The News Rundown
- The cost of living is rapidly getting out of control in Canada, and people are beginning to realize that the government is not helping matters. Food, gasoline, home heating, shelter (which includes rentals as well as home sale prices), pretty much everything has inflated by an insane amount.
- Canada's inflation rate hit 5.1% in January, its highest level since 1991. That means that the cost of everything, on average, went up 5.1% between January 1st and January 31st. That's insane. When you consider that 5.1% is actually an average, which includes things that people don't buy that often, it looks even worse, especially since it's been happening for a while now and the Trudeau government has not even bothered to put in place anything to address it.
- Just in the past year, the price of food purchased at stores was up 6.5%. Shelter costs rose by 6.2%. Gasoline prices have gone up by 31% since January 1st 2021. The cheapest gas that can be found in Canada right now is roughly $1.30/L, and in many major cities it is much higher. In Vancouver and Victoria, it has climbed up to just under $1.80/L.
- Consumers tend to notice high gasoline prices when they fill up their own vehicles, but those higher costs for things like energy and transportation hit businesses too, which also filters down to the price that consumers pay for goods. It's all interconnected, which is something that we've been saying for years now. Because of the country's lack of energy connectivity across provinces, increases in fuel prices will quickly raise the prices on anything. We are now seeing what 7 years of inaction have wrought.
- Higher input costs for the supply chain is a recipe for even higher inflation, and energy prices are showing no signs of subsiding. Economist Royce Mendes with Desjardins says: "With energy prices continuing to rise, inflation is set to accelerate even further and is unlikely to materially slow down before April."
- Here's the kicker. Consumer price pressures aren’t just accelerating, they’re broadening. It’s getting difficult to argue whether the acceleration of inflation to three-decade highs is transitory or being imported from abroad, like Bank of Canada governor Tiff Macklem tried to argue back in October of last year, which we covered on Western Context 239.
- Nearly 80% of the 48 subcategories in Canada’s consumer price index are now rising by more than 2 per cent, according to Bloomberg calculations on data released Wednesday by the national statistics agency.
- That’s the highest proportion since 1991, far exceeding the 50% average. Around two-thirds of prices are rising more than 3 per cent, the upper end of the Bank of Canada’s targeting band. The broader the price pressures the more likely it could drive up inflationary expectations -- making it more difficult for the central bank to return to target.
- The Bank of Canada's deputy governor Timothy Lane admitted in a Wednesday speech that the BoC may now have to be “forceful” in pushing back against high inflation, after months, even years of denial. Lane aimed to explain the central bank’s forecasting errors over the past two years and set the stage for a rapid rise in interest rates.
- In a rare moment of indiscretion for a central banker, Mr. Lane appeared to suggest the bank had already decided to increase rates on March 2, its next policy announcement date – underscoring what most economists already consider inevitable.
- In response to a question about the massive number of government bonds the bank accumulated in the first year and a half of the pandemic, he said the governing council would think about reducing these holdings after the first rate hike.
- Lane replied: “Quite likely, we’ll be saying something about that in a couple of weeks time when we’re actually at the stage of changing our ... uhh, when we’re actually at our next decision point.”
- The Bank of Canada, like other central banks around the world, was caught flat-footed in the fall of 2021 by the strength and persistence of the growth in consumer prices. This situation has prompted a major rebalancing of monetary policy in recent months, with central banks winding down emergency response measures, such as massive purchases of government bonds, and starting to increase interest rates much sooner than expected.
- Lane tried to explain away the BoC's painful missteps by saying: “The recession Canada faced was nothing like a textbook case, and there was exceptional uncertainty about how it would play out.”
- Here's the thing - back in the fall, even in the summer, it was painfully obvious to regular Canadian consumers that inflation was quickly becoming a huge problem. This was not a new thing, and the economists and government in charge of managing these issues have been completely missing.
- Indeed, the Trudeau government is still pushing policies that will increase inflation and continue to depress worker wages. Earlier this week, the Liberals tabled their 2022-24 immigration levels plan to welcome more than 1.3 million new permanent residents to the country over the next three years in order to "help the economy recover from COVID-19 and to drive future growth".
- Critics raised doubts about the government’s ability to process the large volume of applications while struggling with an unprecedented backlog, which stands at 1.8 million applications for permanent and temporary residence and citizenship. But never fear, Immigration Minister Sean Fraser says he has his “full attention” set on tackling the backlogs and creating a more “nimble” system.
- Fraser says: “If we’re not ready to significantly increase our ambition when it comes to immigration, we are going to be in a position where our economy will suffer, and it could put into jeopardy so many of the public services and social supports that make me very proud to be Canadian.”
- The Liberals say the increase in immigration numbers is down to a "race for global talent". This new plan is anything but. They are trying to keep the housing market propped up and wages depressed to fight inflation by giving permanent residencies away to immigrants doing lower skilled jobs. These people end up taking more out of the system than they pay in via taxes.
- Bringing in 1.3 million new immigrants into this country in under 3 years is not sustainable when we have a housing and rental crisis. Immigration Canada does not have the resourcing to properly vet and process 1.3 million people. People think we are getting only high skilled workers but that is the furthest from the truth. Furthermore, there is rampant immigration fraud going on, especially in the International Student Program. This puts heavy downward pressure on low end wages that low income Canadians are counting on. Not to mention upward pressure on an already unaffordable housing market.
- The US will be taking in 500K new immigrants this year, but they have 10x our population. Adjusted for Canada's population we should then be taking in 50K this year not 430K. Imagine if the US scaled their plan to ours instead, could you see Joe Biden get up to the podium to announce that he planned to bring in 10.3m immigrants? That's what the US number would be scaled to ours, and that just brings further questions to Trudeau's plan.
- Shamira Madhany, managing director of World Education Services, said: “What Canada has done here is basically saying, ‘Our borders are open for immigration.’ In terms of our capacity (to absorb immigrants), it’s a different question. We need to make sure we have mechanisms and tools in place to leverage their prior skills and experience. We don’t want highly skilled people to come here to do low-skilled jobs.”
- So while Canadians browse grocery apps to try to figure out how to reduce their bills, the Trudeau government is continuing policies that will make things more expensive. It's time for this to stop.
- This week Edmontonians learnt that the police force owns and operates its two helicopters and an aircraft.
- The problem though is that public knowledge says that we only owned the helicopters.
- The aircraft in question was bought in 1993 and is a 1980 Cessna 182Q. The plane is used for surveilling “severe criminals” according to the police.
- The existence of the plane was also kept confidential for what they called operational reasons.
- The plane was initially unveiled late last year when it came up when Councilor Michael Janz asked a question about it due to what he said were constituency complaints.
- The Edmonton Police Commission has also approved the purchase of a new plane that they will take delivery of later this year for $4.3m.
- Former City Councillor Allan Bolstad who sat on council from 1992 to 2004 chatted with CBC this week and said that as a city councillor of the day, he had no idea such a plane existed.
- He also highlighted that 1993 was the era of Ralph Klein’s budget cuts and most everything the city did from a finance point of view was scrutinized.
- The plane has been stored at the Villeneuve airport west of the city and anyone who saw the plane there could simply look up the tail number and see it was owned by the Edmonton Police.
- C-GMXM is the tail number and anyone can go to a website called Flight Radar 24 and see the details of the plane and if it’s in the air, see exactly where it is.
- The Edmonton Police was relying on a model of security through obscurity where the security of the aircraft was reliant on it looking like a random civilian aircraft that no one would perform a lookup on.
- Edmonton is the only local police force that operates an aircraft and two helicopters.
- Since the plane became public information the Edmonton Police is examining what needs to change operationally and if the new plane will still be delivered this year.
- Many people do not realize that while city councils have the power to bring in bylaws and ultimately approve local taxes, they are heavily at the whim of City Administration, at least in the case of Edmonton.
- While ideas for new policies and bylaws are put forward by council, they often have to ask the administration how to do something.
- There have also been cases in Edmonton’s past in the 70s and 80s where City Council effectively functioned more like the opposition to City Administration.
- Council would ask to do something and the administration would come back with a plan that would produce debate worthy of the House of Commons or legislature.
- This issue of the plane raises that again where we need to ask how accountable is the city given that administration and various commissions (like the police) have so much sway.
- It takes a city council working together and a city council that knows the ins and outs of the system to be able to handle administration effectively.
- This example of the Cessna 182 should be a reminder that modern era city councils need to step up their game and intimately understand the dynamics at play rather than trying to push vanity projects as we’ve seen in the past.
- Violence has erupted at a Coastal GasLink pipeline work site in Northern B.C., leaving workers shaken and millions of dollars in damage. Very early Thursday, just after midnight, Coastal GasLink security called RCMP for help, reporting it was under attack by about 20 people, some wielding axes.
- RCMP Chief Supt. Warren Brown, commander for the north district, called the attack a “calculated and organized violent attack that left its victims shaken and a multi-million dollar path of destruction.”
- Coastal GasLink said in a statement the attackers surrounded some of its workers in a “highly planned” and “unprovoked” assault near the Morice River drill pad site off the forest service road. The company said its workers fled. They were shaken, but no one was physically injured.
- The company's statement reads: “In one of the most concerning acts, an attempt was made to set a vehicle on fire while workers were inside. The attackers also wielded axes, swinging them at vehicles and through a truck’s window. Flare guns were also fired at workers.”
- Coastal GasLink said attackers used grinders to cut locks on a gate, entering an active construction site. They damaged heavy equipment and construction trailers, causing millions of dollars in damage. More precise estimates were not yet available. The attackers also cut equipment hydraulic and fuel lines, causing dangerous leaks. The company said it was working to contain the environmental impact.
- Photos provided by RCMP showed the extent of the damage to the company’s and contractors’ equipment and property. At least two heavy excavators were toppled onto their sides, trucks were badly damaged and a portable office showed extensive damage to the exterior, with parts of its facade torn down.
- RCMP said responding officers were met with a blockade of downed trees, tar-covered stumps, boards with spikes, and fires at the forestry road’s 41 km mark. As police worked their way past the debris, people threw smoke bombs and fire-lit sticks at them. One officer was injured. At the drill pad site, about 12 kilometres further down the road, officers documented damage to heavy machinery, fencing and portables.
- The area was the site of a major blockade last year that lasted two months. The natural gas pipeline project has also been the target of protests and opposition across Canada. In 2019 and 2020, RCMP enforced court injunctions issued to Coastal GasLink and arrested project opponents.
- Elected councils for several First Nations representing the Wet’suwet’en people have said they support the project, designed to carry natural gas to Kitimat for processing and export.
- But Wet’suwet’en hereditary clan chiefs have said the elected councils have no authority off government-created reserves and the clans are the guardians of Wet’suwet’en territories, including those on the pipeline route. The hereditary chiefs have said they did not cede or surrender the territory.
- B.C’s public safety minister, Mike Farnworth, denounced the violence as an “egregious criminal activity” that could have led to serious injury or death. He said in a statement: “There is no excuse for such violence and intimidation. All workers deserve to be protected from harassment and harm.”
- Police called Thursday’s violent incident a “troubling escalation.” RCMP Chief Supt. Brown said: “While we respect everyone’s right to peacefully protest in Canada, we cannot tolerate this type of extreme violence and intimidation. Our investigators will work tirelessly to identify the culprits and hold them accountable for their actions.”
- Alberta Premier Jason Kenney also tweeted his disgust at the incident: “This kind of violence is deplorable. It doesn’t help that some prominent people — like CBC celebrity David Suzuki — normalize the idea of anti-pipeline violence.”
- Regardless, this is still a developing story, and at recording time, there's not much further to go on, other than that this type of attack is unusual for Canada, and should be condemned by everyone anywhere. Unfortunately, this story has flown under the radar of the ongoing coverage of the Ottawa protests, and the media continues to ignore news in Canada to the detriment of everyone living here.
- This week Justin Trudeau and cabinet made the decision to invoke the Emergencies Act.
- As we’ve seen in BC this week there are other far more violent acts and some could even say terrorist acts being undertaken in parts of the country that were not Coutts, AB, Emerson, MB, Windsor, ON, and of course Ottawa.
- The federal Emergencies Act provides 4 different types of emergencies: a Public Welfare Emergency, a Public Order Emergency, an International Emergency, or a War Emergency.
- This most likely falls under the Public Order section and for the act to be invoked there need to be “threats to the security of Canada” and that it’s “so serious to be a national emergency.”
- The protests and blockades were diffused by local and provincial police services everywhere except Ottawa.
- What is going on in Ottawa is likely not a national emergency.
- The threats to the security of Canada include: espionage or sabotage against Canada, foreign influenced activities within or relating to Canada, activities within or relating to Canada directed toward or in support of the threat or use of acts of serious violence against persons or property for achieving a political, religious, or ideological objective, or activities directed toward undermining by covert unlawful acts.
- Of everything that constitutes threats to the security of Canada, aside from local policing failures in Ottawa, the only thing the Prime Minister and his cabinet seem to be looking at is the foreign influenced activities.
- And this seems to be the entire reason for the invocation and we’ll get to why this is the part of this story no one is talking about in just a minute but let’s first look at how the other parties and the Premiers are responding.
- As of recording police have started arresting protestors and compelling local tow operators to cooperate and remove vehicles.
- The organizers of the original Freedom Convoy were arrested on Thursday for counselling to commit the offence of mischief, counselling to commit the offence of disobeying court orders, and counselling to commit the offence of obstructing police.
- These actions drew headlines worldwide including front page coverage of the Wall Street Journal in the US and rightfully has many Americans asking if such an act could happen in their country.
- The opposition Conservatives and Bloc Quebecois have vowed not to support the invocation of the Emergencies Act. The Act invocation must be debated and supported by Parliament.
- The NDP which ceased being the part of the working class and everyday Canadian years ago will likely support the invocation of the Emergencies Act.
- In doing this, the NDP enables Justin Trudeau and increases their risk of losing more seats in the next election whenever that may be. If you get a Liberal government by voting NDP, why vote NDP? Why vote NDP if the party doesn’t stand for its own unique brand?
- NDP supporters ought to be considering replacing Jagmeet Singh at their next party convention if the party ever wants another shot at forming opposition or government.
- The Emergencies Act also requires consultation from the provinces which Justin Trudeau claims he did in a hastily called virtual First Minister’s meeting. The Premiers did not want the Emergencies Act invoked.
- Alberta Premier Jason Kenney is going further and tabling a motion in the Alberta Legislature next week condemning its use and in a letter to the Prime Minister suggested that there wasn’t adequate or meaningful consultation.
- He also pointed out that there were protests that were cleared daily in Edmonton and that the Coutts blockade was cleared without the invocation of the Emergencies Act.
- He finished by calling on the Prime Minister to end the cross border vaccine mandate and “ineffective international travel mandates” according to the Premier.
- And perhaps most importantly, as everyone in Alberta and country wide should note, Premier Kenney called for Canada to begin lifting restrictions like so many other countries, states, and even provinces in Canada have.
- So, why the Emergencies Act?
- Based on logic and deduction, the law enforcement happening, could’ve happened without the Emergencies Act. An order granting powers under the Ontario state of emergency to compel tow truck drivers could’ve been enacted as well.
- It appears that the Prime Minister and Cabinet felt the invocation was necessary to go after foreign funding to the protest organizers.
- On Thursday, Finance Minister and Deputy Prime Minister Chrystia Freeland said, “the consequences are real and they will bite.” She was referring to the government's actions on freezing bank accounts, corporate accounts, and insurance of those involved in the protest.
- Justice Minister David Lametti also specifically singled “pro-Trump convoy donors” in an interview on TV.
- What’s the most disturbing out of all this, even more so than, the visuals of protestors being arrested or the successful wedge by Justin Trudeau of vast swaths of the Canadian public against one another is how it’s all justified.
- As we mentioned the invocation of the Emergencies Act must be debated in Parliament.
- With that, Minister of Public Safety and Emergency Preparedness, Marco Mendicino, tabled a document outlining the government's concerns and reasoning.
- There are 6 types of measures the government sees themselves needing but more can be added.
- They are measures to regulate public assembly (Ontario emergency order can do this), measures to allow law enforcement to compel certain people like tow operators to provide services (Ontario emergency order may be able to do this), measures to prevent people from providing services to the blockade including financial services, measures to allow the RCMP to enforce municipal and provincial laws, measures to allow for fines or imprisonment for any contravention of the orders, and any other yet know temporary measures.
- The Ottawa police prevented people from delivering fuel to the protestors early on so clearly the essential services in question focus around financial services.
- And reading further into the order, we see that the entire basis of the invocation around suspending financial services is based on a single CBC news article using data that was leaked and hacked from Give Send Go.
- The database was hacked last weekend and journalists began calling people on said list and now the government is using the fact that a sizeable chunk of the donations came from the US as a major pretence for the invocation of the Emergencies Act.
- Meanwhile there was a report that millions of dollars funneled in from foreign groups to influence the 2015 election campaign that elected Justin Trudeau and that story when we discussed it on Western Context barely drew any media attention.
- Make no mistake a dangerous precedent has been set here and the media seemingly missed this huge aspect of the invocation of the Emergencies Act.
- Meanwhile Parliament was shut down Friday because of the police operations and it remains to be seen if they will sit this weekend or if the actual debate on invoking the Emergencies Act will happen while it’s being enforced.
Word of the Week
Attack - take aggressive action against a place or enemy with weapons or armed force, typically in a battle or war.
Quote of the Week
“If we’re not ready to significantly increase our ambition when it comes to immigration, we are going to be in a position where our economy will suffer, and it could put into jeopardy so many of the public services and social supports that make me very proud to be Canadian.” - Liberal Immigration Minister Sean Fraser, on justifying his government’s plan to bring in 1.3M immigrants over the next 3 years.
How to Find Us
Episode Title: Freezing Financials
Teaser: Inflation hits a 30 year high as Trudeau plans to bring in 400k immigrants per year, Edmonton’s police force owns a plane, and the Coastal Gaslink project is under attack. Also, Trudeau invokes the Emergencies Act to freeze protestors’ bank accounts.
Recorded Date: February 18, 2022
Release Date: February 20, 2022
Edit Notes: None
Podcast Summary Notes