Prime Minister Justin Trudeau said today he was sorry for not recusing himself from cabinet discussions about awarding WE Charity a multi-million dollar contract to administer the summer student grants program.
“I made a mistake in not recusing myself. I am sorry,” Trudeau told reporters.
He said he should never have been part of the cabinet talks, given his family’s close personal ties to the charity.
The apology comes after CBC News and Canadaland reported that his mother, Margaret, and his brother, Alexandre, were paid in excess of $300,000 by WE and its entities for speaking engagements over the last four years.
Trudeau said he knew his mother and brother were employed as public speakers but he didn’t know just how much his family members were paid by WE.
“I deeply regret that I have brought my mother into this situation. It’s unfair to her, and I should have been thoughtful enough to recuse myself from this situation,” Trudeau said.
Trudeau said the public service first recommended WE as the best pick for the contract, given its nationwide reach and its experience connecting students with volunteer opportunities.
Trudeau said he still should have known that his involvement in talks to award the contract would be problematic, given how closely associated his family is with the organization.
“When it came to this organization and this program, the involvement that I had in the past, and that my family has, should have had me remove myself from these discussions and I’m sorry that I didn’t,” Trudeau said.
He said he regrets that his failure to recuse himself from contract discussions has derailed a program that was set to help thousands of young people find work.
“I’m particularly sorry because not only has it created unnecessary controversy and issues, it also means that young people who are facing a difficult time right now, getting summer jobs, contributing to their communities, are going to have to wait a little longer before getting those opportunities to serve, and that’s frustrating,” he said.
Finance Minister Bill Morneau also apologized for not recusing himself from cabinet discussions on the WE contract.
Morneau’s daughter, Grace, works at WE in the travel department. His other daughter, Clare, has spoken at WE Day events.
“I did not recuse myself from the discussions on this topic and, given the fact my daughter works for the organization in an unrelated branch, I now realize I should have in order to avoid any perception of conflict,” Morneau said in a media statement.
My statement on the administration of the Canada Student Service Grant: <a href=”https://t.co/kPbjp8kiaU”>pic.twitter.com/kPbjp8kiaU</a>
He said the government’s intention was to flow money to WE to help students find jobs — and cabinet was just following the recommendations of public servants.
He said he’d recuse himself from any future discussions about WE.
Conservative MP Michael Barrett, the party’s ethics critic, said Trudeau’s apology was an attempt to stop this story from “spinning out of control.”
“We know that Justin Trudeau is only sorry when he gets caught and that’s what the apology was all about today,” he said.
“As the weight of this comes to bear down on him, he is sorry, but that doesn’t mean that the investigations won’t continue and they certainly should.”
Barrett said Trudeau should appear before the House of Commons finance committee to field questions from MPs, and should waive cabinet confidentiality for all documents related to the contract.
The opposition Conservatives are also calling for an emergency meeting of the Commons ethics committee to study the government’s decision to award the contract to the charity.
In a letter to the committee’s clerk, Conservative MPs Barrett, Damien Kurek and Jacques Gourde say the committee should be recalled and an order should be issued demanding that Speakers’ Spotlight — the agency that arranged for the Trudeaus to speak at WE events — produce receipts for the appearances.
The MPs say the committee also could review “the safeguards which are in place to avoid and prevent conflicts of interest in federal government procurement, contracting, granting, contribution and other expenditure policies.”
The federal ethics commissioner, Mario Dion, already has said he will review the government’s decision to award the contract to administer the $912-million program to WE. The Conservatives have said the RCMP should investigate the deal for possible criminality.
Bloc Quebecois Leader Yves-François Blanchet said he’s tired of hearing apologies from the prime minister on ethical scandals. He said Trudeau hasn’t learned anything from incidents like the SNC-Lavalin scandal or the trip to Aga Khan’s private island.
“There comes a time when we do not trust anymore and when being sorry is not something you believe in anymore,” he said.
“So perhaps there’s something else to be done and the inquiries which have been asked by the Conservatives seem to be a good idea. (Trudeau) should come forward and tell the whole truth.”
WE Charity co-founders Craig and Marc Kielburger offered their own mea culpa in a statement published in a full-page ad in today’s Globe and Mail.
The brothers said the fallout from the botched partnership with the federal government has been “extremely difficult” and they understand why questions have been asked about their financial dealings with members of the Trudeau family.
“The charity’s integrity and purpose has been called into question. It has had direct impacts on our staff, supporters, and beneficiaries. We have made mistakes that we sincerely regret,” the Kielburgers said in the statement.
“It has led us to more closely examine our own internal structures, governance and organization. In the days to come we will have more to say on these matters and about the organization’s future. For now, we wanted to set the record straight, take responsibility for our part, and refocus on the mission that started twenty-five years ago.”
The charity also has faced a backlash from some people — notably former NHL star Theo Fleury and R&B singer Jully Black — who have agreed in the past to speak at WE events for free.
The co-founders said honorariums were provided to certain individuals “who committed to speaking at multiple WE Day cities and many additional events while in the city, requiring significant time commitments.”
Health officials ramp up effort to convince public that vaccine decisions will be based on science, not politics – The Washington Post
Top Food and Drug Administration officials, in published articles and interviews, said they would approve a vaccine only after rigorous review and would consult an outside advisory committee — something that lawmakers and nongovernment scientists have been clamoring for. Agency officials insisted decisions will be based “solely on good science and data.” They got backup from Anthony S. Fauci, the nation’s leading infectious-disease expert, who told Reuters the FDA won’t be swayed by political considerations. He has said a vaccine might be ready by early next year.
But Trump, who has a history of leaning on, and sometimes abusing, government scientists, told Geraldo Rivera on Thursday, “I’m rushing it. I am. I’m pushing everybody.” He said he was focused on saving lives, not on winning the election.
As officials race to stop the pandemic, they are increasingly worried that public skepticism could spur a substantial number of people to reject a vaccine, undermining the nation’s ability to return to some semblance of normal life. To try to counter those concerns, lawmakers and health experts are demanding the FDA adhere to stringent standards and be as open as possible in considering any vaccine.
But the FDA’s efforts to convince the public the agency will make sound, data-driven decisions have been complicated by the White House’s politicization of health and science issues, from the wearing of face masks and school reopenings to its advocacy of unproven treatments such as hydroxychloroquine. The FDA has itself played a role; it was roundly criticized for initially authorizing the anti-malarial drug that was touted by Trump for covid-19. It subsequently reversed the decision.
Bioethicists said that while the FDA’s effort to strengthen public faith in a vaccine is an important first step, the administration’s top scientists and regulators need to go further.
“You can’t have too many voices checking this decision — either to go or not go — given the crucial role that vaccines are going to play, given the political stakes and given the rising distrust of vaccination,” said Arthur Caplan, director of the division of medical ethics at the NYU Grossman School of Medicine. “It’s people worrying they’re going too fast, saying, ‘I don’t trust Trump, I don’t trust this whole process.’ There’s a huge number of people that are just not going to accept whatever FDA says as adequate.”
Caplan called for an independent commission made up not only of scientists, but also of groups of people most in need of a vaccine, as well as “trusted moral leaders.”
“The administration has shown itself time and time again to push its political agenda and steamroll the science,” he said.
Steven Joffe, a bioethicist at the University of Pennsylvania, said that what is important now is what the FDA does, not what it says.
“Specifically, I think transparency about the data and about the process for decision-making are going to be critical for public and professional/scientific confidence in the vaccine,” he said.
Fears about vaccine uptake are flaring as the administration and manufacturers move at unprecedented speed to try to produce a coronavirus vaccine, with a few potential candidates already in late-stage trials. The accelerated timetable has buoyed hopes a vaccine might soon rescue the nation from crisis but also stoked fears that officials, if pressured by the White House, might cut corners to get a product out. Top health officials recognize that a vaccine will be all but useless if there is not broad public trust and support for whatever the FDA approves, according to one current and one former senior administration official.
Rep. Raja Krishnamoorthi (D-Ill.), on Thursday introduced legislation requiring the FDA to solicit advice for every potential vaccine from the agency’s Vaccines and Related Biological Products Advisory Committee, which is made up of outside experts. He stressed the need for the FDA to be as transparent as possible.
“At a time when there is already hesitancy and outright opposition to getting vaccines in the population, any effort that cuts corners or reduces information or public trust would be disastrous, because then we couldn’t achieve herd immunity and resume normal lives,” Krishnamoorthi, chairman of the House Oversight subcommittee on economic and consumer policy, said in an interview.
Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, which reviews vaccines, said in an interview that the agency plans to consult its advisory committee to promote “an open vetting of a vaccine.” He said he wasn’t sure every coronavirus vaccine in the future would need to considered by the committee, but said, “For the first ones that come along, it makes sense.”
The agency has scheduled a meeting of its advisory committee for Oct. 22, according to Paul Offit, a member of the panel and director of the Vaccine Education Center at Children’s Hospital of Philadelphia.
In an article published Friday in JAMA, FDA Commissioner Stephen Hahn, Marks and Anand Shah, FDA’s deputy commissioner for medical and scientific affairs, pledged “unequivocally” to review vaccines “according to the established legal and regulatory standards for medical products.” In an opinion article in The Washington Post on Wednesday, Hahn said, “I have repeatedly said that all FDA decisions have been, and will continue to be, based solely on good science and data.” He also said he has been repeatedly asked whether there has been any inappropriate pressure on the FDA, but he didn’t answer that question in the article. In June, in testimony to a House committee, he said he hadn’t felt political pressure to make any specific decision.
During a briefing for reporters last week, a senior administration official acknowledged the administration is trying to walk “a very fine line” on when it should promote coronavirus vaccines. “We don’t know in whom these vaccines are going to work and who they’re not,” said the official, who spoke on the condition of anonymity, according to ground rules set by the Department of Health and Human Services.
“It’s theoretically possible we could have 10 million doses in the middle of October, the end of October, it may not be till the end of December. It may be in early January,” the official said.
“So the fine line we’re walking is getting the American people very excited about the potential of vaccines and then missing on expectations, versus, you know, having a bunch of vaccines in the warehouse and not as many folks wanting to get it,” the official said.
To address that, he said the federal government’s strategy for communications and promotion of vaccines is going to be “very intense, multichannel, highly targeted,” based on data from the clinical trials.
Global politics from the view of the political-economy trilemma | VOX, CEPR Policy Portal – voxeu.org
Changing paradigm in global politics
In recent years, political landscape has been changing drastically in many countries. In the US, Donald Trump’s administration has pushed the ‘America-first’ agenda and prioritised the nation’s interest above all else since coming to power in 2017. Regardless of existing trade or other agreements, the administration has threatened to increase tariffs for trading partners or walk away from negotiations in case the conclusions are not favorable to the country. The administration’s anti-globalisation or isolationist stance has been observed in the ongoing COVID-19 pandemic as is evident from the country’s departure from the World’s Health Organization (WHO).
The UK has also prioritised its national interest and sovereignty by withdrawing from the EU. In many other countries, populist governments have arisen, both on the left and the right, touting similar slogans and advocating for de-globalisation to recover the economic and social benefits which they claim foreigners and immigrants have free ridden so far.
These new political forces are different from those of the recent past.
For example, after WWII, Europe pursued regional political and economic integration through democratic process, although it required each country to sacrifice its own national interest. Given this history, the rise of countries prioritising self-interest and advocating anti-globalisation means a paradigm shift in the postwar order and a challenge against long-lived European unification efforts.
Even in originally rather democratic countries, such rifts between political authorities and the people have led the former to suppress the latter through undemocratic or authoritarian measures. The example includes Hong Kong, Venezuela, and Turkey.
Rodrik’s political-economy trilemma
The current changes in political order can be comprehensively viewed through the lens of Dani Rodrik (2000)’s political-economy trilemma.
The word ‘trilemma’ may remind international economists of the open economy trilemma.
The open economy trilemma, which has become a central theorem in international finance ever since its introduction by Mundell (1960) and Fleming (1961), states that a country may simultaneously choose any two, but not all, of the three goals of monetary policy independence, exchange rate stability, and financial market openness to the full extent (Fig 1–a).1
Figure 1 Open economy trilemma and the political-economy trilemma
a) Open economy trilemma
b) Political-economy trilemma
Dani Rodrik applied this theory to political economy, asserting that among national sovereignty, democracy, and globalisation, only two of these policy goals or forms of governance can be simultaneously achieved to the full extent, but not all three.
For example, the member states of the EU each have democratic institutions of governance and are open to the globalised markets. However, each state cannot pursue its own national interest or assert its sovereignty (more fully than other member states do). In other words, the EU is a good example of a region marching toward global federalism (Fig. 1–b, bottom right corner of triangle).
Reclaiming its sovereignty in order to pursue its own national interest is exactly what the UK has been trying to accomplish by withdrawing from the EU. According to Rodrik’s political-economy trilemma, the UK could have gone further toward fuller sovereignty either by restricting democratic policymaking or by limiting openness to the global economy (i.e. going from the bottom right corner of the triangle in Fig. 1–b toward the side of ‘national sovereignty’). Considering that Boris Johnson’s administration is acting in strict accord with democratic process, sacrificing globalisation would be the only way the UK could withdraw from the EU. Greater pursuit of a nation’s national interest requires curtailing its access to international markets.
Other countries try to reap the benefit of globalisation while still fully embracing their own sovereign statehood. These countries align themselves with international rules and standards when making their own, but they do not necessarily follow a fully democratic process for policymaking. Their domestic standards and rules are not based on democratically determined policies, but rather on those of multinational corporations and international organisations, or on treaties and agreements concluded by administrative bodies (i.e. bureaucrats who were not necessarily democratically elected). Thomas Friedman (1999) calls this “the Golden Straitjacket” (Fig. 1–b; top of the triangle), which he describes as a state of affairs where “[a country’s] economy grows and its [democratic] politics shrinks.”
A country wearing the Golden Straitjacket can free itself by either pursuing a higher level of democracy or becoming less globalised.
It is also possible for a fully democratic nation to strengthen its national statehood and prioritise its national interest. However, such a country cannot reap the benefits of globalisation (Fig. 1–b; bottom left corner of the triangle). The Bretton Woods system, which existed from 1944 to 1971, allowed its member states to impose capital controls and barriers to international trade. From the perspective of the political-economy trilemma, this is a policy mix of full democracy and national sovereignty.
As these examples show, policy makers can simultaneously choose any two of the three policy goals of national sovereignty, democracy, and globalisation, but cannot achieve all three to the full extent.
Empirical validity of the political-economy trilemma
Now, a natural question arises: Can the theorem of the political-economy trilemma be empirically proven with actual data?
In our recent work (Aizenman and Ito 2020), we construct a set of the indexes, each of which measures the extent of attainment of the three political-economic factors: globalisation, national sovereignty, and democracy. The indexes are available for 139 countries between 1975 and 2016. Using these indexes, we test whether the weighted average of the three indexes is constant. If the indexes are to be found linearly correlated, it would mean that the three variables operate within a trilemma relationship, i.e. the trilemma is empirically valid.
The regression analysis shows that for industrialised countries, there is a linear negative association between globalisation and national sovereignty, while the democratisation index is statistically constant during the sample period. That means, for the industrial countries during 1975-2016, the political economy trilemma was mostly a dilemma between globalisation and national sovereignty. For developing countries, a weighted average of the three indexes adds up statistically to a constant with positive and significant weights, indicating they are in a trilemma relationship, as Rodrik claims.
Closely examining the development of the three indexes over the sample period reveals that for industrialised countries, while the level of democracy is stable and high, there is a combination of rising levels of globalisation and declining extent of national sovereignty from the 1980s through the 2000s, mainly reflecting the experience of European industrialised countries. Developing countries, in contrast, experienced convergence of declining sovereignty and rising globalisation and democratisation around the same period. Emerging market economies experienced rising globalisation and democratisation earlier than non-emerging market economies with all the three variables converging around the middle.
Figure 2 Development of political economy trilemma indexes – income groups
The possible impacts of the three policy goals on political and economic stability
Lastly, what kinds of impact could these three policy goals (national sovereignty, democracy, and globalisation) have on actual politics and economics? We perform regression analysis to examine how the three trilemma variables can affect political stability and economic stability.
Our results indicate that (a) more democratic industrialised countries tend to experience more political instability; and (b) developing countries tend to be able to stabilise their politics if they are more democratic. The lower the level of national sovereignty an industrialised country embraces, the more stable its political situation tends to be. Globalisation brings about both political and economic stability for both groups of countries.
Developed countries, particularly the US and the UK, are now asserting their national sovereignty, touting policies that prioritise their national interests and an anti-globalisation stance. If the regression analysis is correct, such policies could increase political instability and the probability of financial crisis. Furthermore, if a developing country takes an anti-democratic or an anti-globalisation stance, it could face more political or economic instability.
Let us see what will happen.
Editor’s note: The main research on which this column is based (Aizenman and Ito 2020) first appeared as a Discussion Paper of the Research Institute of Economy, Trade and Industry (RIETI) of Japan
Aizenman, J and H Ito (2020), “The Political-Economy Trilemma”, Open Economies Review.
Aizenman, J, M D Chinn and H Ito (2013), “The ‘Impossible Trinity’ Hypothesis in an Era of Global Imbalances: Measurement and Testing”, Review of International Economics 21(3): 447–458.
Aizenman, J, M D Chinn and H Ito (2010), “The Emerging Global Financial Architecture: Tracing and Evaluating New Patterns of the Trilemma Configuration”, Journal of International Money and Finance 29 (2010): 615–641.
Mundell, R A (1963), “Capital Mobility and Stabilization Policy under Fixed and Flexible Exchange Rates”, Canadian Journal of Economic and Political Science 29 (4): 475–85.
Fleming, J M (1962), “Domestic financial policies under fixed and floating exchange rates.” IMF Staff Papers 9(3):369–379.
Friedman TL (1999), The Lexus and the olive tree: understanding globalization, Farrar, Straus and Giroux, New York
Obstfeld, M (2015), “Trilemmas and Tradeoffs: Living with Financial Globalization”, Central Banking, Analysis, and Economic Policies Book Series. In: Claudio Raddatz & Diego Saravia & Jaume Ventura (ed.), Global Liquidity, Spillovers to Emerging Markets and Policy Responses, edition 1, volume 20, chapter 2, pages 013-078 Central Bank of Chile.
Obstfeld, M, J C Shambaugh and A M Taylor (2005), “The Trilemma in History: Tradeoffs among Exchange Rates, Monetary Policies, and Capital Mobility”, Review of Economics and Statistics 87 (August): 423–438.
Rodrik, D (2000), “How Far Will International Economic Integration Go?”, Journal of Economic Perspective 14(1 (Winter 2000)):177–186.
Shambaugh, J C (2004), “The Effects of Fixed Exchange Rates on Monetary Policy”, Quarterly Journal of Economics 119 (1): 301-52.
1 See more on the open economy trilemma in Aizenman et al. (2010, 2013), Obstfeld (2015), Obstfeld et al. (2005), and Shambaugh (2004).
Nova Scotia Premier Stephen McNeil resigns, says he is leaving politics – National Post
HALIFAX — Nova Scotia Premier Stephen McNeil unexpectedly announced his departure from politics Thursday, saying he stayed on the job longer than planned because of the onset of the COVID-19 pandemic.
After 17 years in provincial politics it is simply time for a change, the Liberal premier said, adding he is ready for a rest.
“I’m not leaving because I don’t like the job,” McNeil told astonished reporters who thought they had gathered to cover a cabinet meeting. “I love the job as a matter of fact, and I’ve had tremendous support.”
“Many people are surprised today that I work with, and I’m sure many Nova Scotians are surprised.” A change in leadership, he said, is “the right thing for the province.”
McNeil, who headed two majority governments following his 2013 and 2017 election wins, said he will stay on until the Liberals choose a new leader. He was first elected in 2003 as the member for the riding of Annapolis.
He said he initially wanted to leave in the spring, but the pandemic postponed those plans.
“I was actually going to make this decision in April and then COVID-19 hit and I re-evaluated,” McNeil said. “Then we (Nova Scotia) flattened the curve and there was an opportunity for the party to prepare for a leadership contest and a new leader.”
The premier said the past five months had been difficult for the province because of a series of tragedies, including a mass shooting that claimed the lives of 22 people in central and northern Nova Scotia in April, and the crash later that month of a Cyclone helicopter from a Halifax-based navy vessel, which killed six service members.
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