The News Rundown

Pharmacare deal to help affordability, bring down inflation

March 1 was the day where the NDP and Liberals had to meet up in the middle to secure a deal on pharmacare to keep the agreement between the two parties alive.
As of Friday the NDP says that they have a deal on pharmacare legislation.
The deal would utilize a single payer system to deliver all Canadians free access to birth control, IUDs and emergency contraception, and coverage for all insulin drugs for Type 1 and Type 2 diabetes.
The first piece of legislation is being heralded as a success by Jagmeet Singh because not only is it universal pharmacare but also contraceptives and diabetes medication.
Jagmeet Singh says that the deal will help Canadians afford prescriptions but also lower inflation.
The pharmacare plan will cost an additional $40b per year.
Economists are of course scratching their heads because excess government spending does indeed drive inflation higher.
Singh sees it as a way to lower inflation because “it’s going to save money for women and for people that need access to contraceptives and it’s going to save money for people that have to take life-saving insulin and other medication to deal with diabetes.”
He also believes that this will bring down the cost of medication for everyone as well and wants to fund it by cutting government contracting and investments in the oil and gas industry.
With this there’s of course a lot to unpack and the devil is in the details since we don’t know what the Bill will contain as of yet.
But in broad strokes everyone should worry.
The national day-care plan has been causing issues in Alberta and just recently Ontario daycare operators say that the $10/day program is having issues there leading again to potential closures.
Following the money and economics of the situation drugs will become more expensive if they are subjected to centralized fee schedules and if the program increases demand from where we are now prices will also go up.
The Canadian pharmaceutical system actually works quite well, better than the American system and this plan is rife for all the risks of the American system without the benefit of the free market.
From daycare to dental care to pharmacare the “deals” delivered to the NDP have been causing problems for those already established. We will be watching with a close eye as to how the government plans to roll out the program that will cost upwards of $40b per year.
This plan also completes the merger of the Liberals and NDP. There is not much which differentiates the two parties presently and it remains to be seen if NDP voters realize how their party has been cannibalized.
Political studies done and empirical evidence shows that very rarely do junior coalition partners or even those that support minority governments get rewarded.
The text-book case of this is the 2010-2015 UK Conservative/Liberal-Democrat coalition that saw David Cameron and Nick Clegg work together with Clegg only to be decimated in the election that followed.
Polling numbers if to be believed today show Justin Trudeau’s and Jagmeet Singh’s numbers converging rather than going up.
This is a trend that has been moving since last summer and is going to be hard to shake going into 2025.
The NDP has wedded themselves to the Liberals so hard that both parties have become indistinguishable from each other and now in all likelihood bear the sins of each other as well.
In time it would be interesting to see how closely voters tie Singh and Trudeau together and the difference in any of both leaders' favorability.
The arrangement between the Liberals and NDP is not a coalition government in that both parties have seats at the cabinet table but it is a coalition government in everything else but name.
As more people digest the news of pharmacare we’ll have to see if the fortunes of either party improve or the spiral continues.
And of course at the end of all this, this means now with utmost certainty, there will not be an election until 2025.
Supplementals:

British Columbia's budget for 2024 has been released by the BC NDP and there's a lot to unpack. Firstly, the big new shiny tax that was unveiled has been grabbing a lot of headlines - the BC Home Flipping Tax, where starting Jan 1st 2025 any profits made from the sale of a residential home within two years of buying it will be subject to the tax – with exceptions of course. However, there's a lot more to the budget than just the flipping tax, and we're going to go through all of it here in the next few minutes.
Firstly let's discuss the flipping tax. It's meant as a measure to discourage home flipping, where you buy a property, and immediately turn around and sell it for higher than the amount you bought it for, oftentimes even within the same week or so. The tax comes into effect for properties sold starting Jan 1st 2025, and the tax will apply even if the property was purchased before the effective date.
The legislation the government intends to pass during the spring session would see a sliding scale: 20 per cent on profits made on a home sold within the first year, gradually declining to 10 per cent if sold after 18 months, and further reducing to zero after two years of ownership. The Ministry of Finance estimates the tax could generate about $43 million a year in tax revenue.
This means that if you buy a home for $1M and then sell it for $1.1M within the first year, you will get taxed 20% on the profit of $100K, which is $20K. You still get $80K profit out of it, but government will now also get its cut too.
Divorce, death, illness, and relocation for work, “among others” would be grounds to avoid paying the tax. The mechanism for appeal of the tax and what documentation will be required is still under consideration. Forms will be created by tax administrators between now and January, with details expected after the legislation is formally passed. The revenues are earmarked toward the construction of new affordable housing in the province.
The housing sector in BC has seen lots of challenges in BC over the past year. The provincial budget has formalized billions of dollars in promises made by the BC NDP in recent weeks for programs like BC Builds, and it also provides an in-depth analysis of where the housing market is and where the government believes it’s going.
Building permits were down last year and unsold inventory of new homes grew in the Vancouver, Victoria and Abbotsford areas compared to 2022. Interest rates were blamed for slumping sales last year in B.C.’s largest housing markets, and the population continued to grow due to international immigration, while inter-provincial migration saw loss to other provinces for the fifth consecutive quarter (largely to Alberta).
Financing challenges, skilled-labour shortages, and ever-rising construction costs impacted the market and the number of new homes that were finished and ready for occupancy declined in the Vancouver and Kelowna areas, while Victoria and Abbotsford saw increases.
Despite that, “the ministry expects home sales activity to rebound in 2024 from slow activity in 2023” with prices expected to rise an average of 2.3 per cent this year and 2.9 per cent in 2025.
This budget is of course passed in an election year, meaning that if the NDP are not re-elected on the scheduled date of Oct 19th 2024, this tax may not come into effect. Still, with opposition support divided between the BC United and BC Conservatives, it's looking like Premier David Eby will be cruising towards a majority government even bigger than the one he inherited from John Horgan, regardless of how popular he or his party's policies have been over the past year and a half.
One part of the BC Budget that will raise eyebrows is the amount of money the government is spending. Gone are the fiscally prudent days of the Horgan NDP government: Eby is spearheading a budget that includes a record level of spending and a record level deficit to the tune of $7.9B as well as economic growth of less than 1%.
Finance Minister Katrine Conroy said Thursday that while BC is an economic leader in Canada, a slowing economy and increasing housing and grocery costs mean people needed help, she said.
Yet, both sides of the political spectrum note that while Eby is spending more money than ever before in a budget, there are many key things still missing. The Narwhal reports that while there is a huge contingency fund for wildfires, there is no new funding to protect old-growth forests, wildlife, or to create new protected areas and parks.
The deficit budget commits more than $1.3 billion over the next four years – $325 million a year — to fight climate change and build “a cleaner economy” in partnership with First Nations, communities and businesses.
Of that, $405 million is dedicated to climate emergencies. Another $435 million is for the CleanBC climate plan — the province’s roadmap to reduce carbon emissions 40 per cent by 2030 — and “clean economy initiatives,” including B.C.’s new critical minerals strategy.
Conservation groups are disappointed with the budget, saying it focuses on responding to climate disasters instead of deeper emissions cuts, while Clean Energy Canada, a think tank that aims to accelerate the country’s transition to clean energy, called the budget “very reasonable.”
Clean Energy Canada executive director Mark Zacharias said: “I think that’s the first time we’re actually seeing [the] government connect the dots between climate, the economy and the environment, and also B.C.’s future position in a world that’s decarbonizing, so we’re actually pretty pleased with the budget.”
And yet on the other hand, we have to look at just how much the government is spending and how many services we're getting out of that money. Conroy budgeted for three years of operating deficits totalling $22 billion, double her forecast this time last year in her first budget as finance minister in the David Eby NDP government. The revised three-year plan also calls for adding $61 billion in debt, leading to an almost 60 per cent increase in the total provincial debt since Eby took office.
The John Horgan NDP government took power with an ambitious agenda and a determination to increase funding to services that were neglected by the previous B.C. Liberal government. It also governed through a genuine crisis during the COVID-19 pandemic.
Nevertheless, Horgan and his two finance ministers, Carole James and Selina Robinson, managed to deliver four surplus budgets in six tries. Their one substantial deficit was a record setting $5.5 billion, but that was in the worst year of the pandemic. As Eby’s finance minister, Conroy is proposing to break that deficit record by a wide margin in each of the next three years.
Horgan, despite the pandemic, wildfires, flooding and other challenges also managed to completely retire the province’s operating debt, leaving behind a burden of zero dollars in that category of debt at the end of his last year in office. Conroy, on Eby’s behalf, on the other hand is proposing to boost the operating debt to an unprecedented $22 billion over just the next three years. All in, the Eby government proposes to boost the total provincial debt to $165 billion, almost double what it inherited from the Horgan government.
Conroy insists “our debt burden remains manageable.” For now, yes. But in large measure, it is manageable because previous governments managed debt and borrowing within reasonable limits. In tribute to the Horgan government’s relative prudence on fiscal matters, the debt-rating agencies maintained it at the same top-rank credit rating inherited from the B.C. Liberals. That record is why B.C. had ample leeway to borrow at the best rates and spend heavily when hit by the genuine crisis of the pandemic.
Her best hope is that the agencies will cut her some slack because she socked away $11 billion in unallocated contingency funds. Enough to cut the projected deficits in half if used to cover operating costs.
Unless, of course, Eby follows past practice — he spent most of the $6 billion that Horgan left behind in his last budget — and allocates much of the contingency funding to election-type promises like he did when he first took power.
We will have to keep track and make sure that Eby's spending actually benefits British Columbians, or if his deficits will mirror Justin Trudeau's federal deficit spending - lots of money spent for not much in return.
Supplementals:

One last shot' — Smith vows to build up Heritage Fund, move Alberta off royalty roller-coaster

Next week is budget week in Alberta and this week we were given a preview of the budget to come in that there will be no new taxes, no tax cuts, and no new money put into the biggest ministries beyond inflation + population growth.
But bigger than that was Danielle Smith’s prime time address detailing the fiscal future of the province.
The plan in short: invest in the Alberta Heritage Savings Trust Fund.
The goal is going to be to grow the fund to where it’s now, just short of $25b to somewhere between $250 and $400b by 2050.
To do this the province will invest surpluses and interest earned from the fund into the fund.
The province will also limit government spending increases to below inflation plus population growth.
Danielle Smith said, “In my view, our province has one last shot at getting this right.” So many other Premier’s have tried but failed.
What is the Heritage Savings Trust Fund?
The Alberta Heritage Savings Trust Fund was established in 1976 by then Premier Peter Lougheed.
The fund was created to save for the future, strengthen or diversify the economy, and improve the quality of life of Albertans.
From 1976 to 1983 a portion of resource revenues were invested.
The Getty government stopped putting in a portion of resource revenues and took the interest for general revenues.
The Klein government, while cutting taxes for the population and slashing the size of government, still profited off the interest and didn’t make a capital investment into the fund until 2005.
No other government, Progressive Conservative, NDP, or UCP has since made an investment.
By last March $42b of investment income has been transferred to the government with another $3.5b directed to capital projects spending.
There will come a time when oil loses its value and then loses its value permanently as more countries move away from fossil fuels.
But in the meantime, Alberta, and Canada has the opportunity to reap the benefits of our energy industry.
Norway has a similar fund that was set up after discovery of oil in the North Sea saw its first deposit in 1996 and now holds more than $1.6T USD in assets. Though we must be clear as well that Norway has a rather excessive VAT or value-added-tax.
The hope is that Alberta’s Heritage Savings Trust Fund will function similarly if provincial governments invest into it providing a way for Albertans to live off investment income after 2050 much the same way one sets up a retirement plan.
The Alberta government chose 2050 for a specific reason, that’s Alberta’s net-zero target as well as the net-zero target for many companies in the energy industry.
The challenge will be holding future governments to account on this and Smith alluded that there could be legislation coming this fall to ensure governments invest an appropriate amount and don’t siphon away the interest.
Danielle Smith is bullish on the future of investment, specifically if we see a change of the federal government. She painted a picture for Albertans of the day when Justin Trudeau is gone saying, “Despite the coming years predicted global economic slowdown, I believe our province is on the cusp of an unprecedented and prolonged energy resource boom, one that will include both hundreds of billions in investment and tens of thousands of new jobs not only in oil and gas production but also in designing and building the most advanced emission reduction technologies on earth. It is going to be an exciting time for our province and for Canada, especially once we finally get a federal government that acts like a strategic partner rather than a delusional adversary.”
This is all fine and well but it is inherently abstract for most Albertans especially when there was the promise of a new 8% tax bracket created on income under $60,000 in the election 9 months ago.
That would have amounted to a reduction amounting to $1,500 per year for each Albertan family with two income earners - a lot in today’s economic climate.
This was a win that was sitting on the table but we won’t see it for at least another year.
Bookkeepers and economists can make sense of the Heritage Savings Trust Fund announcement and U of C Economist Trevor Tombe said the province “can relatively easily get there with program spending growth kept to less than population + inflation and saving all Alberta Heritage Savings Trust funds.”
So with that the question that remains, will Alberta do what has only been done 3 times since the 1980s and invest in the Alberta Heritage Savings Trust Fund or will Danielle Smith’s UCP resort back to what successive governments have done?
Supplementals:

Firing Line

BC instructs people to stop saying “British Columbians” because it’s offensive

While the newest BC Budget took a lot of the oxygen out of the room for reporting in British Columbia, there was another story that was only covered in one space this week that deserved a lot more attention. A writing guide by the BC NDP Government encourages people to not use the term "British Columbians", referring to the residents and citizens of Canada's westernmost province, as it may be considered offensive.
The article from True North highlights the astonishing level of control the government wishes to have over our language. The guide, called the "Writing Guide for Indigenous Content" updated Jan 26th, 2024, aims to promote more inclusive language and avoid “outdated” and offensive terms.
It provides recommendations for authors and communicators regarding terms to use when talking about Indigenous issues. Notably, it advises against the use of the term ‘British Columbians,’ citing its so-called exclusionary nature towards Indigenous peoples who may not identify with the label.
The guide reads: “The term ‘British Columbians’ is often used to reference people living in B.C. This term excludes Indigenous Peoples who may not identify with it. For many, they identify as members of their own sovereign nations and do not consider themselves part of one that has actively worked to assimilate their people.”
Instead, it suggests employing the phrase ‘people living in B.C.’ to be more inclusive of diverse populations, including immigrants: “’British Columbians’ also excludes other groups such as newcomers and refugees. We recommend instead saying ‘people living in B.C.’”
Furthermore, the guide includes a section on “Outdated terms to avoid,” discouraging the use of terms such as ‘native,’ ‘traditional,’ ‘tribe,’ ‘band,’ and ‘aboriginal groups.”
This move follows previous efforts by the BC government to control speech such as the removal of 750 “outdated gender-based” terms from provincial regulations in 2022. We covered this back when it happened, and it appears the BC NDP are continuing the trend.
These changes, part of the Better Regulations for British Columbians initiative, eliminated terms like “he,” “she,” “himself,” “herself,” “father,” “son,” and “aunt” from the official vocabulary.
At the time parliamentary secretary for gender equity, Grace Lore, defended the changes, stating that using inclusive language removes barriers to services and protects people’s rights. However, critics argue that such measures represent government overreach and prioritize political correctness over practicality.
Recently many different offensive place names have been changed in Canada, which has had a dark history when it comes to racist connotations. The Yukon has had many places named after a 5 letter word beginning with sq*** that refers to a derogatory name for a First Nations woman, and only recently have these places been renamed.
Quebec, for their part, has had the most difficulty with the N-word, an especially offensive term for black people especially in North America. Many place names including the N word, have had to be changed in just the past few years in Quebec.
The N-word even showed up in the leadership debate during the last Quebec election period in 2022. Parti Québécois Leader Paul St-Pierre Plamondon used the slur last Thursday while referring to the book of a famous Quebec author, and then he dared now former co-spokesperson of Québec Solidaire Gabriel Nadeau-Dubois to do the same.
Nadeau-Dubois was explaining the need for academic freedom in schools and universities when TVA anchor and the evening's moderator, Pierre Bruneau, jumped in. He asked Nadeau-Dubois if the title of Pierre Vallières's 1968 book, which features the N-word, can be said in classrooms. That's when Plamondon pounced.
"N----- blancs d'Amérique, can we say the title of that book?" Plamondon said without warning, before backing Nadeau-Dubois into a corner. "It's a book pertaining to the history of Quebecers. Are you able to say the title of that book?" Plamondon asked.
This exchange played out on live television with 1.5 million Quebecers reportedly watching and Liberal Leader Dominique Anglade, the first Black woman to ever lead a provincial party in Quebec and take part in such a debate, standing right there.
Nadeau-Dubois then replied "Of course, we can say the title of the book from Pierre Vallières, N----- blancs d'Amérique, there is no problem," he said before criticizing his opponent for using the word as part of a personal crusade.
The fact that we have such discourse happening in Canada defies belief and should be condemned. And yet there was no coverage of this in English Canada at the time.
In BC, a lot of these types of offensive names have already been changed many years ago. And yet the NDP government wants to go further and even open up debate as to whether or not our own province's name is offensive. It's a debate that we can have, but until the name is changed, British Columbians, as well as people living in BC will continue to use the language that they feel is appropriate. Hopefully that means treating people with respect, something that seems lost these days.
Supplementals:

Quote of the Week

“The term ‘British Columbians’ is often used to reference people living in B.C. This term excludes Indigenous Peoples who may not identify with it. For many, they identify as members of their own sovereign nations and do not consider themselves part of one that has actively worked to assimilate their people.” - the BC NDP government’s writing guide on Indigenous topics

Word of the Week

Guide - to direct or have an influence on the course of action

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Show Data

Episode Title: Guiding our Future

Teaser: Trudeau and Singh reach a deal on pharmacare, BC’s budget introduces a flipping tax and lots of spending, and Danielle Smith wants to build up the Heritage fund. Also, the BC NDP wants us to stop using the term British Columbians.

Recorded Date: February 24, 2024

Release Date: February 25, 2024

Duration: 57:52

Edit Notes: None

Podcast Summary Notes

Duration: XX:XX