The News Rundown

Freeland replaces Morneau as Trudeau's finance minister

British Prime Minister Harold Wilson is quoted to have said that "a week is a long time in politics". Even with a weekly podcast, something can happen early in a week, and by a week later the news cycle has moved on, or more information comes out about a certain topic, and it's hard to know what will catch the attention of the mainstream media.
On Monday, Finance Minister Bill Morneau resigned, both from cabinet and as an MP, and if you're believing the official story, you must be living under a rock. Officially, Morneau says that he's resigning because "he never planned to run in more than two federal elections", adding that as Canada continues to work towards economic recovery amid the pandemic, it is “the right time for a new finance minister to deliver on that plan.”
However, it should come as no surprise that there are greater things afoot in Prime Minister Trudeau's cabinet, as Morneau is now the 10th cabinet minister in the past year and a half to either resign or be shuffled from cabinet. Is it because these ministers, who Trudeau famously claimed were gender balanced "because it's 2015", were actually incompetent? Did they not want to stay on that long, as Morneau has claimed? Or were they shuffled out because of a power struggle with the Prime Minister and the PMO advisors?
Power struggles have been a problem for Trudeau in the past. The old guard Liberals Stephane Dion and John McCallum were shuffled far away from Ottawa early on into Trudeau's 2nd year. Longtime Saskatchewan Liberal MP Ralph Goodale lost re-election last year due to overwhelming backlash against Trudeau policies in the prairies. And of course, we don't need to detail the SNC Lavalin scandal again which led to two highly competent female cabinet ministers in Jody Wilson Raybould and Jane Philpott resigning in protest.
And of course, another reason swirling around Morneau's resignation is the WE Charity scandal, where preferential treatment and a trillion dollar government program was given to a company that had paid Trudeau's family in the past and employed Morneau's children. Both Morneau and Trudeau are facing investigations by the new federal ethics watchdog, Mario Dion, for taking part in talks to hand WE Charity a contract to run a pandemic-related student-volunteer program.
Morneau says that Trudeau did not ask him to step down from his post as finance minister, but his resignation comes after he had reportedly been clashing with Trudeau over coronavirus spending and over the scope and scale of proposed green initiatives. Morneau also had faced calls from the opposition to resign over the WE Charity scandal.
The 5,000 pages of documents released Tuesday to members of the House of Commons finance committee include dozens of emails and memos from Morneau’s office in relation to the $912-million student volunteer program. The emails from April show public servants from Morneau’s office pushing the idea of WE Charity’s involvement in administering the area and portray a friendly relationship between Morneau and co-founders of WE Charity Craig and Marc Kielburger that was so close Morneau’s department referred to them as “besties.” They include three emails that Craig Kielburger sent directly to Morneau on April 10, April 22 and April 26 in which he addressed the former minister by his first name.
Speaking to reporters on Monday, Morneau said in hindsight he wished that the contract with WE Charity had been handled differently: “As I’ve said, I think that it would have been more appropriate for me to recuse myself from that decision. But moving forward, I think that the most important thing is to think about where you can have the appropriate impact at the appropriate time. And what I’m saying now is it’s appropriate for the prime minister to find someone with a longer term approach to being finance minister that I can give.”
The recent news that Mark Carney, a former governor of both the Bank of Canada and Bank of England, is helping to advise Trudeau on the post-pandemic economic recovery fuelled speculation that Morneau was about to be replaced.
Morneau's track record as finance minister is pretty dim, from fiscal years of 2016 to 2019 of which he was wholly in control of, his ministry posted teeny tiny deficits as Stephen Harper predicted, of a paltry $9.3 billion, $19.9 billion, $18.6 billion and $13.7 billion. And his story obviously doesn’t end with 2019, though how much of the all-time-high pandemic deficit ends up being his depends on whether it finishes above or below the $343 billion he signed off on.
The real problem with Morneau’s deficits was that his party’s platform had promised they would be temporary and not exceed $10 billion. But they continued even as the economy hit capacity output and record low unemployment, an achievement Morneau claimed credit for in his valedictory remarks — though without mentioning that the past two times the economy improved that much, following the recessions of the early 1990s and 2008-9, the federal deficit disappeared. The budget was in surplus for 11 whole years after the 1990s and almost got back to surplus in 2015, as the Conservatives very nearly fulfilled their promise of returning to balance following emergency spending to deal with the financial crisis.
Scrolling through the numbers, what stands out about Bill Morneau is not actually his deficits but his taxes. Real income taxes per Canadian rose from $5,691 in 2016 to $6,084 in 2019, an all-time high. Same thing for personal income taxes, which hit their all-time high of $4,437 per Canadian in 2019. The new taxes were to finance government spending, where Morneau also holds the record. Per capita program expenditure rose from $8,078 in 2016 to $8,725 in 2019, an increase of eight per cent real (inflation-adjusted) per person.
But despite Bill Morneau having brought real per capita income taxes and real per capita program spending to all-time highs, Trudeau apparently feels the Brave New Re-Built Canada he has been envisioning while sitting by the barbecue at Rideau Cottage needs much more program spending, NDP levels of program spending, in fact, packaged in bold new initiatives.
Outgoing Conservative Party leader Andrew Scheer said Morneau’s resignation is “further proof of a government in chaos. At a time when Canadians are worried about their health and finances, Justin Trudeau’s government is so consumed by scandal that Trudeau has amputated his right hand to try and save himself.” Scheer said “scapegoating Morneau does not solve the problem. As long as Trudeau is Prime Minister, the corruption will continue.”
For all of a day, Mona Fortier, the Associate Minister of Finance and Minister of Middle Class Prosperity, a still poorly defined cabinet role, was made acting Finance Minister. Then, a day later, we got a huge surprise, as Chrystia Freeland, the Deputy Prime Minister and Trudeau's personal pinch hitter in problems that need critical attention, was named Morneau's replacement.
Up until today, Freeland, the former foreign affairs minister, was serving as deputy prime minister and intergovernmental affairs minister. She will retain her role as deputy prime minister but hands over her responsibilities for relations with the provinces to Dominic LeBlanc.
Trudeau later told reporters that Canada and the world are at a crossroads as his government and others attempt to relaunch their economies amid surges of COVID-19, and that Freeland was the right minister for the challenges the country now faces: "Chrystia Freeland and I have had conversations over the past almost decade now about how we need to create a fairer country for Canadians, how we need to grow the economy in ways that [help] everyone. She wrote a book on the subject and has been a key player in my government since Day 1. As we look to building a better, more [fair] Canada that is prosperous in creating real opportunity for everyone, I can think of no one who is better suited to work alongside me and the rest of this amazing team as our finance minister to build that better future for Canadians."
Yes, Freeland has talked with Trudeau for a decade about the economy, and she wrote a book. That's good enough for Trudeau to give the reigns of the world's 10th largest economy to a journalist by trade. But that wasn't the story, because once again, Trudeau made it all about gender, as he did back in 2015.
Freeland said she was conscious of the fact that she is now the first woman to hold the office of finance minister at the federal level and said it's about time that the glass ceiling was broken: "I'd like to say to all the Canadian women across our amazing country who are out there breaking glass ceilings: keep going. We are 100 per cent with you," she said.
She said she has taken a particular pride in the Liberal government's feminist agenda and is glad that work is continuing: "The economic challenge created by the coronavirus is hitting women particularly hard. It's hitting mothers particularly hard. We are seeing women's participation in the workforce fall very sharply, and certainly I'm glad that I'll have an opportunity to bring my experience as a woman, as a mother, to this really important challenge our country is facing."
As the Liberal government looks to chart its path forward, Freeland said she will ensure that growth agenda is implemented with the decarbonization of the economy in mind: "The restart of our economy needs to be green," she said. "It also needs to be equitable, it needs to be inclusive and we need to focus very much on jobs and growth."
When she spoke to reporters on Tuesday for the first time as finance minister, Freeland talked about going green, as well as equitable and inclusive growth. Elliot Hughes, a former Morneau adviser now at Summa Strategies, said this suggests the Liberals plan to double down on their existing approach of high government spending. It was also in line with thoughts Freeland laid out in her 2012 book, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, where she bemoans about the 0.1% and their control on media and the economy.
Conservative finance critic Pierre Poilievre said playing "musical chairs'' with the cabinet will not allow the Liberals to overcome the government's failures. There had been media reports that Morneau and Trudeau were at odds over policy options, but Poilievre rejected that claim as "fiction. We all know it was scandal that brought Mr. Morneau down. In fact, we now have a government of corruption, coverup and chaos at a time of a deadly pandemic and the biggest economic collapse since the Great Depression."
Bloc Québécois Leader Yves-François Blanchet has said he will try to trigger a fall election if the prime minister, his chief of staff and the finance minister didn't resign. He then accused Trudeau of throwing Morneau under the bus: "[Trudeau] wants to be superman going into the phone booth to change his uniform, but there's no real change in the prime minister's behaviour."
NDP Leader Jagmeet Singh agreed that Morneau is a scapegoat and that his resignation does not change the channel on the ongoing controversies: "This is a government that is working, that was fighting itself, that has been working for the betterment of their own, themselves as Liberals and their close friends, and that means Canadians are hurting and Canadians hurting is something that keeps me up at night. Now they see the finance minister resigning and they see a Liberal government that's more interested in themselves and scandals than actually helping the people that need help."
Andrew Scheer said it best. This is a government in chaos. We are in a self-inflicted economic crisis, billions of dollars in debt, and the corruption in the Liberal Party goes to the very top, right up to Trudeau. It won't stop until they don't have the option anymore.
Supplementals:

https://nationalpost.com/news/politics/liberals-to-prorogue-parliament-until-fall
https://globalnews.ca/news/7282904/bill-morneau-steps-down/
https://financialpost.com/opinion/william-watson-the-line-on-bill-morneau
https://globalnews.ca/news/7288230/bill-morneau-we-charity-documents/

Trudeau’s government started this pandemic with an attempt to give themselves a blank cheque to spend through the end of 2021. The spending ratchets up this week.
As we previously discussed Bill Morneau has been fired and Chrystia Freeland has replaced him as Finance Minister.
The government didn’t waste any time in putting the new Finance Minister to work.
To start, the CERB program (Canadian Emergency Response Benefit) has been extended 4 weeks and will now end in late September.
In addition to this, $37b in new spending has been promised which includes big changes to the Employment Insurance system and three new benefit programs.
The government hopes that those who were on CERB will transition to this revamped EI program.
The new EI program will require workers to have worked 120 hours to qualify which is well below the current minimum EI threshold of 420 hours. Also, EI benefits will be increased to $400/week minimum.
Once the CERB program ends and people begin to transfer to EI, a new program will be available awarding $400 per week for 26 weeks to anyone who is ineligible for EI.
Also included is a $500 weekly caregiving benefit that will help anyone who has to stay home because school or daycare is closed.
The second new benefit will provide $500 weekly for up to two weeks for those who don’t have paid sick leave and become sick or must self-isolate due to reasons linked to COVID-19.
And finally, the third benefit: the Canada Recovery Benefit, which is aimed at those who don’t qualify for EI.
This benefit will provide $400 per week (the same as EI), recipients will still be able to earn up to $38,000 a year, the benefit is only available to workers who stopped working or saw their incomes reduced as a result of the pandemic.
Past $38,000 a year workers will have to repay 50 cents for every additional dollar earned.
Now of course what we have not seen, from any party, is a plan to kickstart the economy and return to normalcy. COVID-19 cases are still happening here and there, in some places the economy is open with more cases than during the shutdown period (i.e. Edmonton). People will soon begin to ask, what was the point?
Bland and stale plans that cost only prolong the inevitable.
Consider a back to work plan of personal and business tax cuts, combined with the back to work bonus program (a tapered down CERB), and repatriation of critical manufacturing of protective equipment here in Canada.
Instead we have $37b in new spending that prolongs the inevitable fiscal reckoning and doesn’t do anything for the economy. What’s more, this was announced a day after the government prorogued the house until September 23rd.
Prorogation is the act of suspending the house and coming back with a new throne speech.
Trudeau says that the prorogation and throne speech is needed because last year's platform and the budget from 8 months ago doesn’t serve us today.
But, he could have prorogued on September 22nd. The only reason he chose to prorogue now is to shut down the investigations happening in committee that are probing into the WE charity and Trudeau’s ethical breach.
The difference this time is that there’s no major outcry as there was when Stephen Harper prorogued or when Boris Johnson prorogued in the UK.
We know the Bloc is aiming for a vote of non-confidence, the conservatives likely will too under new leader [LEADER NAME], the question is of course, will the NDP support this massive expansion of spending?
The changes announced pave the way for a universal basic income, an income that anyone could claim, no questions asked. This is something the NDP have championed before.
With the NDP holding the keys to this government surviving, we also need to ask why Justin Trudeau and Chrystia Freeland have been using the slogan, “Build Back Better.”
This is the same slogan that Joe Biden is using in the US and put frankly it means putting into place ideas from the World Economic Forum that call for “reinvent[ing] capitalism” that “offers us a chance to shape a more resilient and sustainable world.”
While these ideas are inherently good, applied in Canada by Justin Trudeau and the NDP can only spell trouble for our energy industry.
The prorogation, the use of the slogan “build back better”, and expanded social programs means Justin Trudeau intends to try to transform our economy and nation with a minority mandate.
And this is why debate, questions, and a media willing to ask the hard questions is so important today. With the red-orange elephant in the room, we need to know, are we headed down a massive spending path leading towards a universal basic income? And are the NDP going to let the liberals govern for their full term if we do?
Perhaps a fall election isn’t such a bad idea after all, Canadians should be the ultimate judge.
Supplementals:

https://nationalpost.com/opinion/rex-murphy-the-prorogation-of-the-talented-mr-poilievre
https://www.weforum.org/agenda/2020/07/to-build-back-better-we-must-reinvent-capitalism-heres-how/

Activists continue blockade of logging road on Vancouver Island to protect giant cedar

Protestors have now spent 2 weeks blockading a logging road near Port Renfrew on the west coast of southern Vancouver Island, in an effort to defend what they say is the last unlogged watershed on southern Vancouver Island, saying "enough is enough, it's time to protect these areas."
Protesters want the provincial government to stop Teal-Jones, a private Surrey BC-based logging company that's the largest in the province, from building a road into the Fairy Creek watershed, home to numerous old-growth yellow cedars, including one nearly three meters in diameter, the ninth-widest known yellow cedar in the province. Clear-cutting Fairy Creek, they say, could wreak havoc on the local environment, threatening species diversity and exacerbating flooding in the San Juan River Basin. As well as blocking the logging road, there have also been protests outside of NDP MLAs offices, and an ongoing hunger strike to raise awareness.
In response to the blockade, which began Sunday, Teal-Jones removed machinery from the site Tuesday, after cutting trees and blasting rock to make way for the road. The company said it had no comment at this time.
Teal-Jones holds the tree farm license that includes the watershed. Though the company has not yet applied for a cut block in Fairy Creek, activists worry that move may be imminent, pointing to the recent road construction, which they say is common practice ahead of making a cut block application.
Besides safeguarding Fairy Creek, protestors have pushed for the release of the recommendations of the Old Growth Forest Review Panel on old-growth forest habitats in the province, which was submitted to the Minister of Forests, Lands, Natural Resource Operations and Rural Development, Doug Donaldson’s office. The report prepared by an independent panel of Garry Merkel and Al Gorley was received by Donaldson’s office on April 30 and a public response was announced within six months of receiving the report.
An emailed statement from Forest Minister Doug Donaldson's office also noted that "about two thirds" of the Fairy Creek watershed is already protected by the Marbled Murrelet Wildlife Habitat Area.
Logging in the area remains an important livelihood for some members of the local Pacheedaht First Nation, added the ministry.
According to a spokesperson for the protestors, the Pacheedaht First Nation has offered neither support nor opposition to the blockade.
Despite a long history as a logging community, Port Renfrew has recently rebranded itself as an ecotourism destination, the self-proclaimed Tall Tree Capital of Canada.
TJ Watt, a campaigner with the Victoria-based Ancient Forest Alliance, understands why.
"These are some of the biggest, most remarkable yellow cedars we've ever seen," said Watt, remarking that they're also among the longest-lived life forms in the country. He hopes it stays that way.
In Early August, Donaldson said the Ministry of Forests would release the report "likely later this summer or in the early fall" but near to the end of August it is still nowhere to be seen.
In a reply to MLA John Rustad’s questions about his ministry’s $489 million budget at B.C. legislature, Donaldson said that the ministry also isn’t considering a moratorium on old-growth logging for an industry that has seen steady increase in protected areas and restrictions on the Crown land base.
Earlier in June, an independent study undertaken by a Nelson, BC based research firm showed that there’s only three per cent of old-growth trees left in B.C. The report calls on the government to update forest management strategy for the current mix of forests, and to place a moratorium on old-growth logging in any area with less than 10 per cent old-growth remaining.
The problem with a complete moratorium on old-growth logging across the province is that there are many small towns in BC that only survive due to the forestry industry. Logs have become more and more scarce, and mills have been steadily closing down as work flees Canada.
As logs became scarce and mills further south ran out of wood to make lumber, people across Vancouver Island started to suffer. Pulp mills, log traders, service-providers, secondary manufacturing and contractors were impacted too. Even people in seemingly unconnected industries, such as farmers, could no longer buy wood chips for livestock. They too felt the shutdown. Not to mention the restaurants, retailers and other businesses who saw their customers reduce spending to save money.
The impact of further restricting forestry would be as devastating. In Port McNeill, 80% of the population of 2,200 earns a living from the forest economy. A total old-growth logging ban would likely result in an immediate 60 to 70 per cent reduction in the local workforce.
If the government wants to play it right down the middle, it is possible to protect these giant groves of old-growth forests in Fairy Creek, and be able to generate revenue as well. Look no further than Cathedral Grove east of Port Alberni, not far north of the Fairy Creek watershed. Cathedral Grove is a major tourist draw along Highway 4 heading towards the gateway town of Port Alberni, which connects to Tofino, Ucluelet and little Bamfield along the coast. The grove is a rare and endangered remnant of an ancient Douglas fir ecosystem located within MacMillan Provincial park. The biggest trees in the Grove are about 800 years old and measure 75m in height and 9m in circumference.
The ecosystem is so unique that not only is it a major draw for tourists who stop to take in the tranquil forests, movie directors also descend upon the park from time to time to capture the forests on film, such as the latest Jurassic Park movies, Godzilla, and Star Wars.
If Fairy Creek is to survive, either the government needs to protect it by making it into a park, or make it accessible for British Columbians to enjoy. Logging is something that has to happen in order for small communities to prosper, but there is a balance that can happen where untouched forests are allowed to thrive and logging jobs can still exist. It all depends on what the BC government decides to do.
Supplementals:

https://www.vicnews.com/news/battle-of-fairy-creek-blockade-launched-to-save-vancouver-island-old-growth/
https://vancouversun.com/opinion/op-ed/gaby-wickstrom-old-growth-logging-ban-would-severely-damage-forest-reliant-communities
https://www.timescolonist.com/opinion/op-ed/comment-endangered-landscape-at-further-risk-because-of-north-cowichan-logging-1.24186347

CPC Leadership Race Results

After months of waiting the Conservative party has chosen a new leader.
Erin O’Toole won the race with 57% of the points needed on the 3rd ballot.
Peter MacKay came in second, Leslyn Lewis third, and Derek Sloan fourth.
The Conservative leadership process uses a ranked ballot which saw some surprises, most notable a strong showing from Lewis on the prairies and a surprise victory for Erin O’Toole in Quebec while Peter MacKay won Ontario and dominated the maritimes.
With regards to the popular vote this amounts to 90,635 for Erin O’Toole and 63,356 for Peter MacKay once the votes of Sloan and Lewis supporters were transferred.
This was a leadership race that was extended as a result of the pandemic and upon reporting of results saw delays due to issues with the ballot counting machine.
Erin O’Toole inherits a party that has its debts paid off and is financially in a good position going into the next election.
The biggest story of this race today has unfortunately, for the new leader, become one about how the race was delayed.
Results were first supposed to arrive at 6pm Eastern which was later delayed to 7:30pm and as of 10:30 pm there were still no results shown but the media were told to expect results within 15 minutes.
It was said that about 3% of the total ballots representing a couple thousand were cut by the vote counting machine and they were being reproduced onto non-cut ballots but the number might be higher.
It was well after midnight eastern time before the result was known.
There are some advantages to Erin O’Toole winning, most notably that he already has a seat in the House of Commons and can begin his job as leader as soon as Parliament reconvenes.
Many thought this was Peter MacKay’s race and it would be a coronation but this leadership election has proven again that the Conservative Party of Canada is the only party in Canada where grassroots members in each province have an impact in determining party policy.
Brian Lilley on Twitter was quick to point out that all those who claim the Conservative party is full of “racist rednecks” should look to this leadership race. Leslyn Lewis handily won western rural Canada.
Lewis was the first woman of colour to ever put her name on a party leadership ballot in Canada and her presence in this race was under reported by the media and perhaps that’s why this is such a surprise for the mainstream media.
The party would be well served if Lewis decides to become an MP and she becomes part of the Erin O’Toole team.
Only time will tell what the future holds for Peter MacKay and Derek Sloan, MacKay can go into the night happy knowing that the party he helped found with Stephen Harper is still embracing grassroots democracy and as for Sloan, his views represent a core section of the Conservative base and should be welcomed into a big tent right of centre political party.
O’Toole and MacKay both had the endorsement of many MPs and provincial politicians, gaining current caucus support will not be as difficult as it has been in the past.
The future though needs to be focused on setting forth an agenda that paints a clear difference between the Conservative party and the governing Liberals while making sure that all Canadians feel welcome in the Conservative party and have no shame in voting for the party.
The most difficult task for the new leader will be ensuring that he doesn’t fall down common media traps and sets his own agenda while controlling the media narrative and that’s where our coverage begins with the new Conservative leader.
Supplementals:

CPC riding by riding results

Word of the Week

Chaos - complete disorder and confusion, behavior so unpredictable as to appear random

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Show Data

Episode Title: A Government in Chaos

Teaser: Morneau is replaced by Freeland as Finance Minister amidst financial crisis and the WE scandal, Trudeau unveils CERB changes before he shutters Parliament, and old growth forests are under threat in BC. Also, the Conservatives pick new leader Erin O’Toole.

Recorded Date: August 23, 2020

Release Date: August 24, 2020

Duration: 57:12

Edit Notes: Insert CPC leadership segmnent

Podcast Summary Notes

Duration: XX:XX