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A daily look inside Canadian politics and power. | | | | | |  | | By Nick Taylor-Vaisey | Send tips | Subscribe here | Email Nick | Follow Politico Canada PROGRAMMING NOTE: Ottawa Playbook won’t publish from Dec. 20 to Dec. 31. We’ll be back on our normal schedule on Jan. 3. WELCOME TO OTTAWA PLAYBOOK, I’m your host, Nick Taylor-Vaisey. Today is fiscal update day, which means Playbook is both keeping an eye on that super-important document and also watching all the other things the federal government is doing while fancy charts are distracting the Hill. |  | DRIVING THE DAY | | OPENING THE BOOKS — With four days before parliamentarians head for the hills, it's time for CHRYSTIA FREELAND's second Fall Economic Statement — a fiscal plan that isn't a full-fledged budget but refreshes the government's projections for debt, deficits, growth and a raft of key indicators that size up the country's economic health. — Five people, places and things to watch: Everybody in the capital reacts to a document like this. Playbook picked a few standout voices: → 1. The opposition: Freeland's loudest critic in the Commons will be PIERRE POILIEVRE, the Tory attack dog who won't stop until JUSTIN TRUDEAU admits he personally caused persistent inflation. Reaction from the Bloc's GABRIEL STE-MARIE and the NDP's DANIEL BLAIKIE will also be instructive indicators of how potential parliamentary dance partners are lining up on the Liberal agenda. → 2. Cindy Blackstock: The Globe and Mail scooped the news that today's fiscal update would include a C$40-billion pledge for Indigenous child welfare compensation. Crown-Indigenous Relations Minister MARC MILLER said Monday the feds are at the negotiating table with Blackstock, the executive director of the First Nations Child and Family Caring Society of Canada. Former Sen. MURRAY SINCLAIR is facilitating the talks. Blackstock said there is "still much work to be done." → 3. Other provinces: Every time Ottawa lays down fiscal markers and hints at planned spending, debt-laden provinces struggling to pay for their own programs watch closely. The provinces want more money for health-care systems that were squeezed long before the pandemic's repeated stress tests. → 4. The business lobby: The fiscal-restraint hawks at the Business Council of Canada and the Canadian Chamber of Commerce are insisting the feds transition away from what Chamber CEO PERRIN BEATTY called the "the lockdown and subsidized economy." These orgs want economic growth and fiscal discipline. (Remember the Coalition for a Better Future summit we covered back in October? It's not going quietly into the night. The coalition is growing.) → 5. Markets: Bank economists fretting about inflation will keep an eye on Liberal spending — namely, big-dollar promises from the party’s election platform. Scotiabank’s DEREK HOLT says that while new fiscal stimulus may only have a minor influence on inflation, Ottawa might want to avoid any risk of stoking price pressures. — How to read a fiscal update: POLITICO's Ottawa team chatted in Slack about their established rituals when they're locked up with a government's fiscal plan. On Budget Day, half the team reads the budget speech first. The others head straight for the fiscal tables, like former parliamentary budget officer KEVIN PAGE and retired Maclean's bureau chief JOHN GEDDES. More reading ahead of today's reveal:
— The Star's HEATHER SCOFFIELD reports: Feds to spend more than C$1.5B on COVID-19 rapid tests.
— From the CBC's DON PITTIS: Economic showdown this week will set the tone for 2022.
— KRISTY KIRKUP and BILL CURRY from The Globe: Ottawa earmarks C$40B for First Nations child welfare, long-term reform. | | HALLWAY CONVERSATION | | WHAT'S DRIVING INFLATION? — Playbook called up Canadian Centre for Policy Alternatives senior economist DAVID MACDONALD after he posted an article on what's really behind the recent uptick in inflation. Macdonald writes that only four out of roughly 200 categories in the Consumer Price Index are responsible for more than half of October's 4.65 percent year-over-year increase in overall prices: gasoline and home heating (1.29 percent on its own), home purchases (0.56 percent), new vehicles (0.36 percent) and meat (0.2 percent). Will the high price of gasoline drive up prices in other sectors? That's certainly a possibility. It's very much dependent on the industry — how dependent they are on gasoline — and how much competition there is that would allow them, or not allow them, to increase prices for consumers. Time will tell whether this leads to higher prices in general. We haven't seen that thus far. If you're able to get your goods to market, avoid supply chain problems, you might be able to reap a decent profit despite higher prices when it comes to gasoline. This doesn't seem to fit convenient political narratives. What's pretty clear here is that increased interest rates are not going to drive down the price of gasoline, nor are they going to solve a microchip shortage. They might have an effect on house prices. The other thing worth pointing out is that inflation has almost nothing to do with government support programs for businesses in particular, but also for the jobless, which have also been blamed. How will inflation impact the fiscal update? Alberta has talked about rising oil prices driving up provincial revenues. It's pretty clear the major revisions provincially will be reflected federally. It's not as if the deficit this year is going to turn into a surplus, magically. But the new expenditures on extending existing programs, particularly business supports, will likely be entirely covered by revised revenue estimates. What else are you looking for in Freeland's update? It's unlikely we're going to see a lot in terms of a mini-budget. On the spectrum of mini-budget to straight fiscal update, we're going to be more on the fiscal update side of that spectrum, where we're updating the books and potentially preparing for the spring budget, getting a more accurate picture of the financial books. Particularly given the timeline for the holidays, it isn't really an ideal time to announce substantial new programs. | | AROUND THE HILL | | HOLDING THE GAVEL — The chair elections have begun. BOBBY MORRISSEY is helming the House human resources committee. SVEN SPENGEMANN will oversee foreign affairs. HEDY FRY will shepherd the work of Canadian heritage. JUDY SGRO is in charge of international trade. SEAN CASEY holds the reins on health. PAT KELLY is the Tory chair of the opposition-run ethics committee. — Our crystal ball: Playbook's score is currently 83 percent. Our only flub came at heritage, where Fry ruled the day — though a single committee member, Conservative RACHAEL THOMAS, voted against her taking the chair. — Vote shift: Playbook also had Casey chairing veterans affairs, so we'll take the opportunity to replace that prediction with another. DARRELL SAMSON is out, because he's a parlsec. WILSON MIAO and RECHIE VALDEZ are rookies. That leaves EMMANUEL DUBOURG and CHURENCE ROGERS. Dubourg is Playbook's pick for official languages chair. Could this be Mr. Rogers' neighborhood? — Afghanistan: The session's first special committee has its chair, too. SUKH DHALIWAL will chair his first standing committee after 4,173 days as a Liberal MP dating to 2006 (interrupted by a four-year gap in the party's darkest period). UNDER THE RADAR — Chief Public Health Officer THERESA TAM snuck a massive annual report into Monday's news cycle. The 129-page document is typically optimistic. The word opportunities appears 25 times. Solutions? 24. But challenge racks up 66 mentions. And Tam didn't bury the lede on what she's witnessed through the punishing pandemic. Three key takeaways from her intro: — Takeaway #1: "While our public health system has extended itself to meet the increased demands of COVID-19, it is stretched dangerously thin." — Takeaway #2: "The pandemic has highlighted the strengths of our system but it has also exposed long-standing cracks in the foundation." — Takeaway #3: "The public health system lacks the necessary resources and tools to carry out its critical work, and is the subject of 'boom and bust' funding cycles that leave us ill-prepared in the face of new threats." TENDER LOVING CARE — There was no buying and selling on the federal tender front yesterday, as Public Services and Procurement Canada took down the workhorse buyandsell.gc.ca. "We have become aware of a cyber security vulnerability affecting organizations around the world," read a response to Playbook from the department. "As a precaution, we have proactively taken down some services that may be affected by this potential vulnerability while we address the situation." — Sound familiar? The Canada Revenue Agency posted a nearly identical statement on Friday. Defense Minister ANITA ANAND cautioned several departments to fix a software flaw that "has the potential to be used by bad actors." The Quebec government shut down nearly 4,000 of its own websites. | | HOUSE BUSINESS | | — The Commons voted down the Tory amendment to the Throne Speech on Monday evening. Still to come: the main vote. Drama expected: none. — Ethics commissioner MARIO DION will offer a briefing to the procedure and House affairs committee. "I would expect that the most engaging part of the appearance will be found in the Q&A portion," said MELANIE RUSHWORTH, the director of comms in Dion's office. Perhaps the understatement of the millennium. — The public safety committee will meet at the request of four members to "discuss the mandate given by the House and the urgency for the committee to organize Its proceedings and invite the Royal Canadian Mounted Police and other witnesses to appear." (Translation: The opposition wants to get down to work.) | | TODAY'S HIGHLIGHTS | | Prime Minister JUSTIN TRUDEAU is chairing Cabinet, where mandate letters are surely on the agenda. Later, the PM will meet with Nunavut Premier P.J. AKEEAGOK. The premier will speak to reporters afterwards. Deputy PM CHRYSTIA FREELAND delivers the Fall Economic Statement at 4 ET. NDP leader JAGMEET SINGH will hold a morning press conference on our inflationary times, in which "the rich are getting richer while everyday people are finding it harder to buy or rent a home, cover their monthly bills and buy groceries." | | PAPER TRAIL | | FREE TRADE — Trade Minister MARY NG sent up a flare in the Commons yesterday on free trade negotiations with the United Kingdom. They'll start within 90 days. As it happens, Playbook received a pile of submissions to federal consultations earlier this year on potential trade talks with post-Brexit Brits. The docs, which were disclosed via an access-to-information request, fall into three buckets. — CANZUK: Bureaucrats at Global Affairs Canada were on the receiving end of dozens of submissions from individuals who implored negotiators to think bigger. This was no carbon-copy letter-writing campaign. Every contribution to the raft of correspondence was impressively distinct. Few submissions mirrored the others. But they all took inspiration from the same document: CANZUK International's paper on Canada's foreign policy, which the advocacy group published in March 2020. — Angry Brits: GAC staff also faced a heap of correspondence from fuming British pensioners in Canada who were bloody pissed — to use the regional vernacular — with their home government for freezing pension payments for expats. The Canadian Alliance of British Pensioners has already petitioned Parliament, and the feds are openly sympathetic to the cause. In a response, then-seniors minister DEB SCHULTE insisted her government had raised the issue repeatedly with the British government. RACHEL BENDAYAN, then-parliamentary secretary to Trade Minister MARY NG , poured cold water on the petitioners' demand that Canada leverage their interests in trade negotiations: "A trade agreement is not the appropriate mechanism for advancing the issue of pension indexation by the British government." — Everyone else: Hundreds of submissions came from the cottage industry of sector-specific advocates who pipe up whenever the feds hope to eliminate protectionist barriers abroad. Dairy, beef, canola, grains, architects, and even the Canadian Bar Association. Think Voltron, but with charts. | | ASK US ANYTHING | | What are you hearing that you need Playbook to know? Any questions about the new session of Parliament? Send it all our way. | | PLAYBOOKERS | | Birthdays: HBD to astronaut STEVE MACLEAN, 66 today. … Intergovernmental Affairs Minister DOMINIC LEBLANC is 54. Spotted: Ottawa mayor JIM WATSON, self-isolating out of an abundance of caution (a sign of things to come as case counts rocket skyward?). … Sen. DENISE BATTERS, claiming 7,100 members have signed her petition to challenge ERIN O'TOOLE's Tory leadership. The Toronto Star's SUSAN DELACOURT, out for a (literal) walk in the snow with the prime minister. … The Liberals, which Playbook has noticed are relentlessly pushing — via several emails per day! — a final pre-holiday fundraising deadline (C$199 gets you a party-branded apron, we kid you not). The PM also sat down with CTV's EVAN SOLOMON for a year-end interview that will air Sunday. Ambassador DAVID COHEN gripping-and-grinning for the first time with Immigration Minister SEAN FRASER. Hamilton MP LISA HEPFNER stood in the House in a Ticats jersey circa 1999 to salute the 2021 Grey Cup champion Blue Bombers. … Winnipeg South MP TERRY DUGUID celebrated “a gutsy overtime win” and Manitoba MP DAN MAZIER is already anticipating a Grey Cup hat trick in 2022. Movers and shakers: Export Development Canada's chief economist, PETER HALL, will retire next February after 17 years at the Crown corp. German Federal President FRANK-WALTER STEINMEIER awarded ADRIENNE CLARKSON the Commander's Cross of the Order of Merit of the Federal Republic of Germany — and gave Clarkson's husband, JOHN RALSTON SAUL, the Officer's Cross. McGill's Max Bell School of Public Policy launched the JACK LAYTON Prize for a Better Canada, a C$5,000 award funded by a donation from OLIVIA CHOW. The inaugural jury is CHRIS RAGAN, BRIAN TOPP, JAYNE ENGLE, MYLENE RIVA, and EVAN SIDDALL. Media mentions: JAYME POISSON opened CBC’s Frontburner pod on Monday with a brave explanation for her recent absence. As she explained to listeners, she had been living with post-partum depression. “With the holidays coming up and this pandemic still dragging on. … If you are really struggling out there, you're not alone. It can — and does — get better,” she told listeners. On this morning's show, by the way: Bill 21. CBC has also released a list of the best podcasts of 2021. Included on the list: The Backbench, The White Saviors and Stolen: The Search for Jermain. Farewells: Toronto MP JUDY SGRO paid tribute to MEL LASTMAN in the House on Monday. “Mayor Lastman was a champion of his beloved city of North York for 25 years,” she said. “He was an example to all of us as elected officials of what real commitment was and what hard work can accomplish.” Lastman was also internationally famous for less celebratory reasons. | | PROZONE | | If you are a , catch the latest Pro Canada PM newsletter: Freeland to open up Canada's books. In other news for Pros: — Guilbeault delays release of 2030 emissions reduction plan.
— Can NASA learn from its mistakes on the James Webb telescope?
— Biodiversity reporting efforts should copy climate monitoring, says Belgian minister.
— Report: Boeing whistleblowers say they were pressured to meet production schedules. | | MEDIA ROOM | | — Top of POLITICO this morning: Boris Johnson, down but not out. — On the latest episode of THE BACKBENCH: Economy as entertainment? — The National Post's MATT GURNEY on the government's three-pronged apology to military personnel who were victims of sexual misconduct: "It is intriguing which apologies Justin Trudeau feels he should make personally and those he thinks he can or should skip." — From the CBC’s JOANNE CHIANELLO: From chaos to chaos, Mayor JIM WATSON leaves behind a fractured council. — Conservative MP MELISSA LANTSMAN is on The Hill Times Hot Room podcast. — MAX FAWCETT says the prime minister can burnish his feminist credentials with one simple decision: resign before its too late. — EVs are expected to boom in popularity by 2030. Whether that green switch will be without its problems is far from a sure thing, JASON McBRIDE writes in Maclean’s. — MARK AGNEW and NICOLAS TODD write on Canada’s security policy — a paper with the headline: How Canada Can Graduate from the Kids’ Table. — The CBC’s ROSEMARY BARTON is on the latest edition of The Honest Talk pod. | | TRIVIA | | Monday's answer: Four prime ministers were born outside of Canada: JOHN A. MACDONALD, ALEXANDER MACKENZIE, MACKENZIE BOWELL and JOHN TURNER. Props to DIANNE SHERRIN, CULLY ROBINSON, BOOTS TAYLOR-VAISEY, BEN ROTH, SHEILA GERVAIS, GEORGE YOUNG, MICHAEL MACDONALD, ROBERT MCDOUGALL, ZEV LEWIS, SAM GALEA, LEIGH LAMPERT, BRAM ABRAMSON and JOHN ECKER. Tuesday’s question: Who was stripped of their honorary Canadian citizenship? SAVE THE DATE: TRIVIA — Don't make plans for Dec. 21 at 7 p.m. ET. Playbook is whipping up our first-ever virtual trivia night with Outside The Box Trivia. It will be a chance to show off your knowledge of #cdnpoli. Team play is shaping up to be fierce. RSVP with your team details to Ottawa Playbook. We have teams from CIVIX and BLUESKY STRATEGY GROUP signed up. The Public Policy Forum's KATIE DAVEY is bringing a stacked team. Word is that HILL+KNOWLTON and SUSSEX STRATEGY and META in. We’ve heard legislative aide SARA CIMETTA is onboard. TEAM LPC OF THE 80s is certain to be a contender. Freelance journalist JENN JEFFERYS is wrangling a team. Don't delay. RSVP today! Registration is free. We’ll send sign-up details. The trivia platform enables you to gather teammates from all over — you can play and collaborate at the same virtual table, as long as you all have access to WiFi.
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