Courtesy of Barrie360.com and Canadian Press

Ian MacLennanPublished: Jan 19th, 2024

By Mia Rabson in Ottawa

Federal cabinet ministers meeting in Montreal next week to prepare for the upcoming parliamentary sitting will be told that they simply cannot be too bold when it comes to solving Canada’s housing crisis or preparing for the impact of the next U.S. election.

“There’s no going too bold, there’s no action that it is too much. Absolutely, housing is in a crisis,” said Western University economics professor and housing expert Mike Moffatt, about what he plans to tell the cabinet in a presentation on Monday.

Moffatt is one of more than half a dozen experts who will provide advice to the cabinet on cost of living, the middle class and Canada-U.S. relations during a three-day retreat that kicks off Sunday. 

The meetings come one week before the House of Commons resumes sitting following the holiday break.

Ministers are also meeting amid a sluggish economy, growing global political instability and an extremely cranky Canadian electorate that has watched its spending power diminish over the last year in the face of higher interest rates, ballooning housing costs and bigger grocery bills. 

And the Opposition Conservatives are eating the Liberals’ lunch in the polls, propelled by skillful political messaging from Leader Pierre Poilievre.

Bruce Anderson, a longtime Ottawa strategist and pollster who is now the chief strategy officer at Spark Advocacy, said there is no doubt the government sees the public fatigue with the prime minister and the Liberals. 

He said by this time in the tenure of any government, that’s not abnormal. But this time, it comes after many years of high anxiety and fear, including around the COVID-19 pandemic but also because of global and domestic political and economic unease.

“It’s been a hard few years of finding things for people to feel optimistic or hopeful about,” Anderson said.

And he said this government, as others have before, is being out-politicked by its opponents.

“When you’re in government, you sometimes forget you’re in politics. You think that you’re in government,” he said. “The opposition doesn’t have that problem.”

But Anderson said he also thinks focusing this retreat on housing, kitchen table economics and Canada’s trading relationship with the United States is smart.

“There is a really important budget coming up,” Anderson said.

Moffatt and Tim Richter, CEO of the Canadian Alliance to End Homelessness, will speak to the cabinet about housing Monday, following up on a presentation they made at the last cabinet retreat in Charlottetown in August. 

At that time, the two presented a report listing 10 specific things the government could do on housing, including better co-ordination on housing policy among different levels of government, accelerating the construction of purpose-built rentals and significant investments in community and affordable housing.

Moffatt told The Canadian Press in an interview that he has seen positive moves from the government since then, but it’s just a start, and in the meantime the crisis in housing supply keeps getting worse.

Since August, the Liberals have seen major movement on their $4-billion housing accelerator fund, signing agreements with 23 different cities to flow money for housing projects in exchange for the cities cutting red tape that prevents housing builds. 

That can include changes to municipal zoning bylaws that prevent multi-unit buildings in certain neighbourhoods and policies around building housing close to transit lines.

The government also passed a bill that took the federal GST and HST off construction costs for new purpose-built rentals, something Moffatt applauded as a way to incentivize more rental construction.

But he said none of that will be delivered overnight, and as the economy slows and interest rates are high, housing starts are down and the country is still seeing record population growth. 

That means the number of houses Canada thought it was short in August has certainly already grown. 

On Tuesday, the cabinet will hear from a panel of experts on Canada-U.S. relations ahead of a presidential election most expect to be a rematch between President Joe Biden and former president Donald Trump.

Prime Minister Justin Trudeau told the Chamber of Commerce of Metropolitan Montreal last week that another Trump presidency “won’t be easy” and that Canada is preparing for that possibility.

Laura Dawson, executive director of the Future Borders Coalition, which advocates for smoother but more secure trade across the Canada-U.S. border, said election years are always important in the relationship. 

This year will be no exception, no matter who wins. 

Though Dawson said that a Biden re-election could bring some level of protectionist policy in America, a Trump win would bring a lot more.

“You cannot overstate the destructive power of another Trump presidency,” Dawson told The Canadian Press.

She said Canada needs to start a new charm offensive now, getting ahead of the things it can predict will come up as Trump campaigns and possibly moves back into the Oval Office. 

She said Canada’s consuls general around the U.S., along with Canadian mayors, premiers and cabinet ministers, should all be enlisted to head south, meet with U.S. lawmakers in their own backyards and launch an offensive campaign to counter misinformation about Canada’s trade policies.

2) Economics, Affordability, Top Agenda As Liberal Cabinet Meets In Montreal

FOOD PRICES ARE AMONG THE TOP ISSUES

Courtesy of Barrie360.com and Canadian PressPublished: Jan 22nd, 2024

Mia Rabson, The Canadian Press

One of the federal government’s top priorities for the year ahead involves attracting new international grocers to Canada to expand competition and drive down prices, Industry Minister François−Philippe Champagne said Sunday as a cabinet retreat was about to begin in Montreal.

The entire federal cabinet is in the city for a three−day retreat ahead of the return of Parliament on Jan. 29 and the next federal budget expected later this winter.

With cost−of−living issues still top of mind for Canadians, and signs in the polls that voters are growing ever crankier with the federal Liberals for being unable to provide much relief from rising prices, the ministers are trying to use the meeting to hone in on policies that may help.

Food prices are among the top issues, with food inflation in December still close to five per cent, well above overall inflation which was pegged at 3.4 per cent last month.

Champagne said stabilizing food prices will partially depend on introducing more competition, with just five companies accounting for more than 80 per cent of Canada’s grocery industry.

“If last year it was all about batteries, this year is all about competition,” he said, referring to a spate of massive new electric−vehicle battery plant announcements in 2023.

Champagne said he has been in talks with foreign grocers, who are more interested now that Canada has made some changes to its competition laws. Last year’s adjustments include, he said, more ability to limit restrictions on leases that can keep out competition near existing grocery stores.

The Liberals come into the retreat badly trailing the Conservatives in the polls. The last cabinet meeting in August was also promoted as an attempt to have an all−of−government focus on affordability and housing. There were moves in the fall, including taking the GST off new rental construction projects as well as the updates to the Competition Act.

But they did nothing to slow the Liberals slide in the polls, which Treasury Board President Anita Anand insisted the government is not focused on.

“The premise of your question suggests that we’re here to respond to the numbers in the polling, and that is not the case,” said Anand.

“What we are here to do is to fight for Canadians every single day in terms of what is needed in times of high inflation and high-interest rates. That’s why we’re here with the Canada Child Benefit. That’s why we’re here with $10−a−day childcare. That’s why we’re here with affordable housing.”

Officials in the office of Prime Minister Justin Trudeau indicated last week that cabinet members would be discussing how various programs, such as those Anand listed, are currently working to help Canadians.

Ministers will be hearing from multiple panels of experts on the economy and housing on Monday, and on U.S.−Canada relations on Tuesday. The latter comes as Canada’s largest trading partner moves into a presidential election year that could see Donald Trump return to the White House.

The cabinet retreat comes as economists warn of the potential for at least a mild recession in Canada in 2024, turning up the pressure on the government and potentially heralding more doom−and−gloom for Canadians.

Among the experts will be Frances Donald, the chief economist at Manulife Financial, which warned in its 2024 forecast on Jan. 18 that the economy is starting the year from a position of weakness and uncertainty. Manulife’s expectation is that the worst economic news will be over by mid−year but not without causing at least some short−term pain.

Canadians are slowing their spending and growing nervous about their job security, Manulife warned, and more Canadians will be forced to renew their mortgages this year at rates often two to three times what they were before.

Dominique Lapointe, Manulife’s global macro strategist who penned the forecast, said a lot of economic realities in 2024 will depend on what the Bank of Canada does with interest rates.

The central bank’s aggressive interest rate hikes to counter inflation peaked in July at five per cent, and haven’t been touched since. Economists have predicted the bank will begin to cut that rate down in the spring, but sticky inflation numbers have some hedging that bet now.

The first chance to see what the bank will do comes Wednesday, the day after the cabinet retreat ends.

Housing is another key discussion point, along with immigration and how the two are increasingly linked.

Mike Moffatt, an economics professor and housing expert from Western University, said with Canada’s population still soaring — almost entirely due to immigration — housing supply is falling further behind.

The Canada Mortgage and Housing Corporation said last year Canada is short about 3.5 million homes, and Moffatt said that number is “probably even larger” now.

Immigration and its impact on housing will play an outsized role in discussions in Montreal. The government has already been talking about tying student visa approvals to available housing, and is under pressure to expand that to more immigration approvals as well.

Canada currently has a target of welcoming 485,000 newcomers this year.

3) Feds To Launch Canada-U.S. Engagement Strategy As Presidential Election Looms

Courtesy Barrie360.com and Canadian PressPublished: Jan 23rd, 2024

By Mia Rabson in Montreal

Prime Minister Justin Trudeau says the federal government will launch a renewed effort to promote Canada’s interests in the United States as the spectre of another Trump presidency looms.

He announced the “Team Canada engagement strategy” at the final day of a cabinet retreat in Montreal on Tuesday. 

Cabinet is meeting to prepare for the return of Parliament next week, and ministers have been discussing the upcoming presidential election and the very real prospect that Donald Trump will return to the White House.

“We made it through the challenges represented by the Trump administration seven years ago, for four years, where we put forward the fact that Canada and the U.S. do best when we do it together,” Trudeau said.

“Obviously, Mr. Trump represents a certain amount of unpredictability.”

Industry Minister François-Philippe Champagne and International Trade Minister Mary Ng will be tasked with bringing together provincial and territorial leaders and experts in labour, business and academia. The ministers will co-lead the strategy with Canada’s ambassador to the U.S., Kirsten Hillman.

Foreign Affairs Minister Mélanie Joly said Canada is preparing for any potential outcome in the 2024 race for the White House, be it the re-election of President Joe Biden or a second chance for Trump.

Champagne said the Canadian and American economies are more integrated than ever, which should act as a buffer against the threat of U.S. protectionism.

“One thing that I think former president Trump understands is jobs. And now jobs, millions of jobs, depend on what we have achieved over the last decade,” Champagne told reporters in Montreal on Monday.

“So that economic integration, I think, is going to be a key for the future.”

That includes semiconductors, biotechnology and the auto sector, he said. In 2022, Canada lobbied hard for an exemption to a provision in Biden’s Inflation Reduction Act to ensure electric vehicles made with Canadian batteries or components would still qualify for major U.S. tax credits.

At first, the credits had been much stricter about America-only content, but that carve-out helped Canada secure several major battery plants last year. 

Champagne told The Canadian Press in a December interview that battery plants like the one Volkswagen is building in Ontario would not have happened without the Inflation Reduction Act.

“It would have been far more difficult,” he said. “I think the IRA was the catalyst for reindustrialization in North America.

“If you look at the battery ecosystem, we have strength. My mission is always to strategically position Canada in key supply chains and now we have inserted Canada in the key strategic supply chain, for example of electric vehicles in North America.”

Laura Dawson, an expert on Canada-U. S. relations and the current executive director of the Future Borders Coalition, says Canada needs to be prepared no matter who wins because both Biden and Trump have protectionist tendencies.

“It’s an important time for really taking stock of that relationship, reinvesting in that relationship, because for both Canada and the United States, it is of existential importance for both economics and security,” she said in an interview.

Dawson and Hillman are both among a panel of experts who will make presentations to the cabinet Tuesday on the U.S.-Canada relationship.

They will be joined by Flavio Volpe, president of the Auto Parts Manufacturers Association, and Marc-André Blanchard, the executive vice-president of CDPQ Global investment group.

Dawson said there is work to be done on more effective and integrated supply chains for both economic and national security purposes.

The prospect of a Trump presidency, said Dawson, requires “much more direct action from Canada right now.”

“We know what Trump 1.0 was like for Canada and that was a challenge,” she said. 

“But I don’t feel like that experience makes Canada really well-prepared for Trump 2.0. Because even though we understand what that individual is like, he is much more prepared to launch a very aggressive America-first campaign … right out of the gates that’s going to, I think, significantly impact Canada in a negative way.”

Dawson said Canada needs to start a national charm offensive now, sending ministers, consuls general, premiers and industry leaders to meet with U.S. lawmakers, particularly Republicans, to put Canada’s message on the radar.