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Economists link Trudeau's immigration policies to rising inflation and weak productivity – National Post

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‘We designed our own policy, we put it in place, we implemented it and we still screwed it up’

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Canada’s current immigration policy — among the most open in the world — is now causing economic damage and needs to be reconsidered, according to the country’s top economists.

Prime Minister Justin Trudeau’s decision to dramatically increase immigration — and allow a flood of temporary workers and international students — without providing proper support has created a laundry list of economic problems, including higher inflation and weak productivity, chief economists at Canada’s biggest banks said Thursday during a wide-ranging panel discussion in Toronto.

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“Frankly I’m surprised we screwed it up because we sit in such a privileged position in Canada,” Beata Caranci, chief economist at Toronto-Dominion Bank, told a packed audience at an Economic Club of Canada event.

Unlike many other countries, including the U.S., Canada is not dealing with poorly controlled flows of migrants across its land borders and has had time to think about the implications of its policies, Caranci said. “We designed our own policy, we put it in place, we implemented it and we still screwed it up.”

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Canada accepted about 455,000 new permanent residents in the year to Oct. 1 while bringing in more than 800,000 non-permanent residents, a category that includes temporary workers, foreign students and refugees. With a population growth rate of 3.2 per cent, it’s growing faster than any Group of Seven nation, China or India.

While there are annual targets for permanent residents, there is no cap on international-student permits and the government has made it easier for employers to hire temporary foreign workers.

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“I’ll put it bluntly: We’ve fallen into the population trap,” said Stéfane Marion, chief economist at National Bank of Canada. An increase in the standard of living is no longer possible because “you don’t have enough savings to stabilize your capital to labour ratio.”

Faced with a backlash over housing costs, Trudeau has acknowledged a need for changes. His immigration minister, Marc Miller, has pledged to make it harder for colleges to boost foreign enrolment without providing adequate housing or services. Still, the government is under pressure to maintain high immigration levels as older workers retire and the fertility rate falls.

While the federal government is trying to encourage more rental housing construction along the way, “the numbers just don’t add up,” said Avery Shenfeld, chief economist at CIBC Capital Markets. “I’m a bit surprised that the government is moving fairly slowly on this. I think there’s some urgency to bring these numbers of students and temporary workers into better balance with the arithmetic of our homebuilding strategy, because the two are working at cross-purposes.”

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The problem is worsened in provinces that have restricted funding to post-secondary institutions, forcing the schools to make up the lost revenue with international students, Shenfeld said. The result is community colleges with “branch plants” full of international students in Toronto office buildings, he said. “It’s just really a tuition-making machine.”

None of the economists suggested Canada should shift to a restrictive immigration policy, rather that it be more deliberate about matching the inflow of people to what the country can handle.

Canada has tended to rely on immigration to stanch complaints from businesses about their difficulty hiring, several economists said. While that’s understandable, “in a way we made it too easy for businesses to hire,” said Jean-Francois Perrault, chief economist at Bank of Nova Scotia. He pointed to the U.S., which has much tougher immigration policies and higher productivity. “Immigration policy made it cheaper to bring people in rather than investing.”

Disastrously weak productivity and housing affordability are the biggest challenges facing the Canadian economy, said Douglas Porter, Bank of Montreal’s chief economist, and strong population growth is a factor for both.

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There are other factors at play, of course. A lack of innovation and business investment have weighed on Canadian productivity for decades, said Craig Wright, chief economist at Royal Bank of Canada. He said soaring rents aren’t just caused by immigration pressure — high house prices and interest rates are pushing permanent residents out of home ownership into rental housing.

A Desjardins Securities Inc. report this week found that if Canada were to shut the door to temporary residents right now, real gross domestic product would drop and the recession would last twice as long.

That leaves the Bank of Canada in a difficult spot and explains why it will have to cut rates in 2024, Caranci said, even though housing costs are still forcing inflation above its 2 per cent target. She expects the central bank will start to shift its communication — and remind markets that inflation is about breadth and they are not solely responsible for shelter inflation.

“If they don’t do that, you absolutely get into a recession scenario and potentially a hard recession scenario,” she said.

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Bimbo Canada closing Quebec City bakery, affecting 141 workers

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MONTREAL – Bakery company Bimbo Canada says it’s closing its bakery in Quebec City by the end of the year, affecting about 141 workers.

The company says operations will wind down gradually over the next few months as it moves production to its other bakeries.

Bimbo Canada produces and distributes brands including Dempster’s, Villaggio and Stonemill.

It’s a subsidiary of Mexico-based Grupo Bimbo.

The company says it’s focused on optimizing its manufacturing footprint.

It says it will provide severance, personal counselling and outplacement services to affected employees.

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

The Canadian Press. All rights reserved.



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NDP to join Bloc in defeating Conservatives’ non-confidence motion

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OTTAWA – The New Democrats confirmed Thursday they won’t help Pierre Poilievre’s Conservatives topple the government next week, and intend to join the Bloc Québécois in blocking the Tories’ non-confidence motion.

The planned votes from the Bloc and the New Democrats eliminate the possibility of a snap election, buying the Liberals more time to govern after a raucous start to the fall sitting of Parliament.

Poilievre issued a challenge to NDP Leader Jagmeet Singh earlier this week when he announced he will put forward a motion that simply states that the House has no confidence in the government or the prime minister.

If it were to pass, it would likely mean Canadians would be heading to the polls, but Singh said Thursday he’s not going to let Poilievre tell him what to do.

Voting against the Conservative motion doesn’t mean the NDP support the Liberals, said Singh, who pulled out of his political pact with Prime Minister Justin Trudeau a few weeks ago.

“I stand by my words, Trudeau has let you down,” Singh said in the foyer outside of the House of Commons Thursday.

“Trudeau has let you down and does not deserve another chance.”

Canadians will have to make that choice at the ballot box, Singh said, but he will make a decision about whether to help trigger that election on a vote-by-vote basis in the House.

The Conservatives mocked the NDP during Question Period for saying they had “ripped up” the deal to support the Liberals, despite plans to vote to keep them in power.

Poilievre accused Singh of pretending to pull out of the deal to sway voters in a federal byelection in Winnipeg, where the NDP was defending its long-held seat against the Conservatives.

“Once the votes were counted, he betrayed them again. He’s a fake, a phoney and fraud. How can anyone ever believe what the sellout NDP leader says in the future?” Poilievre said during Question Period Thursday afternoon.

At some point after those comments, Singh stepped out from behind his desk in the House and a two-minute shouting match ensued between the two leaders and their MPs before the Speaker intervened.

Outside the House, Poilievre said he plans to put forward another non-confidence motion at the next opportunity.

“We want a carbon-tax election as soon as possible, so that we can axe Trudeau’s tax before he quadruples it to 61 cents a litre,” he said.

Liberal House leader Karina Gould says there is much work the government still needs to do, and that Singh has realized the consequences of potentially bringing down the government. She refused to take questions about whether her government will negotiate with opposition parties to ensure their support in future confidence motions.

Bloc Québécois Leader Yves-François Blanchet hasn’t ruled out voting no-confidence in the government the next time a motion is tabled.

“I never support Liberals. Help me God, I go against the Conservatives on a vote that is only about Pierre Poilievre and his huge ambition for himself,” Blanchet said Thursday.

“I support the interests of Quebecers, if those interests are also good for Canadians.”

A Bloc bill to increase pension cheques for seniors aged 65 to 74 is now at “the very centre of the survival of this government,” he said.

The Bloc needs a recommendation from a government minister to OK the cost and get the bill through the House.

The Bloc also wants to see more protections for supply management in the food sector in Canada and Quebec.

If the Liberals can’t deliver on those two things, they will fall, Blanchet said.

“This is what we call power,” he said.

Treasury Board President Anita Anand wouldn’t say whether the government would be willing to swallow the financial implications of the Bloc’s demands.

“We are focused at Treasury Board on ensuring prudent fiscal management,” she said Thursday.

“And at this time, our immediate focus is implementing the measures in budget 2024 that were announced earlier this year.”

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



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Anita Anand sworn in as transport minister after Pablo Rodriguez resigns

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OTTAWA – Treasury Board President Anita Anand has been sworn in as federal transport minister at a ceremony at Rideau Hall, taking over a portfolio left vacant after Pablo Rodriguez resigned from cabinet and the Liberal caucus on Thursday.

Anand thanked Rodriguez for his contributions to the government and the country, saying she’s grateful for his guidance and friendship.

She sidestepped a question about the message it sends to have him leave the federal Liberal fold.

“That is a decision that he made independently, and I wish him well,” she said.

Prime Minister Justin Trudeau was not present for the swearing-in ceremony, nor were any other members of the Liberal government.

The shakeup in cabinet comes just days after the Liberals lost a key seat in a Montreal byelection to the Bloc Québécois and amid renewed calls for Prime Minister Justin Trudeau to step down and make way for a new leader.

Anand said she is not actively seeking leadership of the party, saying she is focused on her roles as minister and as MP.

“My view is that we are a team, and we are a team that has to keep delivering for our country,” she said.

The minority Liberal government is in a more challenging position in the House of Commons after the NDP ended a supply-and-confidence deal that provided parliamentary stability for more than two years.

Non-confidence votes are guaranteed to come from the Opposition Conservatives, who are eager to bring the government down.

On Thursday morning, Rodriguez made a symbolic walk over the Alexandra Bridge from Parliament Hill to Gatineau, Que., where he formally announced his plans to run for the Quebec Liberal party leadership.

He said he will now sit as an Independent member of Parliament, which will allow him to focus on his own priorities.

“I was defending the priorities of the government, and I did it in a very loyal way,” he said.

“It’s normal and it’s what I had to do. But now it’s more about my vision, the vision of the team that I’m building.”

Rodriguez said he will stay on as an MP until the Quebec Liberal leadership campaign officially launches in January.

He said that will “avoid a costly byelection a few weeks, or months, before a general election.”

The next federal election must be held by October 2025.

Conservative Leader Pierre Poilievre said he will try to topple the government sooner than that, beginning with a non-confidence motion that is set to be debated Sept. 24 and voted on Sept. 25.

Poilievre has called on the NDP and the Bloc Québécois to support him, but both Jagmeet Singh and Yves-François Blanchet have said they will not support the Conservatives.

Rodriguez said he doesn’t want a federal election right away and will vote against the non-confidence motion.

As for how he would vote on other matters before the House of Commons, “it would depend on the votes.”

Public Services and Procurement Minister Jean-Yves Duclos will become the government’s new Quebec lieutenant, a non-cabinet role Rodriguez held since 2019.

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

— With files from Nojoud Al Mallees and Dylan Robertson

The Canadian Press. All rights reserved.



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