The Liberals

Home , Amarjeet Sohi, Bardish Chagger, Dominic LeBlanc, Energy East, Filomena Tassi, Jagmeet Singh

The three national parties faced challenging and difficult 27th that placed the government under huge pressure summers in 2018. Against a backdrop of NAFTA to make a deal. No deal was reached, but the President uncertainty, a setback on pipeline approvals and sent a note to Congress to advise that he intends to increasing random gun violence in Canadian cities, a renew NAFTA with Canada possibly included. period of volatility lies ahead that will likely continue Meanwhile, the negotiations are continuing in through to the October 2019 election. Washington, with another more reasonable deadline— the end of September. The first casualty of the summer U.S.-Mexico talks was the continued support the Conservatives had given to the government’s approach to NAFTA since the beginning of the renegotiation last year. On August 27th, Conservative shadow foreign affairs minister Erin O’Toole said the U.S.-Mexico deal meant that “the Trudeau government has failed to advance Canada’s trade interests,” and that “it was critical for Canada to be at the negotiation table as a serious partner.” Several commentators also referred to Mexico’s participation in the bilateral talks as a “double-cross” of Canada.

Adding to Liberal challenges was the August 30th The Liberals Federal Court of Appeal decision that at a minimum During the summer, the Trudeau government was delays federal approval of the Trans Mountain pipeline forced to the sidelines of NAFTA for weeks as the expansion on the grounds of inadequate consultation American and Mexican negotiators huddled in with Indigenous opponents and the National Energy Washington, ultimately reaching a draft “Agreement in Board’s failure to consider the impacts of increased Principle” on a bilateral deal in late August. While the tanker traffic on orcas off the lower mainland of B.C. draft deal arrived at decent compromises on North American auto content and Mexican labour rates that The decision has created a political mess for the Prime are likely acceptable to Canada, it also went much Minister and the Liberals. In response, Alberta Premier further than purely U.S.-Mexico issues, addressing Rachel Notley immediately withdrew her support for intellectual property, the sunset clause and agreement the federal climate change plan, leaving in ruins Mr. to eliminate dispute settlement panels for certain anti- Trudeau’s “grand bargain”— the twinning of Trans dumping cases, a move that complicates the talks with Mountain balanced by national carbon reduction Canada. requirements—and potentially leaving taxpayers owning a $3.5 billion pipeline with an uncertain future – President Trump then imposed a one-week deadline for and an expansion that they may not ultimately Canada to come onside with the U.S.-Mexico deal, be able to build. resulting in feverish talks during the week of August

The federal court ruling also exposed a significant gap quarter of 2018, totalling just over $6 million, and between commitments and performance on the Prime almost doubling the Liberals’ total of $3.1 million. Minister’s many promises on Indigenous reconciliation, as well as calling on the federal government to become more directly involved in ensuring that the requirements of the “duty to consult” have been met. The Conservatives

The Conservatives suffered other self-inflicted wounds over the summer. They released, then were forced quickly to withdraw, a mid-July attack ad that showed a black man pulling a suitcase headed for a broken chain link fence, presumably about to illegally enter Canada. The man was walking over a tweet by the Prime Minister: the words “faith” and “diversity” could be The Conservatives had their own existential crises to clearly seen on the PM’s tweet. deal with over the summer, all of their own making. In Mistakes of this kind starkly illustrate the dangers all mid-August Maxime Bernier launched a Twitter attack parties face in attempting to spin issues such as asylum against Justin Trudeau for his “extreme multiculturalism seekers, immigration and diversity into partisan and cult of diversity,” claiming that immigration has strategies. The Conservatives fell into the same trap become “a big-government policy of social engineering later in the summer when they hastily sprang to the for ideological and electoral purposes.” defence of Diane Blain when she heckled the Prime Broadly attacked for “dog whistle” politics and racism, Minister over immigration in Quebec and he sharply Bernier was disavowed by Conservative Leader Andrew rebuked her. It later emerged that Ms. Blain is a Scheer and shadow immigration minister Michelle member of an alt-right organization called Storm Rempel. Bernier then announced his departure from Alliance, that was once affiliated with the Soldiers of the party the very morning the Conservative policy Odin, a virulently anti-immigrant group with affiliates convention opened in Halifax, accompanied by a across Canada. promise to start his own political party, although no If they are serious about being an alternative Tory MPs have followed Bernier out the door. Mr. government, the Conservatives need to up their game Scheer gave a well-received convention speech, so the on this front and stop shooting themselves in the foot. immediate crisis was put to rest, although a Nanos poll in early September reported that 17 per cent of Canadians say they are open to voting for a new conservative party led by Maxime Bernier. Meanwhile, Conservative fundraising remained robust in the second

The NDP then New Democrats should be in a more cheerful mood than they are now. But that’s a rather daunting It would be hard to characterize 2018 as a banner year list of “ifs”. for the NDP. Leader Jagmeet Singh and the party have been rocked by a series of events—some mistakes of Current Polling Trends their own making, others the legacy of the difficult Nanos Weekly Tracking – Mulcair years, and still others simply bad luck. The party September 11, 2018 is working hard to hit what they have called their “reset button” at a pre-session caucus in Vancouver this week, where Mr. Singh will publicly launch his effort to win a seat in the House in the riding of Burnaby South having been vacated by MP Kennedy Stewart. It is a high stakes gamble for the Ontario-based Mr. Singh, who has had a hard time establishing himself in public awareness from outside the Commons. The party’s finances continue to struggle—only $872,000 was raised in Q2 2018, courtesy of the fundraising drift that arose in the declining months of the Mulcair era. New faces have been hired, new experts retained, and insiders are hopeful, but the next quarterly report will be anxiously watched by New Democrat activists and the party’s competitors. The Trans-Mountain pipeline decision may provide a For months, polls have shown the Liberals consistently short term, a win for the B.C. NDP government who maintaining a slight lead over the Conservatives in the have long opposed the project and rely on the BC national topline numbers, with the NDP lagging far Greens for support in the legislature, however it is behind and sliding, to the apparent benefit of the ruling important to note that the pipeline issue trails well Liberals. Horse-race standings this far out from an behind housing affordability as the single most election are always to be taken with a grain of salt since important issue facing the province. The decision will voters are not actually being pressed to make a true probably increase the number of anti-pipeline voters in ballot choice, but there are several reasons to think Burnaby South willing to support Mr. Singh. It is, there is vulnerability for the governing party: however, difficult news for the NDP Alberta • Recently, Liberal support has often been in minority government, and will remain a significant issue that territory (35-40 per cent); divides the federal party. Ontario is the one ray of sunlight for New Democrats, where Andrea Horwath • Since plummeting immediately after the last federal appears to be off to a strong start establishing herself as election, the long-term trend for the Conservatives the opposition leader and challenging the newly-minted has been positive and electoral victory is certainly Ford government daily. plausible: 2016 weekly tracking was mostly in the 25-28 per cent range, 2017 saw it climb to above 30 If six to eight months from now, Jagmeet Singh has won per cent more often than not, and 2018 has seen his byelection convincingly, the caucus grumbling has the party nudge further upward to the 33-35 per quietened, and the party’s fund-raising turns around, cent range;

• Events have recently provided some new threats to lead, the federal horse race is much more competitive public perceptions of the government’s now than it has been since the last election. performance: The National Economy ➢ More provincial governments (some newly Despite the continuing uncertainties surrounding the elected) are taking adversarial positions on future of NAFTA and pipeline construction, the policies such as carbon pricing, threatening the Canadian economy has performed relatively well in the effectiveness of a major policy initiative of the first eight months of 2018: government; • Finance Canada reported a budgetary surplus of ➢ The Federal Court ruling on Trans Mountain $1.1 billion in June 2018, compared to a surplus of introduces a new element to an already only $16 million in June 2017. confusing mix of reputational challenges relating to relations with Indigenous • GDP grew by 2.9 per cent in the second quarter— communities, resource development, climate just short of the 3 per cent predicted by analysts— change and the wisdom of the decision to invest fuelled by an increase in exports of 6.3 per cent. in the pipeline; and • On September 4th, Statistics Canada reported that ➢ The continuing tumultuous drama of NAFTA Canadian exports to the United States rose 3.3 per negotiations is undoubtedly raising anxiety cent in July, (nearly 16 per cent on a year-over-year levels and could result in anything from a basis) to a record $38.4 billion, which pushed this perceived major success and reputational boost country’s trade surplus with the U.S. to $5.3 billion, to a perceived major loss and reputational the largest in nearly a decade. damage. • Year-to-date net national job creation has been While these are potential threats to public support for weak, bouncing back and forth between job gains the governing Liberals, there are also some trends and and job losses. At the end of August, there were a issues that may work to their advantage: net 15,000 fewer jobs than at the start of the year. Ontario alone lost 80,000 jobs in August—the • Support for the NDP is declining and the Liberals steepest decline since the global financial crisis a appear to be the natural beneficiary of this trend; decade ago. the NDP decline is also bad news for the Conservatives who need a stronger NDP to take • One area of concern is Canada’s share of global votes away from the Liberals in order to be stock of foreign direct investment (FDI) which has competitive in many ridings; been on a generally downward trend over the past three decades. • A new national party formed by Maxime Bernier may yet cost the Conservatives votes, as unlikely as • Recent bank economists’ forecasts see declining that may currently seem; and economic growth over the next two years. • The Liberals currently lead in the seat-rich regions Weak investment growth in Canada remains a major of Ontario and Quebec. concern among economic commentators and bank analysts. Q2 business investments were up 0.4 per The Liberal Party has faced its fair share of challenges in cent, the lowest increase since the fourth quarter of the past 18 months and although it tends to maintain a 2016, and two major energy companies

(Imperial and Suncor) have said they will not move Parties Moving to Pre-election Mode ahead with expansions for crude oil production until The summer offered some hints on the issues the they see substantive progress on getting pipelines parties will push in the 2019 federal election, and how approved and built. those issues might be framed. Steep price discounts for Canadian heavy oil sands Expect to see the Liberals shifting to a stronger crude shipments to the United States persist—currently emphasis on the economy, in part motivated by their standing at US$27 a barrel —which costs Canada and weakening support around perceived non-performance Alberta billions in forgone tax revenue annually. on Indigenous policy promises, continued “virtue This week, CIBC CEO Victor Dodig added his voice to the signalling” on gender issues and the government’s calls for change, citing a chill in Canada’s investment inability to solve the asylum seekers problem. The climate due to U.S. tax cuts and regulatory changes, unresolved NAFTA renegotiation, the recent Federal trade uncertainty, interprovincial trade barriers and the Court of Appeal decision on the Trans Mountain absence of clear rules for approving major projects. pipeline, and growing resistance to their plan to place a And yesterday, a Business Council of Canada study by carbon tax on provinces, all remain as major risk factors consulting company PwC forecast that the Trump tax for the Liberals. cuts will put 635,000 Canadian jobs, or 3.4 per cent of While it does not appear to be hurting them in the polls, Canada’s employment, at risk. the Conservatives caused themselves grief this summer, NAFTA and pipeline uncertainties are not the only issues with the unfortunate asylum seekers advertisement facing finance minister Morneau; he has also being withdrawn, plus the departure of Maxime acknowledged that the Canadian economy faces serious Bernier, who accused his former party of being competitiveness challenges in the wake of the U.S. tax “intellectually and morally corrupt.” The Conservatives cuts, deregulatory initiatives and tariff attacks, and at least partly recovered from the loss of Bernier with a Canada’s own regulatory burdens. As a result, he has policy convention in Halifax that was largely seen as undertaken a round of consultations over the summer successful, and which avoided mistakes on such hot on how to improve Canadian competitiveness. In button issues as abortion and immigration. Saskatoon for the Liberal caucus meeting, Mr. Morneau Whether the Conservatives actually face a threat from indicated that all options for improving competitiveness Bernier’s nascent party remains to be seen. remain on the table. Expect signals on competitiveness as well as attention to pre-election spending pressures The NDP have had a difficult few months and were in the Minister’s Fall Economic Update. largely quiet this summer, awaiting leader Jagmeet Singh’s run in the upcoming but not-yet-called byelection in Burnaby South in the B.C. lower mainland. Since Burnaby South will not be vacated until mid- September, and the Prime Minister has six months from that date to call a byelection, there has been speculation that he might delay the call, to make it more difficult for the NDP to change leaders if Mr. Singh should not win. Given their dependence on strong three-way splits resulting from a formidable NDP, the Conservatives must by now be wondering how

they could help Mr. Singh and the NDP find their way to make a deal would be difficult for the Liberals to stronger performance. position positively, but a successful agreement will also create challenges, inevitably creating winners and losers, with the latter demanding compensation for what they “lost” as the price of making trade peace with the Americans. • With the recent Federal Court decision, pipelines are guaranteed to be a major issue. The Conservatives will be highly critical of the Liberals’ mishandling of the file and will pledge to reopen the Energy East project to move western Canada bitumen to Atlantic Canada. The Liberals have yet to signal what steps they will take to respond to the With the 2019 election now just more than a year away, Trans Mountain ruling. the three federal parties began road-testing some preliminary themes and approaches over the summer: • The NDP federal caucus priorities for the fall are being finalized this week. The themes that appear • The Liberals appear set to double down on their key to be developing follow the old standards: “You initiatives—diversified trade, improving Indigenous can’t trust Liberals to deliver” multiple challenges living conditions, middle class issues, immigration, on climate change, losing to Trump, “folding” on gender equity, their record on innovation and supply management, no pharmacare or no science and building pipelines. Lately there have affordable housing wins. been shifts in narrative positioning towards “business competitiveness” and a focus on “clean Getting Ready for the Fall Session…and growth” instead of “climate change.” the 2019 Election • The Conservatives will focus on balanced budgets, The election writ is still more than a year away, but smaller government, less regulation, sane and preparations are already well underway. PMO policy practical immigration, international trade and guru Tyler Meredith recently moved to the Liberal remain against carbon pricing. Research Bureau to work on the platform, and in July, Prime Minister Trudeau shuffled his Cabinet, presenting • To the risk of all parties that engage, immigration, what ideally will be the final roster heading into the asylum seekers and cultural diversity appear to be 2019 federal campaign: guaranteed issues on which all parties will play. The Conservatives are strongest on the practicalities of • Five new ministers were added, along with several managing the asylum seeker issue, but incendiary new portfolios, signalling the government's new and anti-immigration rightist groups have the potential renewed emphasis on particular issues and an effort to cause problems for them if they are not careful. to maximize (and minimize) the impact of individual ministers. • The big imponderable is NAFTA, which likely will not be resolved until late September, and then faces • Jim Carr moved from Natural Resources to ratification by Congress in its pre-Christmas “lame International Trade Diversification, and was duck” session in November-December. Inability to replaced by Amarjeet Sohi, formerly at Infrastructure and Communities.

• Mélanie Joly moved from Canadian Heritage to • With Alberta having pulled out of the federal Minister of Tourism, Official Languages and la climate plan, and Saskatchewan, Ontario and Prince francophonie, and was succeeded by Pablo Edward Island all launching or threatening legal Rodriguez. action against carbon pricing, and with New Brunswick PC leader Blaine Higgs vowing to do the • Francois-Philippe Champagne moved from same if he wins the current election there, Mr. International Trade to Infrastructure and Leblanc has a full plate of challenges. Communities. With the shuffle came new mandate letters for • Treasury Board President Scott Brison also became ministers taking on new portfolios and those Minister of Digital Affairs, and Treasury Board will transitioning to new roles. The letters stressed inter- now provide "oversight on complex horizontal departmental cooperation, adjusted and updated issues such as defence procurement and priorities and restated or reinterpreted government modernizing the (Phoenix) pay system," key priorities and initiatives. stumbling blocks in the implementation of the government's agenda. In late August, the Cabinet Committees also underwent a pre-election makeover, indicating a subtle but • Bill Blair was promoted from Parliamentary stronger focus on the economy. The Prime Minister Secretary to the Minister of Health, where he reduced the number of committees from 11 to seven, managed the cannabis legalization file, to Minister to streamline decision-making processes and to enable of Border Security and Organized Crime Reduction, ministers to spend more time out of Ottawa a nod to the pressure the federal Liberals continue electioneering and building the presence of the to feel on asylum seekers entering from the United government with stakeholders and voters. The Agenda, States, and gang-related gun violence. Results and Communications Cabinet Committee has • Filomena Tassi will now serve as the Minister of emerged as the key “go-to” decision-making group—a Seniors, and Mary Ng is now the Minister of Small virtual re-creation of the all-powerful Policy and Priority Business and Export Promotion, a portfolio committees of previous governments. previously held by Bardish Chagger, in addition to To support the new Cabinet, the PM announced the her role as Leader of the Government in the House annual Parliamentary Secretaries shuffle. Four were of Commons. removed from their role as Parliamentary Secretary, and nine backbenchers were added to fill the gaps. A • Dominic Leblanc, a long-time fixture of the Trudeau few deputy ministers have also been shuffled over the ministry, was appointed Minister of summer as part of the larger reorganization of the Intergovernmental Affairs and Northern executive branch and departmental reporting lines. Development, where he will serve as a dedicated More movement is expected within the senior ranks of resource for smoothing over relations with the public service in order to better support the the premiers in the government's quest to move ministry. forward a variety of Canada-wide initiatives, including the Pan-Canadian Framework on Clean Growth and Climate Change and an effort to reduce barriers to internal trade.

Issues to Watch This Fall were granted permission to export 17,700 tonnes of cheese to the Canadian market—about four per cent of Canada’s cheese products. In the Comprehensive and Progressive Trans Pacific Partnership agreement, Canada conceded 3.25 per cent of its annual dairy production to foreign markets. • The arguments over the importance of Chapter 19 continue. The Prime Minister has drawn it as a key line in the sand, (recently modified to “some kind” of dispute settlement), but there are differing views as to how critical Chapter 19 has been for Canada in the past and how valuable it might be in the future, especially with President Trump in the White NAFTA House. Critics point out it has not prevented or The NAFTA talks continued this week in Washington, resolved U.S. steel and aluminum tariffs, or under the latest “final deadline” for negotiations, this softwood lumber disputes that have historically time the end of September. The major issues under been settled by country-to-country negotiations discussion include supply management (or to quote rather than trade dispute adjudication or rulings. presidential economic advisor Larry Kudlow, “M I L K”), • It also should be noted that in two high-profile Chapter 19 (dispute resolution), intellectual property, trade disputes this year—Boeing vs Bombardier and government procurement, the cultural exemption and Canadian newsprint—the U.S. International Trade de minimis threshold, the level below which goods are Commission ruled decisively in Canada’s favour. given exemptions from duty and sales tax all remain to Finally, when a vengeful President can launch be settled. damaging tariffs at whomever has recently angered • The issue with dairy largely centres on U.S. access him, many question how much protection Chapter to Canada’s protected market for diafiltered or 19 provides in such an environment. On the other ultrafiltered milk. President Trump has vowed to hand, Mr. Trump will eventually be gone from the defend the interests of Wisconsin dairy farmers scene, so there may be some value in keeping some against Canada’s “unfair” and “outrageous” tariffs form of dispute settlement. against imports of their product. Canada argues that • The de minimus issue represents a challenge. the American arguments are unfounded and that Canadians are currently limited to online purchases the real culprit is overproduction, both within the of American products valued at $20 CDN or less United States and globally, not the Canadian system without duties and tax being applied, while the of supply management. threshold for U.S. purchasers buying from Canadian • Be that as it may, the President has made this one online vendors is $800 USD. The U.S.-Mexico of his key targets within the NAFTA renegotiations, agreement moved the threshold to $100 USD, but and Canada is likely to be forced to give way. the Retail Council of Canada argues that even a Besides, under the Comprehensive Economic Trade $200 CDN threshold would result in a loss of Agreement (CETA) with the European Union, 286,000 jobs and $10.2-billion in government European cheesemakers

revenue, and that any increase to the de minimis be exempt from tariffs against Canadian softwood threshold would do significant damage to Canadian lumber. retailers. Trans Mountain fallout • Government procurement appears to remain at an impasse with the U.S. seeking much more access to government contracts in Canada and Mexico, but also demanding to tighten reciprocal access to U.S. procurement. Little progress appears to have been made on this front.

• The cultural exemption is a late addition to the agenda, having only appeared in recent weeks. U.S. broadcast and film stakeholders have not been asking for a more open border to enable acquisitions of Canadian cultural companies, platforms or products. There is some speculation Since the Federal Court of Appeal overturned the that the U.S. may have placed it on the agenda to government’s approval of the Trans Mountain apply greater pressure for Canada to make a deal. expansion, the PM has mused several times on what With our negotiators back at the NAFTA table, President steps the government might take in response. Noting Trump has treated Canada to an ongoing barrage of that the future of resource development across Canada belligerent and threatening comments over recent depends on the federal government responding weeks, including the potential “ruination” of the correctly to the court ruling, he has been less than clear Canadian economy through the 25 per cent tariff on on what his government will actually do. Canadian vehicles exported to the U.S. Some have While the federal Liberals cannot afford to get the viewed these comments as proof of the President’s pipeline approval process wrong again, they are also dislike for Prime Minister Trudeau, which may be the under huge pressure from Alberta Premier Rachel case, but it’s just as likely nothing more than Mr. Trump’s “Art of the Deal” negotiating strategies of Notley—facing re-election next May—to move quickly. berate, make outlandish claims, insult and threaten. Alberta’s support for the federal climate change accord Either way, the PM and foreign minister Freeland have was critical, but the condition was federal approval of smartly kept their cool and not taken the bait. Trans Mountain, and now Mr. Trudeau has not kept his side of the bargain. Finally, to prove the Americans are still on Canada’s Ms. Notley knows that opposition leader Jason Kenney case, there were two new developments in early will be pointing out that her participation in the Pan- September: Canadian Framework on Climate Change and support • Sen. John Hoeven (R-North Dakota) asked the U.S. for a national strategy didn’t result in project approval. International Trade Commission to study the impact Kenney has vowed to join fellow Conservatives in of imports of Canadian potatoes on U.S. potato Ontario, Saskatchewan and Manitoba in opposing the growers; and federal carbon tax. Notley has pulled back publicly from support for national carbon pricing, telling the federal • The U.S. Department of Commerce rejected a government that “Ottawa broke it. Ottawa needs request from Canada’s shake and shingle industry to to fix it.”

Finance Minister Morneau said in Saskatoon that the amendments that would revise the processes and federal government’s next moves will be coming “in requirements for consultation with Indigenous groups. days and weeks. We’re not going to jump to conclusions because people want an immediate response.” In the Positioning on the environment is shaping up to be a meantime, the federal government’s response appears wedge issue for the parties. Provincial and federal to be taking shape: Conservatives seek to define the Liberal record as one of “job-killing carbon taxes” and regulatory burden • An appeal of the Federal Court decision to the while the Liberals will appeal to urban, younger and Supreme Court is unlikely due to the time it would green voters, and argue that while the issues are take, and the possibility of a ruling upholding the complex, they have set the country on a clean growth lower court decision, which would delay the agenda that marries the environment to the economy approval process even further. for future opportunity. The one green topic where there may be common ground is on a nature-based approach • The National Energy Board could be quickly tasked to everything from climate change to parks to protected to address the impact of increased marine traffic on areas. Expect significant debate in this area in the marine mammals, particularly orcas. coming months. • The federal government is rumoured to be Gun violence considering the appointment of a high-level panel Several instances of gun violence struck Toronto and to support the revised “duty to consult” Fredericton this summer, resulting in the deaths of recommendations. seven people, and increasing calls for stricter long gun The government faces an even more pressing set of regulations and the banning of handguns in Canada: questions this fall. Bill C-69, the new environment • On July 22 on Danforth east in Toronto, three assessment package, cleared the House of Commons in people died, including the assailant, and 13 were June and was sent to the Senate. The act repeals the Canadian Environmental Assessment Act of 2012 and wounded as the result of a rampage with a enacts the Impact Assessment Act, repeals the National semiautomatic pistol. As of early September, 291 Energy Board Act and replaces it with the Canadian shootings have occurred in Toronto in 2018, Energy Regulator Act, and “sets out the factors to be resulting in 384 victims. taken into account in conducting an impact assessment, • On August 11, four people, including two police including the impacts on the rights of the Indigenous officers, were killed in Fredericton; the shooter used peoples of Canada.” a long gun and has been charged with multiple This legislation is now headed for heavy cross-currents counts of murder. in the Senate. Many in the provinces and in industry As if anticipating what was to come days later, the PM’s viewed the Trans Mountain decision as proof that the mid-July cabinet shuffle promoted former Toronto new expectations for environmental assessment police chief Bill Blair to cabinet as Minister of Border contained in the act are unrealistic and could result in a Security and Organized Crime Reduction, in recognition halt to new resource projects in Canada. The decision of the rising concerns of Canadians over gang and has hardened opposition and means that the Senate will mental health-related gun violence. be pressed to hear more witnesses and consider the new context in reviewing the bill. Clearly, the government will need to decide whether to offer

Public Safety Minister Ralph Goodale subsequently In the meantime: committed to studying a possible federal hand gun ban, setting up a potentially divisive and unproductive • The Superclusters are close to finalizing their national debate yet again over gun control. Several detailed agreements with ISED and will shortly be Canadian city councils have recently called for hand gun launched and in business. bans. In Saskatoon this week, Minister Blair said • ISED’s six Economic Strategy Tables (advanced "there's an urgency" to the gun control issue and he is manufacturing, agri-food, clean technology, digital prepared to consider "any measure" to reduce violence. industries, health/bio-sciences and resources of the "We are absolutely resolved to do what is necessary to future) have prepared recommendations to keep communities safe." Minister Bains on how to improve innovation; this Competitiveness, innovation and science advice will also feed into Budget 2019. Competitiveness appears to be the new core economic • The Strategic Initiatives Fund (SIF) remains the narrative as the government looks ahead to Budget preferred vehicle for supporting commercialization, 2019 and an election platform. There is little new but it continues to be over-subscribed. Stream 4’s coming in the innovation agenda of the last two years as deadline for statements of interest from consortia it is largely launched and the government moves to and networks applying data capabilities in the implement programs like the Superclusters and the health and biosciences sector closed on August Strategic Innovation Fund. 31st. Subsequent competitions will be held to include other sectors. The two additional policy pieces to be resolved for Budget 2019 are the effort to consolidate company- • Accelerated capital cost allowance (ACCA) changes facing innovation programs and the decision about are actively being discussed for targeted sectors. what to do the third-party research organizations, the so-called “orphans” who have been funded in the past • ISED Minister Bains is personally involved in the by Finance Canada, but never really fit existing program National Digital and Data consultations, which have criteria. While that goes on, Innovation, Science and been continuing over the summer. Economic Development’s (ISED) attention has turned to • In late July, the government released its new policy framework policies surrounding the digital economy to govern contacts between federal scientists and including a focus on artificial intelligence. the media, covering standards for ethical conduct of While important, the ISED workload is unlikely to form a research, freedom from political and other forms of strong economic narrative for political use. The interference, and mechanisms for addressing government continues to talk about aiding the middle breaches of scientific integrity. class through economic and fiscal policy but in the wake • ISED is conducting its Third-Party Organization of other uncertainties, there is a clear need for a more Review that was promised by Budget 2018, through detailed and compelling economic agenda and one-on-one bilateral discussions with several narrative. The Fall Economic Statement will be the dedicated research organizations, including beginning of the effort to try to frame one. Genome Canada, the Stem Cell Network, MITACS, SnoLab and others.

Kingdom of Saudi Arabia(KSA)-Canada spat that Saudi trainee doctors in their programs will be granted an extra three weeks in the country, beyond the original withdrawal deadline of August 31st. Another related issue is the growing list of unissued export permits for sales to the Middle East; if left unaddressed, this could cause significant economic fallout for the defence sector and perhaps for the government. With Atlantic Canada’s vulnerable reliance on Saudi crude oil imports—they contribute almost 40 per cent of the Saint John refinery’s supply—this situation At the beginning of August, following the Saudi warrants a close watch over the coming months. government’s arrest of several female activists including Samar Badawi, Foreign Affairs minister Freeland Defence procurement/shipbuilding tweeted that she was “very alarmed” to learn of the The announcement of the Canadian Surface Combatant arrests, and called for the release of both Ms. Badawi winning design team is scheduled for this fall. This is and her brother Raif, who had earlier been imprisoned the crown jewel of the National Shipbuilding Strategy for challenging the Saudi government. Three days later, (NSS) and the largest defence procurement in Canadian Saudi Arabia’s foreign ministry accused Canada on history. While the BAE/Lockheed Martin Canada Type- Twitter of "an overt and blatant interference in the 26 design is considered to be the preferred choice of internal affairs of the Kingdom," and implemented an the Royal Canadian Navy, the announcement will only unprecedented series of measures against Canada: be the beginning of questions over this highly unorthodox competition. There will be inevitable • Expulsion of Canada’s ambassador Dennis Horak challenges from the losers who have already spend tens from the Kingdom; of millions of dollars chasing this illusive prize. • Suspension of all new trade and investment Over the summer, the timing for Vice-Admiral Mark transactions with Canada, and freezing of all Norman’s trial was set for next summer, dangerously Canadian assets; close to the federal general election. The former Vice- Admiral faces charges of breach of trust relating to • Cancellation of all state airline Saudia flights to and leaked information on the rapidly eroding capacity of from Toronto; the Canadian Navy, hampered as it was by delays and • Withdrawal from Canada of over 15,000 Saudi cost overruns linked to the National Shipbuilding students and their families currently sponsored at Strategy. Canadian medical schools, hospitals and research Mr. Norman’s concerns on the NSS are shared by many institutes; in the sector and compounded by the news that an • Cessation of all medical treatment of Saudi patients under-resourced Coast Guard has had to circumvent the in Canada. government’s “build-in-Canada” policies to ensure access to working (foreign-made) ice breakers. In The Saudis subsequently said that oil exports to Canada addition, there are rumours that ongoing issues within will not be impacted, citing a long-standing policy that the oil trade is not affected by political concerns, and

the two beneficiaries of the NSS—Irving and Seaspan— In Budget 2018, finance minister Morneau appointed may result in “revamped guidance” to be quietly rolled former Ontario health minister Eric Hoskins to head an out in the fall. Ironically, the loser in the NSS Advisory Council to advise the federal government on completion, Quebec-based Davie, has managed to how to implement a national pharmacare program. Dr. complete one ship and has three foreign-sourced ships Hoskins and the Advisory Committee are now in the yard for refurbishment. consulting with provinces, territories, Indigenous leaders, health experts, private sector companies and Asylum seekers jam the system the general public. Their reports on what they heard Data released this week by the Canada Border Services from the consultations and how to proceed are Agency (CBSA) indicates the extent to which the asylum expected next spring, in time for the Liberals to make seekers entering Canada via Quebec have all but pharmacare the centrepiece of their 2019 platform. paralysed the refugee determination system. CBSA reported that the Immigration and Refugee Board has Key Dates on the Fall Agenda managed to finalize only 15 per cent of the 27,674 TBD: First Ministers meeting asylum claims of people who entered between February 2017 and June of 2018. Of those cases that were September 24: Provincial election day in New Brunswick addressed, 1,885 were accepted and 1,614 were October 1: Provincial election day in Quebec rejected. The projected wait time for refugee claim hearings before the Board is now 19 months, up from October 17: Cannabis becomes legal 14 months in September 2016, before the recent influx October 21: One year out from Election 2019 began. These data are guaranteed to spark tough questions in Question Period when the House resumes. October 22: Municipal election day in Ontario Pharmaceuticals & pharmacare October 30: Deadline for the federal government to The federal plan to address high prescription drug prices appeal the Trans Mountain pipeline expansion decision in Canada was announced in May 2017 by former at the Supreme Court of Canada Health Minister Philpott as a multipronged plan to November 12: APEC Leaders’ Summit. increase access to drugs, improve health sustainability and provide federal leadership on lowering drug prices. November 30: G20 Leaders meet in Argentina Detailed proposals include bringing the federal government to the pan-Canadian Pharmaceutical December 17: Start of House of Common's winter break Alliance (pCPA) table, changes to Patented Medicines Price Review Board regulations on pricing, as well as Conclusion other efficiency improvements for drug approvals, As the national political and policy processes re-engage designed to limit potential blow back from the for the fall, we at Earnscliffe look forward to working pharmaceutical sector. The proposed regulations, closely with you to assist in meeting your immediate which have created an unpredictable investment and long-term objectives. environment for innovative companies in this sector, are now proceeding through the consultation and approval process.