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Economists worry growing conflict with China will make Canada and the world poorer



Canadian domestic politics have helped magnify the most recent dispute between Beijing and Ottawa into a full blown tit-for-tat expulsion of diplomats.

While some experts who track relations between China and Canada play the spat down — one called it “pretty trivial” — it’s one more crack contributing to a far more dangerous long-term rupture.

Labelled “global fragmentation,” the issue was raised at a recent International Monetary Fund meeting in Washington, D.C. The current Canadian dispute may represent a further fracturing of the world into competing trade blocs that will not only make us all poorer, but impede crucial talks on shared global threats, including climate change and artificial intelligence.

Diplomacy’s economic impact

Critics of the Canadian government’s handling of threats against Conservative MP Michael Chong’s family in Hong Kong would not see the issue as trivial.

After being pressed by Tory Leader Pierre Poilievre, Foreign Affairs Minister Mélanie Joly cited China’s “interference in our internal affairs” in declaring Chinese diplomat Zhao Wei persona non grata. As expected, in reply China expelled a Canadian diplomat, Jennifer Lynn Lalonde.

While far less significant than previous disputes with Beijing that in the past led to the long-term imprisonment of innocent Canadians and may have contributed to persistent trade sanctions, the latest Canada-China spat is only one sign of hostility between the world’s free-market democracies and what appears to be an emerging alternative bloc.

Conservative Foreign Affairs critic Michael Chong rises during Question Period, in Ottawa, Monday, Nov. 14, 2022.
Conservative foreign affairs critic Michael Chong has pressed the government for action after his relatives were threatened by China, leading to tit-for-tat expulsions by Canada and China. (Adrian Wyld/The Canadian Press)
Just this week, China vowed retaliation against European sanctions on Chinese companies accused of aiding Russia’s war in Ukraine. Also this week, the U.S. government announced it had arrested Litang Liang, an American citizen accused of pointing out to China its friends and enemies within the United States.

“Even as we need more international co-operation on multiple fronts, we are facing the spectre of a new Cold War that could see the world fragment into rival economic blocs,” warned IMF boss Kristalina Georgieva earlier this year. “This would be a collective policy mistake that would leave everyone poorer and less secure.”

Bank of Canada governor Tiff Macklem raised the issue in testimony to the Senate standing committee on banking, commerce and the economy last month after discussions in Washington.

‘Cost to global growth’

“The reality is we have all benefited tremendously from an increasingly integrated global trade and investment system and if that goes in reverse, that will certainly have a cost to global growth,” Macklem told senators.

As an open trading economy, said Danielle Goldfarb, vice-president of global affairs, economics and public policy at the Toronto-based research company RIWI, a decline in global trade could hit Canada hard.

“From Canada’s perspective, as a small open economy and a democracy, we always have had an interest in this rules-based multilateral international order, basically, and that’s kind of an imperative for us,” said Goldfarb in a phone conversation this week.

Cost of Living9:00Trading with the frenemy and how Canada-China trade relations move forward

China-Canada relations are on ice, but trade between the two countries is hotter than ever. After all, what’s a little hostage-taking among friends? Paul Haavardsrud breaks down our current trading relationship and asks if it’s possible to boycott the second biggest economy in the world.

Goldfarb, who is also a fellow with the Vancouver-based Asia Pacific Foundation, said that until a few years ago, Canadian policy on China by both the current governing Liberals and the Conservatives before them assumed that welcoming the growing giant into global networks would make rules-based trade stronger.

“But we’re seeing something different now,” said Goldfarb.

As Deputy Prime Minister Chrystia Freeland outlined in a Washington speech last year, the failure of autocracies like Russia and China to follow what western countries considered free and fair trade rules means democracies must reshape their strategies.

The danger of “decoupling”

“You can’t simply disengage from the second largest economy in the world,” she said, pointing out that China is already beginning to develop policy in the important area of generative artificial intelligence that others, including Canadian AI leader Geoffrey Hinton, say demands global co-operation.

Canada and its allies know it is essential to keep the door open on “global public goods” including AI policy, climate change and avoiding nuclear conflict, said economist Dane Rowlands at Carleton University’s Patterson School of International Affairs in Ottawa. But he said relations with China have never been so bad.


Canada braces for retaliation over Chinese diplomat’s expulsion


China expelled Jennifer Lynn Lalonde, a Canadian diplomat in Shanghai, just hours after Canada named Chinese diplomat Zhao Wei persona non grata over allegations he tried to intimidate a Conservative MP’s family. Government sources say China could make further retaliatory moves involving trade or security.

“I think it is at a nadir right now; it’s at a low point,” said Rowlands. “I think the diplomatic fighting is something that’s just kind of accompanying the more general bad blood that seems to be out there between different groups of countries in the world.”

At the heart of the growing conflict is the expanding clout of China as an economic and military power that inevitably destabilizes the status quo as it challenges the dominance of the United States and its allies.

“It’s not that the United States has shrunk dramatically in terms of its share of the global economy,” said Rowlands. But the U.S. bloc is no longer able to dictate in world affairs, he added.

Feeling their growing power

“When they set a policy … they wouldn’t really have to care how much other countries bought into the idea,” he said of the U.S. But in their reaction to sanctions on Russia, he said that China and India have shown they can now frustrate U.S. and European policy. That is relatively new and a source of friction.

Goldfarb, Rowlands and many others have said that Canada’s ultimate goal must be to use any influence it has to prevent the conflict between China and the U.S. from escalating into war.

But as the IMF’s Georgieva has described, disruptions short of war could have a serious effect on the world economy.

It is a position Rowlands accepts even if there little proof of an immediate economic impact, but he thinks the IMF’s interests may be different from Canada’s.

“The IMF’s view is that globalization is great,” said Rowlands. “We should just let industries go to wherever they’re going to be more efficient.”

Responding to what some see as Chinese bullying in the Chong case may be one way of pushing back on the diplomatic front.

But Rowlands said that as security concerns grow and China threatens to block essential goods such as rare earth minerals, which it has done, it becomes imperative for Canada and its allies to become more self-sufficient, even if that makes us a little poorer in the short run.

“I think it’s a fair argument to make that by importing goods from overseas and letting them do all the production, that we are losing certain advantages economically, as well as as I mentioned, strategically in terms of security.”



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How did Canada’s economy perform in Q1? StatCan to update – Global News



The national economy continued to grow overall in the first quarter of 2023 as consumers spent more in the face of recession fears, according to Statistics Canada.

Canada’s economy grew at an annualized rate of 3.1 per cent in the first quarter, beating Statistics Canada’s early estimates of 2.5 per cent. The Bank of Canada’s latest forecasts had called for 2.3 per cent growth in Q1.


Household spending was up in the quarter following two periods of minimal growth, the agency said Wednesday, but housing investment slowed in the first quarter amid higher borrowing costs.

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StatCan said Canadians particularly spent more on new vehicles in Q1. In a note to clients Wednesday, CIBC senior economist Andrew Grantham ascribed that increase to relief in supply chain kinks meaning previous car orders could finally be delivered.

Canadians also returned to dining and vacations in the quarter, Statistics Canada said, with spending picking up for food, alcoholic and non-alcoholic beverages and travel expenditures.

StatCan had also expected the economy contracted by a modest 0.1 per cent in March, but Wednesday’s release shows economic growth was flat for the month.

Flash estimates for April show growth of 0.2 per cent. Grantham said that was a surprise as the public sector strike in that month was expected to be a drag on growth.

Weakness persisted in Canada’s housing market in the first quarter of the year. New construction was down in every province and territory except the Yukon, StatCan said, while renovations and figures tied to resale activity were also down nationally.

The first quarter GDP figures mark a rebound from what StatCan called essentially flat growth in the final quarter of 2022.

The GDP report comes ahead of the Bank of Canada’s next interest rate decision June 7.

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Why interest rates are squeezing real estate investors

The central bank, which is focused on returning inflation to its two per cent target, paused its aggressive rate hiking cycle earlier this year.

However, governor Tiff Macklem has signalled that the Bank of Canada is still evaluating whether interest rates need to go higher to tame inflation which ticked higher in April.

Grantham said that while the stronger-than-expected GDP figures raise the odds of an interest rate hike next week, he expects the central bank will continue to wait for more data and revise its inflation and GDP forecasts in July before moving again.

— with files from the Canadian Press

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'Difficult day' expected as Halifax-area fire continues to burn out of control –



If the power or data on your device is low, get your wildfire updates on CBC Lite. It’s our low-bandwidth, text-only website.

Officials are expecting yet another challenging day, as crews from across Nova Scotia battle a wildfire burning out of control outside Halifax that has already damaged 200 homes and businesses.

David Steeves of the Nova Scotia Department of Natural Resources said the fire in the suburbs of Hammonds Plains, Upper Tantallon and Pockwock has grown by roughly 49 hectares to 837 hectares.


Steeves, a technician of forest resources, said the growth is not surprising given the dry and hot weather conditions on Tuesday.

He said Wednesday’s forecast is also not favourable, with dry southwesterly winds expected to gust up to 20 km/h.

The humidity is also expected to be low, at around 20 per cent. He explained that when the relative humidity levels get close to the forecasted temperature, it’s known as “crossover,” which is an indicator of “extreme fire behaviour.”

Steeves said that could create dangerous conditions for crews on the ground.

“Today could possibly be a very difficult day,” he said during a press conference at the incident command centre in Tantallon on Wednesday morning. “Our situational awareness is going to be extremely high.”

A helicopter is seen taking off from a soccer field.
A number of helicopters were dropping water on the blaze. This one is shown landing at a staging area in Tantallon, N.S., to refuel on Wednesday. (Haley Ryan/CBC)

The evacuation zone remains the same, and there is no update on when residents may be able to return. Steeves emphasized that the order “is not what we want to do, it’s what we have to do.”

“This is to keep people alive,” said Steeves.

“This is a very dangerous situation. It’s changing every moment with wind, with fuels, with the lay of the land, how the sun is heating the fuels. Everything is constantly evolving, so we have to take the safest route for the citizens we are here to serve.”

Halifax Fire Deputy Chief David Meldrum said additional resources will be on the scene today, including crews from a number of other communities in the province and from Prince Edward Island.

Meldrum said there are eight fire engines, 14 tankers, two Defence Department trucks and about 100 firefighters working on hot spots and flare-ups.

Late Tuesday afternoon, a new fire was reported on Hammonds Plains Road near the Farmers Dairy building.

While it’s close to the perimeter of the original wildfire in the area, it’s considered a new fire.

The area around Hammonds Plains Road from Farmers Dairy Lane to Giles Drive was shut down and an evacuation order was issued, but it was later rescinded.

Meldrum said he patrolled the area Wednesday morning and it was looking “very good.”

The cause of that fire is not yet known.

Stay out of the woods

During a briefing with reporters on Tuesday afternoon, Premier Tim Houston said there is now a provincewide ban on all travel and activity within Nova Scotia’s forests, including hiking, fishing, camping and off-road vehicle use.

Natural Resources Minister Tory Rushton pleaded with Nova Scotians to abide by the order, noting there were seven reports of illegal burns on Tuesday after the burn ban was implemented.

“We don’t take this lightly … but we cannot afford to have any more fires,” Rushton told the CBC’s Information Morning.

Officials said on Tuesday that about 151 homes have been destroyed in the suburban communities about 25 kilometres from Halifax that are home to many who work in the city.

A map shows the fire evacuation area and the local state of emergency area in the Halifax Regional Municipality.
A map shows the fire evacuation area and the local state of emergency area, as of 10:25 p.m. AT on Tuesday. (Halifax Regional Municipality)

Terri and Lutz Kottwitz not only lost their home, but also their business.

The couple run ForestKids Early Learning in Yankeetown, which was decimated by the fast-moving fire that started Sunday afternoon in the Westwood Hills subdivision.

“That’s my life. They’re my family,” a tearful Terri Kottwitz said of the children and families that attended the daycare.

Lutz Kottwitz added: “It’s Terri’s purpose in life. It’s everything.”

Terri Kottwitz said they plan to rebuild.

Wooded areas of municipal parks will be closed as of 8 a.m. on Wednesday. Parks such as Shubie Park, Point Pleasant Park and Admiral Cove Park will be fully closed, as they are heavily wooded. Non-wooded areas of parks, like playgrounds and sport fields will remain open for use.

Visuals of homes destroyed by wildfire in Upper Tantallon, N.S.

2 days ago

Duration 0:25

Officials say the fire, which is burning out of control as of Monday morning, is expected to grow.

The restrictions are in place until June 25, “or until conditions allow them to be lifted.”

Mayor Mike Savage said officials are considering reducing the evacuation area boundary so some people who were forced to flee their homes because of the fire might be able to go back sooner.

Savage said a decision will be made Wednesday morning, but that everything hinges on the movement of the wildfire. He said no reductions in evacuated areas would be considered if the risk of fire spreading rises.

“This is dangerous, and it is unpredictable, and fire safety is the No. 1 concern we have,” Savage told reporters Tuesday afternoon.

Anyone who wants to help people displaced by the fire can donate to United Way Halifax, which has set up a wildfire recovery appeal, he said.

Information Morning – NS6:26Strategies to guard against smoke inhalation

The Lung association gives us some strategies to guard against smoke inhalation. Michelle Donaldson is director of communications with the Lung Association of Nova Scotia and PEI.

Meldrum said Tuesday that most of the damaged or destroyed structures are single-family homes. He asked for patience from some 16,400 residents who are anxiously awaiting information about their properties.

  • Have a question or something to say? Email: or join us live in the comments now.

Meldrum said Emergency Health Services has seen an increase in respiratory distress calls due to poor air quality, some as far away as Dunbrack Street in Halifax, about 20 kilometres from Upper Tantallon.

Why is the wildfire near Halifax hard to contain?

1 day ago

Duration 1:20

Forest resources technician David Steeves explains the firefighting strategy behind the collective efforts to contain the wildfire in the Upper Tantallon area.

Nova Scotia is offering a one-time payment of $500 per eligible household for those affected by the evacuation order. Residents can apply for that payment through the Canadian Red Cross.

No injuries have been reported and no one has been reported missing.

Officials are investigating what started the initial fire in the Westwood Hills subdivision off Hammonds Plains Road, but officials with the Natural Resources department have said it was likely human activity.

Nova Scotia RCMP Cpl. Guillaume Tremblay said officers are patrolling the affected neighbours 24 hours a day to keep people who should not be there out.

Halifax Regional Police warned residents on Wednesday about a potential scam related to the evacuation orders. They said a member of the public received a call that stated the fire was in their area.

“It is unclear at this time what motivated the call. However, police are taking this very seriously given the timing of the call during a difficult crisis,” a news release said.

“We want the public to know that they will not receive individual calls from official sources asking them to evacuate their homes. Evacuation orders will come from emergency alerts through the proper government channels.”

Evacuation areas

The municipality said the evacuation zone could change, and if people need to leave, they should bring their pets, important documents and medication with them, as well as supplies for 72 hours.

People who live in the areas affected by the local state of emergency should have a bag packed and ready to go because they might need to leave on short notice.

Areas affected by evacuations so far include:

  • Westwood Hills subdivision.
  • White Hills subdivision.
  • Highland Park subdivision.
  • Haliburton Hills.
  • Pockwock Road.
  • Glen Arbour.
  • Lucasville Road to Sackville Drive.
  • Maplewood.
  • Voyageur Way.
  • St George Boulevard, including all side streets.
  • McCabe Lake area.
  • Indigo Shores.

The Halifax Regional Municipality said in a news release Monday afternoon that all residents who have been required to leave must register with 311 (toll-free at 1-800-835-6428, 1.866.236.0020 for hearing impaired only line teletypewriter users).

A middle-age woman and older man stand next to each other with a park and water in the background.
Terri, left, and Lutz Kottwitz said they plan to rebuild the ForestKids Early Learning daycare. (CBC)

School closures

The following schools are closed Wednesday:

  • Bay View High School.
  • Tantallon Junior Elementary.
  • Tantallon Senior Elementary.
  • Five Bridges Junior High.
  • St. Margaret’s Bay Elementary.
  • Kingswood Elementary.
  • Hammonds Plains Consolidated.
  • Madeline Symonds Middle School.
  • Charles P. Allen High School.
  • Harry R. Hamilton Elementary.
  • Millwood Elementary.
  • Millwood High School.
  • Sackville Heights Elementary.
  • Sackville Heights Junior High.
  • Basinview Drive Community School.
  • Bedford South School.

Residents who fled Halifax-area wildfire describe roadsides in flames, homes burning

Shelburne County forest fire still out of control, local state of emergency declared

Comfort centres

The Halifax Regional Municipality declared a local state of emergency Sunday night in order to access additional support. 

Comfort centres have been opened at: 

  • Black Point and Area Community Centre, 8579 St Margarets Bay Rd., opens at 7 a.m. on Tuesday and will remain open until further notice.
  • Beaver Bank Kinsac Community Centre, 1583 Beaver Bank Rd., opens at 7 a.m. on Tuesday and will remain open until further notice.
  • Canada Games Centre, 26 Thomas Raddall Dr., open 24 hours.
  • John W. Lindsay YMCA, 5640 Sackville St., Monday to Friday 5:45 a.m. to 10 p.m, Saturday and Sunday 7:45 a.m. to 8 p.m.
  • Community YMCA, 2269 Gottingen St., Halifax, Monday to Friday 9:30 a.m. to 10 p.m., Saturday and Sunday 8:30 a.m. to 5 p.m.

A mobile primary health clinic will be available at the Canada Games comfort centre on Wednesday from 9 a.m. to 5 p.m. The clinic will be able to provide care for non-urgent health issues, like prescription refills, minor respiratory symptoms, sore throat, headache, muscle pain and mental health and addiction support.


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Farmers pressure Doug Ford government to reverse course on housing plan



Under pressure from farmers, Premier Doug Ford’s government is considering backing off from proposals that would allow more housing to be built on Ontario’s dwindling farmland, CBC News has learned.

Leaders of a range of farming and agricultural groups met with senior government officials last week to raise their concerns about proposed changes to provincial land-use policy that Ford and his ministers have said will spur new home construction.

The contentious proposals are part of the government’s overhaul of Ontario’s land-use guidelines, floated last month by Minister of Municipal Affairs and Housing Steve Clark. At the time, Clark called his plan “housing-focused” and said it would create more homes in both urban and rural communities.

On Monday, Clark told the Ontario Federation of Agriculture in a letter obtained by CBC News that he “clearly heard the concerns” and promised “to look at alternatives” to the changes he’d proposed.


Farmers say the proposals as they currently stand have the potential to lead to hundreds of thousands of homes on prime farmland.

Turkey farmer Mark Reusser stands in front of one of his barns.
Mark Reusser is a turkey farmer in the township of Wilmot, southwest of Kitchener. (Evan Mitsui/CBC)

“That is an awful lot of urban people moving to the countryside and having to deal with the issues of farming that they’re not used to,” said Mark Reusser, a turkey farmer in Wilmot Township, less than a 10-minute drive from the western edge of Kitchener.

Reusser says farmers are concerned that putting more homes on and adjacent to farms would lead to conflict with new non-farming residents over the odour, dust and noise that comes with raising livestock or growing crops.

“Agriculture works better when it is somewhat distanced from people, especially people who are from an urban setting originally and who are not used to those things,” Reusser said in an interview on his farm.

“We’re also concerned that (building housing) is probably not the best use of farmland,” he said. “It will never be farmland again once there’s a house on it.”

Concerns homes won’t stay in farming families

The most contentious change would allow the owners of agricultural land to carve out up to three housing lots on each farm parcel, a policy known as severance.

Ford and Clark indicated their intent is to make it easier for farmers to build homes for their adult children on their land.

Steve Clark, Ontario's Minister of Municipal Affairs and Housing speaks in the Legislature on May 18, 2023.
Steve Clark, Ontario’s Minister of Municipal Affairs and Housing speaks in the Legislature on May 18, 2023. (Chris Young/The Canadian Press)

“The number one complaint that I get when I go to the farms is, ‘I want my kids to stay on the farm,’ and there are certain jurisdictions that won’t allow you to build an additional residence,” Ford told the legislature on Monday.

“It has never been our intention for severed lots to be transferred or sold to non-family/farm owners,” Clark said in his letter Monday. “Any ambiguity regarding our intentions will be clarified, eliminated and resolved.”

People in the agriculture sector say the trouble with the policy as proposed is there’s no way to ensure such homes stay in the farming family. They also say it would have the ripple effects of pushing up the market value of farmland, enticing more farmers to sell off housing lots to profit and shrinking the amount of land available for agriculture.

“I don’t think it’s a really smart plan,” said Zac Cohoon, who grows corn, soybean and wheat on his family farm near Port Perry in Durham Region.

“It doesn’t make a lot of sense to me – when we have urban centres that are well serviced, that can handle public transit, sewage disposal and water – to move [housing] into a rural area,” Cohoon said in an interview.

Cohoon says current planning policies are already “destroying some of the best farmland in Ontario and Canada for housing.”

Putting more homes in agricultural areas would put pressure on farm ecology because of new wells and septic systems, he says.

A field of hay in the foreground with a newly-planted field in the background on a sunny clear-sky day.
The reforms to Ontario’s land-use policy coming from Premier Doug Ford’s government would allow the owners of agricultural land to sever three lots from each parcel of their farmland for housing. (Evan Mitsui/CBC)

Quarter of Ontario’s farmland could be gone in 25 years

Ontario lost more than 580,000 acres of farmland in the five year period from 2016 to 2021, according to Statistics Canada. If that pace continues, 25 per cent of the province’s existing farmland will be gone in 25 years.

Cohoon says a far better solution is to put housing on marginal land near cities, closer to the services that can handle an increase in population.

“Moving into agricultural land with [housing] lots doesn’t solve the problem. All it does is spread it out,” he said.

The Ford government has set a target for 1.5 million new homes to be built in Ontario by 2032. The proposals that have drawn the ire of farmers are currently out for public feedback. On Monday, Clark said he will extend the consultation period, which was due to end next week, until early August.

The proposals prompted an uncommon show of unity from the major farming organizations in the province. The associations representing beef, chicken, dairy, egg, pork, sheep, turkey and veal producers joined with the Ontario Federation of Agriculture, the Christian Farmers Federation of Ontario and the National Farmers Union in condemning the planned changes to land-use policy.

Farmer climbs up to the cab of his sprayer on a field of soybean.
Zac Cohoon climbs up to the cab of his sprayer on a field of soybean at his farm near Port Perry, Ont. (Mike Crawley/CBC)

“We do not support policies that will increase residential lot creation in prime agricultural areas or in rural areas that are actively farmed,” said their joint statement, issued on May 19.

“Ontario boasts some of Canada’s richest and most fertile farmland and these policy changes put the sustainability of that land and the food system it provides at great risk.”

While that statement came from the organizations representing farmers, individual farmers like Cohoon and Reusser wanted to speak out too.

“Farmers, like everyone, recognize that there’s a need to find places for people to live,” said Reusser. “It shouldn’t be on farmland, it should be somewhere else. The ability of a country to feed itself is incredibly important.”

Still, Reusser says he’s encouraged by the signs that the Ford government is willing to reconsider its plan.

“I’m looking forward to working with the government … and finding a way to accommodate a place for people to live and protect the business of agriculture at the same time,” he said. “I think that’s a doable thing.”



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