I’m John Schmeiser, CEO for the Western Equipment Dealers Association. Welcome to this edition of Legislative Landscape. For this podcast, I intend to point out some of the significant political and government events of the past year.
So, where to begin? That’s a difficult question. But I am sure all of us are asking “Where it will end?”
Although we are starting to see the rollout of the Coronavirus vaccines, it’s all but assured the impediments unleashed in 2020 will be with us well into 2021 and perhaps extensively beyond.
When the world rang in the New Year on Wednesday, January 1 to welcome 2020, nobody could have foreseen the widespread misery, unrest, and decay that would soon be dumped at our global doorstep. The scope of the medical healthcare pandemic brought about by COVID-19 and the widespread economic collapse that ensued is something none of us have ever witnessed in our lifetimes. The real impact of the pandemic hit Canada in early March when the federal government, along with the provinces, announced lockdowns as a means of restricting the spreading of the virus. Almost immediately companies began laying-off workers. In no time at all there were millions of Canadians on the unemployment line.
No region of Canada has been completely immune from the virus but, as one would expect, the more populated provinces of Ontario and Quebec – have been hardest hit by the pandemic from a healthcare and economic perspective. But British Columbia and the prairie province have also borne considerable pain as well.
The federal government’s response to how they were handling the pandemic became a daily discussion item and at the beginning, they were there to provide a lot of financial support. It seemed that on a daily basis the Prime Minister was making a new funding announcement. Some of this was successful, some not.
A number of our dealer members took advantage of the Canada Emergency Wage Subsidy, deferred rent payments, and sales tax and Worker’s Comp premium deferrals. And the provinces’ followed suit with their daily announcements of response measures, and the number of new cases and deaths related to the virus. Through it all the federal and respective provincial governments dealt with few other issues as everything centered around the COVID-19 pandemic response.
The Prime Minister took a risky move in proroguing Parliament following the resignation of Federal Finance Minister Bill Morneau in late August. Morneau was a direct casualty of the WE Charity scandal. Upon Morneau’s resignation, Trudeau immediately selected Deputy Prime Minister Chrystia Freeland into the finance minister’s role, becoming the first woman ever tasked with the important portfolio. The halting of parliamentary proceedings was cynically viewed by the opposition as a way for Trudeau to try and lessen the heat on the WE scandal.
COVID-19 pandemic has wreaked havoc on the government’s plans, as well as the finances, with a deficit projected to be somewhere in the vicinity of $400 billion. This has pushed Canada’s total level of debt to over $1Trillon and is unsustainable long term. Many are bracing for the negative impact an increase in interest rates will bring, let alone the corrective measures that will need to be taken to get Canada’s finances back to a more acceptable level.
Towards the end of August, the federal Conservatives selected Erin O’Toole to be their new leader, replacing Andrew Scheer. The 47-year-old O’Toole is the Member of Parliament representing Durham, just east of Toronto. He was first elected in a by-election on November 26, 2012.
Canada’s 43rd Parliament began in September where the minority Liberal government survived a confidence vote on its throne speech, thanks to support from Jagmeet Singh and the New Democrats.
The speech was approved by a vote of 177-152 in the House of Commons, with the Conservatives and Bloc Quebecois voting against.
The NDP had already made it known they would support the Liberals. Failure to do so could have forced a federal election at a time when Canadians really don’t have an appetite for it, especially in light of all the lockdown procedures due to the ongoing COVID-19 pandemic.
For the millions of Canadians that received the Canadian Emergency Relief Benefit, also know as CERB since it was rolled out in March, they will now be transitioned over to a revamped and more streamlined Employment Insurance program. CERB officially ended on September 26.
Canadians with 120 insurable hours of work in the last 52 weeks can apply and receive a taxable benefit at a rate of at least $500 per week, or $300 per week for extended parental benefits, for up to 26 weeks.
If some people do not qualify for EI, and still cannot work due to the pandemic, they may be eligible for three new temporary benefits. it will essentially boil down to how many hours the individual worked over the past year.
The other three benefit programs are:
The Canada Recovery Benefit (CRB), which is for self-employed individuals but still require financial support because so much of the economy is still shut down. Valued at $500 for 26 weeks, the benefit is only provided to workers who haven’t returned to work due to COVID-19 or who have seen their income drop by at least 50%.
The Canada Recovery Sickness Benefit (CRSB) is a new initiative that provides $500 per week for up to two weeks for workers who are sick or who must self-isolate due to COVID-19.
The Canada Recovery Caregiving Benefit (CRCB) is for those who are unable to work because they need to care for a child under the age of 12 or family member because schools and daycares are closed. The benefit is up to $500 per week for 26 weeks.
The most significant policy initiative by the Federal Government that will impact our industry not related to COVID is the implementation of another Carbon Tax. On Dec. 11, the Trudeau government announced its long-awaited plan for Canada to achieve the carbon emission reductions that it had committed itself to from the Paris Climate Accord. This includes a new National Fuel Standard that will be implemented in 2022. Designed to meet the Paris Accord’s targets for the year 2030, the carbon tax will rise to $170 per tonne by then.
This breaks a Liberal campaign promise and commitment to not increase or add any carbon taxes and has caught many Canadians off-guard. I envision that this will receive more attention as we enter 2021 and this plan will dominate the debate on climate policy for the remainder of the decade.
I also believe that the increase in the Carbon Tax and the National Fuel standard will be devasting to all sectors of the agricultural economy, but perhaps most significantly to our producer customers who cannot pass the tax on.
There is a lot of speculation that once the Coronavirus vaccine is administered on wide scale in Canada, that may be an incentive for the Liberal government to call an election. Minority governments typically last 18 months or so, and we fully expect the Liberals to be watching the polls to see if the time is right in 2021.
We saw the re-election of provincial governments in New Brunswick, Saskatchewan, and British Columbia; and a lot of political watcher’s state that the re-election was a sign of approval on that province’s response to the pandemic. Whether that continues long term remains to be seen, but no doubt the federal government has seen those results and may see this timing as an opportunity.
We will also look back at 2020 as a successful year for WEDA’s advocacy efforts. In April, we were successful in securing updates to Alberta’s Farm Implement Act. The long-overdue amendments brought the Alberta legislation into harmony with the Saskatchewan and Manitoba laws. The government accepted almost all of our recommendations on return privileges, including the removal of the 24-month deadline on new equipment returns, adding demonstrator equipment as an approved return, and adding reimbursement provisions for signage, required computer software, service manuals, and special tools returns at the time of the contract termination.
Our office has also worked closely with the Agricultural Manufacturers of Canada on the federal connectively issue. We are seeking language clarity in the new USMCA agreement to ensure that connectivity can continue between OEM products made by different manufacturers. We have had a receptive ear in Ottawa on this and expect this to be resolved in early 2021.
We continue to be proactive against any Right to Repair efforts in Canada. Once again, no province introduced such legislation in 2020 and we are optimistic about 2021. Last year we met with numerous farm organizations, and provincial governments to state our position on the issue. We are seeking clarity as to where farmer’s rights legislation still applied to modified equipment. We also submitted several op-eds in Canadian farm newspapers arguing that Right to Repair is more about a desire to Modify. The modification of equipment to get around emission standards is illegal – and we will build on both of our public awareness campaigns and industry advocacy efforts as we go into 2021;
As we look back to 2020, I take the assurance that for the most part, agriculture in Canada has survived the COVID-19 pandemic better than expected. Weather and commodity prices have played a big part of that. Perhaps the only negative we see is that the coronavirus created major disruptions in the inventory and parts supply chain. Equipment manufacturers and dealers have done a great job in putting this issue behind us – and we are hearing many positive reports about the pre-sell period for 2021. But all of us are looking for the pandemic to be behind us so we can return to business as usual.
WEDA will continue its advocacy effort to ensure our dealer’s interests are heard. Should you have any questions on this topic or 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.