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Opinion: The world has changed. Our policies – on defence, the economy, and beyond – will have to as well – The Globe and Mail

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3 years ago

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In the spring of 2019, before everything changed, the federal government presented a budget that was the picture of sunny optimism. The deficit, then a mere $20-billion, was projected to decline to less than $10-billion in four years. This was not by dint of any exercise in fiscal restraint; indeed, it would have declined much faster but for some quite heroic increases in spending, so fast were revenues flowing in. But why not? The revenues were there; they would always be there; might as well spend them. The budget, I wrote at the time, was “a tribute to the pleasures of endless economic growth.”

Well, as I say, that was in the before times. The country has spent the past two years dragging itself through an endless pandemic. The $700-billion debt it was considered prudent to be carrying then – 10 years into an expansion – is now a $1.2-trillion debt. Revenues are as strong as ever; indeed, they are now higher than they were projected to be in that 2019 budget. But spending is even higher: not at the heights it reached in the worst days of the pandemic, to be sure, but far above anything that was ever imagined before. Where it is projected to remain.

Or rather, where it was projected to remain. The pandemic may – or may not – be subsiding, but just as the Trudeau government may have imagined it could settle into another age of endless growth, low inflation, and historically low interest rates, it has been blindsided by reality once again. The short-term economic consequences of Russia’s invasion of Ukraine are bad enough: more supply squeezes, this time in minerals, energy and grains, another spike in inflation, and a heightened risk that this will become embedded in inflation expectations. (The interest rate on 10-year Canadian government bonds, at 2.2 per cent, is now at a four-year high.)

But the longer-term consequences are even worse, even assuming the present conflict does not spiral into the Third World War. A Russian debt default, possibly within days, will send lasting shock waves through world financial markets, especially if it is discovered that one or two institutions have more exposure to Russian debt than they have been letting on. Worse will follow, if sanctions are applied also to China and India, for their willingness to do business with Russia in defiance of existing sanctions. And that is just for starters.

What has yet to be fully understood is what a permanent rupture has just occurred in the world order. Unlike the pandemic, there can be no going back to the status quo ex ante. Under Vladimir Putin, Russia has become not merely a source of instability or the occasional outrage, but an existential threat; even if it can be returned to its cage in the short term, it will be the work of decades to contain it. Predictions of Mr. Putin’s imminent demise will, I’m afraid, prove illusory, and whoever succeeds him could in any case be as bad or worse. This is not a short-term crisis, but a long-term one.

One consequence of this, clearly, will be a requirement – no longer a request – that Canada improve its contribution to the collective defence of the democracies: an increase in defence spending from its current 1.4 per cent of GDP to at least 2 per cent, and probably beyond that. (In the days of Lester Pearson, the great peacemaker, it was closer to 4 per cent.) If this were a short-term or at least finite military engagement, like the Second World War, where the troops could all be sent home at the end, we could simply add this to the debt, and pay it off over many years. But as we are probably looking at a more or less permanent increase, then some difficult choices will have to be made.

It isn’t just the Trudeau government’s pet projects – and there are many of them – that this new demand for spending will have to contend with. It is also the needs of the provinces, specifically for health care. Even before all this, the long-term fiscal prospects of the provinces were looking grim: as an aging population collides with a sclerotic and overburdened health care system, more than one of the provinces is at risk of defaulting on its debts in coming decades. Even radical reform of the health care system cannot avert this. I know the provinces have been in the habit of crying wolf. But this time, they really do need the money.

But so does the defence of the nation. The current crisis has cruelly exposed, if it were not evident already, just how threadbare our military has become: the mere provision of a few hundred rocket-launchers, anti-tank weapons, firearms and grenades to Ukraine has more or less exhausted our own stockpiles. That we need to spend more is self-evident; even more urgently, we need to spend better. Military procurement has been a national disgrace for decades. Played for politics, corrupted by lobbyists, and caught between competing regional interests, projects have routinely come in years late and billions of dollars over budget. Perhaps we could afford this nonsense in the past. We cannot now.

I said everything has changed. But in truth, the golden age we have left behind was never really a golden age. Even that complacent 2019 budget projected economic growth in future years of just 1.8 per cent a year, on average, after inflation – half as fast the economy grew in the 1970s and 1980s, a third as fast as in the 1960s. The only way we will ever be able to afford all of the many new burdens we are piling onto the tax system is if we can generate faster growth – much faster. That is an issue that this government has been content to ignore until now – every bit as much as it has ignored our national security.

So as much as everyone will be looking to see whether, in the coming budget, the government grasps the scale of the new challenges facing Canada, it will also be crucial that it includes, at long last, policies to address the old.

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A timeline of events in the bread price-fixing scandal

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16 hours ago

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September 19, 2024

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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16 hours ago

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September 19, 2024

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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1 day ago

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September 18, 2024

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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