Round 1 in the inflation debate

From: POLITICO Ottawa Playbook - Tuesday Jan 18,2022 12:35 pm
A daily look inside Canadian politics and power.
Jan 18, 2022 View in browser
 
Ottawa Playbook

By Nick Taylor-Vaisey

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WELCOME TO OTTAWA PLAYBOOK, I’m your host, Nick Taylor-Vaisey. Today is Tuesday, which means another stop on the House committee circuit. Health Minister JEAN-YVES DUCLOS and a merry band of bureaucrats will answer for the federal response to an Omicron-fueled wave of infections.

Driving the Day

CARLETON'S MAN VS. THE BUREAUCRATS — When House finance committee chair PETER FONSECA gaveled his gang into session Monday afternoon, everyone knew Tory MP PIERRE POILIEVRE would be first to question Canada’s chief statistician ANIL ARORA and his number-crunching colleagues from Tunney's Pasture.

The order of the day: diving into housing inflation.

The big question: Would the relentless Tory play good cop or bad cop?

Poilievre started with the good, recalling that he'd last seen Arora at a suburban Manotick diner "eating a CPI-adjusted breakfast." Har har.

Enough pleasantries. They came armed with new stats on housing prices from the Canadian Real Estate Association, and wanted to know why Statistics Canada's own data appeared to downplay the, er, overheatedness of Canadian housing markets.

Anyone who follows Poilievre on social media already knows why he was there. He blames Liberal pandemic spending and the Bank of Canada's quantitative easing program for injecting too much money into the economy, making it too easy for banks to lend and people to borrow. The result: sky-high prices.

— Quickly, some stats: Earlier in the day, CREA senior economist SHAUN CATHCART expressed only pessimism on behalf of the nation's prospective homebuyers. “Unfortunately, the housing affordability problem facing the country is likely to get worse before it gets better,” he said.

The industry association reported housing prices in December were 26.6 percent higher than a year earlier, an eye-popping finding fueled in part by record-low availability of housing stock.

StatsCan reported last week that new house prices increased only 11.7 percent last November over the year before at the national level. Quite a discrepancy.

Poilievre openly challenged the agency's methodology.

— What gives? They were comparing apples and oranges. That particular StatsCan metric includes only new homes, not resold dwellings. It's one of several measures the agency uses to track housing and shelter costs.

The Tories also took aim at StatsCan's calculation of monthly "shelter costs" — i.e. housing — as part of the consumer price index that measures overall inflation. Shelter cost increases haven't kept pace with the roaring housing market, they said. (Globe and Mail reporter MATT LUNDY shared an explainer on why that's the case.)

MP JAKE STEWART insisted New Brunswickers' experiences weren't reflected in StatsCan's numbers. GREG PETERSON, an assistant chief statistician, eventually spelled out that CPI calculations reflect the average of every household — many of which have stable monthly rent, mortgage or insurance payments.

It was a rather dense meeting.

— He just couldn't resist: When the mic found its way to Tory MP GREG MCLEAN, he asked Arora if StatsCan was collecting data on the added costs to Canadians of a tax on the sale of their principal residence.

Surely, said McLean, the agency would be taking those steps after the Canada Mortgage and Housing Corporation funded a report produced by the non-profit Generation Squeeze that recommended such a tax.

Conservatives on the Hill are convinced that Liberals are cooking up a new tax justified by that report. Housing Minister AHMED HUSSEN insists that's not a thing. The Tories might eventually be correct, but the tax they're talking about isn't yet real.

Which is why Arora said the agency was not gathering that data.

— Elsewhere in Tory land: Conservative leader ERIN O'TOOLE held a press conference just as Poilievre was warming up at committee. The party boss called for another emergency meeting on the Hill, this time convened by the industry committee.

O'Toole's presser comes five days after the Globe and Mail reported the feds allowed a Chinese state-owned firm to take over Neo Lithium, a producer of the critical mineral that could eventually be destined for electric vehicles, without a national security review.

O'Toole wants a Cabinet minister to defend that decision, and he also wants the Liberals to reverse it. You're on notice, FRANÇOIS-PHILIPPE CHAMPAGNE.

— What's next for FINA: The finance committee meets again Friday. On tap are PETER ROUTLEDGE, the superintendent of financial institutions, and CMHC president/CEO ROMY BOWERS. Expect plenty of questions about a certain home "tax."

GOVERNING GRADES — Ontario Premier DOUG FORD's extremely Doug Ford response to Monday's massive snowfall in Toronto was to get in his truck and dig people's cars out of the piles of white stuff. He called into the CP24 cable news network from the driver's seat — with his camera on.

The premier's boosters will reliably applaud his personal touch. His many haters will take a diametrically opposed view. Was the personal 3-1-1 routine a stunt? Well, it was surely no accident that Ford spokeswoman IVANA YELICH supplied photos to journalists who wanted handy visuals. (Even the premier's shoveling style produced opinions.)

— So what? This actually matters because Angus Reid published its latest polling on every premier's approval. Nova Scotia's TIM HOUSTON is tops in the country at 57 percent. Quebec's FRANÇOIS LEGAULT is second at 56, a point ahead of British Columbia's JOHN HORGAN. Ford was mired in seventh place, ahead of only Alberta's JASON KENNEY and Manitoba's HEATHER STEFANSON.

— The slide continues: At the height of the pandemic's first wave, Angus Reid measured Ford's approval rating at what turned out to be an apex of 69 percent. It's been downhill ever since. He's now stuck at 30.

Ford's critics will say he should have been almost anywhere else after a major snowstorm in the middle of a health-care crisis. They may be in the majority. Back in April of 2020, 88 percent of Ontarians applauded Ford's handling of Covid — a province-wide reaction to the newly empathetic premier who looked nothing like the bully many Ontarians knew from Toronto city council. That number has dropped to 29 percent. Two-thirds now disapprove.

— Notable notables: Saskatchewan's SCOTT MOE used to come out on top in Angus Reid's surveys. Moe's government still gets solid marks on vaccine and rapid test distribution, but his dipping approval — now down to 45 percent — might be explained by the 59 percent disapproval of his handling of the pandemic.

ASK US ANYTHING

What are you watching in 2022? What are you hearing that you need Playbook to know? Send it all our way.

TODAY'S HIGHLIGHTS

— Prime Minister JUSTIN TRUDEAU's public itinerary is exclusively "private meetings."

— Foreign Minister MÉLANIE JOLY met Monday with Ukrainian Prime Minister DENYS SHMYHALHere's the photo evidence … and OLGA STEFANISHYNA, the deputy PM for European and Euro-Atlantic Integration of Ukraine.

— NDP leader JAGMEET SINGH — who's getting used to his new job outside of politics — will speak to reporters at 11 a.m. about the strain on health care systems. Afterwards, Singh will join the first day of the NDP's three-day virtual caucus retreat.

HOUSE BUSINESS

— 11 a.m. The House Standing Committee on Fisheries and Oceans holds an organizing meeting via webcast.

— 1 p.m. The House health committee meets in Wellington Building (and virtually). MPs will hear from Health Minister JEAN-YVES DUCLOS and several officials: Deputy health minister STEPHEN LUCAS, Deputy procurement minister PAUL THOMPSON, National Advisory Committee on Immunization executive secretary MATTHEW TUNIS , Public Health Agency of Canada president HARPREET S. KOCHHAR and Chief Public Health Officer THERESA TAM.

PAPER TRAIL

WARNING SIGNS — Edelman's annual Trust Barometer report is hot off the presses this morning. The topline findings? People around the world trust businesses more than governments or media outlets, and Edelman warns those last two institutions are "fueling a cycle of distrust."

RYAN HEATH, the author of POLITICO's Global Insider newsletter, interviewed RICHARD EDELMAN about his landmark survey. Here's one quotable quote from that conversation:

“Our fears are exacerbated by the pandemic, which has not only given us health concerns but also job concerns. The consequence of this is in every democracy you see that under half of the people believe that they’ll be better off in five years. The base emotion is, ‘I'm scared I’m going to be downwardly economically mobile,' and that is a different kind of world than the entire sort of postwar consensus.”

Follow Ryan's reporting — and the Global Insider podcast — for much more from that interview.

AROUND THE HILL

CASE CLOSED — Ethics commissioner MARIO DION won't be investigating ex-China ambassador DOMINIC BARTON's dealings with Rio Tinto while he was still top envoy in China in 2021.

Global's MARC-ANDRÉ COSSETTE reported on a statement from Dion's office, which concluded that Barton "did not have direct and significant dealings" with Rio Tinto before accepting the mining giant's chairmanship, which he'll take on later this year. Dion's office added that Barton did consult the office on his post-diplomatic post options while he was still ambassador.

Playbookers

Birthdays: HBD to Labour Minister SEAMUS O’REGAN.

Spotted: Foreign Minister MÉLANIE JOLY paying her respects at a PS752 memorial in Kyiv, Ukraine. … An update from PMO policy director JOHN BRODHEAD on his ties to a certain former gig: "I no longer have an nominal ownership interest in Sidewalk Labs."

Movers and shakers: The Liberal Research Bureau is losing a western voice.

"No matter how long I am away from the prairies, my heart and head will always be drawn to sectors with strong support for the prairie provinces and West in general," wrote former LRB managing director MELISSA COTTON on LinkedIn . Cotton's next stop? Senior manager of government relations at CN Rail, where former Trudeau chief of staff CYRUS REPORTER is a VP.

The Independent Senators Group is hiring a chief of staff. Salary range: C$132,100–C$165,700. … RON ROSS is Ontario Economic Development Minister VIC FEDELI's new chief of staff.

From the tenders: The feds are buying up measles, mumps, rubella and varicella vaccine doses by the millions. … The RCAF is looking for a month's worth of hotel rooms in Leeuwarden, Netherlands, in advance of a spring military exercise. … Global Affairs is working to measure the impact of a program that funds overseas civil society projects. The goal: "a measurement framework and toolkit for political advocacy, access, and influence."

Media mentions: CHELSEA NASH is deputy editor of the Hill Times. … Former journalist LESLIE YOUNG takes up a new gig as a policy adviser in the federal public service. … DHRITI GUPTA is officially a Maclean's intern. … Canadaland is hiring a chief operating officer.

Farewells: EDWARD ROBERTS, Newfoundland and Labrador's 11th lieutenant-governor, has died. He was 81.

“Our Province has lost a loyal and dutiful son who made this a better place,” shared Labor Minister SEAMUS O’REGAN, who served as assistant to Roberts during the 1990s. “To think highly of someone and to challenge them to do better is the greatest kindness and the most generous gift. For that, I am indebted to Edward Roberts.”

ADRIENNE PAN, a journalist with CBC Edmonton, died on the weekend at the age of 43. She is remembered here by her colleague MADELEINE CUMMINGS.

PROZONE

If you are a , catch the latest Pro Canada PM newsletter: New ammo in the Covid battle.

And from ANDY BLATCHFORD: Will Omicron influence Bank of Canada policy?

In other news for Pros:

Airlines ask Biden administration for more 5G protections to avoid ‘catastrophic disruptions.’
Surgeon general on Omicron: Next few weeks will be tough.
Walensky faces CDC burnout as pandemic enters third year.

MEDIA ROOM

— On Monday, Health Canada approved the Covid-fighting antiviral paxlovid — a pill that can be taken from the comfort of home. Back in November, Dr. MONICA GANDHI wrote in The Atlantic about the game-changing new drug that "will help the world live with Covid-19."

The humblebrags are just the start of what’s gone wrong on LinkedIn, TIM KILADZE writes in The Globe — an amusing rant in this government town.

— At the Rover, CHRISTOPHER CURTIS takes readers behind the scenes at Quebec's largest prison, where inmates describe "filthy and inhumane" conditions in the Covid era. Said one former inmate: "We’re human beings, not animals. And I doubt very much that animals would be treated this way."

BEN WALDMAN of the Winnipeg Free Press tells the story of Canadian Paintings , a Twitter account that is everyone’s favorite timeline cleanse. If, like us, you can’t get enough of it, we’ll also point you to COLIN HORGAN’s feature from earlier this summer.

— ICYMI, here’s CHRISTINA GONZALES in Maclean’s with a timely feature: Insane house prices and rising inequality are leaving anyone without an account at the bank of mom and dad behind.

TRIVIA

Monday's answer: MP MARCUS POWLOWSKI was most recently an ER physician and also worked as a consultant for the World Health Organization.

Some readers guessed MP BRENDAN HANLEY, who guided Yukon's pandemic response as the territory's chief medical officer of health.

Props to TESSIE SANCI, ROBERT McDOUGALL, JOHN ECKER, CHRIS LALANDE, BRAM ABRAMSON, ALAN KAN and JOHN GUOBA.

Tuesday’s question: On this date in history, who said: “The nineteenth century was the century of the United States. I think we can claim that it is Canada that shall fill the twentieth century.”

Send your answers to ottawaplaybook@politico.com

Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness amongst this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Alejandra Waase to find out how: awaase@politico.com.

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