The News Rundown

Poilievre pledges to reverse Liberals’ capital gains tax changes if elected

With it looking more and more likely that the incoming Liberal leader will end the consumer carbon tax, talk on tax policy has shifted within the Conservatives.
Pierre Poilievre on Thursday promised to reverse the capital gains tax changes if elected.
The capital gains tax rate and inclusion rate was changed last year but the Bill making the changes never actually passed Parliament.
Yet the Canada Revenue Agency is still collecting the increased tax rate since it is their policy to collect tax rates based on announcement rather than Bill passage.
For those who don’t follow tax policy regularly, a reminder on capital gains taxes.
Capital gains taxes are charged whenever someone sells something like stocks or investment properties. In the last budget the portion subject to tax or the inclusion rate was increased.
Individuals will pay the old 50% inclusion rate but corporations will pay the new 67% rate if the Conservatives pledge to reverse the changes doesn’t go through.
Most in the media are painting this as corporation vs. individual but the reality is that anyone incorporated as a business will pay the new 67% inclusion rate unless changed.
That means the small independent car mechanic, plumber, electrician, and even accountant will pay the 67% rate.
This is a tax on business that further makes Canada less competitive.
It’s also what you get when cabinet isn’t run by business owners.
In the dying days of the Trudeau administration the tax increase was proposed as a method of tax fairness since the government was trying to build favour with young Canadians.
But recent polling shows that young Canadians are fed up and among the most amenable to consider US citizenship.
Nonetheless with all this considered the media still is trying to carry water for the tax increase.
The stories discussing Poilievre’s announcement question whether it’s a “jobs tax” despite a C.D. Howe report saying that upwards of 410,000 jobs could be lost if the changes go forward.
The report was authored by the economist Jack Mintz who we’ve discussed before on the podcast and who has wonderful economic credentials.
Mintz said, “Clearly, the impact of the capital gains tax hike is substantial and another hit on Canada’s productivity and economic growth on top of other tax increases and, more important, regulatory obstacles to investment.”
The alternative perspective the media sought was that the job losses could be offset by program spending.
Program spending driven by money that sees us going into debt for economic policy that doesn’t make sense based on economic research.
Many people are saying that given what’s happening with respect to the Canada/US relationship means that we will not be having a carbon tax election.
The reality is though that no Liberal contender has said if the tax will go away completely, be replaced, or if the industrial carbon tax will also go away.
Pierre Poilievre hasn’t spoken about the industrial carbon tax either but by announcing the capital gains tax changes this week it continues to put his campaign in a position ahead of any Liberal contenders even on paper when it comes to tax policy.
The capital gains tax needs to be explained succinctly to voters since most individuals aren’t subject to it unless they have investments (this is why it’s seen as a way to tax the rich amongst progressives) or own businesses which many conservatives do.
It’s all a key plank in making Canada competitive again and putting Canada first.

One of BC Premier David Eby's signature promises of the October 2024 election, just 3 months ago, looks to already be broken, and it's all because of Trump, or at least that's what the BC NDP would have us believe.
Eby signalled Thursday that a $1,000 rebate cheque — the single most expensive promise of the fall provincial election — could be on the chopping block as part of a government spending review. The premier has for weeks been walking back the timing of the “grocery rebate” cheque that would give the average single taxpayer $500 and average family $1,000 in 2025.
The rebate was expected to transition into a tax cut in 2026, leaving a $1.3-billion annual hole in government coffers each year.
It was one of the ways that Eby promised to tackle affordability for low income families, which had many people expecting that the cheque would be delivered in time for Christmas, but the government left nothing in people's stockings or under the tree instead.
B.C. Conservative Leader John Rustad took to social media shortly after to say the premier “never really intended to give British Columbian families $1,000 of much-needed relief. That’s why he’s been slow rolling this rebate since Day 1.”
David Eby blamed the cancellation of the rebate on the incoming US presidency of Donald Trump, who has been quite clear of his intention to hit Canada with tariffs, with the BC NDP leader noting the U.S. tariff threat also puts “a different lens” on programs that made sense last year but maybe not going forward.
Mandate letters issued Thursday direct cabinet ministers to review spending, focusing on economic growth and protecting core public services “in the face of unprecedented threats from beyond Canada’s borders.”
Core priorities in the mandate letters include growing the economy to support jobs and public services such as health and education, strengthening health care, creating affordable housing, helping families with costs including child care, and making communities safer by working with law enforcement and social agencies.
At Thursday’s news conference, Finance Minister Brenda Bailey released numbers that forecast the tariffs and a retaliatory response from Canada would cumulatively cost B.C. $69 billion in lost GDP over the four-year Trump term.
The estimates also predict 124,000 fewer jobs in the province by 2028, that the unemployment rate would rise to 7.1 per cent next year, and that corporate profits in B.C. would decline $6.1 billion this year.
“My direction to her and to every minister, is to ensure that we are oriented to protect British Columbians in this new reality, ensure that we are responsive to the reality of British Columbian families now, and so we’re making sure that everything is being looked at,” said Eby.
Reality is an interesting word choice from Eby, given that it's his government that had blown well past balanced budget territory inherited from the late John Horgan, and is now blaming Donald Trump for BC's poor financial future prospects. It's giving the same energy as Justin Trudeau blaming Covid for Canada's overspending when he had done so for years before the crisis hit, leaving us with little in the way of wiggle room.
As for Eby saying that he's been working for BC families, it's hard to defend that point when the BC legislature will have been on a 9 month pause in between sittings when it finally comes back in February.
If October’s provincial election was a wake-up call for the BC NDP government, as some have suggested, then Premier David Eby has hit the snooze button until February. Heralded by many as a “man of action” early in his premiership, Eby’s signature urgency to deliver on his election campaign promises disappeared by the end of 2024.
On Nov. 6, with judicial recounts underway to finalize election results, Eby acknowledged British Columbians “want to see urgent action taken on their priorities.”
But only 16 days later, despite pledging to hit the ground running as soon as his new cabinet was sworn in, Eby’s government announced the legislature would not sit again until February, making it a nine-month stretch without a legislature in session or a chance for opposition parties to grill the government.
Even a promised legislative sitting to elect a speaker — the first order of business for a new government — was scrapped after the premier’s office confirmed Raj Chouhan will serve in the role again. The premier’s office insisted the government never promised a fall session. But notably, Eby’s office announced there would be no swift return to the legislature only after the judicial recounts confirmed a majority government for the BC NDP.
In contrast, Saskatchewan began its legislative session less than a month after its provincial election, which was held nine days after B.C.’s. Both provinces had fixed election dates, and re-elected incumbent governments with reduced majorities.
Similarly, the government of New Brunswick returned to the legislature for a fall session within a month after its provincial election, held two days after B.C.’s election. While New Brunswick also had a fixed election date, it elected a new government to office.
For more than a year in the lead-up to the provincial election campaign, Eby portrayed the surging BC Conservatives as a “threat to our functioning democracy.” Eby pleaded with Green voters for their support in order to stave off the existential threat posed by BC Conservative Leader John Rustad, and called his main rival “a threat to the things we all care about.”
But, at no point did Eby indicate that if he remained premier British Columbians would wake up to a legislative chamber vacant for a total of nine months. If democracy is so precious that it can be upended by an election result, as Eby claimed, then it should require continuous engagement — not a lengthy pause — to uphold it.
Eventually, British Columbians will have the opportunity to decide whether or not the BC NDP government delivered on its promises — or, at least, tried to deliver on its promises. Eby had the opportunity to begin building that case in early November. But, like the fall legislative session, he chose to forgo it. It's not a good look for a government that promised high, but is delivering low.
Supplementals:

https://thenarwhal.ca/bc-david-eby-government-undemocratic-decisions-opinion/

Alberta government’s diplomatic efforts to avert tariffs a high-wire act, political watchers say

Alberta’s use by federal governments as a wedge policy issue is something the province has dealt with throughout its history.
This week Premier Danielle Smith invoked the rage of the Canadian establishment once more.
Smith made a trip to Florida to meet with soon-to-be President Trump and will be attending his inauguration.
The decision made by the Canadian establishment has been to stand up against Trump and retaliate on Monday with tariffs.
Smith had hoped that she would be able to dissuade Trump from targeting oil and gas.
Meanwhile at home Danielle Smith, according to the Canadian establishment, is undermining Canada’s negotiating position.
That negotiating position is said to include tariffs and potentially an export tax or shut down of oil and gas flowing to the US.
Now it’s not out of the realm of norms for a Premier to meet with a President, in fact Quebec Premier Francois Legault did exactly the same thing.
Media reporting on the matter from the Canadian establishment was unequivocal in their denouncing of Danielle Smith.
The media though was duplicitous in this with coverage from journalists, wire services, and opinion writers.
In one of the most egregious cases the National Post first penned a headline reading, “Doug Ford — and his hat — have a message for Trump as premiers meet to hammer out tariffs plan” with the subtext, “The premiers will sit down with Prime Minister Justin Trudeau, the first face-to-face meeting since his resignation.”
This later changed to “'Country comes first': Trudeau, premiers unite against potential U.S. tariffs, while Smith withholds full support” with the subtext, “’Alberta will not be able to fully support the federal government’s plan' as long as it threatens to impose export tariffs on Alberta energy, Smith said in a statement”
The media has painted it as a forgone conclusion that tariffs and export levies are the way to go without trying to reach a negotiated settlement on trade, the border, the northwest passage, the military, or anything really.
In doing so the Canadian establishment led by Justin Trudeau is willing to use Alberta as a bargaining chip.
Danielle Smith was unequivocal and said, “federal government officials continue to publicly and privately float the idea of cutting off energy supply to the U.S. and imposing export tariffs on Alberta energy and other products to the United States. Until these threats cease, Alberta will not be able to fully support the federal government’s plan in dealing with the threatened tariffs. Alberta will simply not agree to export tariffs on our energy or other products, nor do we support a ban on exports of these same products. We will take whatever actions are needed to protect the livelihoods of Albertans from such destructive federal policies.”
Support from within Alberta has been mixed but those who are familiar with the NEP and the work of Trudeau’s father and where we stand today are more likely than not to support Smith.
Alberta is hearing that Team Canada must be the way but every Albertan will ask, has Team Canada been there for our energy?
The answer is no and the case for this was detailed rather well by former Alberta Energy Minister Sonya Savage who discussed the shutdown of Line 9, veto of Energy East, cancellation of Northern Gateway, hurdles with TransMountain, policy around the TeckFrontier mine, Bill C-69, the oil tanker moratorium, and Bill C-59 just to name a few of the things that have happened over the last 9 years that give Alberta pause.
Danielle Smith called for a true Team Canada approach that asks to stop threatening the livelihood of tens of thousands of Albertans and Canadians via an export tax, to immediately start construction on Northern Gateway and Energy East, to tell Germany and Japan and others that there is a business case for Canadian oil and gas, to repeal the production cap, electricity regulations, and C-69, and treat Albertan tax payers with respect given that equalization has transferred hundreds of billions to Quebec, Ontario, and the maritimes.
Put simply the Trudeau administration is not trusted by the government of Alberta and Albertans who work in energy have been screwed over one too many times.
Alberta NDP leader Naheed Nenshi published a response on X where he is squarely in the camp of other Canadian leaders and not onboard with Danielle Smith’s Alberta first view.
Alberta columnists like Rick Bell and Don Braid summarized the situation thoughtfully for Albertans and actually empathized with them rather than demonizing them as the rest of the media has done.
Their work is in our supplementals for this episode.
As Bell eloquently put it quoting Doug Ford, “We need to work as Team Canada. We can’t have a divided Canada. We have to make sure we all stick together and we’re all singing off the same song sheet.” - A noble goal. Shafting Alberta will not make that happen.
It was also pointed out in other publications that when Trudeau Sr. introduced the NEP (National Energy Program), Trudeau’s biggest supporter was Ontario Premier Bill Davis, a Progressive Conservative just as Doug Ford now is endorsing the Team Canada approach.
Braid also pointed out that the situation is not dissimilar to when Peter Lougheed cut oil shipments to Ontario in response to the NEP.
Braid pointed out that Lougheed was painted as a turncoat, traitor, and enemy of the people but “in truth he was a tough western leader and loyal Canadian who refused to be ruled by the Ontario-federal cabal of that day.”
There are parallels to what Smith is doing and according to Braid, she has been painted a national demon.
Pierre Poilievre when asked about export taxes said “by blocking pipelines and LNG exports in Canada the Liberals have given President Trump massive leverage in making these tariff threats. Had the government built pipelines and sold LNG, we wouldn’t have to give almost 100% of our hydrocarbons to the Americans at discount prices.”
He said that had we had the infrastructure, we could’ve just gone around the Americans and called the whole thing unpatriotic economic sadomasochism.
This is the division that Canada faces. Alberta being wedged by the Liberal team and now mainstream media this week.
Supplementals:

Firing Line

Banned Russian oil is coming to Canada

With the Russian invasion of Ukraine sparking energy instability across Europe, Canada, the US and UK were swift to ban Russian oil and gas in an effort to hobble its economy and invasion of Ukraine. Now we are finding out that Russian oil may still be imported into Canada after all, through a globetrotting "shadow fleet" that has somehow delivered oil to Canada's east coast. After learning this, we really should have just 2 questions: why is this allowed, and why do we need to import foreign oil in the first place when we're one of the biggest producers of it?
As it turns out, millions of dollars worth of Russian oil is coming into Canada thanks to a loophole in federal sanctions. The crude oil originates in Russia, but because it is refined in another country like India or Turkey and mixed with crude from other sources before being exported to Canada, it does not violate sanctions.
CBC News's visual investigations team, in collaboration with the Centre for Research on Energy and Clean Air (CREA), found that since the start of the Ukraine war roughly 2.5 million barrels — or $250 million worth of refined petroleum products like gasoline, diesel and jet fuel — have ended up in Canada. Based on calculations made by CREA, those Canadian oil imports have provided the Kremlin with just over $100 million in revenue, enough to recruit thousands of soldiers in Russia.
Sanctions compliance, according to William Pellerin, international trade lawyer at McMillan LLP, is "more difficult because of a lack of clarity in the Canadian sanctions regime."
Pellerin said: "It's very clear that Russian crude is prohibited from being imported into Canada. It's also very clear that non-crude Russian oil products are prohibited from entering into Canada. What is not clear is … the use of Russian crude imports that then get processed and finished by a third country."
Some of the crude oil — according to data on port visits by vessels, satellite imagery and ship traffic data provided by Marine Traffic — is shipped to those refineries by Russia's "shadow fleet" — a group of tankers widely said to evade sanctions and international oil price cap rules, which limit the price at which Russia can sell its oil.
Last week, the U.S. Treasury Department announced a raft of new sanctions against two major Russian oil producers and 183 vessels — many in the shadow fleet — to crack down on what it called "third-country entities" facilitating the Russian oil trade. So far the Canadian government has been quiet on the matter.
Shortly after Russia invaded Ukraine in February 2022, Canada, the U.K. and the U.S. banned Russian crude and petroleum oil products in an effort to hobble Russia's economy. Later that year, the G7 enacted price cap rules to limit the price of Russia oil to $60 US per barrel.
But some countries, such as India, which is not a member, don't adhere to the G7's rules. India is home to the world's biggest refinery, Jamnagar, which can export over a million barrels of oil a day. Trade data shows that, following the start of the war, Jamnagar went from importing three per cent of its crude from Russia to over 50 per cent over parts of 2024. Canada's imports from Jamnagar increased by 35 per cent in the same period.
Satellite tracking shows the Russian oil tanker 'Legacy', a member of Russia's shadow fleet set off from Ust-Luga Crude Oil Terminal in Russia, near Saint Petersburg, carrying 60,000 barrels of crude in September. Rosneft Oil Company, a Russian company under U.S. sanctions, sold that oil to India-based Reliance Industries Limited, the owner of Jamnagar refinery. And in early October, satellite images show the ship in the waters near the port of Sikka, in western India, as it prepares, according to trade data, offload that oil for Jamnagar refinery.
Shadow fleet tankers often launder Russian oil using tactics including ship-to-ship transfers, changing nationality flags to obscure their identities, turning off tracking systems — and they are often uninsured, according to a report by the Atlantic Council. Some ships have been involved in international snafus, such as the Eagle S, accused by Finnish police last month of having deliberately damaged underwater telecommunication cables in the Baltic Sea. Finnish authorities claim the Eagle S is part of Russia's shadow fleet.
After refining in India, fuels can then be exported to Canada. For example, after leaving Jamnagar late last year, an Indian tanker, the Lilac Victoria, delivered over 50,000 barrels of refined fuel to the Everpoint Wind Tupper refinery in Nova Scotia in December. Some of those 50,000 barrels likely contain oil produced from Russian crude, but it's not clear how much.
It's wild how we have an incredible amount of oil production in Canada and yet because of the lack of federal infrastructure, we cannot ship our own oil across the country, often having to send it to the US, or having to import oil from dictatorships like Venezuela, Saudi Arabia, and now even Russia. If Canada had the ability to sell our oil from ports on either side of the country, perhaps a diversified selling strategy would help out in times where, say, a US president threatens tariffs.
We've been saying on Western Context for years that Canada needs to be in charge of its own resources and the ability to sell and distribute to whoever wants to buy it. This shortsightedness from the Trudeau Liberals will be one of the biggest black marks on his legacy.

Quote of the Week

"It's very clear that Russian crude is prohibited from being imported into Canada. It's also very clear that non-crude Russian oil products are prohibited from entering into Canada. What is not clear is … the use of Russian crude imports that then get processed and finished by a third country." - William Pellerin, international trade lawyer at McMillan LLP on Russian oil imports entering Canada despite sanctions

Word of the Week

Sadomasochism - is the derivation of pleasure from acts of respectively inflicting or receiving pain or humiliation.

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Show Data

Episode Title: Cloak and Tanker
Teaser: Pierre Poilievre promises to reverse Trudeau’s capital gains tax changes, David Eby has cancelled BC’s promised grocery rebate, and Danielle Smith is vilified in Canada for standing up for Alberta. Also, Canada is somehow importing sanctioned Russian oil.
Production Code: WC-403-2025-01-18
Recorded Date: January 18, 2025
Release Date: January 19, 2025
Duration: 1:00:47
Edit Notes: None

Podcast Summary Notes

Duration: XX:XX