The News Rundown
- Soon to be outgoing Prime Minister Justin Trudeau surprised all of us this week with a huge spending policy announcement, just weeks before his Liberal party selects a new leader. The government launched a six-year, $3.9-billion design and development plan Wednesday that Trudeau says will eventually connect Quebec City and Toronto with a high-speed rail line.
- Trudeau said the new rail network will run all-electric trains along 1,000 kilometres of track, reaching speeds of up to 300 km/hour, with stops in Toronto, Peterborough, Ottawa, Montreal, Laval, Trois-Rivières and Quebec City. He said once built, the new high-speed rail network will take passengers from Montreal to Toronto in three hours — about half the time it takes to drive and at double the speed of Via Rail's current trains.
- Trudeau said from Montreal: "Today I'm announcing the launch of Alto, the largest infrastructure project in Canadian history. A reliable, efficient, high-speed rail network will be a game-changer for Canadians."
- Construction on the new line will not begin until the design phase is done, which could take four to five years. Funds are to be allocated at the end of that time period, so it's possible a future government could modify or cancel the project.
- Last month, Trudeau announced he would be stepping down as prime minister. The race to succeed him is in full swing, with a new Liberal leader and prime minister set to be selected by March 9. An election is expected in the spring.
- One of the biggest complaints of the announcement is that the federal government is obviously going to change leadership soon, and also that with an election coming up this year the government may likely change as well.
- Trudeau did address this, saying: ""High-speed rail in this country was always going to be a project that would take long enough to build that it would cover multiple governments … from municipal to provincial to federal. Obviously, future governments will make their determinations about how they invest. But this investment in Canadians, which starts right now, is going to be very difficult to turn back on," he added.
- Trudeau said the consortium Cadence — made up of CDPQ Infra, AtkinsRéalis, Keolis, SYSTRA, SNCF Voyageurs and Air Canada — was selected to build the line. The group was only informed in the last 24 hours that their bid was the best of the three submitted, according to sources that spoke to Radio-Canada. AtkinsRéalis is the new name of SNC Lavalin, who had to change their name after all the scandals they had. That they're involved is not surprising considering their long history of benefiting from the Trudeau government.
- As Radio-Canada first reported in October, the Liberal government had opted for a high-speed train rather than a slower high-frequency train project to transport passengers between Quebec City and Toronto.
- A government statement said "Canada's investment in the co-development phase of the project represents $3.9 billion over six years, starting in 2024-25," in addition to the $371.8 million announced in the budget.
- CBC News asked the Conservatives if they would support the project's completion should they form the next government, but they did not provide a direct answer. Conservative MP Philip Lawrence, the party's transport critic, dismissed the announcement as little more than a photo-op.
- "The prime minister will be gone in two weeks. The minister of transport will not be seeking re-election. Today's announcement is a lame duck statement from a lame duck government. Today's announcement is yet another promise with no details that will take years and $3.9 billion on planning and bureaucracy, without laying a single piece of track."
- National Post columnist John Ivison said that "At this stage of his political career, a Justin Trudeau press conference should be like living next to the highway. With little more than two weeks left in office, the prime minister’s musings should be irrelevant background noise, with no spending implications whatsoever."
- Canada is the only G7 country without some form of high-speed rail, although the idea has been studied for decades. A joint Ontario, Quebec and federal government study completed in 1995 found that the idea of running trains between Quebec City and Windsor was feasible if they were at least 300 km/h and the private sector assumed half the cost and all the risk.
- In 2008, Ontario Premier Dalton McGuinty and Quebec Premier Jean Charest agreed to conduct another study of the project. When that study suggested it could cost more than $21 billion, however, enthusiasm waned. In 2017, Ontario Premier Kathleen Wynne announced plans to build a high-speed rail network between Toronto and London by 2025, but that was axed when Doug Ford took office.
- There is much to be said for high-speed rail, if you can provide a frequent and affordable service, such as the Italians do between Turin and Naples, or the French do between Lille and Marseille. Evidence from Japan suggests high-speed rail can reduce housing costs and congestion by making it easier to live further from big cities. Electrification could reduce emissions.
- But the prime minister’s announcement should weigh the reality of rail travel in Canada. Via Rail, which received $462 million in the last budget for a new fleet, had a $381.8-million operating loss in its last fiscal year. Passenger numbers in 2023 were still lower than they were pre-pandemic.
- Yet, for Trudeau, as always, the announcement is the thing. He now has his fingerprints on the largest infrastructure project in Canadian history. Transport Minister Anita Anand was on hand to recite the first verse from the Book of Trudeau: i.e., “We can’t afford not to (spend).”
- “How could they (the next government) not invest in the potential to add $35 billion a year to the economy once this project is complete?” she asked, rhetorically.
- The real question is: Even if we had the fiscal space (which we don’t), it’s not your fiscal space, so what gives you the right to commit billions of dollars when you won’t even be in government to sign the phase one contracts? That's the real question that should be asked following this announcement.
- Supplementals:
- The details of Mark Carney’s policies are slowly starting to trickle out. This week we have some idea of how Carney sees the federal budget.
- The latest fiscal snapshot provided by the Trudeau government shows a budget deficit close to $60b. The question for any future government is going to be: how can this budget deficit be balanced?
- Mark Carney has announced that he would split the budget into an operating and capital budget.
- With this his plan is to balance the operating budget while running small capital deficits.
- His selling point is that capital projects would be investments. The same way a corporation would make such an investment.
- Capital investments fit the category of things like pipelines and transportation infrastructure.
- The issue that comes up though: who sets the definition for what a capital expenditure is? If you invest in teachers, are you creating human capital? The answer will depend on what kind of economist you ask.
- This is an obtuse issue because splitting capital and operating is a concept that sounds like it’s out of a corporate boardroom and on the whole people already don’t fully understand what makes a federal budget.
- This approach has been tried before though and it was promptly abandoned.
- In 2013 Alberta Progressive Conservative Premier Allison Redford adopted a similar approach to hide the budget deficit splitting operating expenses, capital expenses, and investments.
- This spurred an article in the National Post by Alberta based economist Trevor Tombe who said that Carney’s idea first reminded him of Allison Redford’s move.
- In commenting in the article he said, “And it wasn’t a good thought because it was a disaster when Redford tried that in the 2010s.”
- He continued, “when you ditch consolidated spending figures, and sort everything into these different buckets, that becomes a problem, because it makes it difficult to get a full financial picture.”
- Alberta’s auditor general also had issues with the Redford budgets and said “they failed to meet basic public sector accounting standards.”
- Redford’s tenure wasn’t very long as she was taken down by numerous scandals but after her departure six former Alberta finance ministers and treasury board presidents wrote an op-ed in the Calgary Herald calling for Redford’s accounting practices to be abandoned.
- Incoming Premier Jim Prentice quickly moved to return to how things were before.
- Carney says he wants to do this so the government can spend less and invest more.
- As mentioned early on it’s difficult to pin down exactly what capital spending is but Carney gives some ideas.
- “Millions” of new homes, a major expansion of conventional and clean energy systems, port, rail, and infrastructure for trade corridors, and defence equipment.
- This budget announcement drew the new nickname of “Sneaky Carney” from the Conservatives and Pierre Poilievre said, “Carney’s promise that he will balance the ‘operating budget’ while racking up limitless inflationary deficits on pork barrel spending, pet projects and Liberal waste will result in the same disastrous results as fellow Liberal Justin Trudeau.”
- Now with Carney saying he was going to run small deficits, it of course harkens back to Justin Trudeau pledging 3 tiny deficits, so tiny you could barely even see them.
- But Carney has been quiet so far about how these promises will be paid for. He’s apparently ruled out future tax hikes.
- Carney wants to focus on debt to GDP ratio, again, a similar metric to what the Trudeau government wanted to focus on.
- With countless Trudeau cabinet ministers endorsing Mark Carney, with mostly similar fiscal ideas to Chrystia Freeland and Justin Trudeau, and with budget practices of Alberta’s Alison Redford it’s clear that should Mark Carney win the Liberal leadership and pass a budget not much will change if anything at all for the better.
- The media has largely carried Carney’s comments without tough questions asked and Canadians are being asked to wait around and find out until the receipts come due.
- Supplementals:
- On Tuesday, the BC Legislature finally sat after almost 5 months, and we heard the Throne speech from new Lieutenant Governor Wendy Cocchia, which is of course meant to show the government, in this case the BC NDP's, legislative agenda for the next term of government. Instead, what British Columbians were treated to was a bunch of flowery wartime imagery with references to Winston Churchill, D-Day and the fight against Nazism amid vague promises that left everyone wondering exactly what the NDP were actually going to be doing for the province.
- The opening of the legislative session came amid ongoing threats from the U.S. administration of President Donald Trump to impose sweeping tariffs on Canadian imports, and his repeated assertions that Canada should become the 51st state.
- Cocchia read: "The historic bond between Canada and the United States has been strained in profound ways. Trust has been broken and will not easily be repaired. No matter what the future has in store, one thing has been made clear: We will not leave our future success to the whims of unpredictable forces from beyond our borders,” Cocchia said.
- Asked later about the speech's abundant war imagery, Eby told reporters that there were "moments in history" when British Columbians came together and now is one of those times, with B.C. facing an "outsized and significantly more powerful foe" in the form of the U.S. president.
- He said it made little difference to someone who lost their home whether it was bombed in a war or foreclosed upon because the owner lost their job.
- Opposition Conservative leader John Rustad told reporters after the throne speech that fentanyl, which is one of the key trade issues with the U.S., was only mentioned briefly: "There wasn't a mention of how to plan to tackle that head-on. As a province, we need to be able to address this far more succinctly than what is happening in British Columbia."
- The BC Green caucus said in a statement that the government is stuck in a reactive cycle rather than pursuing a forward-thinking strategy. Jeremy Valeriote, interim leader of the BC Greens and MLA for West Vancouver-Sea to Sky said: “It's easy to employ wartime analogies in face of a fresh, headline-grabbing crisis, but a government with a real vision for the future needs to be laser focused on delivering results to all the long-standing crises British Columbians are facing.” Regardless, the Greens' two MLAs have already committed to supporting the NDP on confidence votes.
- The speech focused on the "roller-coaster ride" the province's citizens have been "put on" by the White House for the past four weeks, and they must prepare for it to continue for the next four years. It said the government was responding with a three-part strategy: to strengthen and grow the economy, diversify trade relationships and respond to American threats. All ministers have also been instructed to speed up permit approvals to get projects built that will create jobs.
- It said the government would expand and strengthen business relationships with Asia, Europe and beyond, while upgrading infrastructure and improving supply chains to keep B.C. "competitive on the world stage and reach new markets efficiently." It also said the government would break down interprovincial trade barriers.
- Still, the throne speech was especially vague on issues like housing, healthcare, the toxic drug crisis, and many other priorities that the province needs to address. Secrecy seems to be a hallmark of the David Eby NDP, a stark contrast from the relatively honest and forthcoming John Horgan NDP.
- Just this week, we found out that on the eve of the last B.C. election, the New Democrats signed an agreement affecting Aboriginal title and Indigenous management of land and resources on the Sunshine Coast.
- However, Premier David Eby chose not to make the 44-page text — or even the fact of its existence — public until after the election was over.
- The agreement was only released Jan. 29 of this year, and only this week did the media publicize the agreement, 6 months after the signing on Aug. 16 and 4 months after the NDP’s narrow one-seat, 22-vote election victory.
- The news release announced that the Shíshálh (Sechelt) Nation and the B.C. government had amended their landmark reconciliation agreement reached back in 2018. The accompanying fact sheet said the revised agreement “allows for transformative change to take place in a structured way that is transparent.” “Transparent” is an odd way to describe an agreement that was signed in secret a month before the election campaign and sat on until months after the votes were counted.
- Signing for the shíshálh were Chief Lenora Joe and two councillors. Signing for the province were then cabinet ministers Murray Rankin (Indigenous relations and reconciliation) and Nathan Cullen (water, land and resource stewardship). Cullen was involved in an earlier example of the NDP’s secretive approach to dealing with Indigenous nations on public land and resources.
- This time last year, he presided over a government plan to amend the Land Act to expedite joint management of public land and resources with the province’s 200 recognized Indigenous nations. It was billed as an exercise in “public engagement,” though Cullen failed to advise the public that he was engaging it.
- The plan was to change the legislation before the election. The backlash was such that Cullen had to abandon it, all the while indicating that the New Democrats would resume the path once the election was over.
- Cullen’s involvement in this second exercise in secrecy has already drawn attention on the Sunshine Coast, as reflected in a letter to the premier from the Pender Harbour and Area Residents Association, which alleged that the government made the agreement with no consultation or advisement of local residents, and "what is even a greater concern is that this agreement was signed by your ministers two months before the last provincial election but not disclosed publicly until months after."
- It also asked whether Randene Neill, the NDP’s winning candidate in Powell River-Sunshine Coast, “was aware of the agreement before she was elected.” Neill won handily with almost 50 per cent of the vote. She was later appointed the successor to Cullen (who lost his seat) as minister of water, land and resource stewardship.
- During the election campaign, Premier Eby promised not to reintroduce the amendments to the Land Act. He said the NDP first needed “to make sure that we have the confidence of British Columbians in this critically important work.” Judging from this latest exercise in secrecy, he and his ministers still have a long way to go to establish any credibility on that score.
- Supplementals:
Firing Line
- It is very clear at this point that within weeks Canada will have a new Prime Minister. And with that there will be changes to the cabinet. There are cabinet ministers who are not running again and one of those is Heritage Minister Pascale St-Onge.
- This week St-Onge announced a new proposal to nearly double CBC funding as an investment in national security.
- Teeing up all of this your head is probably spinning because first of all, why is a government minister who won’t be running making an announcement of a policy that may not survive the new Liberal leader unless of course the new Liberal leader is the same as Justin Trudeau.
- Second, how does the CBC relate to national security? We’ll get into that.
- First, Pascale St-Onge lamented the fact that the online harms act died when Parliament was prorogued and as such the announcement is part of a roadmap to battle misinformation and tackle national security.
- The proposal, as she said, “should be part of a package of measures to protect Canadians from foreign interference, from threats from the Trump administration, and the, hegemony and the place that the richest men on the planet occupy in the public space of discussion, debate and information.”
- With this she focused on “tech oligarchs” in her view who comprise the CEOs of Google, Meta, Amazon, and Tesla for how they’re been influencing the US President.
- In her press conference announcing the roadmap she said this new model should “take politics out of the CBC” but went after the Conservatives for their intent to defund the CBC saying, “you cannot say that you love Canada and yet pledge to destroy our public broadcaster that is central in telling the stories of our country.”
- St-Onge was quiet when she was asked the exact amount the federal government would need to add to CBC’s budget but right now the federal government gives $1.38b to the CBC.
- This works out on average to be about $33.66 per capita, per person in Canada. St-Onge wants to increase this to closer to the G7 average of $62.20. She wants Canada to increase its CBC budget by nearly 184%.
- She was also quick to point out that the exact funding level would have to be determined by a future prime minister or finance minister.
- St-Onge also wants to take the CBC’s funding out of the budgetary process and make it increase based on a set formula.
- The government under this plan could also prevent CBC from showing ads on its news programs which accounted for $493.5m last year.
- This all culminates in a desire to have the CBC be closer to Canadians to be able to be more responsive to what Canadians want out of their public broadcaster.
- The blueprint also calls for the CBC CEO to be chosen by the board of directors rather than cabinet.
- The reality is that some of these changes are decent. But some seek to use the crisis of the moment to drive an agenda using CBC.
- The lack of industrial and corporate competitiveness in Canada is always on full display from a limited selection of grocers to a duopoly in the airlines, and our telecom sector that sees some of the highest prices in the world.
- That of course also extends to the media with a media apparatus that’s leary of change and prevents new traditional cable outlets from getting going on the way by way of the CRTC.
- There’s also the digital services tax that has seen news blocked on Instagram and Facebook in Canada which has disproportionately affected small and up and coming news startups.
- By leaning more into the CBC these issues become exacerbated and the CBC becomes more reliant on the federal government for all the wrong reasons.
- Supplementals:
Quote of the Week
“The changes at the CBC should be part of a package of measures to protect Canadians from foreign interference, from threats from the Trump administration, and the hegemony and the place that the richest men on the planet occupy in the public space of discussion, debate and information.” - Pascale St-Onge on a blueprint of changes for the CBC.
Word of the Week
Lame duck - an official in the final period of office, after the election of a successor.
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Show Data
- Episode Title: Secret Agreements
- Teaser: Trudeau announces a high speed rail network right before he resigns, Carney’s financial policies get lambasted by economists, and BC’s throne speech says very little on the future. Also, the Liberals want to double CBC funding.
- Production Code: WC-408-2025-02-22
- Recorded Date: February 22, 2025
- Release Date: February 23, 2025
- Duration: 1:04:21
- Edit Notes: None
Podcast Summary Notes
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