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The federal Liberals’ lack of concern about the economy is bound to catch up with them

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Canada’s Prime Minister Justin Trudeau takes part in a child care announcement in Ottawa on Dec. 15.BLAIR GABLE/Reuters

Two streams of news are playing out this week: the Liberal government’s economic agenda, and the spread of the Omicron variant of COVID-19. Both have political consequences.

Finance Minister Chrystia Freeland’s midterm report, released Tuesday, made it clear that, for this government, social priorities trump economic concerns.

Stronger-than-expected economic growth (part of it inflation-induced) has lowered the projected deficit for this year, to a still-eye-watering $145-billion. But instead of using the increased revenue to lower that figure, the Liberal government will be increasing spending, including $40-billion over seven years to compensate First Nations children and families for the failures of the child-welfare system.

This comes on top of the Liberal government’s ambitious child-care program, which will permanently increase federal spending by more than $8-billion a year when fully implemented, the equivalent of more than a third of the defence budget for one single program.

The Liberals have increased health care funding to the provinces. They made $78-billion in commitments over five years during the election campaign that will be incorporated into the next full budget. They are offering $5-billion to assist British Columbia in the wake of recent disastrous floods, with more to come.

Even as this government establishes new records in spending and debt, a serious challenge from south of the border threatens the Canadian economy. Alexander Panetta, the CBC’s Washington correspondent, tweeted on Wednesday that he was pressing senators about a proposed provision in the Build Back Better bill that would impose a stiff tariff equivalent on electric vehicles built in Canada for sale in the United States.

When Mr. Panetta asked Sherrod Brown, Democratic senator from Ohio, about a letter Ms. Freeland and International Trade Minister Mary Ng had sent urging senators to drop the restriction, Mr. Brown replied: “I don’t care what Canada thinks.”

If the Senate passes the bill with the EV import restriction in place, the Canadian economy could take a significant hit. And it won’t help that the federal government is threatening to impose retaliatory tariffs in return. Canada cannot win a trade war with the United States, and that trade war will itself damage the economy.

With inflation running at almost 5 per cent, the government this week renewed the Bank of Canada’s mandate to keep it at around 2 per cent. If the inflation rate doesn’t come down soon, governor Tiff Macklem will have no choice but to raise interest rates, which will slow economic growth and cause pain for anyone with a mortgage or other forms of debt.

All this comes amid growing concern within the public service over the Liberals’ lack of interest in generating economic growth, as my colleagues Robert Fife and Steven Chase reported this week.

That lack of concern should come as no surprise. Like his father Pierre, who showed little interest in economic issues, preferring to focus instead on constitutional concerns, the Prime Minister places a low priority on fiscal or monetary policy.

When asked in 2014 whether he would be willing to run deficits as prime minister, he famously replied: “The commitment needs to be a commitment to grow the economy and the budget will balance itself.” On his watch, the budget has never been balanced.

Questioned about rising inflation during the election campaign in August, he said, “You’ll forgive me if I don’t think about monetary policy. You’ll understand that I think about families.”

At some point, voters are going to notice.

Polls have shown over the years that when the economy is the top concern among voters, Conservatives move ahead of the Liberals. But when other concerns push the economy down the list, the Liberals do better.

“Concern about the economy could be the sleeper issue of 2022,” says pollster Nik Nanos of Nanos Research.

“Canadians have seen a Trudeau Liberal government that has spent funds to help Canadians and Canadian enterprises get through the pandemic,” he told me by e-mail, “but there is less of a sense of how it would invest to create jobs and prosperity. Canadians today are more pessimistic about the future than at any time since we have started tracking this.”

The day the economy matters more to voters than the pandemic is a day the Liberals should worry about.

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A timeline of events in the bread price-fixing scandal

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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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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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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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