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A daily look inside Canadian politics and power. | | | | |  | | By Maura Forrest | Send tips | Subscribe here | Follow Politico Canada Thanks for reading Ottawa Playbook. I’m your host, Maura Forrest, with Zi-Ann Lum. Today, the Liberal Cabinet meets in Hamilton. FRANÇOIS LEGAULT lashes out at JUSTIN TRUDEAU over the notwithstanding clause. And will Ontario or Quebec win the electric-vehicle supply-chain race? |  | DRIVING THE DAY | |
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Prime Minister Justin Trudeau | Justin Tang/The Canadian Press via AP |
THREE THINGS TO WATCH THIS WEEK —One week before the return of Parliament, the Liberal Cabinet has decamped to Hamilton to debrief and plan the months ahead. On Wednesday, Bank of Canada Governor TIFF MACKLEM may unveil his eighth consecutive rate hike. And out in Alberta, Premier DANIELLE SMITH might have an announcement to make about some emails.
CABINET RETREAT —Prime Minister JUSTIN TRUDEAU will kick off a three-day Cabinet retreat in Hamilton, Ont., later today, where affordability and inflation, health care and sustainable jobs are expected to top the agenda. Before heading to the Hammer, the PM will stop by Toronto-based quantum computing start-up Xanadu to make an announcement alongside Innovation Minister FRANÇOIS-PHILIPPE CHAMPAGNE. Then it’s off to Steeltown, where he’ll give welcome remarks this evening, followed by a working dinner. The retreat will shift into high gear on Tuesday. — On the agenda: Unsurprisingly, inflation and the cost of living will be top-line items over the next few days, as the Liberals look toward the spring budget. Health care will also be a major topic of discussion. Trudeau telegraphed last week that a health-care deal with the provinces is within reach, and the Globe and Mail reported Friday that a 10-year agreement could be announced at a first ministers meeting in February. — Just transition: Natural Resources Minister JONATHAN WILKINSON has said a long-awaited “just transition” bill is coming early this year, provoking the ire of Alberta Premier DANIELLE SMITH, who claims the legislation is a means to kill jobs in the oil and gas industry. Wilkinson says it’s actually about a plan to fill the clean-tech jobs of the future. “Sustainable jobs,” in the Liberals’ new-and-improved parlance, will feature prominently at the retreat. Trudeau spent last week traveling the country to highlight Canada’s potential as a supplier of critical minerals and electric vehicle batteries. — Shuffle watch: Despite the inevitable speculation, it’s safe to say Trudeau won’t be rejigging his Cabinet before Parliament resumes next week. — Next up: Trudeau will be back in Ottawa later in the week to prepare for the Liberals’ caucus retreat, slated for Jan. 27 and 28. | 
Bank of Canada Governor Tiff Macklem | Justin Tang/THE CANADIAN PRESS |
INTEREST RATE — Economists are expecting the Bank of Canada to announce its eighth consecutive rate hike Wednesday, with most banks predicting a 25 basis point increase. That would bring the central bank’s benchmark interest rate to 4.5 percent, up from 0.25 percent a year ago.
But it seems this increase could be the last, for now. “Though broader inflation trends are still running above the Bank of Canada’s 1% to 3% target range, they’ve already shown clear signs of losing steam,” RBC economists NATHAN JANZEN and CARRIE FREESTONE wrote last week. “Housing markets have already softened significantly. And consumer demand is likely to contract as Canadians feel the pinch of higher debt-servicing costs and prices.” — Key context: The Bank of Canada last raised its key interest rate by half a percentage point in December. At the time, it signaled a pause in the rate hikes could be in the offing. UNDER PRESSURE — Alberta Premier DANIELLE SMITH says she has asked for a review of emails between her office and Crown prosecutors, and expects results early this week, which will be made public. The announcement, made on her Saturday radio show, follows a CBC story published last week that alleged one of Smith’s staffers sent a series of emails to the Alberta Crown Prosecution Service, “challenging prosecutors' assessment and direction on cases stemming from the Coutts border blockades and protests.” — The background: Smith has previously said she asked prosecutors whether it was worth pursuing Covid-related cases, but has since backtracked and said she has never spoken directly with Crown prosecutors. | | TODAY'S HIGHLIGHTS | |
Prime Minister JUSTIN TRUDEAU will kick off the Cabinet retreat at 5:30 p.m. in Hamilton, Ont. But first, he’ll hold a 10:15 a.m. media availability at Toronto quantum computing and software company Xanadu, alongside Innovation Minister FRANÇOIS-PHILIPPE CHAMPAGNE.
Deputy Prime Minister CHRYSTIA FREELAND's schedule lists "private meetings." She'll also attend the Cabinet retreat. 9:30 a.m. Transport Minister OMAR ALGHABRA will make a funding announcement at the Hamilton airport. 10 a.m. Immigration Minister SEAN FRASER will be in Sturgeon Falls, Ont. to make an announcement about Canada’s francophone immigration strategy. 11:30 a.m. Justice Minister DAVID LAMETTI will be at the John Howard Society of Hamilton to announce funding for vulnerable youth in Ontario. 12:50 p.m. Natural Resources Minister JONATHAN WILKINSON will hold a press conference following presentations from clean-tech companies at the Western Sarnia-Lambton Research Park. | | For your radar | |
BATTERIES NOT INCLUDED — Last year, the Financial Post published a story suggesting that in the race to get a foothold in the burgeoning electric vehicle industry, Quebec’s abundance of green hydroelectricity could give it an edge over Ontario, long the nexus of Canada’s auto sector.
At the time, two manufacturing giants, General Motors and BASF, had just announced plans to build cathode production factories in Bécancour, Que. — Fast forward 10 months, and things have changed: Less than two weeks after that article was published, Stellantis and LG Energy Solution announced plans for a C$5-billion EV battery facility in Windsor, Ont. Now, it seems the Volkswagen Group is also looking at Ontario as the site for its first North American battery plant. Recently, Quebec businessman MICHEL RINGUET lamented publicly that Quebec is falling behind, because it doesn’t yet have an investment in a battery cell manufacturing plant. “While we talk and dream, Ontario is attracting them, one after the other,” he wrote on LinkedIn. “All this under the supervision of our minister of industry and innovation, the very Québécois FRANÇOIS-PHILIPPE-CHAMPAGNE. We risk missing the boat for the next five decades.” — This town ain’t big enough: A spokesperson for Champagne tells Playbook, in effect, that there’s plenty to go around. “Our government has supported a robust EV ecosystem right across Canada,” said LAURIE BOUCHARD. “This includes companies like GM, BASF, POSCO, RioTinto, and many more in Quebec.” DAVID ADAMS, president of Global Automakers of Canada, tells Playbook it makes sense that battery manufacturers would be interested in Ontario, where the facilities will be closest to EV assembly plants. Still, he said investment in the overall supply chain has been “pretty balanced” between Quebec and Ontario. In any case, he said, the focus of competition shouldn’t be between the two provinces — the real question is whether Canada can compete with the U.S. Both Quebec and Ontario need to attract as much investment as possible ASAP, he said. “At some point that window, and it’s not a very large window, I think it’s going to close.” NOTWITHSTANDING — On Saturday, Prime Minister JUSTIN TRUDEAU made news with an interview he gave to La Presse’s Ottawa bureau chief, JOËL-DENIS BELLAVANCE. The PM said he wanted to limit use of the notwithstanding clause, and was considering referring the matter to the Supreme Court of Canada. “We are trivializing the suspension of fundamental rights. That's what worries me,” Trudeau told Bellavance. Them’s fightin' words in Quebec, where FRANÇOIS LEGAULT’s provincial government has twice used the notwithstanding clause to preempt constitutional challenges of its controversial secularism and language laws, bills 21 and 96. The clause is a section of the Charter of Rights and Freedoms that allows provincial and federal governments to override certain charter rights for a period of five years. Use of the clause should be “a measure of last resort,” Trudeau said. “By using the notwithstanding clause in this way [preemptively], we have reduced the political cost of the suspension of fundamental rights.” — Legault’s response came swiftly on Saturday: Trudeau’s comments were “a frontal attack on our nation's ability to protect our collective rights,” he said on Twitter. “Quebec will never accept such a weakening of its rights. Never!” — Of course, Trudeau’s remarks weren’t just targeting Quebec: Ontario Premier DOUG FORD most recently tried to use the notwithstanding clause last fall to bind education workers to a four-year contract, but backed down in the face of widespread pushback. BROADCASTING SPAT — U.S. retaliation is “very likely” if the Liberals’ Online Streaming Act becomes law, warns a new white paper from a Washington-based advocacy group. The Computer & Communications Industry Association released an 11-page study Friday calling Bill C-11 a “flawed” piece of legislation that risks undermining foreign investment in Canada’s creative sector and breaching provisions under the USMCA. “Bill C-11 reflects a misunderstanding that regulatory requirements for broadcasting are needed for the internet to encourage local content development,” said JONATHAN MCHALE, the association’s vice president of digital trade policy. He called on Ottawa to “rethink this burdensome and restrictive policy.” The U.S. embassy in Ottawa recently told the Canadian Press it has concerns that Bill C-11 could discriminate against American companies. The bill is currently at third reading in the Senate after a committee passed amendments last month. | | MEDIA ROOM | |
— DANIEL LEBLANC reports that the Business Development Bank of Canada is facing staff backlash over multimillion-dollar contracts to McKinsey, and other spending decisions.
— Deputy Conservative leader MELISSA LANTSMAN says the parliamentary press gallery will see more of Leader PIERRE POILIEVRE once the House of Commons resumes on Jan. 30, according to the Hill Times’ CHRISTOPHER GULY. — NIIGAAN SINCLAIR, head of the Indigenous Studies Department at the University of Manitoba, was on CBC’s Sunday Magazine to discuss the federal government’s C$2.8-billion settlement related to residential schools. — POLITICO reports: JEFF ZIENTS will be JOE BIDEN’s next chief of staff. — The Post’s ANJA KARADEGLIJA interviewed new CRTC chair VICKY EATRIDES,who said the Canadian Radio-television and Telecommunications Commission wants public input on the government’s controversial online streaming bill. … Eatrides also spoke with the Globe’s IRENE GALEA. — In a feature ROB report, SEAN SILCOFF and JOSH O’KANE explain how the Liberals’ multibillion-dollar tech plan created ‘chaos’ instead of growth. “Eye-rolls now greet mentions of the word ‘innovation’ by Ottawa, after years of politicians throwing it around as a buzzword,” they write. — The CBC’s CATHARINE TUNNEY reports: As TikTok faces data-harvesting claims, spy agency warns Canadians to protect themselves. — The federal government has spent nearly C$94 million on hotel rooms for asylum seekers since the last election, MARIE WOOLF reports for the Globe and Mail. | | PROZONE | |
For POLITICO Pro s, here’s our latest policy newsletter from ZI-ANN LUM: Next up in Mexico City.
Other headlines for Pro readers: — Red states are winning big from Dems’ climate law. — U.S. strikes at China with EV battery deal. — Can wild carbon markets be tamed? — Top takeaways from POLITICO Pro's briefing on the House agenda in D.C. — Nuclear Regulatory Commission finalizes approval of first advanced small nuclear reactor design. | | PLAYBOOKERS | |
Birthdays: HBD to former Ontario premier MIKE HARRIS, Conservative MP GARNETT GENUIS, NDP national director ANNE MCGRATH, the CBC's SHELAGH ROGERS, and WYATT SHARPE, who is 14 today.
Movers and shakers: ALEX WELLSTEAD is leaving Ottawa after six years on the Hill, where he’s currently d-comm for Industry Minister FRANÇOIS-PHILIPPE CHAMPAGNE. He’s promising “more to share on next steps in the coming weeks.” MARY LIZ-POWER announced her departure from the Prime Minister’s Office. Spotted: Sen. KAREN SORENSEN, receiving the Queen’s Platinum Jubilee medal in Alberta alongside Sens. PAULA SIMONS and PATTI LABOUCANE-BENSON … Veterans Affairs Minister LAWRENCE MACAULAY, making Valentines … CP’s STEPHANIE TAYLOR, cheering on the Jets. LESLIE SCANLON, Canada’s high commissioner to Pakistan, sharing what’s on her lunch menu. SARAH WRIGHT-GILBERT, naming a Toronto Zoo cockroach after JIM WATSON. KAREN OLDFIELD, ROB BATHERSON and BERNARD LORD, having breakfast on Friday at the Prince George Hotel in Halifax, ahead of a discussion on fixing Nova Scotia’s health-care system at the Halifax Chamber of Commerce (h/t KEITH CORCORAN). | 
Prime Minister Justin Trudeau, second left, NDP leader Jagmeet Singh, centre, Conservative leader Pierre Poilievre, right, and , B.C. Premier David Eby, back centre, prepare to march in the Lunar New Year parade, in Vancouver, on Sunday, January 22, 2023. THE CANADIAN PRESS/Darryl Dyck | Darryl Dyck, The Canadian Press |
Big lunar new year energy: JOYCE MURRAY and DON DAVIES handing out red pockets in Vancouver’s Chinatown … Sen. YUEN PAU WOO also in the crowd with FRANK CAPUTO, MEL ARNOLD and BOB ZIMMER joining revelers on East Pender … Prime Minister JUSTIN TRUDEAU also in Vancity, leading the new year parade with Mayor KEN SIM, PIERRE POILIEVRE, JAGMEET SINGH and DAVID EBY (h/t DARRYL DYCK).
HAN DONG making it rain red envelopes in the GTA … SALMA ZAHID doing the same at the Scarborough Town Centre … TALEEB NOORMOHAMED and RANDY BOISSONNAULT dusting off their red tangzhuang jackets ... PAUL CHIANG chose yellow … white for WILSON MIAO and PATRICK WEILER’s wing chun demo … POILIEVRE, a blue one for Aberdeen Centre festivities in Richmond, B.C. Media mentions: LINDSAY JONES shared a relationship update: “After years of casual dating, the @globeandmail has finally decided to marry me!” KENT DRISCOLL, leaving APTN news, but staying in Iqaluit. … CBC’s OMAYRA ISSA, writing two books for McClelland & Stewart. “The first book will be on the richness of Black prairie life.” The Globe’s JOSH O’KANE is sliding from the tech beat into arts: “I'll focus my reporting on the institutions, businesses, policy and economics that underpin Canadian arts and culture.” In memoriam: The Prime Minister’s Office is mourning the loss of JASPREET PANDHER, who “spent several years on the team, serving Canadians and dedicating himself to building a better country,” Prime Minister JUSTIN TRUDEAU tweeted on Saturday. “He worked hard, spoke thoughtfully, and always knew exactly how to make people laugh.” | | On the Hill | |
— Find the latest House committee meetings here.
— Keep track of Senate committees here. | | TRIVIA | |
Friday’s answer: “I like to help the ordinary people. That’s my claim to fame — being ordinary …”That was LINCOLN ALEXANDER, former Cabinet minister, lieutenant-governor of Ontario and Canada’s first Black MP.
More than a few readers guessed the late CLAUDETTE BRADSHAW. Props to KELLY MACKAY, ROD PIUKKALA, KEVIN BOSCH, DOUG RICE, BOOTS TAYLOR-VAISEY, GOZDE KAZAZOGLU, ROBERT MCDOUGALL and LAURA JARVIS. Today’s question: Name the sitting MP who said: “I know what homophobia feels like in sport. I think that experience has taught me how it feels to be bullied or discriminated against, or not as included as I should have been — because it’s always a little bit insidious and not upfront. … I know there is a lot of discrimination still happening in sport. There still needs to be more done.” Send your answer to ottawaplaybook@politico.com Playbook wouldn’t happen without: Luiza Ch. Savage, Sue Allan and David Cohen. Want to grab the attention of movers and shakers on Parliament Hill? Want your brand in front of a key audience of Ottawa influencers? Playbook can help. Contact Jesse Shapiro to find out how: jshapiro@politico.com. | | | | Follow us on Twitter | | | | Subscribe to the POLITICO Playbook family Playbook | Playbook PM | California Playbook | Florida Playbook | Illinois Playbook | Massachusetts Playbook | New Jersey Playbook | New York Playbook | Ottawa Playbook | Brussels Playbook | London Playbook View all our political and policy newsletters | | Follow us | | | | |  |
