The News Rundown

Why should Saskatchewan pay to heat swimming pools in Quebec?

As of recording we’re 10 days away from Alberta’s municipal elections, referenda vote, and senate election vote.
We’ll be touching on the Calgary mayor’s race a little bit later but in this segment we’re going to look at the other two very important votes happening.
First and foremost, there’s a slate of senators running. 3 from the Conservatives, 3 from the People’s Party, and a number of independents.
The hope is that Justin Trudeau will appoint at least one of these, maybe two, since Senator Doug Black is resigning at the end of October having served what he feels is an acceptable length of time.
For these, Albertans should vote their conscience and vote whatever closest aligns to their political views.
The referenda have the potential to make the biggest splash.
The first question that most Albertans are probably thinking of is the daylight savings referendum. This would have us stop moving our clocks and stay on summer time year round if enough vote - yes.
The move would be done in concert with states on the west coast and BC. Saskatchewan currently does not move and this would mean year round we’d stay on the same time as Saskatchewan.
This would also mean that in the winter, there would only be one hour difference between Alberta and eastern time, just as there would only be one hour difference with BC.
The best way to decide if you want to vote for or against abandoning daylight savings is asking yourself if you are comfortable with a winter sunrise in December at 9:50am.
Summer nights will stay long but winter mornings will be darker if we vote yes on this referendum.
Hockey teams, airlines, and other businesses will have to adapt either way but the smart thing would be a whole of continent approach with the east coast also making the change.
In one final note, California, Oregon, and Washington have voted locally to stop changing their clocks but in the US an Act of Congress is required to bring forth the change and that has not happened yet and BC’s move is contingent on the US moving.
The biggest referendum question that has drawn a load of fire comes down to the question of Equalization.
In particular, Should Section 36(2) of the Constitution Act, 1982 — Parliament and the Government of Canada’s commitment to the principle of making equalization payments — be removed from the Constitution?
Equalization is a federal program that has existed since 1957 and was baked into the Constitution of 1982 along with the push from Alberta by Premier Peter Lougheed that provinces maintain control over their natural resources.
In the show notes we’ve linked supplementary material covering both sides of this debate so our listeners can be truly informed.
In as simple a way as possible, everyone who pays federal tax has a portion of that federal tax get sent to the equalization program.
This evens out among provinces with lesser fiscal capacity (read lesser average income and therefore lesser tax income) to enable them to provide an equal level of services.
Presently BC, Alberta, Saskatchewan, Ontario, and Newfoundland pay into the program while Manitoba, Quebec, New Brunswick, Nova Scotia, and PEI receive from the program.
Meanwhile, Quebec runs budgetary surpluses and provides programs such as subsidized child care and electricity as two examples.
Residents in Quebec will pay 7 cents per kilowatt hour of electricity they consume compared to receiving 23 cents per kilowatt hour of that same electricity the province exports.
This would be similar to gas prices being subsidized in BC or Alberta or Saskatchewan.
Quebec doesn’t pursue development of its liquified natural gas reserves or LNG and is openly hostile to any pipelines flowing through the province.
On election night in 2019, Jason Kenney spoke directly to Quebecers asking to be partners in confederation and to allow Alberta to develop the resource that makes Canada rich.
Alberta pays more into equalization than any other province because our average incomes are higher due to the economic success that we’ve found.
Since 2015 Quebec has received more than $80b in equalization payments while Alberta has had to fight to receive almost anything extra in one of the worst economic downturns ever.
The media says that this is a purely symbolic referendum and they are dead wrong.
While this will not change or remove equalization overnight, it will bring the topic to the top of the national agenda and the federal government will have to engage in a dialog.
The Clarity Act says that a referendum must put forward a clear question and produce a clear result from a majority of the population.
Initially designed for the secession of provinces, the Supreme Court of Canada reference regarding the Secession of Quebec said that if a clear majority expressed the will to secede the federal government would have to enter into negotiations with Quebec.
This is a Supreme Court precedent that so many in the media misunderstand or have no idea exists. What this means for our case is that any matter of Constitutional question raised by a province, will compel the federal government to at the very least enter a dialog with the province in Question on that topic.
That is why we’re having the referendum. Do not let anyone in the media tell you otherwise that it’s a purely symbolic gesture, it’s not.
Supplementals:

On the heels of the two Michaels, Kovrig and Spavor being released from China, Huawei Canada sponsored a Chinese government-linked cultural event in Vancouver last Saturday, with B.C. politicians in attendance waving both Canadian and Chinese flags.
The cultural event was the third Chinese Cultural And Arts Festival hosted at Jack Poole Plaza by the Canadian Alliance of Chinese Associations. Among those attending were B.C. Minister of State for Trade George Chow, Burnaby councillor James Wang, Richmond councillors Alexa Loo and Chak Au, Vancouver mayoral candidate Ken Sim, and Trudeau Liberal-appointed independent Senator Yuen Pau Woo, who we already talked about on last week's Western Context as being incredibly transparent about his sympathetic attitude towards China.
The event was one of many Chinese cultural events tied to China’s consul general in Vancouver last weekend, in conjunction with celebrations for the National Day of the People’s Republic of China, also known as the Golden Week Holiday. This one was the first public event sponsored by Huawei Canada, following the release of Huawei CFO Meng Wanzhou from her extradition process (and subsequent release of Kovrig and Spavor).
The event featured dragon dancing and promoted the upcoming 2022 Winter Olympic Games in Beijing, which are mired in an international boycott to draw attention to China’s human rights abuses – a campaign that has majority support among polled Canadians.
Chow also attended a Chinatown event with Consul General Tong Xiaoling, to commemorate the Chinese Communist Party’s postwar ascent to power, as well as the 110th anniversary of the 1911 Revolution.
Such events, often known as “soft diplomacy,” had been common practice prior to the coronavirus pandemic but had become rare with gathering restrictions coupled with greater tensions between Canada and China.
Also on Saturday, activists co-organized by the group Vancouver Society in Support of Democratic Movement gathered outside China’s consul general to raise more awareness for China’s treatment of Uiygur Muslims in Xinjiang, which the House of Commons has labelled as genocide; dismantling of Hong Kong’s democratic system; and sustained intrusions on Tibetan culture.
The group also brought attention to what it claims are 150 Canadians still detained in China for political reasons, including Huseyn Celil, jailed for more than a decade on terrorism charges related to his Uyghur advocacy, and Sun Qian, a Canadian citizen and Falun Gong practitioner, who was arrested in Beijing in 2017.
Overarching questions following the extradition process include whether Canada will now ban Huawei from its telecommunications networks, on grounds of cybersecurity and Chinese state-led espionage, as have all of its national security allies, and whether the country will continue to forge ahead with more extensive trade ties with Beijing. China is interested in establishing Huawei overseas and has a large appetite for Canadian resources and energy. However, questions persist on whether Canadians want to do business with the authoritarian regime. After all, public opinion polls indicated that four in five Canadians want the government to ban Huawei from our telecommunications networks.
The Chinese government and Huawei spokespeople have long maintained that the tech giant would not be used for espionage purposes or for political reasons as a bargaining chip, but Chinese President Xi Jinping also denied for almost three years that the two Michaels were held as leverage in the Meng case. Clearly, that wasn’t true. What’s more, China’s own National Intelligence Law allows Beijing to compel Huawei to support its intelligence activities.
Huawei has never hid its Chinese patriotism. In profiling Meng three years ago, the Wall Street Journal recounted President Xi’s 2015 tour of Huawei’s London office, to which Meng had relocated Huawei’s financial nerve centre. The Huawei staff serenaded Xi Jinping, China's paramount leader, with “The Song of China.” Its lyrics include “All nations will come to learn from us; we, favoured by Heaven, will be stopped by no one.”
In 2021, eight of the world’s 10 largest economies, including Britain, have either banned or restricted Huawei from their 5G networks. Canada isn’t one of them, and Trudeau is to announce his long-stalled decision in coming weeks. But that decision has already been made in the hearts and minds of Canadians with the cruelty inflicted on the two Michaels and the Canadian telecoms’ rejection of Huawei gear in their 5G networks.
So why the wait to ban Huawei? The question for the Trudeau government is what to do about Huawei’s more than 1,200 researchers and engineers in Canada at eight R&D centres across the country. Huawei uses its alliances with Canadian universities to drain this country of Canadian tech advances, which make their way to China’s hegemonic regime. It’s difficult to see how the continued presence of Huawei’s culture of wolves on these shores is in the best interests of Canada.
The Liberals maintained power in a minority government with a platform silent on such matters. With a platform much more critical of China, the Conservatives lost their bid to take control in Ottawa and may have lost seats in ridings with large Chinese populations due to perceived Chinese government interference.
B.C. Minister of State for Trade George Chow was not immediately available for comment following the event. It’s unclear whether his attendance is an indication that the BC NDP provincial government is set to encourage trade ties with China. Minister of Jobs, Economic Recovery and Innovation Ravi Kahlon oversees Chow’s ministerial post. This summer, when asked if his government intended to strengthen trade ties with China or diversify, Kahlon affirmed the latter.
Chinese-Canadian businessmen lead the Canadian Alliance of Chinese Associations. The alliance states online it aims to promote “unity and cooperation between Chinese communities” while participating in select philanthropic efforts such as disaster relief. While it has claimed to be apolitical, it also claims to “actively participate in various activities of the Overseas Chinese Affairs Office and the Chinese Overseas Chinese Federation,” which are Chinese government-affiliated entities, identified as parts of the CCP’s United Front Work Department. Among its stated goals in Canada is to promote Chinese sovereignty in the South China Sea.
The U.S. Federal Reserve, a pillar of the American establishment, has also published a report that zeros in on how wealthy buyers from the People’s Republic caused a “China shock” on U.S. housing prices. The Federal Reserve study found that “residential real estate capital inflows from China significantly induce higher house prices and employment in the local economy” in certain U.S. cities, especially those with ethnic Chinese neighbourhoods.
The report found an influx of buyers from China contributed to gentrification of neighbourhoods and caused lower-income people to move away. Why don’t Canadian officials produce something similar for this country, where cities like Vancouver, Toronto and Calgary have also been impacted?
Extremely indebted Evergrande is in the news this week because it’s the biggest player in China’s explosive real estate sector, which accounts for 25 per cent of the country’s GDP, a more exaggerated portion than even that in Canada. China’s housing bubble has been fuelled by massive housing speculation through companies like Evergrande. It’s contributed to oversupply and an estimated 65 million empty homes in China.
The company’s crisis resonates worldwide. The media has reported Evergrande, financed in part by the Royal Bank of Canada, owns many properties outside China, including Quebec’s ritzy Château Montebello resort. But beyond that Ottawa doesn’t offer much information on how much corporations or investors from China — or any country — own property in Canada.
Unlike in the U.S., where central bank researchers look openly into foreign ownership, Canadian researchers and politicians who try to get to the bottom of the phenomenon, or restrict it, are labelled as xenophobes by organizations like the Canadian Alliance of Chinese Associations. So, as often happens in Canada, we end up relying on the Americans to expose developments occurring in our own country. Ottawa has a lot of catching up to do with the U.S. on providing information on housing (and money-laundering, for that matter).
Once again, we have issues with China, with Huawei at the forefront. With the conclusion of the Meng and 2 Michaels story, China is now trying to weasel it's way back into Canadians' good graces. For the sake of our country, we cannot let that happen.
Supplementals:

Farkas drops bomb, now Calgary mayor's race is a dogfight

Both Edmonton and Calgary will have new mayor-elects in less than 10 days.
In Edmonton the front runners appear to be Mike Nickel, Amarjeet Sohi, and Kim Krushell.
The race in Edmonton this week focused on the difficulty of starting a business.
Contender Amarjeet Sohi is the only one who doesn’t want to lower tax rates!
Sohi says tax rate increases will stay below that of inflation but with inflation at a record high, that doesn’t help anyone.
Michael Oshry is calling for a tax freeze then a decrease of 1-2% in 2023.
Kim Krushell brings business experience and pledges to make starting and running a business easier in Edmonton. She also is pushing for a tax freeze.
Mike Nickel wants to drop the tax rate by 3.3% next year by reducing the city’s management staffing levels and cutting costs for external consulting. He expects this to save the city $109m a year for the cost of 257 positions.
It’s also worth noting that Sohi wants to create some form of a national park in the river valley but it remains unclear just what this would mean for federal jurisdiction within the city.
In comparison for those interested, Sohi occupies the space that the NDP and Liberal enjoy.
While Michael Oshry and Kim Krushell represent something similar to what we have seen with the current council and Mayor Iveson.
Electing Mike Nickel would represent a big change for the city and put the mayor’s vision more in line with that of the provincial government or conservative side.
In Calgary, the top three seen are Jeromy Farkas, Jyoti Gondek, and Jeff Davison.
Farkas has long been seen as a front runner represents the Conservative side of the spectrum is also openly bisexual.
The question in Canada always comes to what kind of money is influencing things behind the scenes.
At a mayoral debate on Wednesday, Farkas revealed that unions have put $1.7m of “dark money” representing “backroom developers and big business interests” towards his challenger Jyoti Gondek.
Farkas has been running on a platform of fiscal responsibility and the knives have come out recently where union forces and Gondek in particular in his words have, [gone] to such extreme lengths to vilify anybody who is really even reasonably willing to advocate for financial responsibility”
In terms of derailing the bloating bureaucracy at city hall, Farkas has done his best to emulate former Toronto mayor Rob Ford saying, “These councillors, they just cannot be trusted based on the record they never saw a tax increase they didn’t like.”
He also pointed out Gondek’s anti-business policies and his people's first approach of actually going out to talk to those protesting at city hall.
In summary, Gondek represents an NDP style approach for Calgary, Davison sits in the middle, and Farkas represents something to the effect of the conservative side which is a huge difference from what Calgary has had under Mayor Nenshi.
Supplementals:

https://edmontonjournal.com/news/local-news/edmonton-mayoral-candidates-pitch-property-tax-plans-as-city-faces-projected-75-million-shortfall-in-2022

Firing Line

Natural gas price hikes will fuel inflation and hit low-income Canadians the hardest

It's been a quiet news week so far, but we have to ask ourselves, does that mean there isn't news to talk about? Of course not, because often the biggest stories are not covered by the media and go on behind the scenes.
Every working class Canadian who has lived through the pandemic in the past year and a half has likely seen a large increase in costs. Whether it's rents that have gone up due to the insane housing market, food that's gone up due to the carbon tax, or home heating and fuel that's gone up due to a lack of transport infrastructure, all of these inflation issues are interconnected with the changing labour market and consumer spending through the pandemic. Largely it all boils down to one thing - governmental fiscal management (or mismanagement as it were).
Now, I'm not an economist, but I can see when poor decisions made by our federal government have hurt average Canadians by failing to grow the economy, and continuing the risky debt spending that has been common practice since Trudeau's election in 2015. All of the cascading inflation problems that were a problem before the election are still a problem now, and as we move into the time of year where much of the country becomes a frozen popsicle, these ugly problems are going to feedback on each other and turn much worse than we have seen so far.
As we've always seen, inflation will hit those who do not have as much money to weather the storm. When the bottom 20% of income distribution are paying a third of their income on shelter costs (rent, mortgage, utilities, household expenses), it's going to hit them much harder than the top 20% who only have to spend a fifth of their income on the same things.
Let's start with natural gas. Natural gas prices are inflating quickly, and this is going to result in a much larger home heating bill at the end of winter for consumers. Already, a number of Canadian natural gas distributors have hiked their rates.
FortisBC Energy Inc., British Columbia’s largest natural gas distributor, warned in September it would increase rates starting in October, with the majority of customers expected to pay around $8 more a month.
Ontario’s Enbridge Gas said the typical residential customer will see a bill increase of about $7 to $44 a year depending on where they live.
Manitoba Hydro has said the annual bill for a typical household will increase by approximately 8.7 per cent, with larger volume customers potentially seeing increases as high as 19 per cent.
The rising cost of natural gas and commodities also puts upward pressure on the prices of a variety of other products. Higher energy costs, for example, make it more expensive to produce, transport and store food, another major drain on low-income families’ budgets.
And for manufacturers who rely on natural gas, the energy price hike could be the umpteenth cost increase after months of struggling with pricier inputs and supply-chain headaches. There’s a lot of fatigue now among manufacturing companies in absorbing more input costs. So it is very likely that any increases in costs are transferred to consumers from now on, which further complicates the inflation problem.
Global News attempts to explain the natural gas price increase to loosening Covid restrictions around the world, and a higher demand for natural gas being fueled by an increase in economic activity. It also says that the pandemic is to blame for "producers [being] reluctant to make significant capital investments in new drilling programs", and that Canadian natural gas storage levels are at five-year lows.
But in reality, we all know the main reason why that is, because our federal government has ignored the Canadian resource breadbasket over the past 6 years and has heavily hobbled our resource capabilities in Canada to the point where we aren't growing the economy off of the advantages that such a short in prices will provide.
And this lack of development has had a far-reaching impact on our ability to grow food, and transport needed goods, like basic food essentials, across this vast country to the population centers that need it the most.
According to Statistics Canada, food prices are up 2.7 per cent over the past 12 months. But, new research from Dalhousie University’s Agri-Food Analytics Lab published Wednesday shows the food inflation rate in Canada is closer to five per cent. Meat products have seen the largest price spike, with Statistics Canada data noting those products have become 10 per cent more expensive over the past six months.
As grocery prices continue to rise, the price of bacon in Canada reached an all-time high last month. In August 2021, the average price of a 500-gram pack was $8.24, exceeding the $8 mark for the first time ever. Bacon prices previously hovered around the $7 mark in 2019 as well as the early months of the pandemic. But prices have increased 13.7% since August 2020, when the average price was $7.24.
Hot dogs have also seen a jump in prices. A 450-gram pack was $4.96 on average in August 2021, up 13.5% from last year. Beef prices have also skyrocketed. The price of a sirloin steak jumped 12.63% from last year and blade roast increased 10.98%. Round steak and stewing beef saw smaller increases of 5.08% and 4.8%. In addition, chicken prices in August rose 8.4% compared to August 2020. Egg prices rose 7.9% during the same period.
So how are Canadians responding to this sticker shock at the grocery stores? Well, it's forced us to become smarter about what we buy, make difficult choices about what to buy, and to forgo items that used to be staples.
Dalhousie' Agri-Food Analytics lab surveyed 10,000 Canadians over the summer to determine how consumers are responding to rising grocery bills. 49% said they have reduced their purchases of meat products over the past six months due to higher prices. 42% were reading their weekly grocery store flyer more often this year than in 2020, spending more time and effort searching for the best deals than they did last year. And 40% said they were purchasing discounted products with expiry/best before dates within a few days of purchase more often in 2021 than they were last year.
Canadians have also noticed increasing use of a strategy known as “shrinkflation,” where food producers sell products with less quantities or volume without reducing the price. Almost three quarters of respondents (73.5 per cent) said they were aware of certain food products that have shrunk, despite prices either remaining the same or increasing.
Soaring food costs driven by supply-chain snarls and other disruptions hurting the agriculture industry will prove “transitory” and should dissipate in time, says Cargill Inc. CEO David MacLennan: “There are issues in the supply chain: everything from labor shortages to the impacts of climate change, extreme weather events, demand pull for biofuels. So there’s a lot of pressure on the supply chain for agriculture and food.”
Despite top companies, governments and economists calling the recent inflation increases "transitory", ie, temporary, the term repeatedly used by central bankers to imply that inflation would go away on its own, there are growing fears that these new high prices are here to stay.
It's not just Canadians that have noticed Canada's post-pandemic recovery issues. Members of the U.S. Council on Foreign Relations grilled the Bank of Canada governor Tiff Macklem on whether their northern neighbours would have a trouble-free exit from the downturn of the COVID-19 pandemic.
Led by financier and former Democratic politician Roger Altman, members of the U.S. think-tank asked probing questions on whether Canada's housing bubble would have any spillover effects on the global economy, as well as on jobs, inflation, commodity pricing and the difficulty of moving from a low interest rate regime to one without monetary stimulus. Among the new things Macklem discussed were fears that inflation could well turn out to be more long-lasting than expected and jobs recovery could be slower.
Altman asked Macklem: "A lot of people in finance are learning that the most important word in the English language is 'transitory,'...How confident are you that [this inflation] really is transitory, because if you took a poll of smart people in finance … you'd probably get 50% saying it probably is and 50% saying it probably isn't."
Macklem responded: "It's the job of central banks to say it is," in a similarly humorous tone.
But both in the council session and at a later news conference, the bank governor conceded that inflation was running hotter and could last longer than initially expected. In August, Canada's inflation rate hit 4.1 per cent — the highest level since 2003.
And as gasoline pump prices smash records, cars and appliances are unavailable due to a shortage of component chips and ships back up at North American ports, Macklem said the inflationary path was not as simple as many had expected when signs of rising prices first emerged: "We do expect that we will work through these supply disruptions, but I will say, they are proving to be more complicated and they could last a little longer than we previously thought."
Regardless of what the top economists and bankers think, inflation is here, it is hitting ordinary Canadians hard, and it's not going away anytime soon. The fact that the media did not cover this during the election campaign is dishonest, and it shows that the real issues that Canadians actually care about were not on display, as Trudeau's 6 year record on the economy was virtually swept under the rug last month. With no signs of his Liberal minority changing course, Canada is in for a rough few years.
Supplementals:

Word of the Week

Transitory - temporary, not permanent

Quote of the Week

"A lot of people in finance are learning that the most important word in the English language is 'transitory,'...How confident are you that [this inflation] really is transitory, because if you took a poll of smart people in finance … you'd probably get 50% saying it probably is and 50% saying it probably isn't." - U.S. Council on Foreign Relations member Roger Altman, to Bank of Canada governor Tiff Macklem

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Show Data

Episode Title: Symbolic Gestures

Teaser: Alberta shows us that referendums are not just symbolic, Huawei sponsors a Chinese cultural event in BC, and we look at municipal elections in Edmonton and Calgary. Also, inflation on groceries and natural gas is here to stay.

Recorded Date: October 8, 2021

Release Date: October 10, 2021

Duration: 1:02:26

Edit Notes: 2019 vs 2016

Podcast Summary Notes

Duration: XX:XX