Trudeau, Trump and Trade: the New Deal

www.policymagazine.ca November—December 2018

Canadian Politics and Public Policy

Trudeau, Trump and Trade: The New Deal

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The largest manufacturer of men’s and boy’s tailored clothing in the world. www.peerless-clothing.com 1.800.336.9363 5 In This Issue 8 From the Editor / L. Ian MacDonald Trudeau, Trump and Trade: The New Deal 9 Derek H. Burney Canadian Politics and Beyond USMCA: The Enemy is Complacency Public Policy 12 Douglas Porter EDITOR How Do You Spell Relief? U-S-M-C-A L. Ian MacDonald 16 Sarah Goldfeder [email protected] It Ain’t Over if Trump’s Not Winning: The USMCA Scoreboard ASSOCIATE EDITOR Drew Fagan Lisa Van Dusen 18 [email protected] Walking on the Razor’s Edge CONTRIBUTING WRITERS 20 Scotty Greenwood Thomas S. Axworthy, The Arc of a Friendship Andrew Balfour, Yaroslav Baran, Derek H. Burney, Catherine Cano, 22 Meredith Lilly Margaret Clarke, Celine Cooper, The USMCA and the New Rules of the Road Rachel Curran, Susan Delacourt, Graham Fraser, Dan Gagnier, 25 John Weekes Martin Goldfarb, Sarah Goldfeder, How NAFTA Became the USMCA Patrick Gossage, Frank Graves, Column / Don Newman Brad Lavigne, Kevin Lynch, 28 Jeremy Kinsman, Andrew MacDougall, Trade Deal puts Canada with U.S. on China Carissima Mathen, Velma McColl, David McLaughlin, David Mitchell, Don Newman, Geoff Norquay, Canada and the World Fen Osler Hampson, Robin V. Sears, Edward Greenspon and Kevin Lynch Gil Troy, Lori Turnbull, Jaime Watt, 29 Anthony Wilson-Smith The Canada-China Trade Puzzle: A Sectoral Approach WEB DESIGN 33 Graham Fraser Nicolas Landry The Boring Campaign that Wasn’t [email protected] Column / Lori Turnbull SOCIAL MEDIA EDITOR 36 Grace MacDonald New Brunswick: Trick or Treat [email protected] 37 Robin V. Sears GRAPHIC DESIGN & PRODUCTION Judging New Judges: The Confirmation Process Monica Thomas Bob Rooney [email protected] 39 The Importance of a Well-Timed Pause in Getting Bill C-69 Policy Right for All Policy is published six times annually by LPAC Ltd. The contents are copyrighted, but may be reproduced BOOK REVIEWS with permission and attribution in Review by Anthony Wilson-Smith print, and viewed free of charge at 42 the Policy home page at Power, Prime Ministers and the Press www.policymagazine.ca. Robert Lewis Printed and distributed by St. Joseph Review by Lisa Van Dusen Communications, 1165 Kenaston 43 Street, Ottawa, Ontario, K1A 1A4 Leadership in Turbulent Times Doris Kearns Goodwin Available in Air Canada Maple Leaf Lounges across Canada, as well as VIA Rail Lounges in Montreal, Ottawa and Toronto. Now available on PressReader.

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From the Editor / L. Ian MacDonald Trudeau, Trump and Trade: The New Deal elcome to our special issue U.S. ambassadors in Ottawa who also ereignty was not on the ballot, which on the new North Ameri- served for the State Department in allowed François Legault to make the W can trade deal, NAFTA 2.0, Mexico, asks whether the deal “truly case for change from the dominance constitutes a win-win-win?” of the Quebec Liberals and the Parti or as Donald Trump has insisted on styling it, the U.S.-Mexico-Canada The Munk School’s Drew Fagan looks Québécois. Legault’s Coalition Avenir Agreement (USMCA), easy to recog- at the bilateral relationship in a time Québec won 74 ridings in the 125- nize but difficult to pronounce. of tension and concludes Canada is seat legislature, a thumping majority, while the Liberals had their worst It has been more than three decades walking on the razor’s edge. From showing since Confederation and the since Canada and the U.S. negotiated Washington, the Canadian American PQ lost recognized party standing in the first FTA in 1987, and more than Business Council’s Scotty Greenwood the National Assembly. a quarter century since the NAFTA offers a retrospective of the Canadian- was negotiated to include Mexico in American relationship, a view from Dalhousie University’s Lori Turnbull 1991-92. inside the Beltway. looks at the New Brunswick election, which resulted in a minority govern- Derek Burney was present at the cre- Meredith Lilly, who was foreign ment leading to a hung parliament ation of both, first as chief of staff to policy and trade adviser to Stephen that convened on October 23. She Prime Minister Brian Mulroney in the Harper, shares her assessment of the looks at the constitutional and politi- Canada-U.S. round, then as Canadian new deal. And John Weekes, who was cal implications of the situation. ambassador to the United States dur- Canada’s chief negotiator of the first ing the NAFTA talks. NAFTA agreement, offers his perspec- Robin Sears looks at the confirmation tive on NAFTA 2.0. of Brett Kavanaugh as U.S. Supreme There is a huge difference between Court justice and compares the pro- then and now, in that Mulroney was And columnist Don Newman offers cess to Canada’s. dealing with rational political ac- his take on the deal and its political tors in Ronald Reagan and the first implications for Canada in 2019. Looking at the energy, environmen- George Bush, both of whom had a tal and economic implications of Ot- closer who could deliver for them— n our Canada and the World sec- tawa’s Bill C-69, Enbridge EVP Bob James A. Baker, first as secretary of tion, we lead with Ed Greenspon Rooney offers an industry perspective the treasury to Reagan, and then as I and Kevin Lynch’s timely apprais- on taking the time to get it right for secretary of state to Bush. al of opportunities and challenges in stakeholders on all sides, including In- trade between Canada and China, digenous peoples. From the Canadian side, Burney which they call “the 21st century’s played a somewhat similar role in new great power.” Representing only inally, we offer two reviews of both negotiations, and he offers four per cent of the world’s economy important books for the holiday his uniquely informed institutional in 2000, they note that today “China F season. Anthony Wilson-Smith memory, as well as his insights on accounts for 15 per cent and the U.S. looks at Power, Prime Ministers and the the new USMCA, which he sees as 24 per cent. Those numbers are fore- Press, a history of the “historic love- “more as a source of relief than of cel- cast to converge in a decade or so, af- loathe relationship between the Par- ebration.” Burney acknowledges the ter which China will surpass the U.S. liamentary Press Gallery and the gov- unusually difficult circumstances of as the world’s largest economy.” The ernment of the day” from 1867 to the dealing with Donald Trump. Public Policy Forum has recommen- present. No one brings stronger cre- From BMO Financial Group, the dations for Canada’s engagement dentials than author Bob Lewis, who bank’s chief economist Douglas Por- with China, which have been widely spent 35 years working in the Gallery ter asks: “How do you spell relief?” discussed since the October release of and working with his parliamentary And his answer is that while the deal an 18-month study. Not to be over- writers as editor of Maclean’s. “disperses clouds of uncertainty over looked—the issue of human rights In a time of dysfunction in Washing- the Canadian economy, it doesn’t in China. ton, Policy Associate Editor Lisa Van change the fundamental factors driv- Looking back at the Quebec election Dusen finds perspective in Doris Ke- ing the longer-term outlook.” Porter on October 1, Graham Fraser makes arns Goodwin’s portrait of four great walks us through the details of the the case that what started out as a bor- American presidents, Leadership in deal and the markets’ view of it. ing campaign became a fascinating Turbulent Times. Sarah Goldfeder, a former adviser to one—the first since 1970 in which sov- Enjoy.

Policy 9

Prime Minister Trudeau meets with President Donald Trump of the United States during the G7 in Charlevoix. June 8, 2018. Adam Scotti photo

Beyond USMCA: The Enemy is Complacency

While the USMCA has yet to be ratified, Canada Derek H. Burney should begin strategizing beyond the stabilization of he result of our trade negotia- its North American trading relationships and look to tion with the U.S. and Mexico is the possibilities offered by the European trade deal, the T more a source of relief than cel- ebration, especially given the challenge new TPP and our potential trade growth with China of dealing with the highly unconven- and India. FTA and NAFTA negotiation alumnus and tional Trump administration on trade. Better a deal than no deal or a bad deal. former Ambassador to the United States Derek Burney More commendable perhaps for what offers some guidance. it retained than what it gained. With some warts to be sure but, on balance, a decent, respectable deal. Let’s consider first the talks, and how they came together in the end. The

November/December 2018 10 first nine months of the negotiation We still face tariffs on steel and aluminum that proceeded cautiously, with each side have no basis in American law—none whatsoever. doing their homework and staking out their basic positions. Not a lot of Imagine, Canada is an ally in NORAD, an ally in NATO, consensus. The Americans decided and a partner in the Five Eyes intelligence association and that the best way to gain traction yet is subject to tariffs on the grounds of “national was to divide and conquer. So they security”. That is absurd. moved first to reach agreement with the Mexicans and then turned their focus on Canada. My impression is that the two major exemption for culture, etc.—and the forget that what has changed and re- outstanding issues with Canada were, Canadian team deserve credit for that. mains most troubling is the “America number one, access for the Americans What did Canada gain? Some of the First” approach to trade generally by to the dairy market in Canada, which modernization measures that were the U.S. With the original FTA, and is highly protected under supply man- imported from the Trans-Pacific Part- with NAFTA, there was a consen- agement. This, more than anything nership (TPP) negotiation, whether sus and a degree of trust among the else, seemed to agitate Donald Trump, on digital commerce or the facilita- leaders about the objective—mutu- fueling many of his bombastic attacks tion of business travel, should yield ally beneficial trade liberalization that on Canada. increases in access for Canada to the would make the bloc of NAFTA more competitive in the world. Preserving the binding dispute set- U.S. market. tlement mechanism of the existing We have accepted a managed trade The fact that President Trump had agreement, NAFTA, was of primary quota on the auto sector, one that of- a very different attitude about trade importance to Canada. Why? Be- fers significant headroom for growth. made these negotiations more ardu- cause, when you’re dealing with That is a big plus given the importance ous, if not exasperating. He clearly someone 10 times your size, you of the auto sector to our exports. The missed the lesson on mutual benefit. need to protect yourself from the ar- auto parts firms have room to grow bitrary or capricious actions of any and the unions see the wage rate in- This negotiation had U.S. administration. creases accepted by Mexico as helping a serious handicap, create a more even playing field. On hat had been the sine qua non balance, a good result. and I take my hat off to the of the initial agreement, the Canadian negotiating team FTA in 1987. It was preserved We also wanted more certainty for in- T vestors and the deal has given us a de- in particular for their in the NAFTA, and Canada made it a “red-line” issue for us from the outset gree of certainty, or at least tempered stamina and resolve. They this time. The Americans wanted to some of the uncertainty. ignored the president’s get rid of it. We insisted that it stay. What did we miss out on? We still face barbs and tweets, held firm In the end, there was movement by tariffs on steel and aluminum that against key U.S. demands Canada on dairy opening 3.6 per cent have no basis in American law—none of our market (up from 3%) and by whatsoever. Imagine, Canada is an and dealt pragmatically the U.S. agreeing to leave intact the ally in NORAD, an ally in NATO, and with the substance. dispute settlement provisions. That a partner in the Five Eyes intelligence created momentum to resolve the re- association and yet is subject to tariffs maining issues. on the grounds of “national security”. This negotiation had a serious handi- That is absurd. For industries that are I suspect that the United States wanted cap, and I take my hat off to the Ca- fully integrated, these tariffs make nei- to put a “win” on trade in the window nadian negotiating team in particular ther practical nor strategic sense. before the midterms in November. for their stamina and resolve. They After all, they are fighting everywhere I know that our government claims ignored the president’s barbs and in the world on trade. They obviously that they represent a separate is- tweets, held firm against key U.S. de- saw political advantage in being seen sue but these tariffs, and threats of mands and dealt pragmatically with as getting rid of NAFTA (“promise more, were used blatantly to cajole the substance. Yes, the result is essen- kept”), even if only nominally. concessions at the negotiation table. tially a do-over of NAFTA, although Canada held firm against the most We can only hope that they will be we can’t say that because it’s a title egregious U.S. demands—scrapping removed expeditiously after the con- that’s been expunged from the vo- dispute settlement and supply man- gressional elections cabulary. At Trump’s insistence, it’s agement, insisting on 50 per cent Is it fair to say that things haven’t now the USMCA, the U.S.-Mexico- U.S. content for autos, attacking our changed that much? Yes, but never Canada Agreement.

Policy 11 ne new thing is the “non- Asian markets where there’s strong de- ing trade. So, Canada, together with market economy” restriction mand for our natural gas. Japan, the Europeans and with other O in Clause 32, the so-called We also have to take a hard look at our major players at the WTO, should China Clause. The clause stipulates declining competitiveness in North look at pragmatic ways to strengthen that when one of the three USMCA America, especially on the tax and reg- the disciplines and the rules underpin- countries wants to begin trade nego- ulatory front. As the smaller economy, ning the WTO. tiations with a non-market economy, that is not a luxury we can indulge. Complaints about China as a non- the other North American countries market economy stem from the fact must be given three-months’ notice. This agreement in principle is the first concrete step towards a new trade that they’re not playing by the rules, That may be more political rhetoric agreement. But it has to be approved especially on intellectual property, aimed clearly at China than binding by Congress, which has the ratifica- and that is a valid criticism. It would substantively. In my opinion, it has no tion authority for trade and delegates be best to tackle that overtly and col- place in this trilateral trade agreement. the negotiating authority to the ad- lectively at the WTO. I see it as a “knuckleball” one that ministration. Once the administration Secondly, diversification has to be was deemed essential by the Ameri- provides the details of the agreement, more than part of the trade minister’s cans. I would hope that our govern- Congress then has to vote its ap- title. We must get more serious about ment will do everything possible to proval. Per the provisions of fast-track negotiating with countries, even those show that this has no binding effect trade promotion authority, they can that do not share our values or that on Canada. If it had any effect, this only vote up or down without making have political systems different from restriction would be extraterritorial- changes to the agreement. ours. After all, China is a major part ity out of control, and would raise If the agreement passes, then Congress of the global economy, soon to be- questions of sovereignty. has to approve implementing legisla- come number one. We have to decide We have misfired in our approaches tion. Which means we’re looking to whether we are going to deal with the to China thus far. I think we have to 2019, at a minimum, before all of the world as it is or as we wish it were. redouble those efforts and get more se- Congressional actions take place. We have to determine from analysis rious—not just with China, but with We have to do the same in Canada whether we can get a proper negotia- India as well. with our Parliament. But when the ex- tion with China that suits our interests Diversification has to be more real ecutive and legislature are combined, without compromising our funda- than rhetorical as an objective for as in our system, it is more straight- mental values. We have complemen- Canada when it comes to trade. forward. The Mexicans have a new tary economies. There’s scope for ne- We’re never going to replace the U.S. administration coming in December, gotiation. It’s not without its dangers as our number one customer. But we and a new Congress of the Union tak- but it is worthy of serious attention. do have to find opportunities else- ing office in December. The team that A similar approach to India has obvi- where, especially in economies that is signing the agreement will be gone. ous merit and would also enable us to are growing faster than the econo- Throughout all the pending steps we use a negotiation with one Asian giant mies in North America. have to remain attentive, keep our as leverage on the other. We should The mini-TPP gives us good access to wits and ensure that the review and do it in a more coherent and strategic Japan, Malaysia, Vietnam, and other the legislation are consistent with manner than what has been attempt- signatories. We have the Comprehen- what has been agreed and that no new ed over the past decade. sive Economic and Trade Agreement hooks surface. Above all, remember We have an image of being a risk (CETA), which gives us preferential that “it’s not over until it’s over, and averse, cossetted economy and that is access to Europe. We need to make in Washington it’s never, ever over.” unfortunate. We have entrepreneurs better use of those agreements and, as There are a lot of pitfalls ahead on the with brilliant ideas, innovation skills, well, negotiate significant new agree- trade front in a world where protec- all of that. But we have to be more am- ments in an increasingly volatile glob- tionism, populism, nationalism and bitious, more confident and strive for al environment. “America First” are getting political opportunities beyond North America The biggest handicap I see in Canada traction. But hopefully the success of while making the most of those in our is complacency. We’ve become too this negotiation will have a therapeu- immediate neighbourhood. comfortable in the cocoon of dealing tic, calming effect. Derek H. Burney, Senior Strategic Adviser with the Americans for 75 per cent of at Norton Rose Fulbright, was chief of our trade. There are other opportuni- anada has to do a couple of staff to the Prime Minister during the ties, other outlets for Canadian ex- things. The Trump Adminis- negotiation of the Canada-U.S. Free ports. The new LNG facility in Kitimat C tration is doing its level best Tree Agreement in 1987, and Canadian is an excellent opportunity for Cana- to undermine the World Trade Orga- ambassador to the United States during da to open the vista, especially to the nization and the global rules govern- the NAFTA negotiations of 1991-92.

November/December 2018 12

Prime Minister Justin Trudeau and Foreign Minister Chrystia Freeland in the PM’s Centre Block office, reviewing the new U.S.-Mexico-Canada Agreement before their press conference announcing the new deal on October 1. Adam Scotti photo

How Do You Spell Relief? U-S-M-C-A

The new NAFTA 2.0, the United States-Mexico-Canada Douglas Porter

Agreement, remains to be ratified. But the specifics of the hile the new USMCA dis- deal are now known and no one is better qualified to outline perses the cloud of uncer- the details and implications than BMO Financial Group W tainty over the Cana- dian economy, it doesn’t change Chief Economist Doug Porter. the fundamental factors driving the longer-term outlook. The initial financial market reaction to the deal was one of relief, but the positive vibrations didn’t last long, given that it didn’t move the nee- dle on Canada’s broader economic outlook. As well, there is the nag- ging reality that the new agreement must still be ratified by all three

Policy 13 legislatures, including a new U.S. will ultimately see much impact both benefits (to consumers and Congress. Finally, the conventional from these adjustments. Note that some small businesses) and costs (to wisdom in markets was always that a dairy prices are already on track to retailers). Canadian consumers will deal would eventually get done, and drop this year for the fifth time in enjoy lower prices and faster deliv- the only uncertainties were around the past six years, according to the ery times due to less customs pro- timing and the details—so the deal Consumer Price Index. cessing, but this puts yet more pres- ultimately had little lasting impact • Autos: Automotive production will sure on a retail sector that already on markets or consensus projections. be subject to higher North Ameri- faces many deep challenges. can content provisions for duty-free • Prescription drugs: Canada will WHAT’S IN THE DEAL AND shipments across the three coun- extend the patent protection for WHY IT MATTERS tries, with a minimum 40 per cent certain prescription drugs (biologic • Lifespan: The United States-Mexi- coming from USMCA jurisdictions drugs) from eight to 10 years. This co-Canada Agreement, or USMCA, that pay workers at least US$16 per is part of the deal that is a clear will last for 16 years, with a review hour. There’s a “side letter” guaran- negative for Canada, since it will to be made at the six-year mark. At tee that potential U.S. Section 232 add to drug costs with little upside that point, the three countries can tariffs on automotive products will in return. not be applied to Canada or Mex- extend the agreement or begin for- • Cultural: Previous protections for ico up to a certain limit. Canada mal negotiations to fix any irritants. Canadian cultural industries are agreed to a 2.6 million passenger However, as before, any party can retained. However, Canada made vehicle duty-free limit per annum still decide at any time to exit the concessions on copyrights (out to and US$32.4 billion in parts (light agreement after six months’ notice. 70 years after death, from 50 years trucks are exempt). These are not currently). • The dispute settlement mecha- binding constraints as Canada cur- nism for countervailing and anti- rently produces just under two mil- • Restrictions on Canada’s abil- dumping duties (Chapter 19) in the lion light vehicles for its domestic ity to forge free-trade deals with original NAFTA and not part of the and export markets, and currently “non-market” countries: The deal U.S.-Mexico deal, is retained. This exports just over C$23 billion (or gives the U.S. and Mexico the right was a Canadian red-line issue and roughly US$18 billion) in parts. Ef- to review any trade deals that Can- was the sticking point in the origi- fectively, this portion of the agree- ada forges with non-market coun- nal FTA negotiations in 1987. ment is a safeguard that Canada tries (read China), and to abrogate • The state-to-state dispute resolu- will not become a high-volume the USMCA with six months’ notion mechanism (NAFTA’s Chapter producer in the future; given that tice if unsatisfied. While opinions 20) was already retained in the U.S.- Canada’s vehicle production has differ wildly, it’s clear that the cur- Mexico deal. The investor-state dis- trended lower since 1999, this had a rent U.S. administration would pute settlement mechanism (NAF- low probability. We judge the over- loom heavily over any possibility TA’s Chapter 11) will be eliminated all effect of the auto agreement as a of a broad deal with China. between Canada and the U.S. net positive for Canada. • Establishing a Tri-nation Macro- • Supply management: U.S. dairy • U.S. steel and aluminum tariffs: economic Committee: The Com- farmers will get access to just under These remain in place, as do Can- mittee will consult to prevent each 3.6 per cent of Canada’s protected ada’s retaliatory tariffs. A quota USMCA member from embarking market. Canada has agreed to elimi- system is a possible replacement, on a perceived “competitive de- nate its Class 6 and Class 7 milk cat- but this issue may not be settled valuation”. Since Canada has long egories within six months. Given until the agreement is officially abandoned the practice of using that Canada’s dairy market is grow- approved by all three nations. A foreign exchange intervention to ing by roughly 1 per cent per year, broader concern is that the deal “manage” its currency, this might and that the import quotas will be does not limit the U.S. Adminis- not be a big deal. Still, it could see phased in over six years, Ottawa be- tration from imposing Section 232 the Bank of Canada second-guess lieves that the industry can adjust tariffs on other Canadian indus- policy decisions given the poten- to the changes. Even so, the federal tries, apart from autos. tial impact on the loonie. While government intends to compensate • De minimis thresholds: The the Committee seems innocuous, dairy farmers. Poultry and egg pro- threshold value of imported goods it may have challenged the Bank ducers are also relinquishing market purchased online from the U.S. that of Canada’s rate cut in early 2015 share, with poultry opening up by qualify for duty-free access for Ca- (during the oil shock). almost 5 per cent over a six-year pe- nadians rises from C$20 to C$150. • Eliminates the “Proportionality” riod and egg producers ceding 1.3 Imported goods valued at less than clause in energy production: The per cent with no phase-in period. C$40 will also be exempt from sales elimination of this clause is favour- It’s debatable whether consumers taxes. The higher thresholds have able for Canada’s energy industry, as

November/December 2018 14 it had the potential to limit its abil- October 24 rate decision, a major outcome to begin with (we often ity to reduce shipments to the U.S. downside risk has been cleared. Gov- argue that the index is not an ideal and hence diversify sales to other ernor Stephen Poloz has stressed the reflection of the underlying Cana- faster-growing regions, such as Asia. “gradual” rise in rates, but that nar- dian economy). And, the deal does The rapid rise in U.S. oil production rative may well change with a deal little to address other weights, such in the past decade made this clause in hand. We are now anticipating as the record oil-price differential from the original FTA all but redun- three rate hikes in 2019 (January, and slowing credit growth. The big- dant from a U.S. perspective. April, and July). This would bring ger picture is that Canadian equities the overnight lending rate to 2.5 are relatively cheap versus their U.S. IMPLICATIONS FOR MARKETS per cent, the low end of what the peers, with the forward earnings AND THE ECONOMY Bank considers to be neutral. yield gap recently trending around the widest level of the cycle—if the • The economy: This deal was most- • The Canadian dollar: The currency trade deal improves sentiment to- ly about minimizing the negative initially appreciated moderately on ward Canada more broadly, it could impact on Canada from the harsh- news of the deal. This was more or help eventually narrow that gap. est U.S. demands. While Canada less the market scrubbing out risk made some concessions, the big- of a negative outcome, but Canada • Government finances: Ottawa made gest positive from this deal is that continues to struggle from a com- it immediately clear that it will of- it will remove a massive cloud of petitiveness perspective and the fer some support to dairy, poultry uncertainty for policymakers and USMCA doesn’t change that. Prior and egg producers as an offset to businesses. We had been assuming to the deal, we were looking for 78.5 the concessions made in the deal. that an agreement would eventually cents ($1.275) for the end of this Look for an announcement in the be reached, but the deal heavily re- year and 80 cents (or $1.25) for the Fall Economic Statement or Budget duces uncertainty surrounding our end of 2019. We remain generally 2019. The good news is that Ot- 2019 outlook. There is now upside comfortable with that call, although tawa’s finances are tracking some- risk to our call of 2.1 per cent GDP persistent weakness in Canadian oil what better than expected in the growth next year. prices has been a drag on the loonie. current fiscal year (running $4.5 • The Bank of Canada: NAFTA and • Stocks: A limited TSX reaction to billion ahead of last year in the first broader trade uncertainties have the deal likely reflects the fact that four months of FY 18/19). been a key issue for the BoC over much of the index was never all Douglas Porter is Chief Economist of the past year. Looking beyond the that exposed to a negative NAFTA BMO Financial Group.

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Policy 15 Sponsored Content Canada’s Diabetes Epidemic Kimberley Hanson Director of federal affairs at Diabetes Canada

or years now, a huge crisis has been growing, seem- Economic Impact of Diabetes in Canada F ingly unnoticed by many of us—the diabetes epidemic. One in five Canadians has been diagnosed with diabetes, and one in three have either prediabetes or diabetes now. Costs to Canada’s health-care system are rising at a rate of about 40 per cent per decade, topping $27 billion in 2018 and showing no signs of slowing. And at the same time as the rates of this chronic disease are skyrocketing, extensions to the ‘data protection’ period for some medicines under the USMCA may influence their pricing. The architects of a national pharmacare approach certainly have their work cut out for them as they tackle the many issues facing Canadians requiring access to effective and innovative Sources: Costs—International Diabetes Federation Diabetes Atlases; Prevalence— therapies. Canadian Diabetes Cost Model To be clear, about six million Canadians have diabetes, and when Canadians with pre-diabetes diagnoses are included, the number of Canadians living or threatened with diabetes rises to ation of Indigenous-specific strategic approaches led and owned 11 million. To put those numbers in the context of our govern- by Indigenous groups. ment, that equates to 113 of our 338 Members of Parliament Diabetes 360˚ can save our health-care system billions of dol- having prediabetes or diabetes. That’s as many as every sitting member of Parliament who is not Liberal or NDP. Or two-thirds lars in the short- and long-terms. For example, if every Canadian of the Liberal caucus. who has prediabetes had access to the proven Diabetes Preven- tion Program, we could prevent more than 100,000 Canadians Diabetes claims thousands of Canadian lives and disables tens of from receiving a diagnosis of diabetes every year. If we improve thousands more each year. It affects Indigenous Canadians far the care that those already living with diabetes receive, research more adversely. What we are doing now to address this epidemic shows we could prevent a minimum of 5,000 amputations and is, quite simply, not working. 35,000 hospitalizations each year. That would save our health- But, just as government has played a critical role in addressing care system $18 billion in the next decade alone. other health and natural crises, so can it play one in com- bating diabetes—by embracing a nation-wide strategy called here are also significant savings to be realized by Cana- Diabetes 360˚. T dian businesses. According to Benefits Canada, employees living with diabetes cost their employers an average of $1,500 per year in lost productivity. And another $1,500 per year in ex- At the same time as the rates of this chronic disease tra benefit plan costs. Preventing those 100,000 Canadians per are skyrocketing, extensions to the ‘data protection’ year from developing diabetes will save Canadian businesses a period for some medicines under the USMCA may influence further $18 billion in the next decade. their pricing. The architects of a national pharmacare approach certainly have their work cut out for them as Canada’s economic prosperity depends on a healthy workforce. Yet we know that the effects of living with this challenging dis- they tackle the many issues facing Canadians requiring ease impede the ability of those with diabetes to fully participate access to effective and innovative therapies. in the workforce. For employees who must take disability leave because of their diabetes, the leaves are on average 15 per cent longer in duration, and many remain on disability until death. Implementing the Diabetes 360˚ recommendations can help ensure Canada’s economic health at the same time it ensures our Developed in collaboration among 120 stakeholders, including physical health. nine provincial governments, Diabetes 360˚ contains evidence- based recommendations aimed at improving patient outcomes. anada has a proud history as an innovator in diabetes It will enhance the prevention, screening and management of C including, Dr. Frederick Banting’s discovery of insulin in diabetes to achieve better health for Canadians. It will reduce 1921. The 100th anniversary of this discovery is fast approach- unnecessary health care spending by billions of dollars, improve ing, and by supporting Diabetes 360˚, Canada can retake a lead- the lives of millions of Canadians and protect Canada’s produc- ership role in the fight against diabetes. tivity and competitiveness. For a strategic investment of $150 million over seven years, the Diabetes Canada recommends that in Budget 2019 the federal federal government can achieve at least $36 billion in cost reduc- government should establish a national partnership and invest tion, ensure the future health and prosperity of Canadians and $150 million in funding over seven years to support the devel- truly make a difference for all Canadians affected by diabetes. opment and implementation of the Diabetes 360° framework. Concurrently, the federal government should facilitate the cre- That’s just good public policy.

November/December 2018 16 It Ain’t Over if Trump’s Not Winning: The USMCA Scoreboard

Part of trade negotiations, at least between and among and then by bringing Canada back democracies, is post-agreement positioning. Usually, a bal- to the table. ance is sought between assuring constituencies that you Canada scored by securing an agreement in the wake of what was largely weren’t fleeced and that you didn’t fleece in return; the assumed to be a bilateral end-game optimal takeaway being that all sides can claim a win. with Mexico and maintaining the dispute resolution mechanism pre- When negotiating with an American president who likes viously known as Chapter 19. The winning even when there’s no contest, the concept of win- United States scored by securing win-win takes on new proportions. above all a more restrictive rules of origin regime for textiles and autos, increased market access for agricul- tural products, and greater protec- Sarah Goldfeder given up in the process. But that im- tion for intellectual property. mediate high of having come to an onald Trump likes winning. agreement is quickly becoming a chal- hat did each country give More precisely, he hates to lenge to maintain. While both Mexico up? The Mexicans agreed D lose. So much in fact, that if and Canada can count places where W to auto rules of origin he hasn’t won, the game isn’t over. they gave up significant ground, it’s that will likely drive investment north, and to more robust labour Since he became the president of the hard to find an area where the Unit- standards, including legislating the United States, the ruling class has ed States walked away worse off than rushed to read and re-read the Art of ability to bargain collectively. The Ca- when they arrived. the Deal, hoping to use it as an owner’s nadians gave the Americans access to manual of sorts—how to manage this 3. 6 per cent of their dairy market and disruptive force that is the leader of While both Mexico more significantly, agreed to the dis- the free world. While it is simplistic and Canada can solution of class 7, a relatively recent to wholly subscribe to the narrative count places where they creation that was a significant irritant and strategies outlined in that book, gave up significant ground, in the bilateral relationship. In addition, Canada agreed to higher stan- they are at the very least illustrative. it’s hard to find an area President Trump will not call the dards on intellectual property pro- game until he has the most points on where the United States tections, and broader restrictions on the board. September 30, the United walked away worse off data localization. States took the board in the renegotia- than when they arrived. It is less clear what the United States tion of NAFTA and the president both gave up. They backed off on aggres- declared victory and the birth of the sive proposals for U.S. content in United States-Mexico-Canada-Agree- the automobile rules of origin, the ment (the USMCA). Each country had to bring an agree- sunset clause, and government procurement. Peanut, peanut butter and Does the final agreement reached by ment back to their respective elector- sugar tariff rate quotas (TRQs) were all three countries truly constitute a ates that would symbolize victory for increased, allowing Canada greater win-win-win? their domestic political equities. Mex- access into the U.S. market. The Unit- In some cases, a win is avoiding a ico scored with the positioning that it ed States also accepted more mod- catastrophic loss—which is, at least was the partner that essentially made erate increases in de minimis levels, in part, what the Mexicans and Cana- the deal possible, first by agreeing to rather than pushing for the other two dians are pitching to their respective an Auto Rules of Origin chapter that partners to match the $800 U.S. rate constituencies. Having the agreement significantly reduces Mexico’s advan- on online import orders. And, nota- in place is worth more than what was tages for manufacturing investment bly, the United States allowed for the

Policy 17 by 9 per cent (to $1.4 trillion despite economic growth rates that almost doubled (from 2.2 per cent in 2017 to 4.2 per cent in 2018). The federal coffers need funds and the tariffs are providing those funds readily—more so with every tranche of tariffs announced. In other words, those 232 tariffs and the diplomatic headaches they may have caused may be worth every penny for the U.S.

This is the reality of the Trump era: free trade is no longer an aspiration. Managed trade is the future. Not only did the USMCA define a framework for how the three partners will trade with each other, it also dictates, at least in part, how the partners engage in

President Donald J. Trump, joined by Cabinet members, legislators and senior White House trade with the world. advisers, announces completion of the United States-Mexico-Canada Agreement October 1, 2018, during a press conference in the Rose Garden of the White House. White House Photo continuation of a dispute resolution not a threat to it. The side letters on This is the reality of the Trump era: mechanism that many within the the process and TRQ for autos in the free trade is no longer an aspiration. Trump Administration consider to be event of a 232 decision on auto im- Managed trade is the future. Not only an attack on U.S. sovereignty. ports only enshrine the U.S. argu- did the USMCA define a framework for ment that Canada (and Mexico) and how the three partners will trade with ut then there are the side let- their exports have the potential to be each other, it also dictates, at least in ters on the process for future a security threat. part, how the partners engage in trade American use of section 232 B It is also worth noting that the steel with the world. The North American of the Trade Act of 1974. These are and aluminum tariffs remain. While integrated supply chain may appear significant and a win for the United Minister Freeland and the USTR con- States at the expense of the Canadi- to have been saved, but it will have tinue to discuss a path forward, even ans in particular. Section 232 allows to adjust to absorb the impact of the the political pressure of the retaliato- for the U.S. President to unilaterally changes in this agreement. In the end, ry measures imposed by Canada has assign tariffs on goods should the there should be no doubt that Don- not appeared to be sufficient to has- Department of Commerce determine ald Trump won, but on the question ten a conclusion. Kentucky Governor that imports of that good are creat- of whether or not this was a win-win- Matt Bevin, while calling the Cana- ing a national security threat. This is win, the only answer may be the argu- dian retaliatory measures a “cash the same section of U.S. law that pro- ment that no one can prove. Are we grab” in an interview with CBC, also vided President Trump with the au- acknowledged that all tariffs are rev- better off with it than we would have thorization to implement 25 per cent enue producers. been without? tariffs on steel and 10 per cent tariffs on aluminum. Canada has, from the The United States is having a rough Sarah Goldfeder, a principal of beginning, argued that because of time with its books in the Trump Earnscliffe Strategy Group, is a former the unique bi-national nature of the era. Tax cuts accompanied by in- State Department official who advised North American Aerospace Defense creased spending on bloated military two U.S. ambassadors to Ottawa and Command, it is part of the Ameri- and homeland security budgets have previously served at the U.S. Embassy can national security establishment, combined to run up the national debt in Mexico.

November/December 2018 18 Walking on the Razor’s Edge

Trade negotiations tend to be a proxy process for the bi- consumers will benefit from a small opening of the domestic dairy indus- lateral relationship status of the parties at the table. In try to U.S. competition and a small the case of trade negotiations during the tenure of Donald increase in the import limits on du- Trump as president of the United States, that dynamic as- ty-free goods. Canada’s cultural protections were maintained, although sumes a whole new level of delicacy. As the Munk School’s those terms have never really been Drew Fagan writes, the completion of the USMCA negotia- inviolate. And the dispute settlement mechanism—which was a Canadian tions offers some insight into the state of our most impor- “red line” during the talks 30 years tant bilateral relationship in a time of tension. ago and remained so this year—was maintained, representing for Ottawa the preservation of rules over power in an asymmetrical bilateral relationship. The impact of the new United States- Drew Fagan n the deal itself, the doctor’s Mexico-Canada Agreement deserves creed seems to apply: First, do n the shores of Lake On- to be measured from two perspectives: no harm. tario, at the still-operating by looking at the deal itself on the nar- O O Cameco Corp. plant in Port row grounds of trade and investment But on the second measure, the Hope, uranium was processed for the and by looking at the impact on Can- broader state of Canada-U.S. relations, United States Army and used in the ada-U.S. relations more broadly. much appears different and not for world’s first atomic bombs that de- the better. stroyed Hiroshima and Nagasaki in The impact of the During a recent TV interview with 1945 and brought an end to the Sec- President Trump, attentive viewers ond World War. new United States- Mexico-Canada Agreement noted in the White House background It seems strangely appropriate, then— a kitschy painting of an idealized if wildly disconcerting—that the deserves to be measured scene of Republican presidents from Trump administration recently initi- from two perspectives: by Lincoln to Trump relaxing together ated a trade investigation of uranium looking at the deal itself on as if at a public gathering. The two imports on the grounds of national the narrow grounds of presidents sitting closest to President security under Section 232 of U.S. Trump were presidents Eisenhower trade law. President Donald Trump trade and investment and and Reagan. Eisenhower’s own view seems determined to undermine by looking at the impact of relations with Canada was remark- the post-war Western architecture on Canada-U.S. relations able given President Trump’s perspec- of open trade and multilateral secu- more broadly. tive: The two countries were so close, rity with his America First approach. Eisenhower once said, that U.S. of- So why not take issue with the very ficials should see the issues as much imports that helped end the war and from the Canadian viewpoint as the launch almost 75 years of peace and American. Reagan wasn’t quite so prosperity; material that now fuels On the first measure, all thesturm und magnanimous but he found it hard nuclear reactors? drang of the negotiations appears to to say no to Canada, especially when Prime Minister Brian Mulroney called. In a recent conversation, Allan Got- amount to relatively little. The deal is lieb—Canada’s ambassador to the U.S. not ideal, certainly. The USMCA rep- With President Trump, Canadians are during the free trade negotiations of resents a limited turn toward mercan- faced with an unprecedented chal- the 1980s—expressed shock at the re- tilism with an export ceiling on autos lenge: someone who actually portrays cent NAFTA talks, especially the vilifi- (second only to energy by value of the U.S. as having been victimized cation of Canada: “It’s almost impos- Canadian exports to the U.S.) and the by what he characterizes as Canada’s sible to imagine. Since we emerged maintenance of “Buy America” pro- guile (sharp trading practices) and from the British Empire, our assump- grams. But NAFTA needed to be up- sloth (security free-riding). Blame tion always was that we were the Unit- dated for the digital age and the new Canada—the two-decades old Oscar- ed States’ best friend. I’m astonished.” pact does so to some extent. Canadian nominated song—was meant to be

Policy 19 satire. “We must blame them and cause a fuss before someone thinks of blaming us,” was the final line. Perhaps we should have seen this coming. The salad days of free trade occurred in the early years. Trade with the U.S.—in both directions—grew at double-digit rates through the 1990s. Canada’s so-called trade “dependence” on the U.S. grew substantially so that by the turn of the century about 85 per cent of everything Can- ada shipped beyond its borders went directly south.

hen, the terrorist attacks of September 11, 2001 occurred T and nothing has been the same since. Bilateral trade growth slowed markedly as the border thick- ened and the North American economy went into recession. Meanwhile, China joined the World Trade Orga- Prime Minister Mulroney and President Reagan in the Rose Garden of the White House in 1984. nization and the benefits of trade in “Reagan found it hard to say no to Canada,” writes Drew Fagan, especially when Mulroney called. the American mind—even with Cana- White House Photo da—got lost to the controversies over outsourcing and deindustrialization. ing close consultation among the late 40s and 50s—the golden years of Like the border impact post-9/11, the three members if any chooses to push Canadian diplomacy—wasn’t aimed promiscuous use or threatened use of ahead with a trade pact with a non- at drawing distinctions with the Unit- Section 232 trade remedies wasn’t con- market economy such as China. The ed States, as occurred more commonly sidered a serious prospect by Canadian Trudeau government will soon test towards the end of the Cold War and officials as far back as the free trade those terms, given China’s interest in in its aftermath. Quite the opposite, it negotiations of the mid-eighties. Now, re-engaging on trade negotiations. was aimed at helping give birth to and Section 232 must be considered a fun- make effective the global organiza- “Developing our own distinctive in- damental threat to Canada’s economic tions—the United Nations, the Bretton ternational outlook while managing security and to its ties with the U.S. Woods institutions, NATO—that kept our all-pervasive bilateral relationship Canada did win terms in the USMCA the United States engaged globally and with the United States are but two di- for a 60-day cooling off period when prevented an American return to the mensions of a single preoccupation the U.S. threatens to impose new sec- isolationism of the pre-war years. tion 232 measures but it remains to be that has dominated our existence for And so it should be today. No grand- seen whether this will be effective. half a century,” Allan Gotlieb said in a speech to Ottawa diplomats in 1991 standing or public piety, for this More broadly, the years ahead may that deserves to be dusted off today. needlessly riles Washington. Just the seem like walking on the razor’s “Our overriding national preoccupa- dogged work that Canada excelled at edge. We must maintain trade with tion has been about how to limit U.S. two generations ago when the mod- Washington as best we can, for that power over our national destiny while ern world was created. One timely ex- is where the motherlode remains. (Ca- deriving maximum advantage from ample is Canada’s leadership working nadian exports to the U.S. approach our propinquity.” with like-minded countries—absent the total value of all interprovincial the United States—on WTO reforms trade and are almost 20 times greater In that speech and more recent essays, to make it more efficient, effective and than exports to China.) But we must Gotlieb made a distinction between fair. What could be more worthy? also build our trade and foreign rela- Canada’s multilateral vocation dur- Drew Fagan is a professor at the Munk ing the post-war years versus more tions elsewhere in the face of a pow- School of Global Affairs and Public recent times, which applies today as erful neighbour with an indifferent or Policy, University of Toronto, and a even unfriendly mindset. This will be the Trump administration oscillates Public Policy Forum fellow. He is a made more complicated still because between retreat from the world and former Ontario deputy minister and head the neighbour also is jealous—wit- sabre rattling with friend and foe alike. of policy planning at what is now ness the terms of the USMCA requir- Canada’s multilateral activism in the Global Affairs Canada.

November/December 2018 20 The Arc of a Friendship

Canada’s relationship with the United States has been So, when the oath was administered and the 45th president took the po- modulated for the past century by an asymmetry not just dium, the room fell silent. of power but of attention. The smaller partner felt free to When the new president turned his chafe occasionally at the superpower next door and the attention from Washington to foreign larger one politely ignored it. The current American presi- capitals, you could have heard a pin drop in the Canadian Embassy. He dent, however, comes with a set of political, tactical and made the following declaration: temperamental profile points for which Canada happens to “We assembled here today are is- be a very convenient foil. suing a new decree to be heard in every city, in every foreign capital, and in every hall of power. From this day forward, a new vi- Scotty Greenwood nity. Instead, the world got an isola- sion will govern our land. From tionist, an antagonist, a disruptor-in- this moment on, it’s going to be or as long as I can remember, chief who would take particular glee America First. Every decision on the Canada-US dynamic has at making outrageous claims about trade, on taxes, on immigration, F been characterized as follows: other countries and their leaders. on foreign affairs, will be made Canadians love to hate the U.S. but That included confronting Canada as to benefit American workers and the U.S. is only allowed to love Can- well as Prime Minister Justin Trudeau American families.” ada. Some level of anti-American sen- repeatedly, publicly, and relentlessly timent has always been par for the during Trump’s first year and a half essage received. The foreign course north of the 49th parallel. But in office. governments around the anti-Canadianism? In recent history, M world began to recalibrate On the day that the 45th president it hasn’t been a factor, at least not un- their approaches to the U.S. accord- was sworn in, the Canadian Embassy til the election of the 45th president of ingly. Less than a month after the the United States. in Washington D.C. had a reception inauguration, Prime Minister Justin and watch party, as they always do. Trudeau came to Washington for his Canadians were taken aback during Situated at 501 Pennsylvania Avenue first official meeting with his counter- the 2016 campaign when both the with a perfect view of the U.S. Capi- part. The conversation could not have Democratic and Republican nominees tol and inauguration parade route, the gone better. The president said: called for a new look at the North embassy hosts what has become the “America is deeply fortunate to American Free Trade Agreement. Con- most coveted ticket in town every four have a neighbor like Canada. ventional wisdom coalesced around years for the inauguration. the idea that it was time to modern- We have before us the opportu- ize the NAFTA to reflect the modern The mood in town was different that nity to build even more bridges, economy. Conventional wisdom also January 20th than on previous inau- and bridges of cooperation and assumed that Hillary Clinton, general- gurations. There were jubilant Trump bridges of commerce. Both of us ly considered a fan of Canada, would supporters who had traveled from far are committed to bringing great be elected, and the trade negotiation, and wide to experience the election of prosperity and opportunity to whenever it occurred, would reflect the the one who would “Make America our people.” mutual admiration and long-standing Great Again.” Trudeau returned the goodwill, and in ties that Canada, the U.S. and Mexico Once inside the embassy, a Who’s their joint press conference, diplomat- enjoy. Then, in a surprise even to him- Who of U.S. and Canadian officials ically declined several opportunities self, Donald J. Trump won. mingled, wondering if the president- to criticize the president. The world had been expecting Clin- elect who was so bombastic on the The negotiations to update NAFTA ton, a known commodity. She is a for- campaign trail, would become more then began in earnest. Each of the mer First Lady, senator and secretary “presidential” in his inaugural ad- three countries played host to a se- of state, and an unabashed globalist dress. The campaign, after all, was ries of talks. Throughout the ensuing with a deep appreciation for the role over. The weighty business of govern- year and a half, the president would of the U.S. within the world commu- ing was upon him. tweet about tearing up NAFTA, dispar-

Policy 21 age Canada and Mexico, and increase was not good for the gander in Cana- pressure in the negotiations. da-U.S. relations—until now. That’s a disorienting feeling for Canadians. As part of that pressure, the U.S. in- voked “national security” under Sec- It is in this context that NAFTA was re- tion 232 of the 1962 Trade Expansion negotiated. Surprisingly, the U.S. was Act in order to levy tariffs on steel willing to concede on several red-line and aluminum. Never mind what the issues. The U.S. wanted to eliminate president said earlier about Canada the trilateral dispute settlement mech- shedding blood alongside Americans anism. Canada insisted on keeping it. in wars fought together. These tariffs Canada won. The U.S. wanted Canada triggered anger, confusion and im- to transition to free market in dairy mediate retaliation from Canada and products. Canada wanted to main- Mexico, as well as other countries. tain supply management. Neither side won, both compromised with a modest move towards managed trade. At the G7 meeting in Both the U.S. and Canada advocated Charlevoix last June, for enhanced wages in Mexico, especially in the auto sector, and the new Trump and Trudeau again After Lester Pearson criticized Lyndon agreement reflects that. met face to face. They joked Johnson for his conduct of the Vietnam War, the president told him: “You pissed on my That said, before we congratulate our- about having solved the rug.” Photo Library and Archives Canada selves on the USMCA, let’s remember tariffs and fixing NAFTA. that it’s not done. The new agree- They were pretty close to a In the 19th century, Sir John Thomp- ment will need legislative approval deal, it seemed. A press son said of the U.S., “These Yankee in all three countries. Moreover, the politicians are the lowest race of steel and aluminum tariffs remain. In conference and several thieves in existence.” Later, John the case of the members of the 116th tweets later, the relationship Diefenbaker and John F. Kennedy Congress, they will arrive in Washing- was on the rocks. famously disliked each other—the ton in January with other priorities on populist prairie Protestant versus the their minds. Handing Trump a major urbane Boston Catholic. During the victory on trade will surely not top the Vietnam era, Prime Minister Lester Democrats’ list. It will be incumbent Pearson publicly questioned Lyndon on all of those who support the new At the G7 meeting in Charlevoix last Johnson’s handling of the war in a agreement to engage in earnest to see June, Trump and Trudeau again met speech at Temple University in Phila- that it is passed. delphia. “You pissed on my rug,” LBJ face to face. They joked about having And while Canadians now know famously told Pearson. While Pierre solved the tariffs and fixing NAFTA. what it feels like to be subjected to Trudeau and Richard Nixon were not They were pretty close to a deal, it anti-Canadian sentiment coming personally close, they worked well to- seemed. A press conference and sev- from south of the border, there are gether to restore the relationship to eral tweets later, the relationship was two elements of silver lining. One working order. on the rocks. is that Canada and Mexico declined Trump didn’t appreciate the way the n more recent times, the Canada- to take the bait as the U.S. ratcheted Trudeau had characterized their bilat- U.S. relationship has progressed up the pressure in an effort to lever eral talks, or his saying that Canada I irrespective of the dynamic be- a “better deal” for Americans. The would not be pushed around on tar- tween the elected leaders. There has second is, the overall debate about a iffs. Advisers from the White House often been a popular undercurrent new trade agreement has caused citizens in all three countries to pause doubled down on the president’s very of Canadian resentment towards the to make sure they don’t take the tri- personal criticism of Trudeau. U.S., though during Barack Obama’s eight years in office, he sustained lateral relationship for granted. Our This is the point in the story when an approval rating among Canadi- interconnectedness in the North Canadians began to ask if we have ans higher than both his numbers at American neighborhood continues reached an all-time low in Canada- home and that of his domestic coun- to triumph even in the face of tough U.S. relations. The truth is, there have terpart for most of that time, Stephen talk from the disruptor-in-chief. been times when Canadian leaders Harper. It wasn’t until the election of Scotty Greenwood is a leader of the have criticized the U.S., but there are Trump that an American president public policy practice at DentonsLLP not a lot of examples of the U.S. re- targeted Canada for resentment of in Washington DC, and CEO of the turning the ire. his own. What’s good for the goose Canadian American Business Council.

November/December 2018 22

President Trump with Prime Minister Trudeau at a Canada-U.S. bilateral on the margins of the G7 Summit in Charlevoix, June 8, 2018. Also, from left, USTR Bob Lighthizer, U.S. Ambassador to Canada Kelly Craft, and Foreign Affairs Minister Chrystia Freeland. They talked trade. Adam Scotti photo

The USMCA and the New Rules of the Road

At a time of geopolitical disruption, much of it rationalized Meredith Lilly by the unpredictable presidency of Donald Trump, no trade he successful negotiation of deals are local. As evidenced in the so-called China clause the United States-Mexico- of the United States-Mexico-Canada Agreement, a newly T Canada Agreement (USMCA) in principle has been welcomed competitive relationship between Washington and Beijing is with a sense of relief across Can- playing out in places beyond the bilateral. ada. But rather than embraced as a “good” deal for Canada, the USMCA is regarded by most experts as a “good enough” deal, the best that Canadian negotiators could have achieved given the unpredictable and protectionist pos- ture south of the border.

Policy 23 Reaching an agreement with the One overlooked reality is that the end zones for a Americans had become increasingly NAFTA 2.0 were predictable from the outset, necessary in order to restore stability and certainty to Canada’s lagging suggesting the three countries could have arrived at a investment climate, and to prevent trilateral agreement much faster and with less acrimony. a far worse future from material- izing. There is ample evidence that the Trump administration would have made good on its threat to impose punitive auto tariffs on Cana- he best that the two smaller steel and aluminum hit Canada hard, da in the 25 per cent range had the NAFTA partners could be ex- but the U.S.’s real target was China. It Trudeau government failed to sign T pected to achieve in those ar- also took this very aggressive action on to the U.S.-Mexico deal that was eas would be the status quo. by the Americans before Canada’s concluded in August. Auto tariffs on Department of Finance took serious Canada would have spelled disaster Indeed, after more than a year, the measures to address the dumping for both the sector and the broader three countries landed on an agree- and trans-shipment of Chinese steel Ontario economy, jeopardizing well ment that was largely spelled out from that the U.S. had long requested. over 100,000 jobs. Day One. For all the political drama that unfolded in the final weeks of Following the imposition of steel Many accounts have already been negotiations, the same deal could and aluminum tariffs, the Americans written about what Canada gained have been reached last spring, with then proceeded to circle the wagons and lost in the new deal. But one less damage to Canada’s economic on an auto tariff strategy over the overlooked reality is that the end interests. For it was over the summer summer months. With the completion of renegotiations with South zones for a NAFTA 2.0 were predict- months that Canada was slapped Korea and NAFTA partners, the U.S. able from the outset, suggesting the with billions in steel and aluminum reached trade agreements with three three countries could have arrived tariffs and President Trump ramped of its major vehicle exporting trad- at a trilateral agreement much faster up his rhetoric against Prime Minis- ing partners. The subsequent launch and with less acrimony. ter Trudeau, further entrenching the of bilateral negotiations with each of impression that Canada remains an For example, before negotiations be- Japan, the European Union and the unstable investment environment. gan in 2017, virtually no close ob- United Kingdom means the U.S. has servers expected Canada or Mexico also now made commitments to all to come out further ahead under the After more than a of its trade allies who export vehicles Trump administration. Instead, vari- that can keep them protected inside ous modernization chapters such as year, the three any future U.S. tariff wall. digital, small business, services, la- countries landed on an In short, this sequencing has set bour and environment were expected agreement that was largely the table for the Americans to now to be transplanted from the Trans- spelled out from Day One. move forward aggressively with Pacific Partnership (TPP) that the U.S. For all the political drama auto tariffs targeting China. When left in 2017. These modernization added to the $250 billion in tariffs objectives would be accompanied by that unfolded in the final that the U.S. has focused exclusively a U.S. “rebalancing” agenda that re- weeks of negotiations, the on China, the groundwork has been quired both Canada and Mexico to same deal could have been laid for a new Cold War between the make concessions in politically im- reached last spring, with two superpowers. portant areas for Trump in exchange for ongoing access to the American less damage to Canada’s t is through this lens that the market. Mexico would be forced to economic interests. USMCA clause on non-market make concessions on auto rules of or- I economies must be viewed: not igin and Canada would be pressured as a deliberate challenge to Canadian to provide comparable levels of ac- sovereignty but instead as an Ameri- cess to its dairy market that were pre- can chess piece in a much more com- viously negotiated via the TPP. Any But the most important reason to plicated game. Rather than an Amer- other Canadian or Mexican priorities reach a quick deal was to ensure the ican veto on Canadian trade policy, that were not shared by the Ameri- USMCA negotiations did not get Article 32.10 offers a plain message cans were virtually guaranteed to caught in the crossfire of Trump’s de- of deterrence to all countries seeking stall, including government procure- veloping trade war with China that to trade with the U.S.: you’re either ment, temporary entry, and Canada’s started rolling out last spring. The with the United States or you’re with so-called progressive trade agenda. U.S. 232 national security tariffs on China—pick sides.

November/December 2018 24 Trump’s preference for the “stick” over the “carrot” may be brazen and aggressive but this orientation to China is not new for the Americans. For example, other provisions in USMCA that target China date back to the Obama-era TPP text, such as currency manipulation, data localization and state-owned enterprise requirements. Now that these provisions are entrenched in the USMCA, the Americans can use the text as a template for negotiations with future trade partners.

Furthermore, the Americans have already been actively working with the EU and Japan to develop a trilateral approach to address and enforce rules around China’s distortionary Outgoing Mexican President Enrique Peña Nieto with Foreign Affairs Minister Chrystia Freeland in practices such as industrial subsidies, Mexico City on February 2, 2018. Wikipedia photo state-owned enterprises and forced benefit. Instead, we should follow in perspective. While there are many technology transfer. Once the three our normal path of Canadian prag- new opportunities for exporters in countries have a united strategy, matism to support the Americans the fast-growing markets of the Asia others including Canada will be in- where it makes sense, while falling Pacific via our new TPP partners and vited to join this “consensus”. back in areas where it doesn’t. In South Korea, none will replace the fact, many of the trilateral efforts led US market next door. Canada’s in- We needn’t fixate by the Americans to constrain China terests are always better served when on Article 32.10 as would be positive for Canada, par- we cooperate with our friends and a deliberate provocation to ticularly in sectors such as the digital allies: we needn’t throw out the rule Canadian sovereignty that economy where Canadian interests book as we consider what to do next are threatened by unfair practices with China. requires us to reflexively run that undermine innovations in such Meredith Lilly is Associate Professor toward China just to show areas as artificial intelligence. and holder of the Simon Reisman Chair the Americans how In the months ahead, Canada must in International Affairs at Carleton unconstrained we are by remain focused first and foremost University. Previously, she was foreign the provision. Nor should on shoring up our trade agreements affairs and international trade adviser to we halt Canadian progress with established partners, including Prime Minister Stephen Harper. the U.S. and Mexico. And as we take with China on areas of stock of our international trading mutual benefit. position now that USMCA is com- plete, we must recognize that pro- tectionism has become the norm in many parts of the world.

For example, the ratification of CETA When the newly concluded USMCA is proving to be difficult in several is viewed in this broader context, key European countries, potentially Canada’s role is clearly a marginal jeopardizing its future. Canada is not one. We needn’t fixate on Article innocent either. We have recently 32.10 as a deliberate provocation to jumped on the protectionist band- Canadian sovereignty that requires wagon, rolling out our own safe- us to reflexively run toward China guard measures on steel in order to just to show the Americans how un- protect domestic interests. constrained we are by the provision. Nor should we halt Canadian prog- Finally, Canada’s diversification ress with China on areas of mutual goals are laudable but must be kept

Policy 25

Mexican President Carlos Salinas, U.S. President George Bush and Prime Minister Brian Mulroney watch as trade ministers Jaime Serra Puche, Carla Hills, and Michael Wilson sign the NAFTA for their three countries in San Antonio, Texas in October 1992. George Bush Presidential Library photo

How NAFTA Became the USMCA

While it has seemed since his inauguration that Donald John Weekes Trump’s presidency was designed to redefine-down every he contrast between the cir- norm in American policy and politics, nowhere was his cumstances of the original disruptive potential felt more keenly by Canada than in T NAFTA negotiations in 1991-92 and the renegotiation the negotiation of an updated North American Free Trade over the past year could hardly Agreement. As a chief negotiator of NAFTA, John Weekes be starker. Twenty-seven years ago, Prime Minister Brian Mul- was particularly well-placed to observe the difference that roney, President George H. W. a quarter century and one revolutionary president made to Bush and President Carlos Salinas announced their commitment to the trilateral talks. enter trilateral negotiations with the objective of concluding an ambitious agreement that would eliminate or reduce to the maxi-

November/December 2018 26 mum extent possible barriers to the Trump had repeatedly called NAFTA the worst free flow of goods, services and in- trade agreement ever negotiated and promised vestment across the North American continent. to renegotiate it or withdraw from it. Demonstrating his antipathy to trade agreements, he withdrew America In 2017, President Donald Trump from the TransPacific Partnership Agreement on his entered the White House intent on tearing up or rebalancing America’s second day in office. international trade commitments. Trump and Trade Representative Robert Lighthizer did not want agreements with strong enforceable rules that fettered the capacity of the Unit- and also, but to a lesser extent, in ticular, the Americans came forward ed States to use its power to bully its the U.S. Mexico was demonized by with proposals to: partners into agreeing to rebalancing constant vitriolic rhetoric from the • Sunset the NAFTA after five the trade rules in America’s favour. White House and even Canada was years unless all three countries increasingly vilified as an alleged un- Trump had repeatedly called NAFTA specifically said they wanted it to fair trader. the worst trade agreement ever nego- continue; tiated and promised to renegotiate it • Eliminate or weaken all the dispute or withdraw from it. Demonstrating n the first NAFTA negotiation, settlement provisions of the his antipathy to trade agreements, he the leaders of the U.S. and Mexico NAFTA to strengthen the capacity withdrew America from the TransPa- embraced the opportunity to I of the U.S. use its power to get cific Partnership Agreement on his build a new partnership between the what it wanted; second day in office. two countries that would put a century and a half of animosity and war • Alter the rules of origin in the When the negotiations to “modern- behind them. Together with Canada, automobile sector to require that ize and rebalance” the NAFTA got un- they saw the negotiations as an op- any automobile entering the US derway in August of last year it was portunity to make a stronger North market would need 50 per cent US unclear whether Trump’s real objec- America in an increasingly competi- content to benefit from the NAFTA tive was to reach a new agreement tive global environment. Their vision zero duty; or to press outrageous demands to was that the synergies of the NAFTA • Distort the government ensure failure and then to withdraw partnership would make each coun- procurement aspects of the NAFTA from NAFTA. try more prosperous and better able so that the opportunities for to compete globally. Canada and Mexico to compete in In 1991, the three Unfortunately, these ideas were not the US procurement market would leaders all strongly shared by the Trump administra- be severely reduced. tion. For Trump it was “America believed that closer This was not a negotiation in which First” combined with the apparent Trump and Lighthizer were prepared cooperation through trade view that America was better off op- to engage in give-and-take. For them, as a win, win, win erating alone as it confronted new the objective was to rebalance the global challenges. With Trump, there proposition. For Trump, NAFTA in their favour by reducing was no sense that the North Ameri- it is a zero-sum game. the benefits in the deal for Canada can partnership would help the U.S. and Mexico. If Canada or Mexico is meet the challenges posed by a rising doing well, then it must be China. In 1991, the three leaders all ortunately, many in the U.S. at the expense of the U.S. strongly believed that closer coop- did not share Trump’s views on eration through trade as a win, win, trade and NAFTA, including win proposition. For Trump, it is a F many in his own party and even in zero-sum game. If Canada or Mexico the White House. In fact, many were is doing well, then it must be at the vehemently opposed to Lighthizer’s expense of the U.S. Powerful and efficient North Ameri- proposals. Canada and Mexico both can supply chains built under 25 In the fall of 2017, Lighthizer put a conducted vigorous advocacy cam- years of a predictable and secure series of poison pill proposals on the paigns across the U.S. to reinforce NAFTA trade environment were at negotiating table which made it look this vein of support for NAFTA. The risk. A cloud of uncertainty stalled unlikely that any reasonable accom- Canadian effort was unprecedented investment in Canada and Mexico modation could be found. In par- in its intensity and scope. This was

Policy 27 not just a federal government effort but one that had the enthusiastic involvement of all the political parties, the provinces, cities, the business, and important elements of civil society. This was a true Team Canada approach. Canadian advocates met with their counterparts virtually everywhere in the U.S. The message spoke to the value of trade between Canada and the US. and emphasized just how beneficial trade with Cana- da is for American communities and workers, and how the North Ameri- can supply chains make North Amer- ica stronger in a global marketplace. Importantly, this message also found a receptive audience in Congress and in state capitals. Foreign Minister Chrystia Freeland, U.S. Trade Representative Robert Lighthizer and Mexican Minister of Economy Ildefonso Guajardo (L to R) participate in the fourth round of North This awakening American Free Trade Agreement (NAFTA) negotiations at the General Services Administration and mobilization Headquarters in Washington, D.C. on October 17, 2017. U.S. State Department Photo of a pro-NAFTA constituency may be the Canadians long after Trump has left ating dynamic but in the recent ne- the White House. gotiation it assumed greater impor- most important outcome of tance. Of course, both countries were the last two years. This As if to prove how valuable NAFTA negotiating on behalf of their own constituency will remain was to Americans, Trump decided constituencies and interests but there under Section 232 of U.S. law to ap- valuable to Canadians was sufficient commonality of inter- ply global tariffs for phoney national est that the outcome is better than it long after Trump has left security reasons on steel and alumi- would have been had they negotiated the White House. num imports, including from Cana- alone. And in the final phase, Mexico da and Mexico. This inevitably led to actually enhanced Canada’s negoti- retaliation by both countries, which ating leverage by striking a separate adversely affected many Americans, deal with the U.S. For the first time in calling into question whether the the negotiations, Lighthizer wanted At the same time, with Trump president knew how to defend their to conclude a deal with Canada be- threatening to blow up NAFTA, interests and livelihoods. His threats cause that was the only way he could many Americans were conducting to put a similar tariff on automobile secure Congressional support for their own analysis about the value imports worried Canada and Mex- what he had achieved with Mexico. of NAFTA and the jobs it supports ico but also created further unease One result was that Canada was able across the U.S. For years, NAFTA had in the U.S. Twenty-five years ago, to retain the binational panels on dis- become a political whipping boy the negotiations faced difficult mo- pute settlement under NAFTA Chap- but most Americans tuned out the ments but such bullying tactics were ter 19—a key objective. noise and did not expect any presi- never deployed. dent would seriously consider ter- Going forward into the critical period Throughout the negotiations, the minating the agreement. This work of Congressional ratification of the Canadian team led by Prime Minis- and analysis led a very large num- new U.S. Mexico Canada Agreement, ter Justin Trudeau, Foreign Minister ber of Americans to conclude that and beyond, Canada and Mexico will Chrystia Freeland and Chief Nego- NAFTA was in fact valuable to the need to continue to work closely to- tiator Steve Verheul was resolute and U.S., although they recognized that gether. Both will also need to work effective at the negotiating table, in it would benefit from a dose of mod- closely with the American pro-trade, advocacy efforts and in the public ernization. This awakening and mo- pro-NAFTA constituency. war of words. bilization of a pro-NAFTA constitu- John Weekes, a senior business adviser ency may be the most important In the original negotiations, the part- at Bennett Jones LLP, was Canada’s outcome of the last two years. This nership between Canada and Mexico chief negotiator for the NAFTA from constituency will remain valuable to was an important part of the negoti- 1991 to 1994.

November/December 2018 28

Column / Don Newman Trade Deal puts Canada with U.S. on China n the chaos that often envelopes land and International Trade Diversi- steaming ahead with the same kind of Washington as the Trump admin- fication Minister Jim Carr all disagreed tactics against China that it used suc- I istration tweets and stumbles its with that interpretation. cessfully against Canada and Mexico way through one crisis after another, But the Chinese know better. After in the NAFTA negotiations: The impo- both a goal and something of a strat- turning Trudeau away empty handed sition of tariffs against Chinese goods egy were revealed at the beginning of when he went to Beijing in 2017, after exported to the United States. October with the publication of the the publication of the USMCA text, What is at the centre of the clash is a preliminary text of the son of NAFTA: the Chinese foreign minister was on more realistic appraisal of China as it The U.S.-Mexico-Canada Agreement. the phone to Ottawa to denounce really is, and what it wants to become. The goal is nothing short of contain- article 32.10 and urge an immediate China can do this because of its rapid ing the ongoing and rapid military and start to negotiations now. economic growth. But that growth economic rise of China. The strategy is But with Canada’s economic health has been financed mainly by its mas- to make America’s economic partners tied to the American economy, no choose between relatively unimpeded sive pool of low-cost labour and the China negotiations are going to start willingness of American, European access to the United States market and anytime soon. Canadian exports to and Canadian businesses to ship the making a trade deal with the Chinese. the United States make up 75 per cent jobs of their higher-paid lower-skilled of our exports, and are 15 times more The goal and strategy are contained in workers to China. Article 32.10 of the new trade agree- than we export to China. Beyond that, economic arrangement. The article says that if any party, Instead, the new USMCA puts us ments with China come with de- that is Canada, Mexico or the United firmly where we were anyway, on the mands for the transfer of intellectual States, enters into a free trade agree- American side in the confrontation ment with a “non-market economy,” with China over trade, geopolitical property, the stifling of complaints the other two countries would have influence and who is going to set the about human rights and other quid the option of terminating the USMCA rules in the 21st century. pro quos that have nothing to do and replacing it with a bilateral agree- with actual trade. Despite the understandable dislike of ment between themselves. the current American president, Don- Some Canadian businesses have com- The words “non-market economy” are ald Trump is not going to be in that plained that our country has been code for China. Both the U.S. and the job forever. And people in his own too slow to get into the Chinese mar- European Union are in disputes with country as well as abroad may come ket in a big way. They have held up China at the World Trade Organiza- to thank him for taking on China Australia as an example of a country tion. They are arguing that the Chi- now, before it gets to big and wealthy that has aggressively pursued oppor- nese government favours its domestic to be contained. tunities in China. companies over foreign ones through But in the past few years Australia has he U.S. and China have no a variety of dubious practices which been having second thoughts as Chi- China barely bothers to disguise, and trade deal but they are each nese attempts to meddle in and influ- tilts the economic playing field in fa- other’s largest trading part- T ence that country’s chaotic political vour of the home team. Therefore, ners. In what has become a very un- outcomes have become clear. China is a “non-market economy,” a healthy economic relationship, Chi- WTO designation Beijing protests. na has a huge trade surplus with the The Australians have learned that Chi- U.S. and also holds a massive amount nese business is not just about busi- Here in Canada there were immediate ness. With the new USMCA, the Unit- complaints that by agreeing to sign a of American debt. The amount of the ed States may have helped Canada not deal with a clause that could limit fu- debt is so large that an American de- make the same mistake. ture trade deals with other countries, fault or a downward re-evaluation of the government was compromising the dollar would be as catastrophic Don Newman is Senior Counsel at Canadian independence and sover- for China as the U.S. Navigator Limited and Ensight Canada, eignty. Prime Minister Justin Trudeau, So far, the Trump administration and a lifetime member of the Canadian Foreign Affairs Minister Chrystia Free- has ignored those facts. Instead it is Parliamentary Press Gallery.

Policy 29

Canada and the World

Prime Minister Trudeau meets with President Xi at the Great Hall of the People in Beijing, China. December 5, 2017. Adam Scotti photo

The Canada-China Trade Puzzle: A Sectoral Approach

As the Trump administration transforms America’s role Edward Greenspon as the democratic anchor of the rules-based internation- and Kevin Lynch al order, the global trading system is also in flux. While eopolitics has been turned the United States Mexico Canada Agreement has been on its head in the three short completed, the negotiations confirmed that Canada’s G years since the Liberal government of Justin Trudeau came to power. trade future lies in diversification. China will be part of China, the 21st century’s new Great that strategy. Power, has continued its impressive economic growth while further cen- tralizing political control in the hands of the Communist Party and its leader, Xi Jinping, and expanding its global presence through infrastructure, trade,

November/December 2018 30 institution building and military and In 2000, China was responsible for a mere four per intelligence efforts. cent of the global economy and the U.S. a dominant It is busily shifting its economy from 31 per cent. Today, China accounts for 15 per cent and the an export to consumer base and has opened more sectors to imports and U.S. 24 per cent. Those numbers are forecast to converge in a investment as it becomes increasing- decade or so, after which China will surpass the U.S. as the ly responsive to the demands of its world’s largest economy. growing middle class for a clean environment and safe products. Econom- ically, it is investing heavily in education and advanced industries such as robotics, artificial intelligence and ada’s relationship with the U.S. will which sectors to pursue first, the ap- data analytics, aerospace and elec- remain its most important. But it is a proach could forestall the highly sen- tric vehicles. “China is at an historic relationship in flux—and where it is sitive issues of technology transfer juncture. After decades of high-speed headed over time is uncertain at best. and national security while Canada growth, the government is now fo- consults with allies and rethinks its cusing on high-quality growth,” the t is within this environment that regime. Selling lobsters, filling hotel International Monetary Fund (IMF) the Public Policy Forum con- rooms, shipping timber or oil and gas recently stated. I vened a group of business ex- and reaching consumers via internet ecutives, academics, former public As this plays out across the Pacific, a platforms don’t pose direct security servants and elected politicians and relatively new administration in the threats to Canada or our allies. NGOs over the past 18 months to United States is also redefining its It weighed on us that without China, wrestle with what an economically relationship with the global, rules- the second largest economy in the beneficial and politically acceptable based trading system it conceived. world and the largest global pur- Canada-China strategy should look It has withdrawn from the Paris Cli- chaser of much of what this country like. Mindful of the need to mitigate mate Agreement and the Compre- produces, Canada would be left again the risks to Canada of “Make Amer- hensive and Progressive Agreement without a credible diversification ica Great Again,” PPF’s Consultative for Trans-Pacific Partnership (CPTPP) strategy. The comportment of the Forum on China decided—well be- and is sowing uncertainty with at- United States, including the USMCA, fore the USMCA—that the best way tacks on stalwart institutions such has rendered such a strategy all the forward was not a comprehensive as the World Trade Organization more imperative. Yet the behaviour free trade agreement, but rather a (WTO), the IMF and the North At- of China, particularly the centraliz- more focused sectoral approach cou- lantic Treaty Organization (NATO). ing of power flowing from the 19th pled with fresh policies in such areas It is pushing hard to control trade Party Congress in October 2017 and as international cooperation, invest- arrangements—more managed trade the treatment of its Uyghur minority, ment reviews and Canadian sov- than free trade—through a hub-and- often makes it more difficult. spoke system with America at the ereignty. We noted that one of the centre. To those who resist, including most successful trade arrangements espite differences of detail, long-time allies, it is ready and able to in the country’s history was the 1965 the Consultative Forum none- impose arbitrary penalties. sectoral arrangement known as the D theless quickly agreed that Canada-U.S. Auto Pact. the question before Canada was not Yet even amidst its isolationism, the whether we should rethink Cana- U.S. has made it clear it does not We felt that by growing trade in dian policy toward China. It is what countenance China’s rise, viewing the key sectors, through the removal of should that policy should be? How Asian power as a strategic rival rather non-tariff barriers and the promo- could we make it coherent and stra- than a mere competitor or potential tion of mechanisms to facilitate the tegic? How would we represent our partner. Upset by a trade imbalance movement of goods and people and interests while staying true to our heavily in China’s favour, President ward off or mediate disputes, Canada values? As the report notes: Donald Trump has initiated a tariff could record early wins and advance war. In the recently negotiated Unit- the cause of a rules-based trading sys- Canada can only provide the ris- ed States-Canada-Mexico Agreement, tem. This stood in contrast to a likely ing incomes, rewarding jobs and the administration used its economic five-to-10-year free trade negotia- expanding market opportunities weight to impose a condition mak- tion that would stretch over several familiar to past generations by ing it virtually impossible for the two governments and economic cycles, trading more with economies sovereign nations on its doorstep to and seemed tilted more toward fail- that are growing faster than our negotiate free trade agreements with ure than success. (The CETA agree- own, and are sufficiently big to China. By dint of geography, history, ment with the EU took eight years.) make a material economic im- security, culture and economics, Can- Moreover, by thoughtfully choosing pact. Trading with slow-growth

Policy 31 economies will not do the trick. For the most part, the economies that blend high growth with scale can be found in Asia, with China its main engine. In 2000, China was responsible for a mere four per cent of the global economy and the U.S. a dominant 31 per cent. Today, China accounts for 15 per cent and the U.S. 24 per cent. Those numbers are forecast to converge in a decade or so, after which China will surpass the U.S. as the world’s largest economy. Accord- ing to the IMF, China alone accounted for an astonishing 33 per cent of global growth in 2017, outstripping all the rest of Asia (28.8 per cent), as well as Europe (15.2 per cent) and the Western Hemisphere countries (12.8 Sources: U.S. government and Global Affairs Canada per cent), including the U.S., combined. Even with stronger U.S. eco- world. A point of comparison: where- interpreted by the WTO as covering nomic performance this year, Chi- as 75 per cent of Canadian mer- “substantially all trade”), has room to na’s one-third share of world growth chandise goods go to the U.S., the grow through the sectoral approach is holding steady. corresponding figure for the United we recommend. In 2017, Canada’s Kingdom, after more than four de- shipments to China accounted for In the year the Trudeau government cades in the European Union, is un- just 4.3 per cent of our total exports. added the word diversification to der 50 per cent. Meanwhile, 8.4 per cent of the U.S. the previous title of the Minister of export basket, nearly double the Ca- International Trade, a diversification anada’s excessive reliance nadian footprint, went to China. If strategy that doesn’t include China on a single market was some- Canada were simply to match the is bound for the trash heap along- thing it could get away with C U.S. standard, it would translate into side failed dalliances by earlier gov- when that market represented the almost $25 billion in new exports— ernments. As things stand, the ratio great global engine of growth. For more than our current sales to Japan, of our exports to the U.S. versus our many decades, the U.S. soaked up India and South Korea combined. second largest destination, China, what we produced—from crude to This would mark a good, yet hardly is 17:1, and just a small fraction of cars—and accorded us kid-glove treat- politically provocative, start down Canadian companies actually sell be- ment. But our special status began fad- the diversification road. yond our borders. If we are going to ing even before Donald Trump came reduce the risks of dependency and to office. President Barack Obama The Consultative Forum has put continue to prosper, we simply need rejected the Keystone pipeline and forward an interrelated set of rec- to have more businesses sell more insisted Canada bear all the costs of ommendations, starting with our goods and services to more places. a new border crossing at Windsor. sectoral approach, for achieving eco- Better balance in our portfolio of Precisely where American foreign and nomic and geo-political gains for Ca- trade markets will allow us to tap into trade policy is headed in the long-term nadians without sacrificing principle. buyers willing to pay world price for remains an unknown, but the trend These are not intended as a buffet our goods in contrast to our current lines do not invite complacency. table. To pick here and there would situation as a captive supplier unable Despite strong growth in absolute be to deny the necessary integration to secure world price for our oil and trade numbers with China since of measures that make for a strategy gas. To succeed requires all hands on 2000, Canada is a slacker within rather than merely a series of one- deck, including SMEs; we need to be- the G7 in establishing a presence. off actions. We would start sectoral come not just a great trading nation, Canada’s market share has fallen by discussions with agri-food (includ- but a nation of traders. about 25 per cent since 1995. The ing fisheries) and natural resources, We call our report, Diversification not most intriguing comparator actually where mutual interests are already Dependence: A Made-in Canada China is the U.S. Herein lies an important well established and where benefits Strategy, partly in acknowledgement argument for how Canada, while cut will fall disproportionately to rural that we are one of the most trade off by USMCA from comprehensive and remote areas hard-pressed for dependent major economies in the free trade negotiations (essentially economic development. We would

November/December 2018 32 then look to move quickly to such portance of holding China’s feet to rather than the shifting winds of elec- areas as education and research, tour- the fire on the international under- toral outcomes. ism, forestry, insurance and wealth takings it has already made, while try- Among other recommendations, our management, clean tech, life sci- ing to get it to go further. They saw formula includes adjustment poli- ences and engineering services. We no magic solution and said they are cies to assist the transition of Cana- would also seek agreements around “not against” closer trade ties. We rec- dians firms and workers that may be ‘enabling’ sectors, such as aviation ommend working more closely with adversely affected by new trade and and e-commerce, the latter of which our allies to build a greater rule of law investment rules, as was the case with holds out great promise to reduce the consciousness in China. According to the Canada-U.S. Free Trade Agree- costs and practical obstacles to SME’s public opinion polls, Canadians don’t ment and most famously the wine reaching foreign markets. see economic partnership and human industry. We also propose measures rights as binary choices, believing the to ensure that SMEs and female and t the same time, we recom- former will help the latter. In this, Indigenous-led business can reap the mend negotiating an interna- they are in sync with Harvard political benefits of new trade opportunities. tional cooperation arrange- A science professor Graham Allison, au- Trade agreements that are not inclu- ment between Canada and China in thor of Destined for War: Can America sive and do not speak to our values areas of mutual global interest, such and China Escape the Thucydides’s Trap, are unlikely to generate the requisite as environmental protection, climate about how shifts in power have more public support to succeed. We were change and the governance of inter- often than not led to war. He cites the made acutely aware through our pro- national institutions. Polls show that Soviet-American rivalry as an impor- cess of the need for our foreign inter- Canadians strongly favour the two tant exception, arguing engagement locutors to understand the historical countries working more closely to- with rivals beats isolation in that it al- rights of the country’s Indigenous gether on common challenges, partic- lows them to negotiate around their peoples and to engage them directly ularly concerning the environment. disagreements and to communicate, in discussion. On the contentious subject of for- compromise and coordinate their way Finally, we note that at this particular eign investment, we would move to out of crises. juncture in China’s development as a restore clarity and consistency for all middle-class society, Canada has the foreign investors while enacting more We reject entirely the opportunity to offer up its experience rigourous enforcement mechanisms in such areas as public pensions, el- to ensure compliance with undertak- notion that Canada dercare, workplace safety, livable cit- ings given as part of the investment has nothing to offer China. ies, national parks, financial market approval process. Special attention As a successful society, and a regulation, consumer protection and must be paid to the relatively new G7 nation with a natural the like. We reject entirely the no- category of national security reviews. tion that Canada has nothing to of- We recommend working with like- resources endowment and advanced economy, we bring fer China. As a successful society, and minded nations on identifying risks a G7 nation with a natural resources and how best to handle them. These a great deal to the table. endowment and advanced economy, assessments should emerge from a we bring a great deal to the table. more transparent process than at present, led by a formal committee of As Canada approaches the 50th an- economic departments, intelligence niversary of recognition of China, we think the time is ripe for a blueprint officials and independent security anadians understandably want with a 50-year horizon to finally experts. Our model is the Committee to be confident their sover- make Canada as engaged with its Pa- on Foreign Investment in the United eignty is always being safe- C cific flank as it is with its Atlantic and States (CIFIUS), which endeavours to guarded. Canada has a head start over American ones. The choice is simple: actively manage these situations rath- countries like Australia in countering negotiate a serious diversification er than being buffeted by them. foreign interference by virtue of our course or perpetuate the dependency stricter election financing rules. We Ultimately, final determinations on that has recently illustrated the weak- call on Parliament to draft and de- national security issues must rest with ness of our bargaining position. the elected government. But its deci- bate an unambiguous declaration of sions should emerge out of a coherent our intent to protect our sovereignty Edward Greenspon, President and CEO and explicable evidence-based pro- from whomever might treat it lightly. of the Public Policy Forum, is a former editor-in-chief of The Globe and Mail. cess, with as little mystery as possible. We hope such a debate will begin to forge common foreign policy under- Kevin Lynch, Vice Chair of BMO he other deeply vexing issue, standings among parties, so Canada’s Financial Group, is a former Clerk of course, is human rights. We interaction with the world is built on of the Privy Council and Head of the T were told by NGOs of the im- a solid national-interests foundation Public Service.

Policy 33 The Boring Campaign that Wasn’t

By the end of its third week, it was being billed as the the political streams that oppose the Liberals: nationalists, conservatives, most boring Quebec election campaign in generations. No and disenchanted Liberals. Mau- René Lévesque, no constitutional crisis, no sovereignty on rice Duplessis did it in 1936, René the ballot. But by the end of election night, the narrative Lévesque did it in 1976, and now François Legault has done it. had clearly become more complicated than a walk in the park, and in ways that put the polling industry, again, The election on the defensive. Veteran Quebec observer and former of- transformed the ficial languages commissioner Graham Fraser recounts a political map of Quebec. campaign in which language and immigration became The Liberals, whose previous key plot points. low water-mark still produced a river of red along the Ottawa river to Graham Fraser But the night was equally disastrous for the Parti Québécois (PQ), which Montreal’s West Island and hen François Legault, the finished fourth, behind the CAQ, the out Autoroute 10 to the leader and founder of the Liberals and the left-wing Québec soli- Eastern Townships, lost 3 of Coalition Avenir Québec daire, with only nine seats and 17 per 5 seats in the Outaouais and W cent, its lowest share of the vote ever. (CAQ), made his way through the The party was eliminated in working- were wiped out in the election night crowd on October 1, he Townships. seemed almost overwhelmed, admit- class ridings in the east-end of Mon- ting to reporters that he was surprised. treal—losing seats it had held since 1970—in Quebec’s Lower Town, Sher- The public opinion pollsters had in- brooke and Rouyn-Noranda. dicated that, after leading for a year, On election night, Legault’s remarks Legault’s CAQ had slipped during the And Québec solidaire surged, winning were conciliatory, and the next campaign, and that the race was very 10 seats and 16 per cent of the vote. day, at his first news conference, he tight. On September 20, CROP even PQ Leader Jean-François Lisée stepped stressed that the new government predicted a Liberal victory. down immediately; Liberal Premier would have three priorities, each one Philippe Couillard, who won his seat, But within minutes of the polls clos- in an area he was personally comfort- resigned as leader and as an MNA ing, it was clear that the CAQ was able with: the economy (he was a three days later. cruising to a majority government, former businessman); education (he ending up with 74 of 125 seats in the The worst was not over for the Liber- had been a minister of education); National Assembly and 37.4 per cent als. While Couillard resigned his seat, and health (he had been a minister of the vote. the Liberals also kicked a member out of health). It was only the following The election transformed the political of caucus for having leaked informa- day that two of his members, and map of Quebec. The Liberals, whose tion to the CAQ and the following probable cabinet ministers, said that previous low water-mark still pro- week the PQ won a riding recount, the new government would be push- duced a river of red along the Ottawa taking another seat from the Liberals. ing ahead with its most controversial river to Montreal’s West Island and Final score: CAQ 74, Liberals 29, PQ policy: forcing government employ- out Autoroute 10 to the Eastern Town- 10, QS 10. ees to forgo religious attire (crosses, ships, lost 3 of 5 seats in the Outaouais It is a political truism that the Liberal kippas or hijab) as a condition of and were wiped out in the Townships. Party of Quebec is the oldest party employment, with the threat to use The oldest party in Quebec had its with the deepest roots and that the the notwithstanding clause of the worst result in its 151-year history: 32 only way it is defeated is when a ri- Charter of Rights and Freedoms—an seats, and 24.8 per cent. val pulls together a coalition of all echo of Ontario Premier Doug Ford’s

November/December 2018 34 And 30 years ago, the late Lise Payette produced a documentary called “Dis- paraître” which similarly raised the spectre of the disappearance of Que- bec as a French-speaking society. Legault’s intervention produced head- lines. “Immigration: Legault joue la carte de l’identité” said the front page of Le Devoir. (“Legault plays the identity card”) There was a pundit consensus: Legault had seized the initiative and defined the ballot question, and focused attention on his determination to reduce the flow of immigration to Que- bec from 52,000 to 40,000 a year. But 10 days later, in Cap Santé—a pic- turesque town on the St. Lawrence between Trois-Rivières and Quebec CAQ Leader François Legault and his wife Isabelle Brais at a campaign event. Legault swept to a majority with 74 seats and 37 per cent of the vote. Wikimedia photo City—he was asked by a reporter how long it took an immigrant to become approach to governing—if this were school lunches, reduced transit fares a Canadian citizen. challenged. and child care fees, and improved old “A few months,” Legault replied. It was a blunt reminder of the most age homes. Actually, it is three years, the report- difficult part of the CAQ campaign. But in St. Colomban—hardly a centre er corrected. It got worse. The next for immigration in Quebec—Legault day, after saying he had stayed up expressed the concern that because of almost all night studying the issue, Legault expressed immigration, Quebec’s grandchildren he fumbled another basic question, the concern that might not speak French. was unable to name a bilingual province in Canada (New Brunswick is the With this, he touched on one of the because of immigration, only one) and joked that, clearly, he historically primal fears in Quebec Quebec’s grandchildren would not be a candidate for a high society: Immigration could mean the school quiz show. might not speak French. disappearance of the French language. With this, he touched on one Suddenly, it seemed he had seized ut for his opponents, it was of the historically primal the agenda in the most dramatic way, no joke. For Couillard and Li- fears in Quebec society: evoking French-speaking Quebec’s B sée, it was a golden opportu- Immigration could mean existential-nightmare fear. It evoked nity. The issue was no longer about identity—or the Liberal response— the disappearance of the the song “Mommy” that Pauline Ju- lien had recorded in 1974, which was that there is a crying need for immi- French language. sung in the voice of a small child who grants to deal with the shortage of wondered why she no longer spoke workers—but about competence. French. (“Mommy, mommy, how Lisée was merciless. “It’s not a ques- come we lost the game? / Oh Mommy, tion of being a quiz show contestant. mommy are you the one to blame? / n September 6, Legault spoke We didn’t expect that from him. But Oh Mommy, mommy, tell me why to reporters in Saint Colom- we did expect that, on his major file, it’s too late, too late / Much too late.”) ban, a small town abut 70 km that he would know the steps to ac- O cess citizenship, since he wants to play northwest of Montreal on the edge That same year, Liberal Premier Robert of the Laurentians. Until then, the Bourassa’s Bill 22, making French the around with them. That he thinks it campaign had been a combination of official language of Quebec, became takes a few months to become a citi- gaffes (usually about tweets and oth- law. In 1977, the first PQ government zen means he is guilty of ignorance er embarrassments that candidates passed Bill 101, the Charter of the for someone who claims to be the had not shared with their parties) French Language, doubling down on great immigration reformer.” and grocery lists of ideologically in- the language protections that were in- Couillard joined in, arguing that by distinguishable promises: subsidized herent to its independence platform. suggesting Quebec should have total

Policy 35 control over immigration, Legault was putting existing agreements at risk. “Through his incomprehension, he would weaken Quebec’s powers.” And that set the stage for a historic event: the first televised English-language debate between Quebec’s political leaders ever, where Couillard and Lisée continued to pound away at Legault’s promise that immigrants would have to take a French test and a test on Quebec values after three years and be forced to leave if they failed. Suddenly, after a year with a comfortable lead in the polls, the CAQ began to slip, and it looked like a possible photo finish. Immigration was the centrepiece of Legault’s campaign, the wedge issue that distinguished him from the Lib- erals, and he did not know the basics. But by bungling the details of citizen- Prime Minister Trudeau meets with incoming Premier François Legault in Yerevan, Armenia, ahead of the Francophonie Summit. October 11, 2018. Adam Scotti photo ship, he opened himself up simulta- neously to both Couillard and Lisée, Lisée’s attack may have backfired. For about message discipline. Whether, as and support seemed to drain on both in the final results, he was defeated in premier, he will articulate the darker sides. Since the CAQ coalition con- his own constituency of Rosemont in anti-immigrant and more particularly sists of both discontented Liberals east-end Montreal, by former La Presse anti-Muslim sentiments he sometimes and disillusioned Péquistes, this was columnist Vincent Marissal, and the expressed is another matter. a serious wound. PQ fell behind QS. Similarly, the English debate played to The Washington Post and Libération both Couillard and Lisée’s strengths ut ultimately none of it matt- in Paris have both noticed his anti- and Legault’s weakness. An optimis- ered. What appeared to be a immigrant position, Libération lump- tic interpretation would be that the B close race turned out to be a ing him in with Donald Trump and English debate was a recognition of sweep. The CAQ won decisively in ev- Brazil’s right-wing authoritarian Jair the linguistic security of the French- ery region of Quebec—except Montre- Bolsonaro. Already, Legault has had speaking majority and its ability to al, where the English-speaking voters to disavow the enthusiasm expressed be generous to the English minority. remained loyal to the Liberals, Québec by France’s right-wing xenophobe, A more cynical interpretation would Solidaire increased its presence in the Front National Leader Marine Le Pen, suggest it was an effective Lisée ploy poor and working class French-speak- who hailed him as an anti-immigrant to pull Legault onto thin ice; Legault ing ridings in the east end, and the kindred spirit. Legault responded by is much less articulate in English than CAQ had a breakthrough with two rid- saying that even with reduced immi- either Lisée or Couillard, and Manon ings in the far east end of the island. gration numbers, Quebec would be receiving more immigrants per capita Massé’s English is weaker still. CROP president Alain Giguère was re- than the United States or France. “On The third debate was remarkable in duced to saying plaintively that people va en prendre moins, mais on va en that Lisée turned on Québec solid- said one thing to pollsters and then prendre soin,” (We will take in fewer, aire rival Massé and pointed out that did something else in the privacy of but we will take care of them) was his she was not, in fact, the leader of the the ballot box. If it was a bad night for catchy campaign phrase, repeated in party but co-spokesperson. While he the Liberals and the PQ, it was a very his tweet rejecting the Le Pen support. was criticized for his aggressiveness bad night for the polling industry. Now, this remains his biggest chal- toward a woman who has seemed the What remains to be seen is whether lenge, for the world is watching. personification of left-wing compas- Legault will be as disciplined as his sion, his outburst did have the effect first post-victory prepared statement Graham Fraser is a visiting professor of focusing media attention on Qué- suggested. There were two veterans at the McGill Institute for the Study of bec solidaire. of the Harper PMO, Carl Vallée and Canada, and author of the bestselling Two years ago, QS had overwhelm- Catherine Loubier, advising on the René Lévesque and the Parti ingly rejected a merger with the PQ. transition, and they know something Québécois in Power.

November/December 2018 36

Column / Lori Turnbull New Brunswick: Trick or Treat hoever said provincial a significant political liability for the lieutenant governor would have to de- politics is boring has had mainstream parties that have worked cide whether to give Progressive Con- W to eat those words over the to protect and entrench bilingualism servative Leader Blaine Higgs a chance past year and a half, as elections in in the province. to govern or heed Gallant’s advice. British Columbia, Ontario and, most he day after the election, Gal- If the lieutenant governor denies Gal- recently New Brunswick, have pro- lant met with Lieutenant Gov- lant’s request for dissolution, Higgs’ duced very interesting, if sometimes ernor Jocelyne Roy-Vienneau numbers are only marginally better ambiguous, results. T to obtain permission to remain pre- than Gallant’s. A partnership with When the votes were counted in New mier for the time being. The primary one of the smaller parties would bring Brunswick on September 24, it was role of the lieutenant governor is to his total to 25 for a majority. He could not clear who would form the govern- ensure that there is always a premier govern as long as the partnership ment. The magic number for a major- (the individual who holds the confi- lasts, presuming that Guitard chooses ity is 25. The incumbent Liberals elect- dence of the legislature, regardless of to remain the speaker following a loss ed only 21 MLAs and the Progressive party standings or popular vote). As of confidence for the Liberals. If Gui- Conservatives elected 22; the Greens the incumbent, Gallant remains in tard resigns, forcing the Higgs govern- and the People’s Alliance elected three office throughout the election period ment to put up its own speaker, this MLAs each. but in a caretaker capacity until ei- outcome would force the new speaker ther another premier is sworn in or he Pre-election polls had favoured Brian to break every tied vote in the dead- himself has demonstrated that he can Gallant’s Liberals to win the night. locked legislature going forward, an hold the confidence of the Legislative But as election day drew nearer, the undesirous outcome that is inconsis- Assembly. Therefore, he could not Liberal spread in the popular vote tent with the spirit of responsible gov- drag his feet. contracted. Though they ultimately ernment and the independence of the still led the popular vote, it was not On October 23, the legislature met speaker’s chair. enough for them to maintain a plu- and selected Liberal MLA Daniel Gui- If Gallant gets his dissolution, the rality of seats. tard as the speaker. The Speech from new election would kick off in No- the Throne was read the same day. Whoever ends up occupying the pre- vember. None of the parties has the Though the text of the speech bor- mier’s office will need a partner to get money for this. Voter turnout would rowed heavily from opposition party things done in the legislature. When likely be low. The smaller parties playbooks, it is not likely to survive a a similar outcome occurred in BC in would have the most to lose, given vote; Gallant doesn’t have the num- 2017, the NDP and the Greens de- their historic showings in the Sep- bers. The premier would then go to cided against forming a formal coali- tember election. Out of fear of anoth- the lieutenant governor to request tion and instead opted for a co-signed er divided legislature, voters might that the legislature be dissolved, as agreement of confidence and supply choose to park their votes with either Christy Clark did in 2017 after los- designed to provide stable governance of the two traditional parties, each ing the vote on the throne speech. for four years. of which would offer a mixed-bag of Like her, Gallant would say that the promises in a power-hungry attempt Among the NB parties’ elected mem- current legislature is unworkable with to appeal as widely as possible. bers, it is fair to say that there is no another election the only way to sort Lori Turnbull is the Director of the natural or easy alliance. Though all out this mess. In BC, however, the School of Public Administration at of the parties have roughly the same partnership between the Greens and Dalhousie University, fellow at the problems and challenges in their lines the NDP, backed up by the agreement Public Policy Forum, and deputy of sight, their approaches to defining of confidence and supply, made it dif- editor of Canadian Government and resolving these challenges is difficult for the lieutenant governor to Executive magazine. She is co-author ferent and, in some cases, irreconcil- deny the NDP the chance at forming of Democratizing the Constitution: able. The hostility of the People’s Al- a government. In New Brunswick, in Reforming Responsible Government, liance toward bilingualism makes it the absence of such a partnership, the winner of the Donner Prize.

Policy 37 Judging New Judges: The Confirmation Process

Anyone who has ever worked in a country transitioning to was but the latest indictment against the independence of the American ju- democracy knows that the system is about more than free diciary. It was bad enough that until a and fair elections. An independent judiciary is a crucial decade ago, judges for higher courts in component of any democracy, and as Robin Sears—who the U.S. had to endure public hazing by showboating politicians in their has served democracy in a variety of contexts around the approval process, but there was an un- world—writes, that principle is now at risk in America. derstanding that opposition members would not block an administration’s choice for circuit, appeal and Supreme Court positions. Robin V. Sears ask any citizen who needs protection from a corrupt government what they That has now been severely compro- hose who see democracy only hunger for most, and their first choice mised and along with it the uncondi- through the lens of politics and will almost always be clean judges be- tional faith of American citizens in the T elections fail to understand fore clean politicians. independence of their most important that the more important democratic courts. Behind the scenes, the rot is So, it matters greatly how judges are pillar is the judiciary. Having devoted even deeper. Instead of the American chosen and by whom, how their fair- my life to campaigns and electoral Bar Association being granted “first ness is monitored and by whom. politics, this was a late-blooming and among equals” status as the selector of difficult reality to accept. But years the long list of candidates for judicial in Hong Kong both before and after Sadly, the Trump appointments, GOP administrations the 1997 handover of the territory to administration is now get their candidate lists from the China hammered that truth home. pushing the United States Federalist Society. This Koch broth- ers-funded organization was created Whitehall did deliver a half-democra- closer to a judicial model cy before handing the territory to Chi- decades ago to groom and promote na. But, so far, neither has ever been where judges play active the hardest of hard-line conservative so foolish as to attempt to politicize and unashamed roles in judges. In the judicial arms race this the judiciary. partisan politics and away has created, the Democrats have, arguably much too late, created their For it is the security of contracts and from the independent own progressive judicial appoint- their robust enforcement by a sea- judiciary the framers ments PAC and think tanks. soned and independent judiciary that deemed so valuable in the even now keeps Hong Kong the pre- To be sure, the judicial appoint- ferred destination for those who want Constitution and the ments committees of the ABA still to do business in Asia. One may only Federalist Papers. go through the motions, but insiders hope that Beijing does not overreach know where the real power to get a in its efforts to build better “loyalty to judge named now resides. the Motherland” and try to create a In Canada, we appear to have evolved more compliant judiciary. Beijing has adly, the Trump administration a system that keeps the appointment weakened but not yet broken Hong is pushing the United States clos- process in the hands of elected gov- Kong’s administrative independence S er to a judicial model where judg- ernments, but is one seasoned by a Those of us who have grown up in de- es play active and unashamed roles in formal review process by chosen com- mocracies with deep traditions of ju- partisan politics and away from the mittees of Canadians from each re- dicial independence tend to take the independent judiciary the framers gion. This Judicial Advisory Commit- sanctity of this, one of the four pillars deemed so valuable in the Constitu- tee system, broadened last year by the of democracy, for granted. In places tion and the Federalist Papers. federal government, was part of its ef- like Turkey, the Philippines, Cam- fort to reduce the number of old white The fiasco that was the confirmation bodia and Pakistan elections are not men on the bench and to better reflect process for Justice Brett Kavanaugh clean, and neither is the judiciary. But regional and demographic diversity.

November/December 2018 38 Allan Blakeney was vigorously opposed to the Charter when he served as premier of Saskatchewan, on the very basic ground that unelected judges should not be making politicians’ decisions for them. Despite threats from both premiers Doug Ford and François Legault to gratuitously use the notwithstanding clause—inserted partly at Blakeney’s insistence—for nakedly partisan purposes, we seem to have mostly avoided one side poach- ing on the other’s traditional domain for 36 years so far. But in a federal state, and one with an enormous reservoir of unresolved legal issues with Canada’s first peoples, it is surely true that a non-partisan, President Trump nominates Judge Brett Kavanaugh for the U.S. Supreme Court. July 9, 2018. non-sectarian, and regionally bal- White House Photo anced high court is the best final arbi- ter of issues that the parliaments and Former Prime Minister Jean Chrétien certainty of civil war, the Court tried legislatures have been unable to re- attacked the changes recently, de- to forbid governments from restrict- solve among themselves. It was, ironi- crying the selection of a committee ing slavery. With Brown v. the Board cally, the Saskatchewan government of “nobodies” to appoint judges. As of Education—the legal foundation of that took the federal government to the committee’s name implies, they the modern civil rights struggle—the court to secure once and for all pro- advise on appointments only. He is U.S. Supreme Court played a central vincial primacy in the regulation and right to demand that governments role in race relations and politics. In taxation of natural resources. should still be held accountable for recent years, Supreme Court decisions the wisdom of their judicial choices. in the Citizens United case, in rever- Canadians who are tempted by the As he put it, “If you have a bad judge sals of voting rights and other democ- spectacle of the American Star Cham- in Canada, you know who is respon- racy-related rulings have arguably had ber judicial confirmation process sible. You know it is the minister of an impact on electoral outcomes. It as an exercise of direct democracy justice and the prime minister.” But it is not surprising therefore, that par- should give their heads a shake. It is is not clear that that line of account- tisans work hard to promote judges merely the basest backroom partisan ability has been overturned by nam- from their own tribe. knife job, only broadcast in all its ing not just lawyers, but other citizens While we have had a history of for- bloody glory. to make recommendations. mer politicians moving onto the Those like Chrétien, apparently, who This system, balanced between the bench, and partisan favorites some- believe that seeking the counsel of a elected politicians’ responsibility for times winning appointment over wider number of Canadians in the the final appointment, supported by those better qualified, we have had selection of a broad and diverse judi- the advice of bar associations and little overt partisanship from the ciary destroys political accountability, advisory committees would seem to higher court benches in Canada. should be asked to offer some evidence neatly fit a Canadian desire for com- Canadian conservative bleats about of the damage after the amended sys- promise among institutions, insiders “activist judges” should really be tem has been in place for a few years. seen as merely plagiarized American and ordinary citizens. Then, perhaps, we should all reflect on sloganeering to describe decisions how blessed are we as Canadians, to n the United States, the balance is they do not like. One may be sure have a judiciary respected around the shifting strongly in favour of par- that a Supreme Court decision that world; one that continues to evolve tisan consideration in the choice rolled back Charter rights would I in a balanced and thoughtful manner of judges, in part because judges play not be seen as “activist” by the Ca- to meet the needs of a very different an increasingly political role. Far more nadian right. When the Court does Canada than the one for which it was than in Canada or even the civil code come down on the side of tradition first created. system in Quebec, judges are asked as opposed to change—as they did to leap in to nasty partisan conflicts. on the “‘duty to consult” decision in Robin V. Sears, a principal of Earnscliffe From the egregious Dred Scott deci- September—there is usually an eerie Strategy Group, was national director of sion in 1854, which ramped up the silence from critics. the NDP during the Broadbent years.

Policy 39

Construction on Enbridge’s Line 3 Replacement Program in Alberta and Saskatchewan in 2017. When completed between Alberta and Wisconsin in 2019, the project will come in at $5.3 billion, creating thousands of jobs. Enbridge photo

The Importance of a Well-Timed Pause in Getting Bill C-69 Right for All

Canada enjoys competitive advantage from democracy, Bob Rooney the rule of law, well-trained workers, natural resources hen working to a tight and geographic proximity to as well as trade agreements deadline, it’s easy to forget with the world’s major markets. But Enbridge EVP Bob W the importance of a well- timed pause. Yet, it is the pause that Rooney also notes that “according to the World Bank’s allows us to step back and refocus Ease of Doing Business index, Canada ranks 34th out on core objectives to ensure we are getting things right. There is a tight of 36 countries in average time to get regulatory approv- deadline looming as Canada’s fed- al for construction projects.” eral government seeks to implement a comprehensive policy package designed to advance core environmen-

November/December 2018 40 tal, social and economic goals. As Capital is seeking safe havens and Canada should can be expected, there are many moving parts associated with at- be high on the list. We have so many advantages— taining these admirable and impor- from strong democratic traditions and the rule of law to a tant goals. Canadians would benefit generous natural resources endowment, well-trained if we all took a well-timed pause to people and relative proximity to the world’s major refocus on what matters most—getting the policy framework right for consumer markets. Canadians. The Pan Canadian Framework (PCF) sets out a comprehensive emission reduction plan, including carbon fact, getting the policy framework panies increased from approximate- pricing (output based pricing sys- right. That is, when all these mov- ly $60 billion in 2013 to $100 billion tem), clean fuel standard and meth- ing parts stop moving will we have in 2017, while inbound FDI fell by ane regulations. Bill C-69—a bill to achieved our goals? nearly half to $30 billion. repeal and replace both the Cana- Nevertheless, recent developments dian Environmental Assessment Act, point to green shoots of optimism 2012 and the National Energy Board in the Canadian energy sector. LNG Act––is designed to enhance public L et’s take a moment to take stock. Canada announced in October that confidence in the regulatory system. These are uncertain times. The post- it will proceed with a $40 billion ex- While C-69 also seeks to “enhance Second World War global order is port facility in Kitimat, B.C.; the en- competitiveness by developing a under serious stress from protec- ergy provisions of the United States system for timely and predictable tionist and nationalist forces, while Mexico Canada Agreement (USMCA) decision-making, which provides public confidence in institutions is signal that North America is likely to certainty to investors”, this objec- greatly diminished. Rising global maintain its deeply integrated energy tive has—until recently—taken a debt—almost $250 trillion in per- market and supply chains; Enbridge’s back seat to emission reduction and sonal, corporate and government Line 3 Replacement Project is on track Indigenous engagement efforts. A debt in March 2018—a strengthen- for completion in Canada by the end recent joint government-industry ing U.S. dollar and rising interest of the year; and the TransMountain collaboration (Canada’s Economic rates threaten the stability of our expansion project has a potential (al- Strategy Table on Resources of the global financial system. Meanwhile, Future) made strong recommen- climate change, disruptive innova- beit challenging) path to completion. dations in support of economic tion and digital technologies are re- Not only do projects have a path to growth; these recommendations still shaping our world. approval under the existing regula- need to be integrated into regulatory tory framework, they’ve progressed and climate policy. In a world awash in uncertainty, while advancing core environmental capital is seeking safe havens and and social goals. The sum of all the parts could add Canada should be high on the list. up to a healthier investment climate We have so many advantages—from and public confidence in Canadian strong democratic traditions and the Even as policy institutions—which, in turn, will al- rule of law to a generous natural re- debates continue to low Canada to seize the opportunity sources endowment, well-trained to meet global energy demand while be waged, significant forces people and relative proximity to the are driving the energy materially reducing global emissions world’s major consumer markets, in- and ensuring that Indigenous people cluding the U.S. and Asia. It is also sector to take action to and local communities benefit from worth noting that Canada is ranked enhance its economic energy development. fourth out of OECD countries for en- competitiveness, and to Governments and industry appear vironmental policy stringency. Yet, align with broader to be increasingly focused on the according to the World Bank’s Ease right mix of things. The long-term of Doing Business index, Canada environmental and social competitiveness of Canada’s energy ranks 34th out of 36 OECD countries policy goals. sector depends on getting environ- in average time to get regulatory ap- mental, diversity and Indigenous proval for construction projects. We policy right—just as it depends on have certainly seen evidence of this a globally competitive fiscal policy in the context of pipeline approvals. environment. The question that lin- This ranking goes part of the way to ven as policy debates continue gers amid Canada’s highly polarized explaining why outbound foreign to be waged, significant forces political debate is whether we are, in direct investment by Canadian com- E are driving the energy sector to

Policy 41 take action to enhance its economic that of the average barrel refined the project phase, with more op- competitiveness, and to align with in North America. Suncor, for ex- portunity available over the life- broader environmental and social ample, reports that the emissions cycle of the asset. This result illus- policy goals. Most notably, as global profile of its Fort Hills facility trates just how important energy energy supply moves from scarcity will be four per cent lower than infrastructure companies are in to abundance, consumers are free the average barrel refined on this contributing to Indigenous eco- to choose energy that, in addition continent. nomic reconciliation efforts. to being safe and reliable, is also Similarly, LNG Canada—which uch has changed recently cheaper, cleaner and more conve- will receive a significant amount nient. Similarly, Indigenous people to better align the interests of power from hydro sources—is of the Canadian energy and local communities—backed by billed as the cleanest LNG ex- M sector with the government’s key social norms and court decisions— port facility in the world. There policy objectives. Despite what we are asserting greater influence on will be globally significant emis- tend to hear in the news, Canada’s the future of energy production and sion reductions if Canadian LNG energy industry is increasingly infrastructure. displaces coal use in China. As aligned with the federal govern- These forces—often but not always Canadians, we should be proud ment’s core policy objectives: en- supported by government policy of these efforts. We should also suring competitiveness, diversity, in Canada—have already had ma- be advocating for the use of Ar- emission reductions and Indigenous jor impacts on energy systems here ticle 6 of the Paris Agreement, economic reconciliation. If, as it and abroad. Three examples are which would give Canada cred- should, Canada is going to help meet instructive: it for helping to reduce global global energy demand while materi- emissions. 1) Competitive renewables and ally reducing global emissions and integrated solutions 3) Improved Indigenous ensuring that Indigenous people and engagement and economic local communities benefit materially Renewable energy costs have opportunity from energy development, then we fallen dramatically—to the point need to make sure we get the policy Just as Canada’s energy sector is that they can now compete for framework right. capital with fossil fuel projects. poised to compete globally on For instance, solar photovoltaic cost and carbon, the sector is fo- A well-timed pause on Bill C-69 will (PV) costs dropped more than 70 cused on improving both diver- provide the opportunity to ensure per cent between 2010 and 2017. sity and Indigenous engagement. alignment among the bill, the Pan- Canadian Framework and the Re- Over the same period, the cost of At Enbridge, we’ve come to un- sources of the Future report. If we onshore wind dropped approxi- derstand—viscerally—that ex- take the time to do this right, then mately 23 per cent while the aver- pectations of pipeline companies we’ll end up with a consistent policy age cost of offshore wind dropped have changed dramatically. We’ve framework that effectively integrates 13 percent to $0.14/kWh. learned that although what we do to improve pipeline safety and en- government and industry’s core ob- While the competitiveness of vironmental protection is essen- jectives. It is worth the effort. renewables will continue to im- tial, how we do it is equally im- Bob Rooney is Executive Vice President prove, relatively low average ca- portant. In our business the how and Chief Legal Officer of Enbridge Inc. pacity factors (under 25 per cent is all about relationships. in Calgary. for solar and less than 40 per cent for wind) mean that conventional As a linear infrastructure com- fuels will play a significant role pany with assets across North well into the future. America, maintaining strong relationships with Indigenous na- 2) Cleaner oil and gas tions and groups is no easy task. We hear less about competitive- We work regularly with more ness gains made within the Ca- than 200 Indigenous nations and nadian oil and gas sector. Accord- groups in Canada and 30 feder- ing to IHS Markit, operating costs ally recognized tribes in the U.S. in the oil sands have fallen—on Our Line 3 Replacement Proj- average—by 40 per cent since ect—which replaces 1,031 miles 2014, while emissions intensity of existing pipe with state of the dropped 21 per cent between art pipe—is committed to deliver 2009 and 2017. Some new oil approximately $350 million in sands production is expected to economic opportunity for Indig- have an emissions profile below enous nations and groups during

November/December 2018 42 Book Reviews

Power, Prime Ministers and the Press, his power—and eviscerated Diefenbaker new book on the historic love-loathe in the process. In a handwritten note relationship between the Parliamen- still on file at the Diefenbaker Canada tary Press Gallery and the government Centre at the University of Saskatch- of the day. (It is also, surprisingly, ewan, The Chief referred to Newman Bob’s first book ever.) Just like the as “the literary scavenger of the trash politicians they cover, the journalists baskets on Parliament Hill” and as an that Lewis writes about—starting in “innately evil person”. But Newman the early 1900s and extending to the was no partisan. He became so ad- present—run the gamut from biased ept during Pearson’s time at getting to balanced; bland to blustering; sober scoops on cabinet secrets that Pearson to scotch-soaked. The one trait they threatened to fire any minister caught almost all share is an obsession with leaking to him. Newman dutifully re- the daily drama of politics. ported that revelation two days later. hat makes for no shortage of col- Lewis recounts how his interest in T ourful characters to write about, writing such a book, which was four An Excellent and Lewis makes the most of their years in the making, sprung from a foibles. For much of the 20th century discussion he chaired at the Cana- Gallery Close-up history of the Gallery, its members— dian Journalism Foundation. Its title: almost exclusively male for most of “Does the Press Gallery Matter?” That Robert Lewis that time—enjoyed cozy, first-hand question was prompted by factors in- relationships with the subjects they cluding growing distrust of the media; Power, Prime Ministers and the Press. covered. That included the ability to the sharp decline in the number and Toronto, Dundurn Press, 2018. drop in on various prime ministers readership of newspapers; the increas- for a drink, to informally probe and ing ability of political parties to bypass Review by Anthony sometimes advocate for various posi- traditional media by delivering their Wilson-Smith tions on government policy. Some of messages directly online; budget cuts those exchanges were reported; many for those media institutions still oper- f there were a hall of fame for Can- were not. That access gave journal- ating—and the decline in membership I adian political journalists, Bob ists greater insight into policies and of the gallery itself. (Between 2012 Lewis would surely be in it. As a Par- the motivation behind them—while and 2016, Lewis reports, the Gallery liament Hill reporter and bureau chief those conversations remained off-re- shrunk by almost 20 per cent, from for three publications, starting in the cord as an unabashed trade-off. Blair 370 members to 320.) Those reporters mid-1960s to the end of the 1970s, Fraser of Maclean’s, writing about Les- are expected to file regularly updated he was as respected as he was liked ter Pearson when he was external af- stories more often throughout the day by all sides. He went on to become fairs minister, observed that “We all on various platforms in order to keep managing editor and then editor of feel entitled to ring him up any hour up with the insatiable appetite of a Maclean’s magazine for another two of day or night…Quite often he puts wired world for immediacy. decades, while his influence on the his official life in reporters’ hands with Hill remained undiminished. a clarifying, but grossly indiscreet, in- ewis sympathizes with those terpretation of the known facts.” L challenges. His “lament”, he writes, The qualities that defined him as a is “not for a press gallery that might person—his genial manner, intelli- No Canadian journalist today would have that first-hand exposure, or write have been, nor for some mystical gence, innate fairness, and keen eye golden age.” But if the private scotch for detail—also distinguished him as like that. But those who think that acrimony between politicians and jour- drinking exchanges between politi- a journalist. When I arrived in Ottawa nalists is a new phenomenon haven’t cians and reporters in past years were for my own tour as bureau chief and studied the toxic relations between, too much to one extreme, then so, columnist for Maclean’s in the 1990s, among others, John Diefenbaker and Lewis writes, is the present-day antip- the first question prime ministers Bri- the Gallery. The notoriously prickly athy that ultimately diminishes both an Mulroney and then Jean Chrétien Diefenbaker started his term in power sides. By the time these elements asked was the same one: “So, how is on a friendly fishing trip with several came together in the 2015 election my old friend Bob?” journalists—and ended it at war with campaign, the need was clear, he ob- Few people have had a closer view of much of the Gallery. He was particu- serves, “for reporters to operate with Canadian federal politics up front, and larly obsessed with Peter C. Newman, civility, thoughtfulness and a modi- even fewer have Lewis’s level of under- whose book Renegade in Power gave the cum of humility—along with scepti- standing of its sweep and sometimes first-ever real behind-the-scenes re- cism, and for politicians to give up subtle nuances. That is evident in porting on a Canadian government in the bullhorn and the lash.”

Policy 43

Candidate Joe Clark with Bob Lewis, Ottawa bureau chief of Maclean’s waiting for a flight at Toronto Airport during the 1975-76 Conservative leadership campaign won by Clark on the fourth ballot. Photo by Ted Grant, Maclean’s

Ambitious in scope as it is rich in up- number of different ways. ably never been more difficult to do. close anecdotes, Power, Prime Minis- There has never been a time in But that, in turn, leads back to the ters and the Press reminds us that the which so much information can be question that prompted this book: way news events are reported can de- made available so quickly to any- “Does the press gallery still matter?” pend as much on the people report- one equipped with a mobile device As Lewis rightly concludes: “Now, ing them as it does on the events or laptop with modem. But as Lewis more than ever.” And so, by exten- themselves. What has changed so argues, someone has to provide con- sion, does this excellent book. dramatically is the willingness—or text and balance—and know how lack of same—of news consumers and when to ask the right questions Anthony Wilson-Smith, former to accept what they are told at face to produce meaningful answers. Ottawa bureau chief and later editor value. A news event only happens That’s the job of the people in the of Maclean’s, is President and CEO of once, but it can be told in an infinite Ottawa press gallery—and it’s argu- Historica Canada.

Leadership in Turbulent Times. this review a crafty compare-and- New York, Simon & Schuster, 2018. contrast between Doris Kearns Good- win’s study of how four of Ameri- Review by Lisa Van Dusen ca’s greatest presidents governed in turbulent times and Woodward’s irst, a disclaimer: If you’re look- Fear—published one week apart in F ing for a tale of Survivor-style, September—but hit my preposterous- hair-on-fire office politics, reality- chaos threshold before page 100 of show melodrama and casual tyran- the Woodward book, so, here we are. ny—a cross between Dante Alighieri Luckily, you don’t need to read an and Ernst Lubitsch played out in the entire book about Donald Trump’s high-stakes hallways of the White implausible presidency for the ton-of- House—this isn’t the book for you. bricks contrast between the current For that, you want Michael Wolff’s occupant of the White House and the shock-a-minute Fire and Fury or the presidents whose leadership qualities more forensic but equally bloodcur- are deconstructed in this book to hit dling Fear by Bob Woodward. you on every page. Abraham Lincoln, When Presidents Having a limited appetite for the con- Theodore Roosevelt, Franklin Delano vergence of the war on democracy Roosevelt and Lyndon Johnson were Fought Chaos and theatre of the absurd currently neither perfect men nor perfect presi- playing out in Washington, I haven’t dents. The contrast begins from the Doris Kearns Goodwin read either book. I was going to make lowest common denominators that

November/December 2018 44 none of them ever suggested the U.S. bition, some more noble than others regular trips to the theatre is no less government print money to lower (in the ambition breakdown of desire endearing for its fateful irony. the debt, claimed that trade wars are to do good vs. lust for power, John- In the end, the true contrast isn’t good and easy to win or toyed with son may tilt most toward the latter) between these men and the one cur- appointing his own daughter to the but all of them individuals who loved rently occupying the White House, second most important post in U.S. their country, and whose unique it’s between functioning democracy diplomacy. It may as well end with combination of experience and per- and compromised democracy. Func- the fact if any of them was a compul- sonality seemed tailored for the par- tioning democracy produces leaders sive, unsolicited grabber of women’s ticular moments of crisis in which who end slavery, not start it; who pelvic parts, he never bragged about they governed. In Lincoln’s case, it’s elevate their country, not degrade it; it into a hot mic. hard to imagine a leader who could who exhibit love, not contempt for Among the advantages to corrupting have accomplished what was argu- their fellow human beings; and who and hacking democracy, if you’re ably the greatest feat of transfor- strengthen civil rights and human into that sort of thing, is that it al- mational leadership in U.S. history rights, not weaken them. American lows the otherwise unelectable without his peculiar combination democracy, in its uncompromised to obtain power for the interests of temperament, generosity of spirit state, has produced some of the who’ve secured it for them, finan- and ability to communicate. world’s great leaders. This book reminds of us that. cially or otherwise. When power can ll four shared the quality of hav- be obtained through mass manipula- A ing lived through dramatic Above all, at a time when so much of tion, disinformation, corruption and reversals of fate from which they the content that crosses our screens other covert tactics, the prerequisites emerged better, more empathetic reflects an agenda to normalize the of character are reversed, and success men, even if some coped with the patently abnormal and rationalize becomes the province of bad people psychological strain of setbacks the utterly irrational, Goodwin’s only willing to do anything it takes to and loss more effectively than oth- agenda is to deploy her moral com- fool voters instead of good people ers: Lincoln and Johnson’s bouts of pass to measure these men and im- with a positive argument to make, major depression humanize them; part the lessons of their lives. In that take it or leave it. The predetermined FDR’s triumph of mind over matter way, she comes through on every outcomes of corrupted democracy and empathy over privilege in lit- page, like a fifth leader. preclude the need for instinct, tal- erally getting the better of polio by Lisa Van Dusen is associate editor of ent, relatability, empathy, integrity, transcending it to embrace humil- Policy Magazine and a columnist for intellect and skill, which makes this ity, help others and strengthen his The Hill Times. She was Washington book a sort of valentine to the un- resilience made him precisely the bureau chief for Sun Media, a writer for corrupted kind. man and the president he was. The Peter Jennings at ABC News, and an The presidents in Goodwin’s book are fact that Lincoln would alleviate the editor at AP in New York and UPI in all basically good people; men of am- colossal stress of the Civil War with Washington.

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Policy Growing Canada’s cleantech sector. The polarization of the media. Millennial voter intentions. THE REVIEW Getting universal pharmacare right. NOV-DEC 2018 VOL 1 ISSUE 5 USMCA noun [u-smak-ah, u-shmuhk-EH] BEFORE THE BELL | FROM THE EDITOR

FROM THE EDITOR omeone should have reminded be patient centric, responsive, and provide President Donald Trump that value and sustainability. Prime Minister Justin Trudeau Next, in Accelerating Cleantech in Can- caffeine and content is a boxer. After being dragged ada, a Sixth Estate Spotlight on growing the Sinto the ring for an incredible weight cleantech sector, Navdeep Bains, Minister of class mismatch, the government should Innovation, Science and Economic Devel- President | Executive Producer be complimented for escaping disaster by opment, used the platform to make a major Andrew Beattie striking a new trade agreement (USM- funding announcement. The session, in [email protected] CA) in September. Following a draining conjunction with the annual public meeting ten-round bout of negotiations, brought of Sustainable Development Technology Vice President about by the US-imposed forced destruc- Canada, looked at the broadening scope of Executive Producer tion of an existing NAFTA agreement, cleantech companies in Canada. Todd Charlebois the government stood tall and salvaged a Finally, in separate sessions in advance of [email protected] long-standing mutually beneficial trading the US midterms, Before the Bell looked at relationship. Prime Minister Trudeau and two areas that are expected to have a major Associate Producer Canada may have been outmatched but impact on the outcome: millennial voter not outclassed. intentions and the role of the media. Special Bruce Libbos Now, the government must return its expert guests included John Della Volpe, [email protected] focus to the many other fights ahead on the director of polling at the Harvard Kennedy Card. At the Sixth Estate and on Before the School’s Institute of Politics, and Emmy Host of Before the Bell Bell we continue to explore those issues award-winning journalist Betsy Fischer Catherine Clark ringside. Martin, now executive director of the Women In this issue we start with the prospect of Guest Hosts and Politics Institute at American University. a national pharmacare program. Dale Smith Providing a Canadian perspective to discuss David Akin, Shawn McCarthy highlights the season premiere of Before if what we are seeing in the US is a harbinger the Bell in his piece Universal Pharmacare: for our own upcoming election was David Video and Prescribing a Solution, recapping the juris- Coletto, CEO of Abacus Data, and Shawn Streaming Production dictional challenges, costs, and now rami- McCarthy with the Globe and Mail. You can Skyfly Productions fications of extending intellectual property read their opinions in Millennial & US Mid- protections in the new USMCA - all elements terms: Passionate but are they predictable Contributing Writers Dr. Hoskins will have to consider when he and Media Today: Media or the message. Dale Smith and Pamela Fralick completes his report next spring. We hope you will continue to join Before And Pamela Fralick, president of Inno- the Bell for the many remaining rounds and Editor, The Review vative Medicines Canada, argues in Getting watch what will be a marathon of fights for Andrew Beattie it Right on Pharmacare that any universal the government leading to the Title – next pharmacare program must have three pillars: October’s federal election.

For information about advertising in The Review please contact Table of Contents Bruce Libbos, Associate Producer at [email protected] Universal Pharmacare: Millennials & US Midterms: Passionate, Opinions expressed are those of the author Prescribing a Solution But Are They Predictable? and do not necessarily reflect the policy or BY DALE SMITH 2 BY DALE SMITH 7 position of the Sixth Estate

Sixth Estate | Before the Bell is a live jour- Getting it right on Pharmacare Media Today: nalism event series focused on important BY PAMELA FRALICK Medium or the Message issues that impact Canadians. To further 4 BY DALE SMITH 9 its commitment to editorial excellence and support its mission, Sixth Estate relies on sponsorship support. To learn more about Accelerating Cleantech in Canada sponsorship opportunities please email us at BY DALE SMITH [email protected] or call us at 613- 232-1130. 5 Before the bell | Pharmacare

Implementation of National Pharmacare chaired of their own. She said it’s an issue that the feder- by Dr. Eric Hoskins. Moderators David Akin al government can’t realistically do on its own. Universal and Shawn McCarthy welcomed their respective “Any pharmacare programs that currently panels — on the politics and policy of the issue exist are provincial in scope — the problem is — to flesh things out. that it varies from province to province,” said On the politics, Peter Cleary, senior con- Pohlmann. “You can’t move this forward with- Pharmacare: sultant with Santis Health and former senior out direct provincial involvement, and they’re aide to then-Health Minister Jane Philpott, probably going to have to deliver it regardless.” said Canadians aren’t yet in a position to rank L. Ian MacDonald, publisher and editor of Prescribing pharmacare versus other healthcare priorities be- Policy magazine, said that national pharmacare cause a detailed plan has not yet been presented. has been a perennial promise from political parties, Cleary added that provinces have the ability to there has been very little momentum, and there go their own way, but there are added complica- will be added complications with the new terms a Solution tions if the federal government decides to exert around intellectual property in the USMCA. some authority, particularly through a national “The NDP have been working very hard in formulary. question period to make this intellectual prop- BY DALE SMITH “I think that politicians are really uncom- erty issue an Issue,” said MacDonald. “Whether Sixth Estate fortable with deciding what gets coverage and they’ll succeed is another question.” what doesn’t, and that’s at the crux of a national During the main panel on policy, Pamela formulary, and that was in the mandate letter Fralick, president of Innovative Medicines Can- n its report to Parliament last April, the when I was in the minister’s office a couple of ada, said that the whole-of-stakeholder approach House of Commons Standing Committee years ago and it continues to be,” said Cleary. needs to be front and centre as the pharmacare on Health recommended a national, univer- “We’ll see if we get to the pharmacare piece discussion evolves. sal pharmacare program, a policy shift that because there’s a lot of other pieces that they “That patient-centric view of the world is Iwould have the support — according to a 2015 haven’t touched yet.” number one for us,” said Fralick. “We don’t ex- Angus Reid poll — of an overwhelming 91 Corinne Pohlmann, senior vice-president ist if we don’t have patients, and care for them, percent of Canadians. Before the Bell hosted a of national affairs and partnerships with the and provide products that are useful.” panel of experts to discuss the options current- Canadian Federation of Independent Business Fralick added the challenge for pharmacare ly under discussion, the costs involved, and (CFIB), said that her organization represents tends to be implementation, which is what Dr. the ongoing work of the Advisory Council on business owners who rarely have drug coverage CONTINUES ON PAGE 3

The Review // 2 Before the bell | Pharmacare

“It turns out that with private plans, there Walker says that this is where pharmacists is reasonable coverage across Canada, but can come in, to help better manage patients’ Universal public plans are another story,” said Yale. “We drug regimens. don’t see why you would take public money to Bill Casey, Liberal MP for Cumberand-Chol- replace private plans for the vast maority of chester, Nova Scotia, and chair of the House of Canadians that do have access to their medi- Commons Standing Committee on Health, said Pharmacare: cally necessary treatments. We want to avoid a that the committee’s two-year study on phar- race to the bottom.” macare in Canada was a fascinating exercise. In Yale’s estimation, that means closing the “The consensus in the report is that we will gaps in the public system in order to best lever- have better healthcare at a considerably lower Prescribing age scarce resources. cost with a national pharmacare program, and Joelle Walker, director of public affairs that was absolute with healthcare providers,” with the Canadian Pharmacists Association, said Casey. a Solution says that pharmacists are already on the front Casey adds that the federal government line of managing drug plans, they can see current has six different drug programs, and where the gaps are in the system, and that the provinces can have six to twelve programs each, CONTINUES O PAGE current system is not sustainable over the long meaning there is a considerable amount of over- Hoskins has been tasked to tackle by the federal term. head in administering them. Casey added that the government. Fralick pointed out that this is “There are a lot of areas that we haven’t Parliamentary Budget Ofﬁ cer conducted a study why Hoskins will report to both the health and focused on, including the appropriateness and on behalf of the committee, which determined ﬁ nance ministers. utilization of medications,” said Walker. “A that the current uebec program was probably Janet Yale, president and CEO of the recent statistic around medication returns to the best model, though Yale countered that it still Arthritis Society (Canada), says the principle pharmacies cited that in four provinces alone, it doesn’t meet all of the needs of patients. of pharmacare should be timely and equitable was about 00 tonnes of medications returned in “What we have doesn’t make sense to me,” access to medically necessary treatments for all 201. People aren’t using their medications as said Casey. “If we have a national pharmacare Canadians, irrespective of where they live. prescribed.” program, we will have consistency in delivery.” Opinion | Pharmacare

P PRESIDENT, INNOVATIVE MEDICINES CANADA

etting it

right on Pharmacare let to right: uest host avi in lobal es ill ase P hair ouse o ommons Staning ommittee on ealth oelle aler anaian Pharmacists ssociation anet ale rthritis Societ Pamela ralic nnovative eicines anaa Source: itter

Pharmacare Reasons for this include a lack of awareness costs low for taxpayersand 90 did not want of their eligibility and out-of-pocket costs. group coverage to be put at risk of cancellation. t has often been cited that Canada is the A made-in-Canada pharmacare program We agree with Canadians that any phar- only maor western country with a national should focus on meeting the needs of those macare option must be both fi scally responsible Medicare system that does not include vulnerable Canadians who need medicines but and practical to implement in the context of some version of a national public drug are either not eligible for any coverage or have Canada’s mixed public and private insurance Iplan. Last year, more than 20 million prescrip- insuffi cient coverage. framework. tions were fi lled by Canadians. Pharmaceuticals are the most frequently used therapeutic inter- Value and Sustainability System Responsiveness vention used by clinicians to treat people and Canadians are generally supportive of the Pharmacare options should refl ect diverse yet somehow pharmaceuticals have not yet been government’s decision to examine ways to help and evolving patient needs and be responsive to fully integrated into the Canadian health system. make medicines affordable for all Canadians, technological change through the timely adop- Innovative Medicines Canada has been according to an Abacus data survey released in tion of innovation. Medicines have the potential advocating for the creation of a pan-Canadian September1. When asked what factors should to save lives or enhance a patient’s quality of framework to support comprehensive access to be considered in developing a national policy, life and save precious healthcare dollars. For pharmaceuticals for all Canadians.To inform this 9 of respondents indicated the need to keep example, a study of six classes of innovative dialogue, we put forwardthree principles that we medicines in Ontario found that the cost of the believe should form the basis of any sustainable new medicines was offset by reductions in the national pharmacare program. use of other healthcare resources such as phy- sicians and hospitals, and reduced productivity Patient-centric lossesin the workplace. First and foremost, we believe that all Cana- A national pharmacare system does not have dians should have timely access to the choice of Nearly 10% of to be an all-or-nothing proposition. Canadi- medicines they need, regardless of income, age, ans don’t have to choose between the current or postal code. Canadians dual-payer system or a single-payer universal While there is robust private and public pharmacare program funded entirely by gov- drug coverage in Canada, we recognize that (3.6 million) ernment. By addressing the needs of Canadians these systems are not perfect and that some who don’t have coverage or are underinsured, Canadians are falling through the cracks, either we can create a sustainable national pharmacare because they have no coverage, or they have are not taking program that ensures that patients receive the insuffi cient coverage. Fortunately, according best standard of care and have timely access to to a recent analysis by the Conference Board advantage of public necessary medicines for years to come. of Canada, over 9 of Canadians are in fact Pamela Fralick is president of Innovative eligible for some form of prescription drug drug coverage for Medicines Canada coverage. However, nearly 10 of Canadians Contributed to the Sixth Estate – The views (. million) Canadians are not taking advan- which they and opinions expressed in this article are those tage of public drug coverage for which they are of the authors and do not necessarily refl ect the eligible. are eligible.” offi cial policy or position of the Sixth Estate.

Th e Review // Sixth estate spotlight | cleantech

environmental impacts. According to a 2016 re- “Data and intellectual property are what port by Analytica Advisors, the global market for critically matter, and our lives are increasingly Accelerating cleantech is poised to triple to $3 trillion by 2020, depending on it,” said Lawrence. She added that which creates a huge opportunity for Canadians data is worth protecting. to take advantage of this booming sector. Sixth “That’s why SDTC places a particular focus Estate’s Spotlight hosted a panel of experts to dis- on working with cleantech start-ups who are Heads that stay Cleantech in cuss what is being done to accelerate the growth looking to harness the power of data to advance of cleantech in Canada. Moderator Lianne Laing pre-commercial demonstration and the technolo- welcomed Minister of Innovation, Science and gy ideas that they drive,” said Lawrence. Economic Development (ISED) Navdeep Bains, During the panel segment of Spotlight, Canada who used the occasion to announce $58.6 million Audrey Mascarenhas, president and CEO of ahead of the curve in funding for 14 Canadian cleantech companies. Questor Technology, who also chaired the fed- BY DALE SMITH The funding is through Sustainable Development eral government’s economic strategy table for Sixth Estate Technology Canada (SDTC). clean technology, said that there’s an enormous KPMG’s Public Sector practice is committed to supporting “We want to make sure that Canada plays a opportunity for Canada to use digital to grow governments build connected citizen experiences. We leadership role, and that’s why clean technology clean-tech industries and to think of things from o many Canadians, cleantech may was such a critical part of our innovation and a systems perspective. are passionate about harnessing the digital revolution to sound like an abstract, catch-all term skills plan, because it genuinely represents a key “[We’re] starting to look strategically at enable the long-term prosperity of Canadians. used to describe any innovation aimed market growth opportunity for us,” said Bains. how we combine all of our different technol- at the green market. In fact, it is an Leah Lawrence, president and CEO of ogies to provide a solution, whether it’s on Tindustrial transformation that includes any SDTC said that when it comes to cleantech, water or air, and then market that strategically, Let’s do this. process, product or service that reduces negative “data is king.” CONTINUES ON PAGE 6 © 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative 5 // Sixth Estate (“KPMG International”), a Swiss entity. All rights reserved. 21751 Sixth estate spotlight | cleantech

While the re-negotiated NAFTA agreement, from mating, and that would prevent a bunch CONTINUES FROM PAGE 5 the USMCA, includes intellectual property of pesticides from going into the environment,” and globally,” said Mascarenhas. “This is an provisions, some experts have warned they will said Gilbert of a pheromone-based mating exciting time.” hinder, not help, Canadian innovation. disruption technology produced by Semios. Mascarenhas said that the government’s Mark Schaan, the director general of the “It turns out that it worked out really well, strategy tables were industry-led, and there was marketplace framework policy branch at ISED, and we’ve displaced ten million litres of toxic a focus on implementing cleantech to grow the said that increasingly, ISED is trying to meet pesticides.” economy and create jobs. the paradox of going from a country that leads Gilbert said that they hope to use similar James Hinton, IP lawyer and patent and in development of new innovation and ideas to tools to help farmers use less water as they scale trademark agent with Own Innovation, said that being a country that leads in commercialization up their production. Gilbert also said that Cana- while the good news is that Canada is good at and reaping the benefits of those ideas. dian companies need to be on the offensive and researching cleantech, the bad news is that it’s “We’re placing the emphasis where it should be not defensive in order to become global leaders. international companies that are able to take – that we recognize that we need to be net generators Mascarenhas said that having a patent can advantage of the research. and net owners of the ideas that we produce, and of make companies competitive on the global “Even though Canadians are creating these the datasets and the insights that come from those stage, but the question is how to take those ideas and technologies, Canadian businesses lag datasets to maximize their potential,” said Schaan. patents in a strategic direction. She also noted globally for IP ownership in cleantech,” said Michael Gilbert, CEO and founder of the that patents can be of little value if they don’t Hinton. “Canada decreased 22 percent in filings precision agriculture data analytics platform create companies and jobs, which is why the from three years ago, so it places us dead last in Semios, said that tools such as the internet of government needs to close the funding gap for countries that file more than 100 applications.” things and artificial intelligence-driven ma- scaling-up. Hinton said that while the government has chine-learning are making it possible to avoid “If we don’t invest and create scale-up implemented a national IP strategy, it needs to using physical labour in agriculture and are companies in Canada, we’re actually subsidiz- do more to capture the economic value of the becoming more targeted in their approach. ing the rest of the world’s GDP growth,” said technologies Canadians create and it needs to “We started out with a relatively simple but Mascarenhas. “We need to make sure that we’re act swiftly. odd proposition that we could stop butterflies looking at the entire ecosystem.”

Heads that stay ahead of the curve

KPMG’s Public Sector practice is committed to supporting governments build connected citizen experiences. We are passionate about harnessing the digital revolution to enable the long-term prosperity of Canadians.

Let’s do this.

© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 21751 BEFORE THE BELL | Millennial Voter Intentions

Millennials & US Midterms: Left to right: David Coletto CEO Abacus Data & Shawn McCarthy Globe & Mail. Passionate, Photograph by Sixth Estate But Are They Predictable? s with all elections these days, millennial voters, who have their own values the looming November 6th U.S. and attitudes. Before the Bell hosted a panel BY DALE SMITH midterms have refreshed the September 27th on the factors that guide Sixth Estate A conversation on how to mobilize CONTINUES ON PAGE 8

Consumer expectations and technological innovations are driving business decisions. Modernizing Canadian insurance regulations will enable insurers to innovate and meet those expectations while improving the customer experience. Learn more about the future of insurance at IBC.ca BEFORE THE BELL | Millennial Voter Intentions

CONTINUES FROM PAGE 7 Della Volpe said that the political awakening for older millennials — who so effectively millennials’ decisions, and what signals they mobilized for the Obama campaign in 2008 might be sending for Canadian candidates — was 9/11, and they have continued to be a ahead of the October 2019 federal election. reliable progressive voting bloc. For the younger Moderator Shawn McCarthy welcomed John millennials, the Great Recession showed them Della Volpe, director of polling at the Harvard the failures of the system, and that Republicans Kennedy School’s Institute of Politics, and failed to take advantage of the opportunities that David Coletto, CEO of Abacus Data. it presented, which fed the grassroots movement Della Volpe, an expert on millennial atti- for Bernie Sanders. tudes and behaviours, said his research shows “The anger and questions that were raised that young Americans are deeply concerned about how this sort of thing happened in 2016 about the state of their country, democracy, have now been channeled into a very produc- and institutions, and that there is a deep sense tive series of conversations on campuses, and of anxiety among them. Polling also shows when I ask a young person why they’re voting, that they blame politicians, big money and they’re more likely to tell me that they’re doing the media for the state of things, but also the it to support some marginalized population structural barriers to advancement. He also not- within their community or within the country,” ed that there is waning support for capitalism said Della Volpe. among youth. On foreign policy, Della Volpe outlined “Despite the fact that two-thirds of young in an RCP op-ed in May the level of support Americans have more fear than hope, despite among young Americans for multilateralism. John Della Volpe. Photograph by Sixth Estate the fact that they’re questioning everything The Harvard Kennedy School Institute of from the politicians to the media, to struc- Politics’ Bi-Annual Survey of Youth Attitudes Abacus’s own numbers, released in April tural challenges including capitalism, there showed that an overwhelming percentage 2016, showed forty-five per cent of Canadians are a lot of indications in our data and other of young Americans under the age of 30 — aged 18 to 25 voted Liberal, compared with 25 data sets…that we’re on the verge of seeing a regardless of party affiliation — believe in per cent for the NDP and 20 per cent for the once-in-a-generation attitudinal shift about the a highly collaborative approach to foreign Conservative Party. efficacy of politics and political engagement,” policy. said Della Volpe. For his part, when asked about millenni- For the midterms, Della Volpe said his als’ values versus those of older generations, polling shows an increase in Democratic and Coletto pointed to the sense of fairness and independent-identified voters who “definitely equality, and in Canada, climate change has a plan to vote” relative to the last “wave” election sense of urgency. He also said there is a sense in 2010, whereas there is a dip in self-identified that the system is broken, which is something Republicans. There are a lot of that Trudeau was able to tap into in Canada the “We expect to see an increase in overall par- way Sanders did in the U.S. ticipation, but more importantly a change in the indications in our data and Della Volpe said that by contrast, one of composition of the vote,” said Della Volpe. “We the top issues for young Americans is school have far more young Democrats participating other data sets…that we’re shootings, as well as inequality. Reaching young than young Republicans.” millennial women is also where there is contrast Della Volpe said that the reason some youth on the verge of seeing between Canada and the U.S. don’t vote is that they don’t see tangible results, “Making gender equality a core part of the as they do with community service. But in the a once-in-a-generation government’s agenda speaks to the generation, Trump era, he is seeing a rise in engagement and particularly to young women,” said Coletto comparable to the aftermath of 9/11. attitudinal shift about the of the Trudeau government. “The broader Me- From a Canadian perspective, Coletto said Too movement has empowered them and given that while the values are similar, the majority efficacy of politics and them a voice.” of young Canadians feel optimistic about Coletto also noted that Canada’s region- Canada, and that there is less adherence to political engagement.” al divides are more pronounced than class, partisanship. particularly around issues like climate change “In 2011, the Conservatives and the NDP — John Della Volpe and carbon taxes. He also said that housing basically split the youth vote,” said Colet- director of polling affordability and jobs are the most pressing to. “Four years later, Justin Trudeau did at the Harvard Kennedy School’s needs, which provides an opportunity for the very well. There’s a lot of fluidity in young Conservatives to come up with policies to fill Canadians.” Institute of Politics that space.

The Review // 8 BEFORE THE BELL | Media M T ei or the essage

BY DALE SMITH ith the next Canadian federal panel Media Today Medium or the Message. Sixth Estate election little more than a year Moderator Catherine Clark welcomed legendary away and the campaign for No- Washington producer Betsy Fischer Martin, who vember’s midterms in the Unit- as the late Tim Russert’s long-time producer on Wed States providing lessons for Canadian media Meet the Press was one of the most inﬂ uential on what to expect in a changing news landscape, women in Washington, and Globe and Mail en- Before the Bell launched its new season with the CONTINUES ON PAGE INNOVATION HAPPENS WHEN SCIENCE,

S E HEALTH AND POLICY INTERSECT BEFORE THE BELL | Media

you can have two totally different universes of CONTINUES FROM PAGE information being consumed. ergy reporter and Carleton University reporting Fischer Martin listed examples of how head- instructor Shawn McCarthy. lines are presented by different outlets, and which The Emmy Award-winning Fischer Martin, stories were given top billing between outlets that now executive director of the Women and ooing today have more political leanings, and how that can Politics Institute at American University, spoke create bubbles for media consumers. about asymmetrical polarization, whereby one at the media Fischer Martin said that during the mid-90s, political party moves signiﬁ cantly away from she would have the Senate majority and minority the mainstream, largely used to describe the landscape … you leaders on Meet the Press together to talk about leg- move of the Republican Party further to the right islation or issues, and that in the past ten to twelve while the Democratic Party has only moved can have two years, she hasn’t seen the bearers of those two titles slightly to the left. Fischer Martin likened it to together in the same interview. She also noted that a football game where the Democrats moved totally different the series of hour-long interviews with presidential from the 0-yard line to the 30-yard line, while primary candidates that were the norm in 2000 have the Republicans went from their 0-yard line to universes of virtually disappeared as candidates chose friendly beyond the goalposts. outlets for six- or seven-minute interviews. “Looking today at the media landscape, I do information being Fischer Martin suggested there are things that think we have seen that same football game be- both journalists and news consumers can do to coming played, said Fischer Martin. “Conservative consumed.” bat polarization, such as producing more straight media has moved signiﬁ cantly away from what news and fewer opinion columns, and creating a we think of as mainstream, centre-left, or even sharper line between the two, along with ending the centre-right media. The result of that is a spec- — etsy isher artin practice of newspaper editorial endorsements. trum of media organizations where essentially eporter CONTINUES ON PAGE

INNOVATION HAPPENS WHEN SCIENCE, HEALTH AND POLICY INTERSECT BEFORE THE BELL | Media

CONTINUES FROM PAGE McCarthy noted that social media is not only allowing politicians to bypass the media to reach “We need to condition readers and news people directly, it’s also impacted marketing when consumers to pay for good journalism, said businesses bypass media advertising for targeted Fischer Martin, and pointed to the declining social advertising. The downside of this, he noted, numbers of outlets. “They’re slashing staff left Social media is not only is that it tends to only reach a core audience. and right, and we end up with statehouses across “If you’re trying to reach those who are not the country that have no local reporters moni- allowing politicians to partisans but are persuadable, you have to look toring what’s going on in state legislatures it’s beyond that strategy, said McCarthy. one of the fi rst things that newspapers cut.” bypass the media to Fischer Martin said that media need to fi gure Shawn McCarthy, global energy reporter out how to give people both their “short clicks with the Globe and Mail and instructor of polit- reach people directly it’s along with more substantive content, that will ical reporting at Carleton University, said that still provide a viable business model. McCarthy metrics show newspaper publishers that people also impacted mareting also said that people need to beware of treating prefer to read columns, which is why resources the media as a monolith when each organization get shifted there. when businesses bypass has a target audience that is different from their “You go where the numbers are, especially competitors. when the business models are under so much media advertising McCarthy said that he sees the same trends stress now, said McCarthy. “Maybe in Canada, from the U.S. happening in Canada when it there’s a bit less of that hardcore opinion that for targeted social comes to the reach of populist leaders — per- you would associate with…a political point of haps not in as visceral a manner as with Presi- view, but it’s going that way. advertising. dent Donald Trump, but that they are all tapping McCarthy said that there are still people in into fears among the electorate about how fast Canada who feel that the mainstream media is the world is changing. either too far left or too far right for their partic- — Shan arthy “Politics is refl ecting that and the media are ular point of view. eporter lobe ail refl ecting that,” said McCarthy.

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l’avenir est à bord

Plus que jamais, VIA Rail souhaite amener les Canadiens vers un avenir durable. Maximiser sa Réduire son Réduire ses Faire partie d’une productivité empreinte écologique dépenses grande communauté Avec le Wi-Fi gratuit, les sièges Choisir le train, c’est contribuer Ensemble, on contribue VIA rapproche 4 millions confortables, l’espace et le à un avenir plus vert. à réduire aussi celles de de voyageurs et cellulaire à portée de main, tous les Canadiens. 400 collectivités au Canada. travailler à bord est aussi, voire plus efficace, qu’au bureau.

Liaison Nombre Distance Temps Temps Coût du voyage Coût du voyage Économies pour de départs productif non productif en voiture** en train le contribuable par jour en train en voiture* (à partir (voyage en train)*** de seulement)

Ottawa Toronto Jusqu’à 20 450 km 4 h 23 min 4 h 34 min 467 $ 44 $ 423 $

Ottawa Montréal Jusqu’à 12 198 km 1 h 55 min 2 h 27 min 227 $ 33 $ 194 $

Ottawa Québec Jusqu’à 8 482 km 5 h 23 min 4 h 39 min 488 $ 44 $ 444 $

Toronto Montréal Jusqu’à 13 541 km 5 h 25 min 5 h 30 min 562 $ 44 $ 518 $

Les employés du gouvernement du Canada sont admissibles à un rabais de 10 % sur leurs voyages personnels réservés auprès de VIA Rail. Les employés du gouvernement du Canada peuvent profiter de tarifs spéciaux pour leurs voyages d’affaires réservés par l’entremise des Services HRG de voyage partagés. Le rabais ne s’applique ni aux tarifs Évasion ni à la classe Prestige. * 30 minutes ont été ajoutées à la durée totale du voyage en voiture afin d’inclure les retards dus au trafic et au mauvais temps. ** Le coût du voyage en voiture est calculé selon la formule suivante : coût en $ du voyage en voiture (taux de 0,55 $/km établi par le Conseil du trésor pour l’Ontario pour une voiture conduite par un employé du gouvernement X distance parcourue) + frais en $ d’employé gouvernemental (taux horaire moyen d’un employé gouvernemental de 48 $/h selon un salaire de 100 000 $ par année, y compris les avantages sociaux X durée du voyage) = coût total en $ pour le contribuable. *** L’économie pour le contribuable associée aux voyages en train est calculée selon la formule suivante : coût en $ du voyage en voiture – coût en $ du voyage en train = économies en $ pour le contribuable. Les tarifs et les conditions peuvent changer sans préavis. MC Marque de commerce propriété de VIA Rail Canada inc.

Policy

2100, rue Drummond Cossette Montréal (Québec) H3G 1X1 20/02/18_15:55 client : VIA Rail Canada nº 1111111152978 format pap : 100 % @ 300 dpi description : Magazine Nº VIA - trim — : 8,5” x 11” publication : POLICY MAGAZINE – FR ( Livraison 15 Février ) safety - - - : 7,5” x 10” (0,5 po) conseillère : Camille D. MARS / AVRIL bleed — : 8,75” x 11,25” (0,125”) infographiste : Eric L. visible : — nom fichier : 111152978_VIA_GovAd_Policy-PP-Mars-Avril-Fr.indd

We are living through an information technology revolution set against a context of sustainability, energy concerns, and the fourth industrial revolution – the meshing of the digital world of people and machines as internet meets production. This is our ever-evolving workspace, where technology accelerates growth and innovation like never before and more than ever we aim to create a Canada whose people, technology and innovation ecosystem can compete on the global scale abb.com/future

ABB Ad-POLICY Magazine.indd 1 2018-08-09 9:11 AM An Open Letter to the Prime Minister and the Minister of Finance

The Right Honourable Justin Trudeau, The Honourable William Morneau, P.C., M.P. P.C., M.P. Prime Minister of Canada Minister of Finance

Dear Prime Minister and Finance Minister:

In my role as a volunteer board member of four major volunteer organizations in healthcare, education, social services and arts and culture, I am well aware of the increasing needs of the benefactors of these organizations and how the charitable sector plays a vital role in the well-being of society generally. The needs of the benefactors are growing and governments cannot keep up with the increasing demands. To provide much needed relief with the private sector as a helping partner, I recommend that your government remove the capital gains tax on charitable donations of private company shares and real estate in the 2019 budget, the same policy and legislation that presently exists for listed securities. There are 84,000 Centraide registered charities in Canada which employ over 2.1 million people and serve a large United Way Flickr photo proportion of the Canadian population from all walks of life.

The case for this proposal is compelling: • It is not a “Tax Break for the Rich”. The real beneficiaries of this proposal are the millions of middle class Canadians who are served by our registered charitable organizations. For example there are now 87 United Ways and Centraides in Canada and collectively, they provide crucial funding to over 3,000 community based agencies that deliver more than 6,200 services and programs to support those in need.

• The fiscal cost of the measure is shared by our tax payers and the donor, whereas the Heart and Stroke Foundation cost of direct government spending is borne 100 per cent by our tax payers. Queens University Flickr photo • The measure removes a barrier to charitable giving and enables successful entrepreneurs to give back to the communities that have played an important role in their success. These entrepreneurs live in all parts of Canada, small towns and villages in rural areas as well as our cities. • The exemption would put the Canadian charitable sector on an equal footing with their United States counterparts with whom we compete for the best talent to help raise funds and address the challenges of managing the operations of charitable organizations.

• Extending the capital gains exemption would generate an estimated $200 million Food Flickr Bank Vancouver photo in new charitable donations every year going forward.

As the previous Conservative government included this measure in its 2015 budget, it is reasonable to assume that the Conservatives will include this measure in their 2019 Election Platform. There is a very high level of awareness and support among all stakeholders in the charitable sector including the 2.1 Canadians whom the sector employs.

I urge you to include this measure in your 2019 budget. It will be a great legacy for your government to leave for all Canadians for generations to come.

Thank you!

Yours truly,

Donald K. Johnson, O.C., LL.D. Barrick_Policy_Oct2018 v3.pdf 1 10/2/18 11:20:51

In it for the long haul

We’re looking back on 10 years of a unique partnership with the C Western Shoshone in Nevada. M

Y CM Our partnership has allowed us MY

CY to build a strong mining business CMY and, together, we’ve built a K strong foundation for Western Shoshone communities through education, cultural initiatives, and employment opportunities.