The News Rundown

Budget 2024 tries to sell youth a more affordable life with billions in spending

The 2024 federal budget was unveiled this week and it has provisions in it that would make one scratch their heads as to why they’re in a budget document, such as lowering cell phone plan activation prices, offering halal mortgages, and a regulation to prevent employers from contacting employees after hours.
The budget itself is titled as “Fairness for Every Generation” and it doesn’t take long to look at what Justin Trudeau and his Finance Minister Chrystia Freeland are up to.
In her address to the House of Commons the Finance Minister said, “we are acting today to ensure fairness for every generation. We are moving with purpose to help build more homes, faster. We are making life cost less. We are driving the kind of economic growth that will ensure every generation of Canadians can reach their full potential.”
The latter part of this statement has raised eyebrows amongst entrepreneurs, small business types, and economists.
We’ll get into why that’s the case a little bit later in this story but at this point we have to ask who exactly is this budget pandering towards?
Polling has shown that Trudeau and the Liberals have lost that core bunch of millennials who were in the 18-25 branch that carried them to victory in the past.
This budget is an attempt to win them back by focusing on what those people would have heard growing up with movements like Occupy Wall Street being the centre of mind.
The budget also shows Trudeau’s latest political wedge: the wealthy vs. everyone else.
Of course this type of dialogue used to be in vogue throughout the 2008 financial collapse and ensuing recession. The hope of Trudeau and team is that the budget changes the channel of affordability to one where those people suffering from affordability woes (who isn’t?) turn against the wealthy.
At first the conservatives will be demonized, then those who oppose the new budget measures will be demonized, and the goal will be to head into the next election with the public absolutely hating a portion of the population that this budget aims to tie to the conservative opposition.
But of course we need to ask, why now and is it enough? Well it appears as though again as we’ve been saying, the Liberals have entirely encapsulated the NDP and their core ideals.
Will the NDP see this and say no and pull the plug? Probably not.
As a result of measures focused on adjusting the capital gains tax rate we saw a substantial amount of discourse on this in the media this week.
The budget will raise the inclusion rate on returns from 50% to 67% on individuals whose gains exceed that of $250,000 and for corporations and trusts that 67% rate applies for all capital gains.
The simplest way to put these changes in perspective is a chart from economist Trevor Tombe who calculates that the budget will give Canada the third highest top marginal capital tax rates in the OECD only behind Denmark and Chile.
Previously Canada was behind the US and firmly in the middle of the pact but being top 3 has already begun sending shockwaves through the business community.
Hundreds of technology CEOs have signed an open letter asking the government to restore competitiveness. Of these include the CEO of Shopify, an online shopping platform used globally that is headquartered in Canada.
The end result is that these companies have the ability to move their business outside of Canada and can do that and some will.
That action in itself will do a huge amount of harm to the Canadian economy as rather than paying taxes to Canada they’ll simply just disappear and the government will be poorer and productivity in Canada will be hampered if we see an exodus of high tech firms and a decline in entrepreneurship.
These changes also affect small business owners disproportionately.
Those most worried are professionals such as doctors and dentists who operate as private practices and in the case of the Ontario Medical Association of Doctors, they have already sounded the alarm that these capital gains tax changes could cause doctors to leave the country, force existing physicians out of practice, or dissuade new grads from even starting a practice in Canada.
This budget is either made by people who are inept with regards to economics, have ignored their briefing materials, or as most likely, are focused on political survival and looking for any potential wedge.
The biggest issue though is the national debt. This budget has the deficit running at $39.8b with the national debt ballooning to $1.4T with debt servicing costs hitting $54.1b.
That is more than the government spent on the Ministry of Health and Ministry of Defence.
The skyrocketing debt and what that is doing to our economy was by far the part of this story that was talked about least. It’s probably the most important.
Rising in the House of Commons to respond to the budget, Conservative leader Pierre Poilievre said: “Who pays? Who pays for this latest $50b orgy of spending by this costly Prime Minister? .. YOU will pay. You, the welder or waitress who can’t pay your mortgage because he’s inflated mortgage rates. You will pay because he carbon taxed your food and now you can’t feed your kids.”
He then listed a variety of measures undertaken over the last 9 years by the Trudeau government that made life more expensive and unaffordable and repeating things 9 times, like the budgets, is the definition of insanity.
We’ve come a long way from Trudeau campaigning on modest deficits that were characterized as being small or tiny.
That will be Trudeau’s legacy and it will be a problem for the next generation to fix. A fix that needs to start sooner rather than later.
Supplementals:

It's no secret to anyone that groceries have gotten insanely expensive over the past few years, with some products doubling, some tripling, others even quadrupling or more in price. Food insecurity is now a major problem in Canada, something that in recent decades was never an issue. Food bank usage is at an all time high, and there are many social media groups dedicated to dumpster diving.
While the Trudeau government is undoubtedly aware of the problem, it's unclear as to whether or not they seriously plan to fix the reasons why inflation has been continuing to wreak havoc on Canadians. The latest inflation data indicate that, since just prior to the pandemic, food prices are about 23% higher, but it's likely that most items are higher than that by far.
A survey from last fall found that Canadians are putting their grocery bill ahead of their nutrition, with 45.5% of respondents saying the cost of their groceries outweighed the importance of their food’s nutritional value in terms of what they are purchasing.
Still, Industry Minister François-Philippe Champagne has been on the case for months, and his latest scheme is has been to try to 'lure' foreign grocers to Canada, in an interesting choice of words from the Wall Street Journal, in order to force the domestic stranglehold that just a few companies, namely the three biggest grocery companies—Loblaws, Metro and Empire currently have.
Champagne has criticized domestic grocers for failing to be transparent on the causes of food inflation, and told the antitrust watchdog he expected the agency to “confront abuses” in the domestic marketplace. At one point, Champagne and other officials spoke of a windfall tax on grocery-chain profits unless prices for grocery staples stabilized.
Last September, Champagne met with the CEOs of Canada’s biggest grocery chains to discuss their high pricing.
Champagne told reporters after their September meeting: “The large grocery stores have accepted to work with the government of Canada. This is a step in the right direction. We’ll keep on pushing them. Trust me, this is just the beginning.”
However, very little materialized from that meeting, which opposition leader Pierre Poilievre later called nothing more than a photo-op.
This has come against a backdrop where Canadians have told pollsters that we are frustrated with cost-of-living matters, and with the Trudeau Liberals at their most unpopular, even hated, ever.
Champagne has also discussed attracting foreign grocers to Canada. In late February, a top official at the industry department provided a list of a dozen foreign retailers that Champagne could target, most of which are from Europe.
The list here includes France's Les Mousquetaires, Germany's Aldi, Lidl, Edeka Group, and Rewe Group, the Netherlands' X5 Retail Group, Norway's Reitangruppen, Portugal's Jerónimo Martins, Spain's Mercadona and Distribuidora Internacional de Alimentación (also known as DIA), and Turkey's BIM Birlesik Magazalar. So far, none of the companies have confirmed any interest in opening up retail outlets in Canada.
The US's Grocery Outlet Holding, a California-based discount food retailer with about 470 stores in nine states, was the lone North American company on the list, and Layla Kasha, a senior vice president said the company had no plans to expand into Canada.
In a report last year, Canada’s Competition Bureau, which is in charge of antitrust enforcement, said the grocery sector was concentrated and dominated by Loblaw, Metro and Empire. It pointed to what transpired in Australia after Germany’s Aldi chain entered, which forced domestic operators to significantly reduce prices.
The report from the Bureau said: “Canada needs solutions to help bring grocery prices in check. More competition is a key part of the answer. The successful entry of international grocers into the Canadian industry may be the best option to bring about lower prices, greater choice, and increased levels of innovation.”
A spokeswoman for Metro told the Wall Street Journal that it welcomed further competition from abroad, noting that U.S. chains like Walmart and Costco have already been in Canada for years.
David Soberman, a marketing professor at the Rotman School of Management, tells CityNews he approves of the list, saying many of the companies named are known as market disruptors. He said: “If you’re able to get a hard discounter into the Canadian marketplace, that will put some real pressure on the traditional supermarkets to offer Canadians better prices.” In a sense, he is correct, as more competition does generally bring down prices. The issue is that there is no word on what financial incentives, if any, would be required to attract foreign players to Canada, or whether or not these companies would even be interested in entering the Canadian market.
Grocery inflation is still very real, and even though it's slower than it has been, prices are still going up, and shrinkflation is a very real threat to consumers. Anecdotally, I counted at least 4 different products on last week's grocery trip that had shrunken packaging sizes with prices remaining unchanged.
It's clear that this government failed to control inflation under their watch, and this latest ruse from Champagne seems more like a desperate hail mary rather than a logical and thought out plan. We'll see if any of the companies do decide to come to Canada, or if it just doesn't make sense.
Supplementals:

Get ready for the Rate of Last Resort, as Alberta tweaks — but keeps — its default electricity rate

For a long time here on the podcast when the subject of electricity rates have come up we have implored our listeners to switch to a fixed rate plan. This week there appears to be another suite of changes coming to electricity rates in the province.
The biggest changes are in determining how the default rate is calculated with the goal of removing volatility.
The regulated rate option will be renamed to the rate of last resort.
Being called the regulated rate, it was assumed that being regulated it would be safe when in reality it was one of the most expensive options available.
By calling it the rate of last resort the goal is to move people towards more stable rates.
The default rate or the regulated rate or the rate of last resort now sees it set monthly by the Alberta Utilities Commission based on wholesale electricity prices.
Anyone who wants to can see what the upcoming regulated rates are for the last year and for the coming month.
You can see these linked in our show notes over at westerncontext.ca
If we look at Calgary, the rate jumped from 16 cents per kilowatt hour (kWh) last May, up to a record 31.9 cents in August. With lower wholesale prices this year, the RRO has dropped to 12.8 cents per kWh for April.
If these kinds of swings are something you’re not interested in you can sign up for a flat rate that will bring some predictability.
According to Minister of Affordability and Utilities Nathan Neudorf a third of commercial users, 46% of farm customers, and 29% of residential customers are on the default rate.
If we go back to 2016, the regulated rate was just 4.2c per kWh.
For clarity in terms of what the Alberta government expects, they expect that had these changes been made the rate last year would have averaged less than 12c/kWh instead of the 22c/kWh we saw.
U of C economist Blake Shaffer said the details of the default rate methodology are still needed and the biggest impediment to widespread change is that low-income consumers might be blocked by lack of credit.
He also added that now we’re past the crisis of high power prices and the new default rate will be a fixed price.
He further elaborated on X that it is possible that as we head into 2025 the power rate prices could drop below the current 10-12c fixed rate of last resort pricing.
There is also the risk that as consumers move to or leave the rate of last resort that the power providers will become overhedged or underhedged facing a loss.
The question then comes up, will the province pass those losses onto the customer since in a de-regulated market the providers will look to protect themselves before engaging in contracts with the Alberta government.
This idea of offloading costs from the power providers to the population happened last year where before the election the provincial government suspended all extra fee payments designed to cover power company losses but we all paid after the election.
At the end of the day Albertans who have signed up will be able to end their plans if the price of the default rate drops below what the fixed-rate plans are able to offer.
What is not addressed in any of this is the delivery costs and the price of the carbon tax.
Folks on the fixed-rate will know that power varies wildly and a good portion of the bill is for administration, delivery, and the carbon tax.
While lower energy prices are nice, it is a moot point if the bulk of the bill is related to non-regulated prices.
Supplementals:

https://ucahelps.alberta.ca/regulated-rates.aspx

Firing Line

Feds halt deportation of B.C.-based climate activist

Over the past month I've been following the case of Muhammad Zain Haq, a Pakistani born climate activist living in BC on a study permit. The reason why it's such an interesting story is, up until very recently, Haq was scheduled to be deported this Sunday, which is Earth Day, in part because his activities as a climate activist with Extinction Rebellion got him in trouble with the law.
It's important to note that Haq is Pakistani, not Canadian, because almost all the media talking about this story refers to him as a 'BC climate activist', when he is not. He is BC-based, where he lives with his Canadian wife, a fellow climate activist he married in spring of 2023.
But what did Haq do that would cause him to be deported in the first place? Although he had been the lead organizer for Save Old Growth, a movement advocating for the protection of BC’s old forests and a spokesman for Extinction Rebellion at Simon Fraser University, he gained notoriety for protests against the Trans Mountain pipeline. He also pled guilty to mischief charges after being arrested 10 times since joining an Extinction Rebellion protest on the Burrard Bridge in 2019.
In 2021, he was arrested and charged in Burnaby, BC, after he breached a court-ordered injunction of the Trans Mountain’s Burnaby Terminal.
Last July he pleaded guilty to five mischief charges for participating in illegal blockades and celebrating the arrests on social media. Court heard he'd been arrested multiple times throughout the Lower Mainland and was released each time on promises not to return — but did anyway.
Haq was given a conditional sentence of 61 days, minus 14 days for time served. He was also under a 12 month probation. In 2022 he spent nine days in prison for blocking Trans Mountain in violation of a judge’s order.
Originally, Haq arrived in Canada from Pakistan in 2019 on a study permit, but when his attention turned to climate activism and non-violent civil disobedience, the Canada Border Services Agency (CBSA) began investigating his academic progress, and in 2022, determined he violated his permit by failing to make sufficient progress.
His immigration lawyer, Randall Cohn, believes that CBSA officials began investigating Haq's studies after he was arrested for violating an injunction order related to the Trans Mountain pipeline.
Cohn said that since he hadn't been convicted of any charges at that time, he couldn't be found inadmissible to Canada as a result of criminality — so officials relied on the study permit violation.
Haq was enrolled at Simon Fraser University (SFU) and had been working toward a major in history. He was on academic probation at one point, and eventually put his studies on pause, but says he's currently allowed to re-enrol in courses, and that the university has supported an extension of his study permit.
A last-ditch effort to appeal his deportation was denied by a federal judge last week. And yet, on Friday, two days before he was scheduled to go to the airport, Haq received a call from the office of Vancouver Quadra MP Joyce Murray, who represents his riding. Their message: stay close to your phone. When the call came in, it was the CBSA officer tasked with his case, telling him he wasn't getting deported.
A lot of questions remain unanswered. The ministers of immigration, Marc Miller, and public safety, Dominic Leblanc both have the authority to stay Haq’s removal from the country — one through a humanitarian exemption and the other through ministerial direction to CBSA.
A spokesperson from the Minister of Immigration, Refugees and Citizenship said their office does not comment on individual cases due to privacy legislation. A spokesperson for Murray's office said the MP was not immediately available.
So, to recap, a higher up in the federal government, likely a cabinet minister, personally made sure that this foreign-born resident was not deported due to breaking the law. The same individual, who was admitted to Canada on a study permit, instead of excelling in his studies preferred to devote his energy on protesting necessary Canadian infrastructure and breaking the law in the process.
The Liberal government subverting justice sounds very familiar, considering all that they've done to handicap the courts' ability to prosecute and sentence criminals, especially repeat offenders who are then let out to commit more crime. While Haq may not be an especially dangerous individual, the fact remains that he broke the law, while as a guest of Canada.
The fact that he was allowed to stay by the federal government also draws parallel between this climate activist and another activist who pulled similar stunts and who now occupies the high position of Trudeau's environment minister - Steven Guilbeault. Was he the one to pull the strings for Haq? We don't know for sure.
Guilbeault, who also made headlines protesting and getting arrested repeatedly for mischief, notably for scaling the CN tower in a prison-like orange jumpsuit, certainly can draw parallels between himself and the Pakistani supposed student.
In the meantime, Cohn said, the government will offer Haq temporary status, which could at least allow him to find work and return to school while his application – which was sponsored by Haq's Canadian wife, fellow climate activist Sophie Papp – makes its way through the system.
Of course, we're not likely to get many further answers on the story. A CBSA spokesperson said the agency won't comment on details of an individual case, which are protected under the Privacy Act. The CBSA spokesperson said, "being engaged in lawful protest activities would not, in and of itself, render an individual inadmissible to Canada."
Regardless, it sends a message to people here on permits that it doesn't matter if you subvert the reason why you're here in the first place, subvert Canadian interests, or even break the law, if you protest loud enough, the Canadian government has your back. Just as long as you're not protesting against them while in a truck.
Supplementals:

Quote of the Week

“Who pays? Who pays for this latest $50b orgy of spending by this costly Prime Minister? .. YOU will pay. You, the welder or waitress who can’t pay your mortgage because he’s inflated mortgage rates. You will pay because he carbon taxed your food and now you can’t feed your kids.” - Pierre Poilievre on 9 years of continued deficits.

Word of the Week

Pander - to do or provide exactly what a person or group wants, especially when it is not acceptable, reasonable

How to Find Us
Westerncontext.ca

westerncontext.ca/subscribe

westerncontext.ca/support

twitter.com/westerncontext

facebook.com/westerncontext

Show Data

Episode Title: The Last Resort

Teaser: Trudeau’s 2024 budget features billions in new spending, Champagne tries to lure foreign grocers to Canada, and Alberta keeps its default electricity rate. Also, the federal government halts the deportation of a law-breaking climate activist.

Recorded Date: April 20, 2024

Release Date: April 21, 2024

Duration: 52:31

Edit Notes: Western Password

Podcast Summary Notes

Duration: XX:XX