liberals’ plan to spend between 70 and 100 billion dollars over the coming years on stimulus to help the economy recover. Budgets usually identify current needs while addressing longer-term problems – and areas that may be under consideration include: increasing supports for mental health, dealing with the opioid crisis, pursuing reconciliation, and providing supports for seniors.
There have been past promises made to create a national childcare system, improve skills training and financial incentives to build a greener economy.
We have seen some other posturing that puts an emphasis on business support to kickstart an economy, which coincidentally is accelerating all on its own. We are seeing an unexpected acceleration of housing prices and one can question the merits of adding more spending that would accomplish little beyond overstimulating an already hot economy – which, of course will surely surge even more once the pandemic has subsided.
In the past 13 months, an estimated 122 billion dollars flowed to Canadians through labour market supports such as the emergency response benefit, the Canadian Emergency Workers Support benefit, the subsidized rent program and enhanced employment insurance. It is projected that the comparable figure for these support programs in 2021-22 will be less than 43 billion dollars, reflecting a gradual phase-out of aid measures.
This budget will be the first for Finance Minister Freeland and comes amidst a lot of criticism as Canada was the only G-7 nation to govern without outlining their spending plans in a budget. In fact, as I mentioned earlier, it will be a full two years that Canada has gone without budget at the federal level.
The signs of a spring vote are everywhere, notwithstanding the prime minister’s public posture against calling an unforced election. Ads highlighting the merits of government relief programs are airing, Russian and Chinese sanctions are being deployed to stiffen our foreign policy spine and announcements supporting electric cars, seniors, high speed internet for Quebecers and innovation are gushing forth.
The trick for election-hungry Liberals is to find a way to make their budget severely toxic to diverse opposition interests. It will be a challenge to upset Conservative savers, NDP spenders and Bloc separatists with such united gusto, that they’d be willing to put their fate in voter hands just as the vaccines are going into Canadian arms. Because the government has received such a failing grade on the vaccine rollout, and the additional covid travel restrictions are an annoyance, a better bet would see Trudeau framing the budget as a post-pandemic policy revolution which demands a fresh mandate to implement.
Yet there’s precious little pre-budget chatter about the real villain in this pandemic – a lousy public health care system which finishes at the bottom of the G7 countries in hospital beds per 1,000 residents. And yet public health seems to have been largely overlooked at the federal level as Trudeau goes shopping for votes in areas of higher poll-supported impact instead of merely boosting the health care transfer to provinces.
Of the almost $400 billion the feds have blown in the last year, very little is directly tied to helping provinces improve the way health care is delivered. While the pandemic has revolutionized the workplace, turned the boardroom into a video link and rendered cash money as borderline obsolete, the health care system has yet to dramatically adapt to the crisis it has confronted over the last year.
And yet, we see an Official Opposition twisting itself into policy pretzels over what, if any, climate change policy it will endorse. Support to bolster public health care spending gets the silent treatment.
It’s increasingly difficult to resist the urge to throw things at television screens whenever Trudeau sidesteps questions about the alleged sexual misconduct of top military leaders, glosses over his government’s failures on domestic vaccinations and mask production or the political gamesmanship they deploy over simple questions on the WE Charity scandal.
Despite that, Trudeau may yet snatch a majority victory from what should be, at best, another minority win. The most current poll has the Liberals on top of the Conservatives by 8 percentage points, and for Prime Minister Trudeau, the next month or so will be dedicated to rolling out popular creative spending, getting the problems with the vaccine rollout behind him and insisting he wants to make Parliament work for all Canadians.
We can expect the Liberals to be spewing billions of dollars wildly in every vote-buying direction while plotting ways to render Parliament dysfunctional enough to provide cover for an early election call.
My prediction – Canadians will go to the polls in mid to late June. But in term of who will win, I am not yet willing to make a prediction. I have learned that a week in a campaign can be a lifetime, and that the only poll that counts is the one on election day.
We also got an answer on a high-profile issue late last week. Many Canadians were anxiously awaiting a decision from Canada’s highest court on the controversial Carbon tax. The Supreme Court has ruled that the federal carbon tax is constitutional.
The court dismissed the appeal that was launched by several provinces. In a 6-3 split, the court said that reducing greenhouse gas emissions is “a matter of national concern.”
Ontario, Alberta and Saskatchewan had challenged the Greenhouse Gas Pollution Pricing Act, saying it interfered with provincial jurisdiction. However, the court agreed with the federal argument that putting a price on carbon could be done under the constitution’s peace, order and good government clause.
Our association joined several farm groups stating our opposition to the Carbon tax when it was introduced, and we have come away disappointed with the decision. Most see higher costs forced on our farmer customers and our equipment manufacturing industry, higher costs that will affect their profitability and negatively impact equipment sales down the road.
The Agricultural Producers of Saskatchewan (APAS) has estimated the cost of producing an acre of wheat will increase by $12.50 by the time the carbon tax is fully implemented in 2030, this according to their president Todd Lewis. Its commonly accepted that producers will see additional cost increases on trucking, rail freight and grain drying, just to name a few.
It should be noted that there were strong dissenting opinions in the 6-3 ruling, specifically focusing on the federal intrusion on provincial rights that were instrumental in the formation of Canada as well as in the establishment of the Canadian constitution. Weather this leads to further federal intrusion into provincial responsibility, or even creates a constitutional crisis, remains to be seen.
Opposition Leader Erin O’Toole was quick to announce that a Conservative government would repeal the federal carbon tax mandate if elected. But in the short term, Ontario, Saskatchewan and Alberta have pledged to work with industry as they develop their own provincial carbon tax solution to meet the federal requirements.
And finally, Canadian farmers will have access to only some of the proposed $170 million in new AgriStability money after agriculture ministers reached a partial deal last week. The ministers agreed to remove the reference margin limit, at a cost of $95 million, and extend the application deadline to June 30 this year. But they did not agree to increase the compensation rate from 70 to 80 percent. That leaves $75 million of federal support money on the table.
The change is retroactive to include the 2020 program year and is in effect until the current Canadian Agricultural Partnership expires in 2023.
So six provinces, representing the majority of agricultural production, passed a motion asking Ottawa to pay its 60 percent share of that anyway, without provincial participation. But federal minister Marie-Claude Bibeau indicated that was not likely. As you can understand the provinces are upset that the federal government would again withhold available program support money to our producers.
Farm organizations expressed nearly unanimous opinions on the change: that removing the RML is a good step, but increasing compensation would have been even better. Canadian Federation of Agriculture president Mary Robinson admonished the federal government for treating the negotiations like a game when farmers have been telling them for years, that they needed meaningful support.
That’s a quick wrap of some of the key items discussed at the federal level. Should you have any questions on these topic or any other government affairs issues, please do not hesitate to contact us.
Podcast By John Schmeiser
JOHN SCHMEISER is the CEO of the Western Equipment Dealers Association (WEDA). First established in Canada in 1927, WEDA represents over 2200 farm, construction, and outdoor power equipment dealers in both Canada and the U.S.