The News Rundown

Trudeau Begins 2nd Term Much Deeper in the Red Than Expected

When the latest federal election happened in October, the campaign seemed to be light on policy and heavy on leader qualities. Now we know why, as just after Parliament adjourned for Christmas break, Finance Minister Bill Morneau released the fall fiscal update. And when you find out what it looks like, it looks more and more deliberate that he did so intentionally so the opposition couldn't scrutinize the Liberal spending plan.
Trudeau’s government released new budget estimates that showed federal finances in much worse shape than expected, even before the Liberals move ahead with tens of billions of dollars in new campaign pledges.
The government is currently on track to run a deficit of $26.6 billion this year and $28.1 billion in 2020. That’s well above the $19.8 billion and $19.7 billion deficits projected in the government’s last budget. Deficits in the five years between 2019 and 2023 will exceed projections by about $35 billion.
Not only that, the real number will be even worse, since that $28.1 billion projection is without including all the spending promises made by the Liberals in the campaign. The Liberals pledged new annual measures expected to cost about C$15 billion annually over the next four years, though planned tax increases will buffer some of the impact on deficits.
Once again, Morneau seems focused on reducing debt to GDP, which is not always a solid indicator of a strong economy: “The prime minister gave me a mandate where he asked me to ensure that we meet a couple of key conditions. One is that we do maintain that very strong balance sheet by reducing our debt as a function of our economy, and we’re doing that. Second is we want to continue to invest in Canadians.”
Deficits are widening even as the federal government’s revenue comes in slightly stronger than expected in 2019 and 2020. Revenue in 2019 is seen at $340.1 billion, up from the $338.8 billion projected in March. In 2020, the federal government expects to take in $352.3 billion, versus initial projections of $351.4 billion. Program expenses are well above projections however.
The new deficit numbers already surpass the peak budget gap projected by the Liberals during the election campaign. They had anticipated the shortfall would jump to about C$27 billion in 2020 once new tax cuts and spending were introduced.
While a larger deficit and stable debt-to-GDP ratio may be acceptable if the economy was getting stronger, the Liberals can’t even manage that. They are projecting growth of just 1.7% and 1.6% in this year and next year. That puts Canada far behind the United States. And when you consider that massive immigration artificially makes GDP look bigger, the reality on a per-capita basis is that our economy is incredibly weak.
Conservative Finance Critic Pierre Poilievre says Bill Morneau's fiscal update shows Canada's economic position is weakening relative to our main competitors. He said the government is responding to economic challenges by piling up debt, adding "devastating" red tape and creating obstacles to building major projects: "What we're facing now is the prospect of a made-in-Canada recession. When we went into the last downturn in 2008, Canada led the pack. We were the last into the recession and the first out. It looks like this time that Canada could be in the worst position of our competitors going into the troubled waters ahead."
On Twitter Poilievre also blasted Morneau's decision to release the fiscal update immediately after the close of Parliament on Friday: "How gutless. Morneau will give a Fall Economic Update outside of Parliament, so he won't face questions about rising bankruptcies, unemployment and insolvencies. Trudeau's tax hikes, red tape and socialism created this hardship. Now he's trying to hide from it. We won't let him."
He even invoked Joe Clark, who once famously said "A recession is when your neighbour loses his job. A depression is when you lose your job. Recovery is when Pierre Trudeau loses his job." Poilievre updated it to say “A recession is when your neighbour loses their job, a depression is when you lose your job, a recovery is when Justin Trudeau loses his job”.
NDP finance critic Peter Julian also said he was "profoundly disappointed" by the update: "It's surprising how weak this economic update is when you contrast it with how readily the Liberal majority government was willing to give billions of dollars to Canada's biggest corporations when they were in power. Now in a minority Parliament they should be thinking about regular families and communities and they seem to be ignoring that."
The Canadian Chamber of Commerce is also disappointed with the update, noting that it does little to help the businesses that are the drivers of the economy. Chief economist Trevin Stratton said the update makes deficits an" enduring fixture" of the fiscal plan and leaves untenable levels of debt to future generations.
"Our perpetual structural deficit will put Canada in a difficult position to use fiscal stimulus should it be required in the event of a widely expected global downturn. Should a foul economic wind blow at anytime in the next four years, this fiscal house of cards will inevitably fall," he said in a statement.
Morneau also seems totally out of touch, talking about the ‘great job numbers,’ following a massive loss of over 70,000 jobs last month. This fiscal update shows the Liberals have learned nothing, and have no willingness to get our economy back on track, and our budgets back to balance.
Supplementals:

Closing a chapter yet again on Western Context: Abdulahi Hasan Sharif has been sentenced to 28 years for his actions in the September 2017 Edmonton van terror attack.
For the attempted murders of Zubick, Biegel, O’Hara and Stewardson, the folks Sharif tried to run down, he was sentenced 10 years consecutive to the 10 he received for the attempted murder of EPS Constable Mike Chernyk.
He was also sentenced to 10 years for fleeing police causing bodily harm and two for dangerous driving. Due to the principle of unduly long or harsh punishment, these sentences will be served at the same time as the others reducing the total to 28 years.
The RCMP did confirm that an ISIS flag was found in the car.
The flag was not reported to the jury and no photos of the flag were filed into evidence by the Edmonton Police Service.
Why would this be?
Despite this the chance according to RCMP Superintendent Stacey Talbot the decision to not prosecute on terrorism charges was made to ensure the best chance of justice being served
There was no evidence at all that Sharif was remorseful and this could further be seen based on his desire to defend himself.
Back on episode 43 we discovered that the terrorist came into Canada by declaring asylum in 2012 and was given refugee status. He initially arrived in the US as an illegal immigrant and was ordered to be deported, but Immigration and Customs Enforcement (ICE) released him due to not having the resources to pursue the case, this meant he was to be integrated into the american population.
The crown was using for life in prison but assistant crown prosecutor Elizabeth Wheaton said that 28 years was a “very significant sentence” and that “The circumstances of this case were unprecedented in Canada and the sentence demonstrates the extent to which offenders will be held to account.”
The goal for a case like this was the protection of the public in the future as well as general deterrence.
Edmonton Police Chief Dale McFee, read a community impact statement and said he has mixed emotions about the sentence. “I don’t think you’re ever happy with a sentence, because you see the looks on the victims there,” he said outside court Friday. "I think we’ve been heard, based on the totality of the sentence. Is it enough? You know, you just hope in 28 years this individual can come to grips with what he did. And the terror and the tragedy that he’s caused for individuals and their lives.
Edmontonians and Canadians in general will have to decide if 28 years is long enough for such an act.
Supplementals:

https://www.cbc.ca/news/canada/edmonton/edmonton-abdulahi-sharif-u-haul-police-pedestrians-1.5396274

Third China-owned senior care facility in B.C. placed under government management amid concerns over health, safety of residents

It's been 3 years now since we started Western Context, and so many stories have come and go in that time. This next BC story has been simmering for quite some time, but I always knew it would come back to haunt us.
In February 2017 on Episode 5; yes, 144 episodes ago, I did a story on one of BC's biggest retirement chains being sold to a Chinese company. Here's what I wrote at the time:
"The Trudeau government has green-lighted the sale of one of British Columbia’s biggest retirement home chains to a Beijing-based insurance titan with a murky ownership structure in a deal that gives China a foothold in Canada’s health-care sector.
Anbang Insurance group is the Chinese company behind the purchase, and it is unclear who actually owns and controls the company. It is estimated that about 92% of the company is owned by relatives of the chairman Wu Xiaohui and his wife Zhuo Ran, the granddaughter of former General Secretary of the Communist Party Deng Xiaoping, and relatives of Chen Xiaolu, the son of a high ranking People's Liberation Army general.
With high up connections with the ruling party of China, a country well documented with human rights abuses, it is curious that the Trudeau government would openly give the OK for a sale to a Chinese company.
Anbang has withdrawn from offers to buy other companies in the US in the past, when regulatory agencies requested a shareholder structure and the company's funding sources in order to approve the sale.
Canadian officials said on Tuesday their review of the takeover included a screening for any potential impact on national security. “No issues were raised,” a spokeswoman for Innovation, Science and Economic Minister Navdeep Bains said."
At the time in 2017, China had yet to put forward a hostile face towards Canadian interests. But the writing on the wall was there.
The New York Times reported in September 2016 that Anbang's structure has stoked such suspicion about its true ownership that some Wall Street firms, including Morgan Stanley, have opted not to advise the company on United States mergers and acquisitions because they cannot get the information needed to satisfy their "know your client" guidelines.
Anbang withdrew an application for regulatory approval of a purchase of Iowa-based Fidelity & Guaranty Life, according to Reuters, after the New York Department of Financial Services sought more details about the Beijing firm's funding and shareholder structure – information Anbang was not immediately able to provide.
And yet, our Canadian government approved the takeover of a Canadian company by a Chinese front company that might as well have been owned by the Chinese government itself.
The Vancouver firm Retirement Concepts at the time defended the sale by saying the company's executive team will operate the retirement-nursing homes on behalf of Anbang.
in 2017, Navdeep Bains said the deal gives Retirement Concepts "a strong financial partner" that will support the expansion of the business and provide high-quality services to more seniors.
He said B.C. regulators will ensure elder care remains up to code, saying the province "imposes rigorous standards of care on all operators of residential care and assisted living facilities." Let's keep that in mind, as we remember that "no issues were raised" at the time of the purchase.
Fast forward to today. This week, a third facility of for-profit seniors’ care homes owned by Retirement Concepts has been placed under government management because of current risks to the health, safety and dignity of more than 200 residents.
The Vancouver Island Health Authority’s chief medical officer has appointed an outside administrator to run the Selkirk Seniors Village in Victoria. Two other care homes owned by Retirement Concepts are already under the agency’s administration – an exceptionally rare intervention.
The Health Authority has already appointed an administrator to oversee the Comox Seniors Village on Sept. 30. The facility was flagged by the Vancouver Island Health Authority as “high risk" last spring. The Nanaimo Seniors Village was put under administrative control after a Nov. 19 report found similar problems leading to neglect.
Both the federal and provincial governments vowed strict oversight of Retirement Concepts after the chain was sold to China’s Anbang Insurance Group in a deal approved by Ottawa in 2017, despite widespread concerns about how foreign ownership might affect the quality of care.
At the time of the sale, the federal government offered assurances that care levels in the homes would be maintained. The federal government has refused to say if the company is in compliance with the terms it imposed at the time of the sale. But on Thursday, B.C. Health Minister Adrian Dix says it is clear Retirement Concepts is not meeting provincial standards for health and safety.
Dix had harsh words for Retirement Concepts: “There are no excuses. The people who are charged with administering Retirement Concepts, they are responsible for following the law. The goal here is to bring them back into compliance with the law in B.C. so that seniors are protected.”
In his report released on Thursday, medical health officer Murray Fyfe said Health Authority officials have repeatedly intervened, and have provided additional staff, but still management at the Selkirk care home has failed to protect seniors in care. The infractions involved neglect – not meeting the needs of residents for bathing, wound care, comfort, and supervision.
“It was apparent that the Licensee has not demonstrated an understanding of their role and responsibility in ensuring that sufficient strategies and actions have been implemented to guarantee appropriate staffing is in place at all times,” he wrote.
Even in 2017 the sale was suspicious and eyebrow-raising worthy. At the time, I was concerned about the sale of a major senior care chain to a Chinese company, with ownership tied to the Chinese government, a government that is well documented for human rights abuses. And with the benefit of hindsight, we see that it's somehow now an even worse decision that it was even in 2017, and it's all because of the Trudeau government's approval. Trudeau's follies over his first term have been well documented, but this is one of the lesser known ones. Trudeau has been saying that he's been standing up to China for Canadians, but has he really?
Supplementals:

Firing Line

5 takeaways from Trudeau’s ‘mandate letters’ to his cabinet

Last Friday Justin Trudeau released the mandate letters for his new cabinet.
Define: mandate letter
Normally mandate letters were private, Trudeau is the first Prime Minister to release them publicly.
Global highlighted a list of 5 takeaways. They include:
Innovation Minister Navdeep Bains’ letter asks him to use any tools at his disposal to reduce the average cell phone bill in Canada by 25 per cent. Bains is also being told to see that cell providers that resell service bought in bulk from other providers’ networks expand and increase competition. The letter also puts a deadline for the Liberals and companies to lower prices: Two years.
Catherine McKenna in her new portfolio as Infrastructure Minister has to enforce a time limit for provinces to hand over lists of construction projects. 2 years.
Bill Morneau has to change the mortgage stress test for first time home buyers and remove the test from mortgage renewals.
Agriculture Minister Marie-Claude Bibeau’s mandate letter requires her to “draw on lessons from recent trade disputes” to improve the federal government’s ability to “respond to export protections against Canadian agriculture, such as were recently faced by canola, beef and pork producers.” This effectively means that the government should respond quicker when a country like China blocks our product.
Global ended their list with what can only be described as absurd reporting: “What [Foreign Affairs Minister Francois-Philippe] Champagne’s mandate does have is a request to ‘ban the development and use of fully autonomous weapons systems’ — also called killer robots. The idea of artificial intelligence-driven machines that can target and kill without human oversight has raised alarms globally, and on Parliament Hill.”
Global missed two of the biggest things from the Ministers’ Mandate Letters though.
First, Deputy Prime Minister and Minister of Intergovernmental Affairs Chrystia Freeland is now overseeing almost all ministries.
Chrystia Freeland will work closely with the Prime Minister on setting and fulfilling the government’s agenda, she’ll “lead key cabinet work streams in the achievement of national commitments to Canadians” (medicare, pan-Canadian framework on climate change, new gun control methods, and child care amongst other things) and in total she’ll work with 11 other ministers.
The thing though is that these responsibilities almost always fall to the Prime Minister. Theories have abounded from that he’s setting her up to fail, he wants a “western voice” as she was born in Peace River making bigger decisions, or that she’s being set up to be his successor.
As Brian Lilley commentated for the Toronto Sun, this doesn’t leave much at all for Trudeau to do and in the past he has said he views the Prime Minister as more of a figure head.
Or Trudeau may see a future where given his black face episodes, the RCMP investigation into SNC-Lavalin, and a potential obstruction charge that he may not be able to govern or lead the party into the next election so he needs someone ready to pick up the torch and carry on.
Second, Minister of Heritage Steven Guilbeault is tasked with things such as preparing our athletes for the 2020 Olympics but also must draw up legislation that imposes “significant penalties” on social media companies that don’t remove hate speech within 24 hours.
Child exploitation and terrorism are also mentioned but hate speech has its own segment.
There are a lot of questions that come up, will Steven Guilbeaut being a staunch environmentalist determine the criteria and will he craft the law in such a way that statements of support towards oil and gas be offensive?
As a member of Greenpeace, he was involved in 2001 when environmentalists climbed the CN tower and chained themselves to gas pumps.
Guilbeault is on record as finding commuting by car offensive and we don’t even know if these will be his rules or if they will be defined elsewhere.
Germany currently imposes fines up to 50 million euros against tech companies that do not remove hate speech.
Canada could be going this way and yes, this was in the Liberal’s election platform. Elections have consequences. The media missed it then and they are missing it now.
Supplementals:

Word of the Week

Mandate - the authority to carry out a policy or course of action, regarded as given by the electorate to a candidate or party that is victorious in an election.

How to Find Us
Westerncontext.ca

westerncontext.ca/subscribe

westerncontext.ca/support

twitter.com/westerncontext

facebook.com/westerncontext

Show Data

Episode Title: The Invisible Mandate

Teaser: Trudeau’s fall fiscal update shows deeper deficits than expected, the terrorist in the 2017 Edmonton van attack gets 28 years, and a BC retirement home sale to China raises major issues. Also, the media covers Trudeau’s mandate letters, but misses key parts.

Recorded Date: December 19, 2019

Release Date: December 22, 2019

Duration: 45:44

Edit Notes: None

Podcast Summary Notes

Duration: XX:XX