Canadian Prime Minister Justin Trudeau’s surprise political deal with the smaller left-leaning New Democrats will lead to heftier deficits and threatens to upend the Liberal government’s promise to rein in runaway inflation, economists said.
Trudeau on Tuesday announced a rare written “supply-and-confidence” agreement that will see the NDP prop up his minority government until 2025 in exchange for more social spending.
Top of the list is a dental-care program for low-income Canadians and a national prescription drug plan, both of which will likely be costly, permanent spending initiatives, economists said. Details of the two programs should emerge in the federal budget due to be presented next month.
With the Canadian economy already at capacity and price pressures mounting, incremental spending – even if merited – could complicate efforts to keep inflation expectations moored, said Rebekah Young, director of fiscal and provincial economics at Scotiabank.
“The finance minister risks further undermining Ottawa’s credibility in its commitment to tackling inflation,” she said.
Young expects the pact, which has been denounced by the main opposition Conservatives, will lead to an additional C$15 billion-C$20 billion ($12 billion-$16 billion) in government spending over the life of the three-year deal and potentially C$40 billion in total by fiscal 2026-2027.
The jump in tax revenue resulting from surging inflation will likely mask much of the new spending in the near term, she said, but the deal could add half a percentage point to structural deficits over the medium term.
Fitch Ratings stripped Canada of one of its coveted triple-A credit ratings in June 2020. S&P Global Ratings and Moody’s Investors Service still give Canadian debt their highest ratings.
The federal government’s COVID-19 pandemic support programs have already pushed Canada’s debt-to-GDP ratio to a projected peak of 48.0% in 2021/2022 from 30.9% in 2018/2019. It could decline more slowly from there due to the increased spending.
“It does look like it would open the pocket books at the federal level,” said Pedro Antunes, chief economist at the Conference Board of Canada.
Canada, like other countries globally, is grappling with red-hot inflation, which hit a three-decade high of 5.7% in February. At the same time, businesses are scrambling to hire enough workers to meet booming demand.
New federal dental and prescription drug programs would require more specialized workers, who may demand higher wages, which could then create another round of inflation, Antunes said.
“We can start getting to that vicious spiral that we don’t want to be in,” Antunes said.
The Liberals pledged C$78 billion in stimulus over three years during last year’s election campaign. The NDP’s platform had priced a national drug plan at C$38.5 billion over five years and C$11 billion for dental coverage.
Spending under the deal will likely look quite different.
With Canada’s economy firing on all cylinders, analysts say the center-left Liberals should be focused on balancing the budget rather than adding stimulus so businesses do not grow concerned about the possibility of higher taxes.
“The right path is to grow the economy to pay for new spending measures – not the other way around,” said Robert Asselin, senior vice president of policy at the Business Council of Canada.
Adding to swelling expenses is the response to Russia’s invasion of Ukraine, which may prompt Canada to boost defense spending.
“Our investments in our Canadian Armed Forces will continue to increase and we will have more to say about this at the appropriate time,” said Trudeau, speaking at a summit in Brussels to address the Ukraine crisis.
Trudeau said his deal with the NDP will not impact defense spending plans.
(Graphic: Canada’s federal debt – https://graphics.reuters.com/CANADA-POLITICS/ECONOMY/dwvkrqaalpm/chart.png)
(Reporting by Julie Gordon in Ottawa and Fergal Smith in Toronto; Editing by Paul Simao)
Ontario election: 4 ways Doug Ford has changed the province's politics – The Conversation
The dismal environmental record of the Doug Ford government in Ontario is well-documented. Despite some recent moves on “greening” the steel sector and electric vehicle manufacturing initiatives, the province is on track to see major increases in greenhouse gas emissions, particularly from the electricity sector.
The government’s emphasis on highway expansion in the Greater Toronto Area is further evidence of this trend.
The Ford government’s record on environmental issues is an extension of its wider approach to governance. It has broken from the traditional norms of Ontario politics, which have emphasized moderation and administrative competence, as reflected through the long Progressive Conservative dynasty.
Looking back on Ford’s four years in power reveals four themes about his approach to governance — and what the next four years might have in store if public opinion polls are correct and he wins again on June 2.
1. Reactive governance
The Ford government’s agenda seems driven by instinct more than ideology. It came to power with scant vision for what a provincial government should do other than cut taxes, red tape and hydro rates. It’s struggled when confronted with more complex problems that required the province to play a much more active role.
The resulting governance model has been fundamentally reactive, and grounded in relatively short-term perspectives. The government has tended to act once a situation reaches the crisis stage, rather than identifying potential problems and taking action to prevent them.
This pattern has been most evident in the government’s hesitant responses to the COVID-19 pandemic. It tended to react to waves of COVID-19 infections rather than anticipating them and taking measures to minimize their impacts, even when given clear and consistent scientific advice to do so.
Issues like the environment and climate change are destined to do poorly under such a reactive governance model. They require taking action now to avoid problems in the future.
We are constantly reminded of this by the reports of the Intergovernmental Panel on Climate Change and federal and provincial environmental commissioners. Only responding when problems have become too obvious to ignore tends to mean it’s already too late.
2. Creeping authoritarianism
The government’s run-up to the election has placed a strong emphasis on “getting it done” — it’s the Progressive Conservative party’s campaign slogan — in areas like housing and highway and transit construction, in particular.
The flip side of this emphasis has been increasingly aggressive exercises of provincial authority, particularly over local governments. One of the government’s first moves was to arbitrarily cut Toronto City Council in half. The province threatened to invoke, for the first time in the province’s history, Sec. 33 of the Charter of Rights and Freedoms, known as the notwithstanding clause, to get its way.
Ontario’s planning rules have also been rewritten, not only at the provincial level, but down to the level of site-specific development plans within individual municipalities, almost universally in favour of developers’ interests. Ministerial zoning orders — which circumvent local planning processes and public consultations, designating land use without the possibility of appeals — are no longer the exceptions they once were.
Instead, they seem the new norm for planning in Ontario. Broad powers have been given to provincial agencies, most notably the provincial transit agency Metrolinx, to build what are often poorly conceived and politically motivated transit projects.
The notwithstanding clause was ultimately invoked by the government as it pertained to its election financing legislation that seemed designed to silence potential critics.
Even local school boards were forbidden to adopt COVID-19 containment measures more stringent that those put in place at the provincial level.
3. Friends with benefits
While the Ford government has gone to great lengths to silence voices of critical constituencies, it’s been extraordinarily open to the voices that support it.
The government has demonstrated a distinct tendency to uncritically accept whatever its favoured industry lobbyists tell it to do. This has been evident in its approaches to COVID-19, housing and infrastructure, mining, aggregate extraction sites like gravel pits and quarries, energy and long-term care.
4. Spend but don’t increase taxes
A final defining feature of the Ford government has been a tendency to disregard the fiscal consequences of its decisions. The focus instead has been on short-term savings for consumers.
The cancellation of the previous Liberal government’s cap-and-trade system immediately following the 2018 election cost the provincial treasury billions in forgone revenues. Hundreds of millions more were spent cancelling renewable energy projects.
Hydro rates are being artificially lowered through an annual $7 billion in subsidies from the provincial treasury, money that could otherwise be spent on schools and hospitals. The pre-election cancellation of tolls on Highways 412 and 418 will cost at least $1 billion over the next 25 years, while the cancellation of vehicle licensing fees will cost the province an estimated $1 billion each year.
All of this is at odds with previous Progressive Conservative governments in Ontario, which were largely fiscally prudent.
It isn’t clear yet to what extent the potential political success of a governance model organized around these four themes represents a fundamental break from the traditional norms of Ontario politics. If Ford wins again, is it due to the weaknesses of the alternatives being offered to Ontario voters, or does it signal a permanent realignment in the province’s politics?
Either way, June 2 could be a watershed moment in the province’s history, defining a “new normal” for politics in Ontario.
CNN Poll: Most Americans are concerned about the US and 'burned out' on politics – CNN
(CNN)Americans across political lines are united in their generally negative feelings about the US and its politics, according to a new CNN Poll conducted by SSRS, with Democrats particularly unlikely to express political enthusiasm.
In defense of office politics – Smartbrief
“Office politics” often gets a bad rap. It’s thought of as the domain of catty gossip, shady backroom deals or sycophantic compliments reminiscent of the movies “Office Space” or “9 to 5.”
Thankfully, in real-life, office politics is often much tamer — and also unavoidable for anyone with the ambition to advance.
Why? Because, at its core, office politics is about relationships with colleagues and decision-makers. And nurturing those relationships can go a long way toward advancing your career goals.
What is office politics?
While politics is often derided as purely a popularity contest, there are actually two components — being popular and getting things done.
Let’s think about “real” politics for a moment. You can be very good at getting things done, but if you’re unpopular, you’re not going to be elected in the first place. On the other hand, if you get elected because you’re popular, but fail to accomplish anything, you’ll probably find yourself voted out in the next election.
In office politics, exactly as in “real” politics, you can often get small things done without the support of others. But the more impactful your goals, the more you need to get other people on board to make them happen.
Liked + Trusted + Respected = Influence
To have influence, colleagues need to like you, trust you and respect you.
If you’re not liked, well, that’s pretty much curtains for influencing decisions, unless you’re already the boss. It’s worth noting that to be liked, you must first be known.
If you’re liked, but not respected, you might be involved the discussion, but your view won’t carry any weight. We could call this “Charlie Brown syndrome” after the classic Peanuts character.
If you’re respected but not trusted (think of a well-qualified politician whose agenda you dislike), you may be consulted on an issue but colleagues may have misgivings about your motives.
To influence behavior and decisions in the office requires all three. Liked + Trusted + Respected = Influence.
Can office politics drive value?
Everything we do at CareerPoint is based on our philosophy that career success is driven by the value you create for your employer.
We talk about value creation by referencing eight drivers of value. You could think of these as the atomic elements of employee value. It’s a framework you could use to analyze almost anything in relation to HR or career advancement. Why? Because anything that affects your value as an employee influences both the success of your career and the success of your company.
What we know as “office politics” touches on several of these value drivers, but let’s focus on just two: Relationships and positioning.
Of all the categories of relationships that drive value for a company, none are more significant than customer relationships. If customers like, respect and trust you, they are more likely to highly value your services, keep buying them and recommend them to others. They’re also likely to be patient with you when things go awry, as things inevitably do.
The value of customer relationships can be tremendous and long-lasting. In a law firm, a single relationship can be worth tens of millions of dollars. Relationships are so important that when a partner moves from one firm to another, they often take the relationships with them. In fact, it’s hard to think of an industry where good customer relationships can’t move the dial on company success.
This means good customer relationships are a source of influence for employees. If customers highly regard you, the business won’t want to lose you and ought to value your opinion. If, on the other hand, no customer would notice or care if you left, your influence on decisions and events will be more limited.
Positioning yourself for advancement
The value driver most closely aligned with office politics is the one we’ve named Positioning. It’s all about navigating office politics to position yourself for advancement. After all, you could be the hardest working and most valuable employee in the business but fail to secure advancement if you don’t understand the politics.
The best way to think about this is to imagine a meeting of your company’s management team. Your potential promotion is being discussed. What do you want everyone to say and do?
Obviously, you want everyone to say that you are the best choice for the role. But will they?
There’s nothing you can do at this moment. It’s too late to influence any further.
In some ways, the discussion is a culmination of everything you’ve said and done since you’ve joined the company. The decision will be made largely on how the participants feel about you and the idea of you in a new, more influential role.
This is no idle abstraction. This is exactly how most advancement decisions are made. If you want to advance, the advocacy of every person around the table is what you’re solving for in the game of office politics.
5 tips for becoming an effective office politician
Here are five quick tips you can use to help build trust, respect and likeability in your workplace.
- Get involved with projects and initiatives outside of your team and department whenever possible. This will help you begin to widen your network.
- Avoid overusing email with new connections. It’s impossible to establish a relationship over email. Use the phone or arrange a quick Zoom/Teams/Webex meeting.
- Aim to impress every single new person you work with, both inside and outside the organization. First impressions count and impressing people is often easier than you think. Just be reliable, responsive and helpful. Do things faster or better than they expect.
- You don’t build influence by being a weathervane who simply goes along with everything, but you don’t build influence by opposing everything, either. The middle course is to articulate your position clearly, call the pros and cons as you see them, accept that others will see it differently and get on board with decisions you don’t agree with.
- Do favors for people when it helps them without expecting anything in return. If you are generous by nature, you will build a network of influence and appreciation, and you’ll be seen as a team player. This network will help you get things done down the line.
Remember, no matter how much you hate it, office politics is a part of office life we all have to contend with. Instead of avoiding it, put your best foot forward, take smart risks, make mistakes, and learn from them.
To find out how CareerPoint can help you and your team navigate office politics and create the win/win relationships you need to succeed, visit CareerPoint’s website today.
Originally from the west coast of Scotland, Steve McIntosh is a recovering accountant (ICAEW), HR professional (GPHR) and MBA (University of Oxford). After starting his career with global accounting firm KPMG in 1998, Steve founded offshore financial services recruitment firm CML in 2004, which he led as CEO for 16 years.
In 2020, he founded CareerPoint.com, the virtual coaching platform that helps companies and their people get ahead of the curve. With customers and coaches in more than 30 countries around the world, CareerPoint is well on its way to achieving its twofold mission to help a million young people advance in their careers and level the playing field for underrepresented groups.
McIntosh is a “zealous convert” to the value of HR as a driver of business value and the author of “The Employee Value Curve: the unifying theory of HR and career advancement helping companies and their people succeed together.“
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