President Donald Trump was celebrating his recent deal (with Saudi Arabia, Russia and other oil-producing nations) to prop up oil prices — by reducing oil production — though so far his attempt at rigging the oil markets has been a spectacular failure. One of the few bits of good news from the coronavirus recession is the large drop in U.S. gasoline prices — due to falling oil prices, as demand for oil has collapsed. So why is Trump trying to reverse this trend?
The United States is now largely self-sufficient in oil production. If Trump’s deal finally does raise gasoline prices, this will, in effect, be a financial transfer from American consumers in all 50 states to the oil industry, and the few states where production is concentrated. Internationally, the democracies of Europe and Asia (our allies) are energy importers. This market-rigged oil price increase will burden their economies.
Trump claims the American oil production cuts will come about due to market forces under current conditions. But if market forces don’t cause cuts, the Trump administration is considering using COVID-19 as an excuse to shut down offshore U.S. oil production. And it’s even talking about paying oil companies to not produce oil. Worse yet, if we retain these oil production cuts when the economy recovers, we’ll again be a significant net oil importer, dependent on places like Russia and Saudi Arabia for our economy to function.
As usual with Trump, nothing about this deal is transparent or well-documented. This might seem moot (with the current oil price collapse). But since the current deal isn’t working —Trump might press even further to support oil prices. It’s worth asking — who benefits?
Republican donors benefit from this deal
The American shale oil industry (as a high-cost producer) was particularly damaged by the collapse of oil prices and its own incompetence. Other oil producers (e.g., the Mexican government) had the common sense to hedge oil prices in the market. The shale oil industry gambled on stable (or higher) oil prices. It lost, and now American consumers will pay for their greed. Is Trump’s support for this oil deal related to past or future campaign contributions?
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Several primarily Republican states (e.g., Oklahoma, Texas, etc.), heavily dependent on the oil industry, benefit if Trump succeeds. Indeed, senators from these states were so eager for a cartel deal that they threatened to force the United States to withdraw troops and protection from Saudi Arabia if it didn’t cooperate in raising oil prices. (Remember when the GOP believed in free markets and not global cartels?) Is Trump manipulating oil markets to help out states politically important to him?
Russia’s a winner, though no friend to democracy
Russians have hacked our elections, been accused of assassinations in the United Kingdom and Germany, and spreads vicious anti-American lies. Russia, as a petro state, needs to stabilize oil prices, and long term it wants to curb U.S. oil production to reduce American clout in global energy markets.
According to Andrew Weiss, formerly of the U.S. National Security Council, Trump bent over backward to engage with Russian President Vladimir Putin and “has gone out of his way to lionize Putin … in very stark contrast to the constant harping on traditional U.S. allies … as ripping off the U.S. or taking advantage of the pandemic to hurt the U.S.”
Perhaps Putin promised Trump some “favors” (e.g., inventing dirt on Democratic presidential rival Joe Biden, hacking the 2020 election or using Russian social media propaganda to boost the GOP) in exchange for our cooperation in this oil deal?
I could describe additional scenarios, but hopefully I’ve made my point — this deal seems suspicious.
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If this sounds paranoid — remember, Trump already tried to use America’s resources to bully the Ukraine into helping his 2020 reelection campaign and the GOP-controlled Senate did nothing to punish him.
Since surviving the Ukraine scandal, Trump has fired the inspector general of the intelligence community who supported the whistleblower on the Ukraine incident, and Attorney General Barr has said that the firing was appropriate because the IG overstepped his authority — by telling Congress what was going on. Barr has even claimed that Trump’s soliciting Ukrainian help (to interfere with America’s elections) wasn’t illegal. One of Trump’s loyalists is now acting director of national intelligence.
If Trump made any shady deals, it might be a while before we find out, if we ever do. Further, any Trump quid pro quo with these participants isn’t likely in writing, but more of a wink and a nod.
Trump claims he’s trying to raise oil prices to save “hundreds of thousands of energy jobs” in America — but that’s unlikely. First, oil and gas extraction only employs about 160,000 people in America. Further, there’s no evidence of promises by these companies to maintain U.S. employment levels. Despite this OPEC diplomacy, the industry expects layoffs. Also, while raising oil prices might protect jobs in the oil industry, it will likely cause job losses in all other industries that have to pay higher oil prices. The result could easily be a net job loss for America.
Seriously, if you believe Trump is trying to raise oil prices to help out American workers — there’s a bridge in Brooklyn I would like to sell you.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
