As Parliament resumed sitting on Monday, September 18, Canada’s summer of wildfires continues, with tens of thousands of people displaced, economic losses in the hundreds of millions of dollars and an area the size of New Brunswick and Nova Scotia consumed by the flames.
Significant developments during the summer:
- In a major cabinet shuffle on July 26, the prime minister dropped seven ministers, promoted seven backbenchers, and reassigned the majority of cabinet roles.
- Housing supply and affordability have joined the rising cost of living as the dominant issues for the fall policy agenda. Last week, the Liberals announced measures to respond to the housing and cost of living crises.
- On August 10, the federal government released the draft Clean Electricity Regulations, which are designed to help Canada achieve a net-zero electricity grid by 2035.
- New Treasury Board President Anita Anand has set an October 2 deadline for cabinet colleagues to say how they will cut spending by $15.4 billion over four years.
- In recent public opinion polls, the Conservatives have opened a 9 percentage point lead over the Liberals.
Cabinet shuffle
The prime minister’s remake of the federal cabinet traded poor performers and MPs who are not running in the next election for mostly younger MPs and promoted ministers who had done well in previous portfolios. The PM also kept electoral considerations in mind: many of the departing ministers sit in safe ridings, while many of the newcomers represent seats they won narrowly in the last election.
Among the key changes:
- Anita Anand, formerly minister of national defence, moves to president of the treasury board, replaced by Bill Blair.
- Pablo Rodriguez becomes minister of transport and will continue to serve as Québec lieutenant.
- Sean Fraser becomes minister of housing, infrastructure and communities, and is replaced at immigration, refugees and citizenship by Marc Miller.
- Dominic LeBlanc becomes minister of public safety, democratic institutions and intergovernmental affairs.
- Jean-Yves Duclos, formerly minister of health, becomes minister of public services and procurement and is succeeded by Mark Holland, formerly government House leader.
The shuffle set off massive movement among political staff including several significant departures. It will take some weeks until new ministers and new staff start settling in and responding to stakeholders.
The national economy
Citing sharply slower economic growth in the second quarter, “with output contracting by 0.2% at an annualized rate,” the Bank of Canada held its policy interest rate at 5 per cent on September 6, but left the door open to more rate hikes if inflation ticks up. The decision followed a rise in inflation of 3.3 per cent year over year in July, up from June’s 2.8 per cent increase. Also in July, Statistics Canada reported that mortgage interest was up by 30.6 per cent year over year, while grocery prices slowed marginally from a year over year increase of 9.1 per cent in June to 8.5 per cent in July.
In advance of the announcement, July’s sharp increase in mortgage interest prompted widespread political appeals to the BoC to ease up on rate increases. NDP Leader Jagmeet Singh released a statement saying that “with a whopping 30 per cent increase to mortgage costs due to high interest rates, the Bank of Canada’s policies are causing the inflation that they are supposed to prevent.” In addition, three provincial premiers, B.C.’s David Eby, Ontario’s Doug Ford and Newfoundland and Labrador’s Andrew Furey all appealed to the Bank to stop hiking interest rates.
In a statement that accompanied the announcement, the Bank said,
Recent CPI data indicate that inflationary pressures remain broad-based. Year-over-year and three-month measures of core inflation are now both running at about 3.5%, indicating there has been little recent downward momentum in underlying inflation…Governing Council remains concerned about the persistence of underlying inflationary pressures, and is prepared to increase the policy interest rate further if needed.
Major policy issues
Counting the costs of the wildfires
The European Union’s Copernicus Atmosphere Monitoring Service (CAMS) estimates that so far this year, Canada’s wildfires have emitted 327 million tonnes of carbon into the air. By comparison, Canada’s various net zero plans aim to reduce Canadian emissions by 268 million tonnes from 2020 levels by 2030.
The property losses caused by the fires are yet to be counted, but the insurance industry is sure to be impacted significantly. In addition, municipal governments will demand provincial and federal help for wildfire prevention and resiliency programs, and with the costs of reconstruction and upgrading infrastructure. Several provincial governments will also likely seek federal help in compensating evacuated citizens for lost wages.
Under the Disaster Financial Assistance Arrangements (DFAA), the federal government is responsible for 90 per cent of compensation costs resulting from disasters, and this summer’s fires are sure to put significant pressure on the fiscal framework. Provinces will also be lobbying the federal government for changes to DFAA to make the program more responsive to building resiliency into forest fire preparedness.
The housing crisis
Housing supply and affordability have emerged as the dominant issues on the fall policy agenda. The price of a typical Canadian home has jumped by 40 per cent in five years, the average monthly rent is now $2,117, up by 8.9 per cent in the last year, and one in seven employed Canadians relies on a food bank. In its latest report on housing supply gaps, the Canada Mortgage and Housing Corporation (CMHC) said that another 3.5 million housing units are required by 2030, over and above the number of units expected to be built by that time, in order to restore affordability to 2004 levels.
Factors contributing to the crisis include:
- Canada’s rapidly growing population – continuing high immigration levels: 465,000 in 2023, and the rising number of foreign students in Canada: 807,000 in 2022.
- In 1993, the federal government ended its role in subsidizing the building of new social housing units, and in the late 1990s, many provinces devolved the management of housing to the municipal level. Construction of purpose-built rental units has not kept up with population increases.
- According to the recent National Housing Accord report, bottlenecks that prevent housing construction include: “a lack of coordination, a shortage of inputs from labour to materials, high costs, low productivity, inability to get timely approvals and the insufficient construction of non-market housing.”
In addition, Benjamin Tal of CIBC Capital Markets told the recent Liberal cabinet retreat on Prince Edward Island that how Statistics Canada counts non-permanent residents underestimates this country’s population by about one million people, meaning that Canada’s housing crisis is actually worse than perceived. Statistics Canada said it would amend its data collection approach.
Federal housing and cost of living initiatives
Last week at the Liberal caucus retreat in London, the prime minister and ministers announced a suite of initiatives to address housing and housing affordability:
- An agreement under the $4 billion Housing Accelerator Fund will provide London with $74 million to fast-track the creation of over 2,000 additional housing units over the next three years. It will enable the city to approve high-density developments without the need for rezoning.
- The government will introduce legislation to remove the goods and services tax (GST) on the construction of new rental apartment buildings and will call on provinces that apply provincial sales tax or the provincial portion of HST to rental housing to match the federal rebate.
- The government will require local governments to end exclusionary zoning and encourage building apartments near public transit to have Housing Accelerator Fund applications approved.
To combat the rising cost of living, the federal government will:
- Amend the Competition Act to remove the “efficiencies defence,” which allows anti-competitive mergers to survive challenge if corporate efficiencies offset the harm to competition.
- Empower the Competition Bureau to take action against business collaborations that stifle competition and consumer choice, particularly in situations where large grocers prevent smaller competitors from establishing operations nearby.
- ISED Minister François-Philippe Champagne will meet with the leaders of Canada’s five largest grocery-store chains this week to come up with a plan to stabilize prices; the prime minister threatened new tax measures if they fail.
In addition, the government will extend the term loan repayment deadline for the Canada Emergency Business Account program by one year.
Opposition Leader Pierre Poilievre responded to the federal housing initiatives by releasing the text of a Private Member’s Bill – the Building Homes Not Bureaucracy Act – he will introduce this week:
- The act would force municipalities to increase the number of housing units allowed by 15 per cent, or risk losing federal infrastructure funding.
- Municipalities that exceed the 15 per cent increase in housing units would receive a bonus in federal infrastructure funding and have permits expedited.
- Withhold transit and infrastructure funding from cities until sufficient high-density housing around transit stations is built and occupied.
- The federal government would apply financial penalties to municipalities that block construction of new housing.
- List 15 per cent of the federal government’s 37,000 buildings and all appropriate federal land to be turned into homes people can afford.
Party strategies
The Liberals have suffered a steady six-month decline in public support and appear not to have a clear strategy for reversing the current polling trends. The Liberals’ challenges are complex and multi-faceted: after eight years in office, incumbency is becoming a liability. A September 7 Abacus Data poll found that 83 per cent of Canadians want to see a change in government, while only 17 per cent believe the Liberals deserve to be re-elected.
According to a recent Angus Reid poll, the Liberals’ loss in public support has occurred in all regions of the country. Since the last election in 2021, the prime minister’s approval rating has dropped among all demographic groups, and is now at three-year low, with 63 per cent of Canadians disapproving of his performance. Most telling perhaps is the Abacus finding that “most Canadians feel the government has either a “bad plan” or “no plan” to deal with most of the top issues facing the country.”
On the policy front, this summer has been a strangely quiet period for the federal government. The July cabinet shuffle was billed as a reset to bring more urgent focus to major economic challenges such as housing supply and affordability, but the August cabinet retreat in Charlottetown came and went without any new directions or initiatives.
For the Conservatives, leader Pierre Poilievre has broadened his message track over the summer from simple appeals to the party’s base to a broader focus on the economy, providing a more explicit set of policy alternatives that appeal to wider audiences in the electorate.
The Conservatives continue to outperform the other parties on the fundraising front; at the end of 2022, they had almost $13 million of cash on hand. In the first quarter of 2023, the party raised $8.3 million, while the Liberals brought in $3.6 million, the NDP $1.3 million, the Greens $400,000, the Bloc $322,000, and the People’s Party $296,000. The Conservatives are using more than $3 million of their war chest for an aggressive ad buy to redefine and soften Mr. Poilievre’s image and messaging.
The earlier reticence of many voters to warm to Mr. Poilievre personally due to his sharp partisanship is easing and according to the Angus Reid poll, he is now seen as the “best prime minister” by nearly twice as many as those who say the same about Mr. Trudeau (32 per cent to 17 per cent). He is also viewed by a plurality (41 per cent versus 17 per cent) as best to manage the economy. The party held a successful policy convention last week in Quebec, but with the next election 18-24 months away, the party is aware of concerns that it has “peaked too soon” and that both the leader and caucus need to keep their focus tightly on the economic performance of the government and issues that matter to voters.
While the NDP remains flat in the national polls and is not interested in an early election, they see a host of opportunities in the Liberals’ recent drop in public support. At their early September caucus meeting, they signaled they will seek further policy commitments from the government through the Confidence and Supply Agreement (CASA) under which the party agreed to support the Liberals in exchange for policy concessions. Urgent issues on the NDP’s list include housing, grocery prices and the cost of living, respect for workers and Indigenous people and tackling the climate crisis while lowering consumers’ bills. Specifically, they will be pushing the Liberals to:
- Announce the details of the long-term dental care plan, which the government has put in place on an interim basis.
- Introduce and pass the Pharmacare Bill and the “anti-scab” legislation by the end of the year.
- Proceed with the Canadian Sustainable Jobs Act, which is currently before the House.
- Introduce a Homebuyers’ Bill of Rights and measures to address the financialization of housing.
- Introduce further measures to reduce GHG emissions.
New team of parliamentary secretaries introduced
Following the Liberal Party’s caucus retreat in London, Prime Minister Trudeau welcomed a new team of parliamentary secretaries to support the cabinet on their various portfolios on September 16. Parliamentary secretaries serve no formal role in cabinet or the decision-making process, but support their ministers on House of Commons business, and departmental-related work, particularly in communications. Of note in the new list of parliamentary secretaries are the number of duplicate roles being held by MPs. Typically, only one parliamentary secretary is assigned to a particular file, with some exceptions. But, with this most recent announcement a number of MPs share files or hold multiple files.
Chris Bittle and Peter Fragiskatos will both serve as parliamentary secretaries to the minister of housing, infrastructure and communities. Julie Dabrusin will serve as parliamentary secretary to the minister of environment and climate change and to the minister of energy and natural resources. Marc Serré will serve as parliamentary secretary to the minister of energy and natural resources and to the minister of official languages. While Adam van Koeverden will serve as parliamentary secretary to the minister of environment and climate change and to the minister of sport and physical activity.
The complete list of parliamentary secretaries is below:
- Jenica Atwin as parliamentary secretary to the minister of Indigenous services.
- Vance Badawey as parliamentary secretary to the minister of transport.
- Jaime Battiste as parliamentary secretary to the minister of Crown-Indigenous relations.
- Rachel Bendayan as parliamentary secretary to the deputy prime minister and minister of finance.
- Chris Bittle as parliamentary secretary to the minister of housing, infrastructure and communities.
- Élisabeth Brière as parliamentary secretary to the minister of families, children and social development.
- Paul Chiang as parliamentary secretary to the minister of immigration, refugees and citizenship.
- Julie Dabrusin as parliamentary secretary to the minister of environment and climate change and parliamentary secretary to the minister of energy and natural resources.
- Pam Damoff as parliamentary secretary to the minister of foreign affairs (consular affairs.)
- Francis Drouin as parliamentary secretary to the minister of agriculture and agri-food.
- Terry Duguid as parliamentary secretary to the prime minister and special advisor for water.
- Greg Fergus as parliamentary secretary to the president of the treasury board and parliamentary secretary to the minister of health.
- Darren Fisher as parliamentary secretary to the minister of mental health and addictions and associate minister of health.
- Peter Fragiskatos as parliamentary secretary to the minister of housing, infrastructure and communities,
- Lisa Hepfner as parliamentary secretary to the minister for women and gender equality and youth.
- Yvonne Jones as parliamentary secretary to the minister of northern affairs and parliamentary secretary to the minister of national defence (northern defence.)
- Mike Kelloway as parliamentary secretary to the minister of fisheries, oceans and the Canadian coast guard.
- Iqra Khalid as parliamentary secretary to the minister of national revenue.
- Annie Koutrakis as parliamentary secretary to the minister of tourism and minister responsible for the Economic Development Agency of Canada for the Regions of Quebec.
- Irek Kusmierczyk as parliamentary secretary to the minister of employment, workforce development and official languages.
- Marie-France Lalonde as parliamentary secretary to the minister of national defence.
- Kevin Lamoureux as parliamentary secretary to the leader of the government in the House of Commons.
- Stéphane Lauzon as parliamentary secretary to the minister of citizens’ services.
- James Maloney as parliamentary secretary to the minister of justice and attorney general of Canada.
- Bryan May as parliamentary secretary to the minister of Small business and parliamentary secretary to the minister responsible for the Federal Economic Development Agency for Southern Ontario.
- Taleeb Noormohamed as parliamentary secretary to the minister of canadian heritage.
- Jennifer O’Connell as parliamentary secretary to the minister of public safety, democratic institutions and intergovernmental affairs (cybersecurity.)
- Rob Oliphant as parliamentary secretary to the minister of foreign affairs.
- Sherry Romanado as parliamentary secretary to the president of the King’s Privy Council for Canada and minister of emergency preparedness.
- Darrell Samson as parliamentary secretary to the minister of rural economic development and minister responsible for the Atlantic Canada Opportunities Agency.
- Randeep Sarai as parliamentary secretary to the minister of veterans affairs and associate minister of national defence.
- Marc G. Serré as parliamentary secretary to the minister of energy and natural resources and parliamentary secretary to the minister of official languages.
- Terry Sheehan as parliamentary secretary to the minister of labour and seniors.
- Maninder Sidhu as parliamentary secretary to the minister of export promotion, international trade and economic development.
- Charles Sousa as parliamentary secretary to the minister of public services and procurement.
- Ryan Turnbull as parliamentary secretary to the minister of innovation, science and industry.
- Anita Vandenbeld as parliamentary secretary to the minister of international development.
- Adam van Koeverden as parliamentary secretary to the minister of environment and climate change and parliamentary secretary to the minister of sport and physical activity.
- Sameer Zuberi as parliamentary secretary to the minister of diversity, inclusion and persons with disabilities.
Key dates and events
- September 18 – Parliament resumes sitting
- October 3 – Manitoba general election
- October 14-16 – NDP Policy Convention
- November – Usual month for the federal Fall Economic Update
- December 15 – Parliament rises for the holidays
- December 2 – Vote to select the next leader of the Ontario Liberal Party
