tag:theconversation.com,2011:/africa/topics/bill-morneau-43653/articlesBill Morneau – The Conversation2020-08-24T15:29:24Ztag:theconversation.com,2011:article/1448942020-08-24T15:29:24Z2020-08-24T15:29:24ZChrystia Freeland and the merit myth that won’t go away<figure><img src="https://images.theconversation.com/files/354128/original/file-20200821-22-jum0b2.JPG?ixlib=rb-1.1.0&rect=69%2C107%2C4901%2C3144&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Deputy Prime Minister and Minister of Finance Chrystia Freeland responds to a question during a news conference on Aug. 20, 2020 in Ottawa.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Adrian Wyld</span></span></figcaption></figure><p>Chrystia Freeland made history by becoming Canada’s first woman finance minister. The next day, she experienced what many high-achieving women do: her qualifications for the job were immediately challenged. </p>
<p>Journalists reported that Freeland <a href="https://www.cbc.ca/news/politics/freeland-morneau-finance-minister-bay-street-experience-1.5691135">lacked the Bay Street experience</a> of her predecessor, Bill Morneau, that her “<a href="https://www.pressreader.com/canada/the-globe-and-mail-bc-edition/20200819/281831466101417">mastery of business issues was relatively untested</a>” and that she was merely a journalist with no business credentials. </p>
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<p>Such reporting ignores Freeland’s stellar performance in two cabinet posts over five years and overlooks the fact that she was an <a href="https://www.newswire.ca/news-releases/chrystia-freeland-wins-national-business-book-award-512475541.html">award-winning financial journalist</a> before entering politics. For some, Freeland’s qualifications for finance minister were insufficient. </p>
<p>We shouldn’t be surprised. Denigrating or <a href="https://www.theguardian.com/commentisfree/2010/may/16/carole-cadwalladr-women-politics-power">ignoring women’s credentials</a> is a common strategy to reinforce ideas about <a href="https://doi.org/10.1080/21565503.2018.1532917">who is entitled to the most powerful positions</a> in our society. My co-authored book, <a href="https://global.oup.com/academic/product/cabinets-ministers-and-gender-9780190069001?cc=ca&lang=en&"><em>Cabinets, Ministers, and Gender</em></a>, shows that downplaying women’s qualifications helps explain why so few make it into top government posts. </p>
<p>Women were entirely absent from Canadian cabinets until 1957, when <a href="https://time.com/4101443/canada-first-female-cabinet-minister/">Ellen Fairclough was appointed to cabinet</a> by prime minister John Diefenbaker. Since then, progress has been slow, and few women have <a href="https://global.oup.com/academic/product/cabinets-ministers-and-gender-9780190069001?cc=ca&lang=en&">held the most powerful posts</a>. Just three women have served as justice minister, two have led foreign affairs and just one woman, Kim Campbell, has been defence minister, a post she held for less than six months. </p>
<p>Women’s gains in politics and the workplace over the past few decades are undeniable. Yet men continue to dominate the upper echelons of politics. Why? Our research digs into how qualifications and arguments about merit are deployed to women’s disadvantage. </p>
<h2>Qualifying for cabinet</h2>
<p>There are no formal qualifications for ministers in the countries we studied — Australia, Canada, Chile, Germany, Spain, the United Kingdom and the United States. We interviewed former ministers and political advisers, read former leaders’ memoirs and dug into media archives to figure out why some people make it into cabinet and others don’t. </p>
<p>We found that even without written rules, there were still widely recognized expectations about the qualifications ministers needed. Political experience and policy expertise were central, but we found that friendship and loyalty mattered even more, especially to the person doing the appointing.</p>
<p>Women have a harder time qualifying on these grounds. That’s because the networks where political friendships develop often originate in all-male or mostly male spaces like private school, fraternities and golf clubs. Examples include former British prime minister David Cameron’s “<a href="https://inews.co.uk/news/politics/day-long-knives-ruthless-may-dispatched-notting-hill-set-14248">Notting Hill set</a>,” many of whom sat in his cabinet.</p>
<h2>The route to cabinet</h2>
<p>Another route to cabinet is having policy expertise, educational credentials and professional experience related to the post. Unfortunately, patterns of gender segregation in the workforce get reproduced in cabinet. Researchers find that <a href="https://doi.org/10.1111/j.1540-5907.2005.00158.x">women tend to be appointed to less prestigious</a> cabinet posts that correspond to stereotypically feminine professions like education, social services and health. </p>
<p>If qualifying for more powerful posts like finance, defence and foreign affairs requires occupational experience, women will be disadvantaged. Women lead a mere <a href="https://www.cnn.com/2020/05/20/us/fortune-500-women-ceos-trnd/index.html">7.4 per cent of Fortune 500 companies</a> and continue to be <a href="https://www.canada.ca/en/department-national-defence/services/women-in-the-forces/statistics.html">vastly under-represented</a> in the Armed Forces. The high-profile cabinet spot where women are most likely to be found is justice, which is unsurprising given the ever-growing number of women graduating with law degrees.</p>
<p>But the real reason why criteria requiring occupational experience undermines women’s chances of making it to cabinet are the ones exemplified by the reaction to Freeland’s appointment: qualifications are in the eye of the beholder. They’re not objective, and they’re not static. They shift and change depending on who’s being considered and who’s doing the judging. </p>
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<img alt="Justin Trudeau elbow bumping Chrystia Freeland" src="https://images.theconversation.com/files/354127/original/file-20200821-24-nkng6t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/354127/original/file-20200821-24-nkng6t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=378&fit=crop&dpr=1 600w, https://images.theconversation.com/files/354127/original/file-20200821-24-nkng6t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=378&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/354127/original/file-20200821-24-nkng6t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=378&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/354127/original/file-20200821-24-nkng6t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=475&fit=crop&dpr=1 754w, https://images.theconversation.com/files/354127/original/file-20200821-24-nkng6t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=475&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/354127/original/file-20200821-24-nkng6t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=475&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Chrystia Freeland elbow bumps Prime Minister Justin Trudeau after being sworn in as Finance Minister on Aug. 18, 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span>
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<p>While doing research for our book, we encountered several cases of women’s qualifications for cabinet being ignored or downplayed. The most egregious — and sadly similar to Freeland — is when Theresa May, former British prime minister, was selected by newly elected prime minister David Cameron as home secretary, one of the most powerful posts in government. May had been in parliament for 13 years, served as party chairman, and shadowed six different portfolios. Yet the <a href="https://www.theguardian.com/commentisfree/2010/may/16/carole-cadwalladr-women-politics-power">media still challenged her qualifications</a> for the position.</p>
<h2>Merit as a strategic tool</h2>
<p>When Trudeau first appointed a gender-balanced cabinet in 2015, <a href="https://www.thebeaverton.com/2015/11/50-female-cabinet-appointments-lead-to-5000-increase-in-guys-who-suddenly-care-about-merit-in-cabinet/">the satirical <em>Beaverton</em> ran the headline</a>: “50 per cent female cabinet appointments lead to 5,000 per cent increase in guys who suddenly care about merit in cabinet.” The headline illustrates how merit arguments are deployed precisely when women’s gains threaten the status quo. </p>
<p><a href="https://www.cbc.ca/news/politics/kim-campbell-sexism-freeland-minister-finance-1.5694539?fbclid=IwAR0WegGNc4pBB5UslYDuMtQ171PXtaWW_itTbjsI-sMm9ikYWFuAdtsoGxs">Journalists who ignore Freeland’s qualifications</a> or imply — contrary to the historical record — that Bay Street experience is a qualification for finance minister, are doing the same thing, except they’re not trying to be funny. </p>
<p>Instead, they’re sending an all-too-familiar message to women seeking high office: No matter what you accomplish, it will never be enough.</p><img src="https://counter.theconversation.com/content/144894/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Susan Franceschet receives funding from the Canadian Social Sciences and Humanities Research Council.</span></em></p>Reactions to Chrystia Freeland’s appointment as finance minister demonstrate how qualifications and arguments about merit are deployed to women’s disadvantage in politics.Susan Franceschet, Professor of Political Science, University of CalgaryLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1321782020-03-08T12:52:35Z2020-03-08T12:52:35ZAre Canadians ready to ditch GDP as a key prosperity indicator?<figure><img src="https://images.theconversation.com/files/319188/original/file-20200308-64601-1f1bcyw.jpg?ixlib=rb-1.1.0&rect=0%2C666%2C4944%2C2583&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Research shows Canadians want to move away from the GDP as a measurement of progress, prosperity and happiness, and consider protecting the environment more critical than growth. A hiker is seen here in British Columbia.</span> <span class="attribution"><span class="source">Alex Shutin, Unsplash</span></span></figcaption></figure><p>In 1968, the late Robert F. Kennedy, then a presidential candidate in the United States, pointed out <a href="https://www.jfklibrary.org/learn/about-jfk/the-kennedy-family/robert-f-kennedy/robert-f-kennedy-speeches/remarks-at-the-university-of-kansas-march-18-1968">in a famous speech</a> that Gross Domestic Product (GDP) “measures everything … except that which makes life worthwhile.” </p>
<p>More than 50 years have passed since that speech, and even though several pundits have <a href="https://hbr.org/2019/10/gdp-is-not-a-measure-of-human-well-being">noted the limitations</a> of GDP as an indicator of human well-being, most countries and politicians are still fixated with GDP growth as a primary indicator of progress. </p>
<p>But change seems to be coming. </p>
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<a href="https://images.theconversation.com/files/318100/original/file-20200302-18262-180m1s1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/318100/original/file-20200302-18262-180m1s1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/318100/original/file-20200302-18262-180m1s1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=413&fit=crop&dpr=1 600w, https://images.theconversation.com/files/318100/original/file-20200302-18262-180m1s1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=413&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/318100/original/file-20200302-18262-180m1s1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=413&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/318100/original/file-20200302-18262-180m1s1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=520&fit=crop&dpr=1 754w, https://images.theconversation.com/files/318100/original/file-20200302-18262-180m1s1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=520&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/318100/original/file-20200302-18262-180m1s1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=520&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Finance Minister Bill Morneau is seen on Parliament Hill in Ottawa in February 2020. Will his next budget move away from the GDP?</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Adrian Wyld</span></span>
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<p><a href="https://nationalpost.com/news/politics/liberal-budget-could-focus-more-on-personal-happiness-less-on-countrys-financial-condition">Recent news reports</a> indicate that the Canadian government is mulling over introducing a budget that would focus on new indicators of progress like happiness and well-being. </p>
<p>If the federal Liberals do indeed focus on these new indicators, it would be a marked distinction from previous government budgets, which focused heavily on traditional economic measures such as GDP growth to indicate Canada’s progress. </p>
<h2>GDP in use since the 1940s</h2>
<p>Economic growth is the increase in the inflation-adjusted market value of goods and services produced in an economy and is measured as the per cent increase of GDP. The GDP as an indicator has been in use since the 1940s and reflects the size of the economy.</p>
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Read more:
<a href="https://theconversation.com/we-need-to-modernize-how-we-measure-national-wealth-129666">We need to modernize how we measure national wealth</a>
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<p>Most countries pursue GDP growth as a primary policy objective since it’s often equated with social progress and well-being. But some experts have long criticized the fixation on economic growth and have proposed the use of <a href="https://www.bu.edu/pardee/files/documents/PP-004-GDP.pdf">alternative indicators</a> to better capture societal improvement. Countries have so far been reluctant to use new indicators, partly because they’re considered subjective and harder to measure. </p>
<p>Although the focus on happiness and well-being would be unique in the Canadian context, new indicators of progress have been proposed in other countries such as <a href="https://www.weforum.org/agenda/2019/05/new-zealand-is-publishing-its-first-well-being-budget/">New Zealand</a>, <a href="https://stm.fi/en/international-cooperation/the-presidency-of-the-council-of-the-eu/economy-of-wellbeing">Finland</a> and <a href="https://www.theguardian.com/world/2012/dec/01/bhutan-wealth-happiness-counts">Bhutan</a>. Even the European Commission’s <a href="https://ec.europa.eu/environment/beyond_gdp/index_en.html">Beyond GDP</a> initiative is exploring indicators that better account for environmental and social measures. </p>
<p>While the government in Canada intends to move in this direction, would Canadians support such a shift?</p>
<h2>Canadians’ views on GDP</h2>
<p><a href="https://doi.org/10.1016/j.ecolecon.2019.03.007">A peer-reviewed study</a> led by the lead author of this article explored the perceptions of Canadians on this topic. The study focused on assessing whether Canadians think that economic growth measured in GDP is the best measure of progress and prosperity. </p>
<p>The results show that nearly 43 per cent of the respondents were likely to support a Canadian politician who would not pursue economic growth as a major policy goal. </p>
<p>The level of support varied across provinces — 38 per cent of Albertans, 41 per cent of Ontarians, 46 per cent of British Columbians and 48 per cent of Québecers were likely to support such a proposal. </p>
<p>In addition, 53 per cent of participants agreed that a good life is possible without continuous economic growth while 26 per cent of respondents were undecided and 21 per cent disagreed. </p>
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<img alt="" src="https://images.theconversation.com/files/318099/original/file-20200302-18279-uu9an.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/318099/original/file-20200302-18279-uu9an.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=443&fit=crop&dpr=1 600w, https://images.theconversation.com/files/318099/original/file-20200302-18279-uu9an.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=443&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/318099/original/file-20200302-18279-uu9an.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=443&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/318099/original/file-20200302-18279-uu9an.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=557&fit=crop&dpr=1 754w, https://images.theconversation.com/files/318099/original/file-20200302-18279-uu9an.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=557&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/318099/original/file-20200302-18279-uu9an.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=557&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Shipping containers are seen at the Fairview Cove Container Terminal in Halifax in Aug. 2017. Canadians say progress is possible without continuous economic growth.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Andrew Vaughan</span></span>
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<p>These results indicate that many Canadians are open and could be willing to support new indicators of progress that move away from GDP growth, thereby boosting the federal government’s plan to focus more on happiness and well-being. </p>
<p>Fifty-six per cent of respondents also said that Canada should not continue growing its economy if there’s substantial negative consequences, such as environmental degradation. The research was conducted using an online survey with a sample size of more than 1,000 Canadians spanning various age groups, income categories and political affiliations. </p>
<h2>Canadians prioritize environmental protection</h2>
<p>The results of the study are in line <a href="https://www.environicsinstitute.org/docs/default-source/project-documents/the-common-good-who-decides-2012-trudeau-foundation-annual-survey/backgrounder---english.pdf?sfvrsn=6d64e0fa_2">with past surveys</a> that found between 60 per cent and 88 per cent of people prioritize environmental protection even if it slows down economic growth, illustrating the importance that Canadians give to other non-economic goals. </p>
<p>Participants in the peer-reviewed study indicated a potentially high level of support for post-growth ideas; a majority of respondents supported a move away from a consumption-led economic model. </p>
<p>As many as 65 per cent of respondents backed the idea of moving towards an economic system with reduced levels of consumption, and more than 80 per cent agreed that, in view of limited natural resources, people should figure out ways to increase quality of life while reducing overall material consumption. </p>
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<img alt="" src="https://images.theconversation.com/files/318106/original/file-20200302-18295-42sk09.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/318106/original/file-20200302-18295-42sk09.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/318106/original/file-20200302-18295-42sk09.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/318106/original/file-20200302-18295-42sk09.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/318106/original/file-20200302-18295-42sk09.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/318106/original/file-20200302-18295-42sk09.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/318106/original/file-20200302-18295-42sk09.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Canadians feel people can increase their quality of life while reducing consumption.</span>
<span class="attribution"><span class="source">(Austin Schmid/Unsplash)</span></span>
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<p>Although alternative indicators of progress have been criticized due to difficulties in their measurement, overall, the study recommends that governments could be more accountable to their citizens by using more comprehensive indicators of economic welfare.</p>
<h2>Measuring well-being and happiness</h2>
<p>These findings challenge the assumed consensus about the desirability of GDP growth, indicating that Canadians hold diverse views on this topic. </p>
<p>A significant proportion are open to considering other indicators of progress that could focus more on well-being and happiness than on increasing consumption.</p>
<p>With a deepening climate crisis, <a href="https://www.nationalgeographic.com/environment/2019/05/ipbes-un-biodiversity-report-warns-one-million-species-at-risk/">unprecedented biodiversity loss</a> and widespread inequality, it’s pertinent to remember the words of Robert F. Kennedy and question whether indefinite GDP growth will deliver true and long-lasting prosperity. </p>
<p>The time may be ripe to start pursuing other more laudable goals and many Canadians are likely to support such a shift.</p><img src="https://counter.theconversation.com/content/132178/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With a deepening climate crisis, unprecedented biodiversity loss and widespread inequality, it’s pertinent to question if indefinite GDP growth will deliver true and long-lasting prosperity.Fernanda Tomaselli, Lecturer, Forestry and Climate Change Communication, University of British ColumbiaSandeep Pai, Ph.D. Student & Public Scholar, Institute for Resources, Environment and Sustainability, University of British ColumbiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1139642019-03-27T22:51:57Z2019-03-27T22:51:57ZHow government deficits fund private savings<figure><img src="https://images.theconversation.com/files/266133/original/file-20190327-139374-aupiwv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Canadian bank notes are seen in this 2017 photo. Ottawa finances deficit spending by borrowing money. Twenty per cent of the money is borrowed from the Bank of Canada. In other words, the government borrows that money from itself. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Adrian Wyld</span></span></figcaption></figure><p>The ruling Liberals have tabled another deficit budget. The government debt grows larger. Commentators are wringing their hands and wagging their fingers. The worries are largely based in misrepresentation or ignorance of government debt and money.</p>
<p>The received wisdom on government debt is that it saddles future generations with the burden of repayment. The received wisdom is wrong. As long as a government’s debt is denominated in its own currency, repayment is never a problem. Why? Because the government can always create the necessary funds. </p>
<p>A sovereign government’s debt is one source of a country’s currency. National governments literally spend money into existence.</p>
<p>Deficits can cause problems, but to properly understand those problems, we have to understand the role that government finance plays in a country’s monetary system. </p>
<h2>Government Financing 101</h2>
<p>The Canadian government finances deficit spending by borrowing money. Twenty per cent of the money is borrowed from the Bank of Canada (BOC). In other words, the government borrows that money from itself. </p>
<p>The borrowed money is recorded as a debt on the government’s account and an asset on the BOC’s account. As a <a href="http://publications.gc.ca/collections/collection_2015/bdp-lop/eb/YM32-5-2015-51-eng.pdf">Library of Parliament brief</a> on the process states, the “Bank of Canada creates money through a few keystrokes.” It adds that “there is no external limit to the total amount of money that the Bank of Canada may create for the federal government.” <a href="https://theconversation.com/explainer-what-is-modern-monetary-theory-72095">The government could just as easily borrow from itself 100 per cent of the deficit funds</a>. </p>
<h2>Deficits fund savings</h2>
<p>Not only do governments create money in order to fund their budget deficits, the government’s debt becomes the financial wealth of the private sector. </p>
<p><strong>Annual Change in Financial Assets, 1991-2018</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/265385/original/file-20190322-36244-1csutib.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/265385/original/file-20190322-36244-1csutib.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=436&fit=crop&dpr=1 600w, https://images.theconversation.com/files/265385/original/file-20190322-36244-1csutib.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=436&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/265385/original/file-20190322-36244-1csutib.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=436&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/265385/original/file-20190322-36244-1csutib.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=547&fit=crop&dpr=1 754w, https://images.theconversation.com/files/265385/original/file-20190322-36244-1csutib.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=547&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/265385/original/file-20190322-36244-1csutib.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=547&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Source: Cansim table 36100580. ‘Private sector’ aggregates data for ‘Households and non-profit institutions serving households’, ‘Corporations’ and ‘Non-residents.’ ‘Governments’ is ‘General governments.’
Note: Series is the year-over-year change in quarterly values.</span>
</figcaption>
</figure>
<p>Changes in the financial assets of the government and the private sector mirror each other. Government debt equals private sector financial assets, by definition.</p>
<p>When the government posts a deficit, the private sector’s financial assets increase. When the government posts a surplus, the private sector’s financial assets decrease. </p>
<p>In other words, <a href="http://www.debtclock.ca/">when the Canadian Taxpayers Federation hauls out their debt clock</a>, showing the federal government’s increasing debt, they are also showing the private sector’s increasing financial wealth.</p>
<h2>Separating the description from prescription</h2>
<p>The theory describing how money works in sovereign currency countries is called <a href="http://www.levyinstitute.org/publications/modern-money-theory-101">Modern Monetary Theory</a> or MMT. Many critics of MMT confuse description and prescription.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/explainer-what-is-modern-monetary-theory-72095">Explainer: what is modern monetary theory?</a>
</strong>
</em>
</p>
<hr>
<p>Some of the people most associated with MMT, such as academic <a href="https://twitter.com/StephanieKelton">Stephanie Kelton</a> and U.S. congresswoman <a href="https://twitter.com/AOC">Alexandria Ocasio-Cortez</a>, make policy prescriptions on the basis of MMT insights. </p>
<p>The most prominent example is a call for the U.S. government to fund an ambitious Green New Deal to move to a post-carbon economy. But this is distinct from the content of MMT, which describes how the money of sovereign currency countries works.</p>
<h2>When deficits become problematic</h2>
<p>One of the <a href="https://www.project-syndicate.org/commentary/federal-reserve-modern-monetary-theory-dangers-by-kenneth-rogoff-2019-03">straw arguments</a> <a href="https://www.bloomberg.com/opinion/articles/2019-02-19/budget-deficits-still-matter-sorry-mmt-proponents">against MMT</a> is that <a href="https://www.bloomberg.com/opinion/articles/2019-01-10/u-s-economy-modern-monetary-theory-bets-deficits-don-t-matter">its proponents claim deficits do not matter</a>. That is completely wrong. Deficit spending puts money into the economy. When more money chases after the same number of goods or assets, the result is inflation, which can have deleterious effects. However, fear of inflation is vastly overblown. </p>
<p>Critics of MMT typically invoke a few historical instances of hyper-inflation. Venezuela, Zimbabwe and the Weimar Republic are their mantra. However, these events occurred in <a href="http://bilbo.economicoutlook.net/blog/?p=3773">completely different economic contexts</a> where production had collapsed. Besides, inflation is primarily a function of <a href="http://bnarchives.yorku.ca/207/">unequal economic power</a>. <a href="http://bnarchives.yorku.ca/259/">Economic power allows some businesses to continually raise prices and not others</a>. </p>
<p>Taxes offer a solution to inflation. Because governments create money, they do not need taxes to fund programs. Instead, taxes are used to remove from the economy some of the money chasing after goods. Although <a href="http://bilbo.economicoutlook.net/blog/?p=34118">some MMT proponents</a> <a href="http://neweconomicperspectives.org/2014/05/taxes-mmt-approach.html">advocate redistributive taxation</a>, that is a <a href="https://theconversation.com/a-wealth-tax-forces-those-responsible-for-climate-change-to-pay-for-it-105547">prescription rather than a description</a>. </p>
<p>One legitimate concern of deficit hawks is that partisan governments will use their spending power for partisan purposes. The repayment myth has constrained such abuse. However, we cannot properly manage the government’s unique spending power if we do not start from a basic understanding of money and government debt.</p>
<h2>What it all means</h2>
<p>We need to closely examine what governments are and are not funding. <a href="https://ftalphaville.ft.com/2019/01/16/1547640616000/America-has-never-worried-about-financing-its-priorities/">A <em>Financial Times</em> article</a> about MMT recognized that the United States government operates as MMT theorizes. It just uses that spending power to fund a bloated military instead of transitioning to a post-carbon economy. </p>
<p>When the federal government deflects calls to fund certain programs with a claim that they cannot afford it, they are misleading us. They can afford it. They are choosing not to fund it. </p>
<p>Consider the issue of on-reserve water quality. The Liberals promised to deal with the widespread and long-standing problem of poor-quality water in First Nation communities. However, the Parliamentary Budget Officer identified a <a href="http://www.pbo-dpb.gc.ca/web/default/files/Documents/Reports/2017/FN%20Water/FN_Water_EN.pdf">30 per cent shortfall in funding</a> for dealing with the issue. As of Jan. 23, 2019, <a href="https://www.aadnc-aandc.gc.ca/eng/1516741379405/1516741409130">91 communities have water advisories</a>. Why? The funding shortfall is not because of fiscal constraints. It is a choice.</p>
<p>Deficit spending is not, in and of itself, a panacea to all of the issues Canada faces. The hurdles to achieving clean water for all First Nation communities are more than money. But by understanding the actual constraints on government finances, we can get past the obfuscating arguments that government debt is a burden on the future. </p>
<p>The tradeoff is not between the financial well-being of future generations and the current well-being of those in need. The tradeoff is between what the government is choosing to finance and what it’s choosing not to finance.</p><img src="https://counter.theconversation.com/content/113964/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>D.T. Cochrane does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Critics complain that government debt saddles future generations with a financial burden. The critics are wrong.D.T. Cochrane, Lecturer in Business and Society, York University, CanadaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1002932018-07-19T21:23:42Z2018-07-19T21:23:42ZTrudeau’s cabinet shuffle patches holes before next election<figure><img src="https://images.theconversation.com/files/228503/original/file-20180719-142408-g0e58c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Mary Ng is hugged by Prime Minister Justin Trudeau after being sworn in as Minister of Small Business and Export Promotion during a swearing-in ceremony at Rideau Hall on July 18, 2018. The cabinet shuffle sets the stage for the next federal election in the fall of 2019.</span> <span class="attribution"><span class="source"> THE CANADIAN PRESS/Justin Tang</span></span></figcaption></figure><p>Prime Minister Justin Trudeau’s <a href="https://www.cbc.ca/news/politics/trudeau-cabinet-shuffle-2018-1.4749976">recent cabinet shuffle</a> could be considered as minor, because he left many key ministers in place.</p>
<p><a href="http://cfreeland.liberal.ca/">Chrystia Freeland</a> remains in Foreign Affairs, <a href="http://bmorneau.liberal.ca/">Bill Morneau</a> in Finance and <a href="https://pm.gc.ca/eng/minister/honourable-jody-wilson-raybould">Jody Wilson-Raybould</a> in Justice, occupying what many regard as the most important portfolios for any federal government. </p>
<p>Perhaps the prime minister believes they’ve been successful to date, despite <a href="https://theconversation.com/consumers-to-pay-the-price-as-canada-punches-back-against-u-s-tariffs-97685">continuing trade skirmishes with the United States</a>, <a href="https://www.theglobeandmail.com/news/politics/morneau-credits-simpler-small-business-tax-plan-to-crowdsourcing/article38157292/">tax proposals for small businesses</a> from which the government has largely retreated and outstanding issues <a href="https://ottawacitizen.com/cannabis/cannabis-business/health-canada-warns-cannabis-companies-against-sponsoring-music-festivals-and-promoting-pot">regarding cannabis regulation</a> and <a href="https://www.macleans.ca/society/assisted-dying-was-supposed-to-be-an-option-to-some-patients-it-looks-like-the-only-one/">assisted dying</a>.</p>
<p>The only minister essentially <a href="https://nationalpost.com/news/politics/once-a-rising-star-melanie-joly-demoted-after-hurting-liberals-in-quebec">demoted is Melanie Joly</a>, probably because the Heritage portfolio’s issues (notably exemption from taxation for Netflix and weak efforts to encourage Canadian cultural production) seem to have overwhelmed her. </p>
<p>Many other changes seem largely inconsequential. And yet it’s not really a minor cabinet shuffle at all.</p>
<h2>Federal election on the horizon</h2>
<p>First, it’s probably the last cabinet shuffle before the 2019 election. It’s not impossible to imagine further changes before then, but it’s unlikely, because ministers are normally given a chance to settle in and show what they can do before the government goes again to the polls.</p>
<p>Second, with an election next year, Trudeau has taken the opportunity to change portfolios and ministers so as to highlight areas where he may face campaign challenges. If new faces in new roles can be successful, the Liberals will feel more confident entering the first campaign in which their record as a government will be the focus of attention.</p>
<p>What are the areas the prime minister has signalled needed shoring up? Where are the holes he is trying to plug?</p>
<p>First, <a href="https://www.theglobeandmail.com/politics/article-canada-still-aiming-for-intensive-nafta-talks-even-though-trumps-in/">as NAFTA renegotiations drag on</a> (or are stalled), there is enormous pressure to find ways to be less dependent on the U.S. market. It has long been an aim of Canadian governments to broaden the list of places to which we export, and to diversify the list of goods and services we make available.</p>
<p>U.S. President Donald Trump’s tariffs and the threats to NAFTA’s survival have significantly increased the urgency of those aims.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/beyond-nafta-canada-must-find-new-global-markets-98430">Beyond NAFTA: Canada must find new global markets</a>
</strong>
</em>
</p>
<hr>
<p>The renaming of International Trade to Trade Diversification, <a href="https://www.winnipegfreepress.com/local/jim-carr-takes-over-as-canadas-new-trade-minister-488562721.html">with Jim Carr moving from Natural Resources to head the ministry</a>, is intended to respond to that urgency, as is the increased focus on export promotion in the Small Business portfolio now under <a href="https://www.yorkregion.com/news-story/8748798-markham-thornhill-mp-mary-ng-elevated-to-cabinet-in-trudeau-shuffle/">rookie MP Mary Ng.</a></p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/228504/original/file-20180719-142408-zjo9on.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/228504/original/file-20180719-142408-zjo9on.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=436&fit=crop&dpr=1 600w, https://images.theconversation.com/files/228504/original/file-20180719-142408-zjo9on.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=436&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/228504/original/file-20180719-142408-zjo9on.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=436&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/228504/original/file-20180719-142408-zjo9on.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=547&fit=crop&dpr=1 754w, https://images.theconversation.com/files/228504/original/file-20180719-142408-zjo9on.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=547&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/228504/original/file-20180719-142408-zjo9on.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=547&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Melanie Joly, demoted to Minister of Tourism, Official Languages and La Francophonie, speaks with Jim Carr, now Minister of International Trade Diversification, at Rideau Hall.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span>
</figcaption>
</figure>
<p>Second, in the first few years of Trudeau’s mandate, he had the benefit of several sympathetic provincial governments from whom he could hope to receive cooperation. There were Liberal governments in British Columbia, Ontario, Quebec and the Atlantic provinces. Even the NDP government of Alberta and the Conservative government of Manitoba could be expected to be helpful with some issues. </p>
<p>The traditional battles between Ottawa and the provinces over funding and taxation did not go away, but the hostility was muted.</p>
<p>Now, however, with the election of Doug Ford’s Conservatives in Ontario and John Horgan’s NDP government in B.C., disagreements over pipelines, climate change and refugee settlement are looming large.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/ford-nation-rises-again-what-doug-ford-means-for-ontario-97985">Ford Nation rises again: What Doug Ford means for Ontario</a>
</strong>
</em>
</p>
<hr>
<p>It’s possible that the formation of a united Conservative party in Alberta could lead to a change of government there in the next provincial election. And there have also been suggestions that the Quebec Liberals are not secure.</p>
<h2>Hostile provinces?</h2>
<p>The prime minister, therefore, could soon be facing unsympathetic governments in a majority of provinces. <a href="https://globalnews.ca/video/4338202/dominic-leblanc-changes-portfolios-named-minister-of-intergovernmental-northern-affairs-and-internal-trade">The appointment of Dominic Leblanc</a> — an experienced, tough-minded but persuasive MP — as Minister of Intergovernmental Affairs is intended to make federal-provincial relations more manageable in the new climate.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/228505/original/file-20180719-142414-1i21jqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/228505/original/file-20180719-142414-1i21jqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=452&fit=crop&dpr=1 600w, https://images.theconversation.com/files/228505/original/file-20180719-142414-1i21jqv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=452&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/228505/original/file-20180719-142414-1i21jqv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=452&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/228505/original/file-20180719-142414-1i21jqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=568&fit=crop&dpr=1 754w, https://images.theconversation.com/files/228505/original/file-20180719-142414-1i21jqv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=568&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/228505/original/file-20180719-142414-1i21jqv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=568&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Dominic LeBlanc arrives at a swearing in ceremony at Rideau Hall in Ottawa.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/ Patrick Doyle</span></span>
</figcaption>
</figure>
<p>Third, <a href="https://www.theglobeandmail.com/canada/article-ontario-withdraws-support-for-resettlement-of-asylum-seekers-who/">migrants entering Canada at irregular crossing points</a> has strained the resources of the Ministry of Immigration. Additionally, a spike in <a href="https://toronto.ctvnews.ca/toronto-s-police-board-wants-more-security-cameras-new-technology-to-help-curb-gun-crime-1.4019962">gang-related gun crime in Toronto</a> has raised public concerns.</p>
<p>The creation of a new portfolio called Border Security and Organized Crime Reduction, <a href="https://www.macleans.ca/politics/ottawa/justin-trudeaus-new-cabinet-bill-blairs-big-promotion/">under the direction of former Toronto police chief Bill Blair</a>, is intended to signal an understanding of voters’ concerns about border security and gang violence.</p>
<p>Fourth, as the government moves to ensure completion of the Trans Mountain Pipeline expansion, <a href="https://edmontonjournal.com/news/politics/graham-thomson-edmonton-mp-amarjeet-sohi-now-in-charge-of-getting-trans-mountain-pipeline-project-built">Trudeau has appointed Edmonton MP Amarjeet Sohi as Natural Resources Minister</a> and Vancouver MP <a href="https://vancouversun.com/news/local-news/north-vancouver-mp-jonathan-wilkinson-named-federal-minister-of-fisheries-oceans-and-coast-guard">Jonathan Wilkinson as Fisheries Minister</a>. They can be expected to lead the fight to overcome opposition in B.C. to the pipeline’s completion.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/228506/original/file-20180719-142426-5hqp64.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/228506/original/file-20180719-142426-5hqp64.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=490&fit=crop&dpr=1 600w, https://images.theconversation.com/files/228506/original/file-20180719-142426-5hqp64.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=490&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/228506/original/file-20180719-142426-5hqp64.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=490&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/228506/original/file-20180719-142426-5hqp64.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=616&fit=crop&dpr=1 754w, https://images.theconversation.com/files/228506/original/file-20180719-142426-5hqp64.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=616&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/228506/original/file-20180719-142426-5hqp64.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=616&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Amarjeet Sohi stands with Prime Minister Justin Trudeau and Governor General Julie Payette after being sworn in as Minister of Natural Resources at Rideau Hall.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span>
</figcaption>
</figure>
<p>It’s probably fair to say that if trade is diversified without abandoning the American market, if border security is strengthened without abandoning a commitment to refugees, if federal-provincial relations lead to more federal wins than losses, and if the Trans Mountain pipeline is completed without a serious oil spill, the prime minister will feel his decisions were sound. </p>
<p>That’s assuming, however, that no fires break out in Foreign Affairs, Finance or Justice — never guaranteed.</p><img src="https://counter.theconversation.com/content/100293/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert Drummond has received funding from SSHRC. He is currently a member of the NDP.</span></em></p>With a federal election next year, Prime Minister Justin Trudeau has shuffled his cabinet. What do the new faces in new jobs tell us about where the government feels it could be challenged?Robert Drummond, University Professor Emeritus, Politics and Public Policy/Administration, York University, CanadaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/974492018-05-30T15:43:50Z2018-05-30T15:43:50ZJustin Trudeau’s risky gamble on the Trans Mountain pipeline<figure><img src="https://images.theconversation.com/files/221002/original/file-20180530-120493-n3853u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A protester holds a photo of an oil-soaked Prime Minister Justin Trudeau during a demonstration against the Kinder Morgan Trans Mountain Pipeline expansion in Vancouver on May 29, 2018. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span></figcaption></figure><p>In the lead-up to the last federal election, Justin Trudeau said: “Governments might grant permits, but only communities can grant permission.” </p>
<p>Vancouver and Burnaby did not grant permission to the Trans Mountain Pipeline expansion. Neither did a number of smaller Indigenous and non-Indigenous communities. </p>
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<p>Nevertheless, <a href="http://www.cbc.ca/news/politics/federal-cabinet-trudeau-pipeline-decisions-1.3872828">Trudeau’s Liberal government approved the expansion.</a> Then, this week, Finance Minister Bill Morneau <a href="https://www.ctvnews.ca/politics/feds-spending-4-5b-to-buy-trans-mountain-pipeline-1.3949663">announced that the government was taking over the project from Kinder Morgan.</a> </p>
<p>This was a momentous day in terms of environmental politics. What are the potential consequences of the announcement? </p>
<p>The decision poses real risks to the federal Liberals, including harm to its reconciliation efforts with First Nations, strain on federal-provincial relations, accusations of interference in B.C. politics, the potential collapse of the federal carbon-pricing scheme and consequences for the environmental movement.</p>
<p>There are currently <a href="https://www.ourcommons.ca/Parliamentarians/en/members?currentOnly=true&province=BC">18 federal Liberal MPs from B.C.</a>, many of whom will be in jeopardy in the next election because of the decision. </p>
<p>In the last election, environmental organizations like <a href="https://dogwoodbc.ca/">Dogwood</a> and <a href="https://www.leadnow.ca/">Leadnow</a> worked to elect candidates who were progressive on environmental issues. In the next election, those groups and others like them will be steering voters away from the Liberals.</p>
<h2>Trudeau vowed respect to Indigenous peoples</h2>
<p>Another plank in Trudeau’s <a href="https://www.liberal.ca/realchange/a-new-nation-to-nation-process/">federal election platform</a> was “… for Canada to have a renewed, nation-to-nation relationship with Indigenous Peoples, based on recognition, rights, respect, co-operation, and partnership. This is both the right thing to do and a sure path to economic growth.” </p>
<p>While it’s true that there are <a href="http://nationalpost.com/news/canada/what-do-first-nations-really-think-about-trans-mountain">differences of opinion among Indigenous communities</a> in terms of opposition or support for the Trans Mountain pipeline, based on my personal communications as a scholar who studies environmental movements, there are more Indigenous people opposed than in favour. </p>
<p>Already, <a href="http://www.cbc.ca/news/canada/british-columbia/first-nations-kinder-morgan-transmountain-1.4615263">several Indigenous-led court challenges</a> threaten the pipeline’s expansion. It’s possible that the federal government’s acquisition of the project could make things more complicated, and may lead to further court challenges.</p>
<p>The decision will also put further strain on federal-provincial relations, at least with regard to British Columbia. The province’s premier, John Horgan, has made every effort to avoid having tensions with the federal government and his Alberta counterpart <a href="https://globalnews.ca/video/4239828/this-isnt-a-personal-issue-b-c-premier-horgan-on-trans-mountain-pipeline-announcement">become personal</a>, and he has tended to avoid escalating the situation. </p>
<p>However, Horgan’s NDP, with the support of the Green Party, <a href="https://www.theglobeandmail.com/canada/british-columbia/article-bc-seeks-jurisdiction-over-oil-shipments-with-court-reference/">will continue with its court challenge,</a> and perhaps take other measures, so it’s hard to imagine how tensions will ease.</p>
<p>One potential provincial consequence is that the pipeline decision could affect opinion about <a href="http://www.cbc.ca/news/canada/british-columbia/proportional-representation-referendum-1.4635794">the upcoming provincial referendum on electoral reform in B.C.</a> </p>
<p>It seems plausible that discontent with the status quo underlying the pipeline decision may result in increased support for changing the political system at the provincial level.</p>
<h2>A gift to Rachel Notley?</h2>
<p>One of the federal government’s motivations was to deliver a pipeline to Alberta Premier Rachel Notley <a href="http://www.cbc.ca/news/canada/edmonton/carbon-tax-hike-trans-mountain-expansion-notley-1.4578353">in exchange for her government taking action on legislation regarding carbon pricing</a> and other measures aimed at reducing greenhouse gas emissions.</p>
<p>Polls suggest Notley is likely to be replaced by <a href="http://www.cbc.ca/news/canada/calgary/road-ahead-poll-ucp-win-next-election-1.4636786">provincial Conservative leader Jason Kenney</a> in the next election, and also indicate <a href="https://globalnews.ca/news/4236201/ontario-election-poll-ndp-soften-pc-lead/">Doug Ford could win in Ontario</a>, although he’s in a tight race with the NDP’s Andrea Horwath.</p>
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Read more:
<a href="https://theconversation.com/how-an-ndp-victory-in-ontario-is-a-real-possibility-97158">How an NDP victory in Ontario is a real possibility</a>
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<p>Both Kenney and Ford have promised to oppose carbon pricing. And so it seems possible that the Trudeau government could have unwittingly unleashed the “carbon bomb” of the oilsands, <a href="https://www.reuters.com/article/idUS257590805720110829">as world-famous climate scientist James Hansen has referred to it</a>, as the federal carbon-pricing scheme stalls.</p>
<p>The environmental movement has done a lot to oppose the expansion of the pipeline by raising awareness and mobilizing action about climate change. It has influenced public opinion, suggested policy options and worked to varying degrees with governments and industry. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/221000/original/file-20180530-120511-1ey6f78.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/221000/original/file-20180530-120511-1ey6f78.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=419&fit=crop&dpr=1 600w, https://images.theconversation.com/files/221000/original/file-20180530-120511-1ey6f78.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=419&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/221000/original/file-20180530-120511-1ey6f78.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=419&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/221000/original/file-20180530-120511-1ey6f78.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=527&fit=crop&dpr=1 754w, https://images.theconversation.com/files/221000/original/file-20180530-120511-1ey6f78.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=527&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/221000/original/file-20180530-120511-1ey6f78.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=527&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Trump-eau? A woman holds a sign bearing photographs of Trudeau and U.S. President Donald Trump during a protest against the Kinder Morgan Trans Mountain Pipeline expansion in Vancouver on May 29, 2018.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span>
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<p>May 29 was a tremendously disappointing day for the movement, but it’s unlikely to roll over and play dead. It will continue to ally itself with First Nations who are opposed to the pipeline, to engage in court challenges and to try to sway public opinion. </p>
<p>Protests will also continue. It’s possible that illegal protests will escalate, and this could be consequential. During the Civil Rights movement, for example, the arrest and jailing of peaceful African-American demonstrators <a href="https://www.voanews.com/a/nonviolencekey-to-civil-rights-movement/1737280.html">had a positive impact on perceptions</a> of their plight; the public saw them as being treated unjustly. </p>
<p>The same could happen in Canada, depending on who is involved, what actions are taken and how things play out. </p>
<p>The environmental movement will also be highly active in the next federal election, and this time it’s unlikely its members will be knocking on doors on behalf of the federal Liberals. </p>
<p>It’s also possible this will be a watershed moment for youth activists, who may be increasingly mobilized by the climate crisis and <a href="https://www.theglobeandmail.com/report-on-business/rob-commentary/is-justin-trudeau-a-hypocrite-on-climate-change/article34797080/">the inconsistency</a> between Trudeau’s words in Paris on climate change and in Canada on pipelines, not to mention their potential dismay that Indigenous peoples might once again be facing unjust treatment.</p>
<p>The coming years will be interesting, and likely tense.</p><img src="https://counter.theconversation.com/content/97449/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Tindall receives research funding from the Social Sciences and Humanities Research Council of Canada. This is an agency that provides funding for academic research. The funding is for research expenses, not the salary of the author.
David Tindall has a volunteer affiliation with the Climate Reality Project Canada, for whom he periodically gives educational presentations to public audiences on climate change.</span></em></p>The Trudeau government’s decision to buy the Trans Mountain pipeline from Kinder Morgan is incredibly risky. Here’s why.David Tindall, Professor of Sociology, University of British ColumbiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/928922018-03-08T00:01:56Z2018-03-08T00:01:56ZCanada can’t win a trade war with the United States<figure><img src="https://images.theconversation.com/files/209033/original/file-20180306-146697-1ulj4gd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A welder fabricates a steel structure at an iron works facility in Ottawa on March 5, 2018. U.S.President Donald Trump's stated intention to impose new tariffs on steel and aluminum imports could start a trade war. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span></figcaption></figure><p><a href="http://bmorneau.liberal.ca/">Bill Morneau</a> is perhaps an influential figure in Canadian Prime Minister Justin Trudeau’s cabinet, but he’s not conducting himself like most finance ministers. Given <a href="http://business.financialpost.com/pmn/business-pmn/highlights-from-federal-budget-tabled-tuesday-by-finance-minister-bill-morneau">the budget he presented recently</a>, he may be more of a social justice warrior.</p>
<p>Supporting more diversity, equality and inclusiveness is obviously critical to the betterment of our society, but I believe most Canadians expect more from a finance minister. His recent budget was sorely lacking.</p>
<p>There were <a href="https://globalnews.ca/news/4051334/canada-2018-budget-no-plan-to-balance-books/">no plans to balance the books</a> and, most importantly, there were no mitigating strategies presented in relation to a floundering global trade environment. </p>
<p>Few details were given on the government’s plan <a href="http://www.metronews.ca/life/money/2018/03/06/many-canadian-businesses-don-t-have-post-nafta-plans.html">to deal with NAFTA’s possible demise</a> on Washington’s “America First” policy, and there were no attempts to circumvent trading challenges.</p>
<p>The ugly face of protectionism is slowly making its way across the globe. U.S. President Donald Trump announced last week he’s considering new trade restrictions, including a 25 per cent tariff on imported steel and a 10 per cent duty on aluminum, though Trump’s trade and manufacturing adviser <a href="https://www.vox.com/2018/3/7/17094756/tariffs-mexico-canada-nafta-negotiations-navarro">says Canada and Mexico will be exempt — for now,</a> and depending on how NAFTA negotiations go.</p>
<p>Nonetheless, trade wars are something Trump appears to relish.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"969525362580484098"}"></div></p>
<p>Despite recent trade deals signed by Canada, the world seems at odds with open trade, and instead everyone wants to protect their own domestic markets.</p>
<p>This is a seemingly dangerous path given that agriculture and food are often considered the most vulnerable and sensitive sectors when it comes to trade barriers. </p>
<p>They’re easy targets. Tariff or even non-tariff barriers can make a significant dent in a country’s economy almost instantly, <a href="http://www.worldbank.org/en/news/feature/2013/09/05/medidas-arancelarias">and consumers are often affected the most.</a> </p>
<p>Most economists see freer trade among nations as an absolute good until politics come along. But not all trade is created equal. Some win while others lose, and given the economics of our country, Canada cannot win many trade wars, especially not with the United States.</p>
<p>In fact, we are already witnessing how a trade war could affect the Canadian agrifood sector as Canadian pulse farmers <a href="http://www.cbc.ca/news/canada/saskatchewan/india-chickpea-tariff-pulse-industry-1.4559947">are now bracing for some major trading headwinds from India.</a></p>
<p>Some political opponents are linking our prime minister’s <a href="https://theconversation.com/justin-trudeaus-india-debacle-shows-the-pitfalls-of-nation-branding-92727">recent globally mocked visit to India</a> with the country’s decision to increase tariffs on chickpeas <a href="http://www.cbc.ca/news/canada/saskatchewan/india-chickpea-tariff-pulse-industry-1.4559947">from 44 per cent to 60 per cent, overnight. </a></p>
<p>The decision comes after India introduced a variety of tariffs on pulse crops, including lentils, peas and chickpeas, in the past few months. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/209163/original/file-20180306-146671-o798uy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/209163/original/file-20180306-146671-o798uy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=372&fit=crop&dpr=1 600w, https://images.theconversation.com/files/209163/original/file-20180306-146671-o798uy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=372&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/209163/original/file-20180306-146671-o798uy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=372&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/209163/original/file-20180306-146671-o798uy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=468&fit=crop&dpr=1 754w, https://images.theconversation.com/files/209163/original/file-20180306-146671-o798uy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=468&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/209163/original/file-20180306-146671-o798uy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=468&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Pulses are displayed with price tags at a wholesale market in New Delhi, India, in February 2018.</span>
<span class="attribution"><span class="source">(AP Photo/Altaf Qadri)</span></span>
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<p>These are growth sectors for our economy. Canadian pulse exports to India alone are <a href="http://www.livemint.com/Politics/FQZLoZ2G2Vv5HXo7Ni7iDP/Justin-Trudeaus-visit-reflects-uneasy-state-of-IndoCanada.html">worth well over CDN$1 billion.</a> This could easily escalate further and affect other sectors of our agrifood economy. </p>
<p>In Europe, South America — everywhere — we are seeing more governments reducing their exposure to international markets. It cuts risks and simplifies business for many producers.</p>
<p>But there is <a href="https://www.vox.com/policy-and-politics/2018/3/4/17078240/trump-tariffs-trade-war-steel-aluminum">also considerable consensus around the world</a> that trade wars can backfire and ultimately hurt consumers. </p>
<h2>Expensive way to retain jobs</h2>
<p>Trade barriers, which are often scientifically unjustifiable but politically motivated, make economies weaker and less competitive over time. Duties may look like an attractive, simple mechanism to protect domestic interests, but they are an extremely expensive way to retain jobs in an economy.</p>
<p>But Canada doesn’t exactly have an immaculate record either on trade barriers.</p>
<p>Canada itself applies heavy duties on many imports, including dairy products, poultry and eggs. These duties are embedded <a href="https://www.thestar.com/news/canada/2017/10/16/us-takes-aim-at-supply-management-system-for-dairy-eggs-and-poultry-in-latest-nafta-talks.html">into our supply management regime</a>, considered by many as one of the most protectionist policies in the world.</p>
<p>In some cases, <a href="http://www.macleans.ca/economy/economicanalysis/why-the-dairy-industrys-defence-of-supply-management-is-so-flawed/">duties exceed 300 per cent.</a> </p>
<p>Most countries do enact duties on a variety of food products, but Canada goes even further by enabling and controlling domestic production with quotas. We are the only western economy still doing it. That makes it extremely awkward to ask trading partners for exemptions to their own trade barriers.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/209167/original/file-20180306-146671-1ct182l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/209167/original/file-20180306-146671-1ct182l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/209167/original/file-20180306-146671-1ct182l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/209167/original/file-20180306-146671-1ct182l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/209167/original/file-20180306-146671-1ct182l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/209167/original/file-20180306-146671-1ct182l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/209167/original/file-20180306-146671-1ct182l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A dairy farmer holds onto a cow as he takes part in a protest in front of Parliament Hill in Ottawa in September 2015 to demand the protection of Canada’s supply management system in the Trans Pacific Partnership negotiations.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Sean Kilpatrick</span></span>
</figcaption>
</figure>
<p>What remains under-appreciated is how intertwined all economies are, not just those of the U.S. and Canada. Duties in one sector will affect the ability of other sectors to trade. It is difficult, if not impossible, to link steel and aluminum with dairy, poultry and/or eggs, but the connection exists.</p>
<p>Trade wars easily escalate, spelling trouble for an open economy like Canada’s. Given our abundance of resources and knowledge, we have plenty to share. <a href="http://www.international.gc.ca/economist-economiste/performance/state-point/state_2017_point/index.aspx?lang=eng">Almost 60 per cent of our economy is trade-driven.</a> </p>
<p>Morneau essentially short-changed Canadian taxpayers last week with his so-called budget. I believe the government’s focus on equality would have been better served at another time.</p>
<p>We should not be shocked to see Ottawa utterly unprepared for Washington’s wrath towards its trading partners. Upholding equity values for our country is undoubtedly noble, but the government could fall short on its social promises if it runs out of cash.</p><img src="https://counter.theconversation.com/content/92892/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sylvain Charlebois does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ottawa seems utterly unprepared for a trade war with the United States. The recent federal budget upholding equity values is noble, but won’t mean a thing if the government runs out of cash.Sylvain Charlebois, Professor in Food Distribution and Policy, Dalhousie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/926462018-03-02T19:31:58Z2018-03-02T19:31:58ZCanadian pharmacare is closer to becoming a reality<figure><img src="https://images.theconversation.com/files/208732/original/file-20180302-65529-1ecdcyx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The fact that Ontario's health minister, Eric Hoskins, is resigning from his post to head up a newly announced advisory council on a Canadian pharmacare system bodes well, meaning Ottawa's new initiative may go beyond being "just another study." Hoskins is a longtime advocate for pharmacare.</span> <span class="attribution"><span class="source"> THE CANADIAN PRESS/Darryl Dyck</span></span></figcaption></figure><p><a href="https://theconversation.com/why-canada-should-introduce-universal-drugs-coverage-79824">A universal pharmacare program</a> can help remove inequities in access to drugs based on age, income and geography, and achieve savings in the overall cost of pharmaceuticals. </p>
<p>The 2018 federal budget included a promise to create an Advisory Council on the Implementation of National Pharmacare. Essentially, pharmacare would mean Canadians would have the costs of drugs and medications covered under our public health insurance system. </p>
<p>Is Ottawa’s announcement what pharmacare advocates have been waiting for? Maybe.</p>
<p>Some of the early details give reason for optimism, while others raise concerns. </p>
<p><a href="https://doi.org/10.1017/S1744133117000408">My research shows that</a> to understand current reform efforts, we need to learn from our history. Specifically, we should take lessons from past attempts to expand public health insurance in Canada. Doing so can help us understand the obstacles facing the new advisory council as well as opportunities for it to achieve real change.</p>
<p>One concern is that the new council will amount to “just another study.” There have been a <a href="http://journals.sagepub.com/doi/10.1177/0840470416658907">number of federally sponsored studies of pharmacare in the past</a>, from the 1943 Heagerty Committee to the current parliamentary standing committee on health that has been studying the development of a national pharmacare plan since December 2015 and is due to issue its final report shortly. </p>
<p>Some observers have been encouraged by the word “implementation” in the new advisory council’s name. But there are certainly many details that will need to be worked out if pharmacare is to be implemented on a national scale. </p>
<h2>Overhaul needed</h2>
<p>A concrete step to ensuring success would be to give the council the mandate and resources to focus on a detailed implementation plan, rather than revisiting yet again whether Canada actually needs expanded public pharmaceutical insurance.</p>
<p>Another concern is that the council will be too timid, focusing its attention on “patching up” existing drug insurance programs rather than planning for the major overhaul <a href="http://pharmacare2020.ca/">many experts believe</a> is necessary.</p>
<p>Incremental change may seem attractive, but my research has found that this approach limits opportunities for achieving meaningful expansions in public health insurance. </p>
<p>Since the earliest days of Canadian health policy development, many politicians and top bureaucrats have viewed pharmacare as fundamentally unaffordable. This idea has persisted <a href="https://doi.org/10.1503/cmaj.141564">despite evidence</a> to the <a href="http://www.pbo-dpb.gc.ca/en/blog/news/Pharmacare">contrary</a>, and it makes them reluctant to consider bold reforms. </p>
<p>However, when it comes to expanding public health insurance, the research shows that <a href="https://ipolitics.ca/2016/05/06/its-time-for-a-national-pharmacare-program/">incremental approaches do not tend to culminate in significant change</a>. Instead, incremental reforms that are intended to expand coverage step-by-step stall because they require resources but do not deliver on important reform objectives, like improved equity and access and better cost control.</p>
<p>Finance Minister Bill Morneau hinted the day after the budget was tabled that the advisory council was being steered towards constrained reform. He told the Economic Club of Canada that he anticipated a pharmacare strategy that “<a href="http://www.cbc.ca/news/politics/morneau-budget-2018-pharmacare-1.4555186">deals with the gaps, but doesn’t throw out the system that we currently have</a>.” </p>
<h2>Key pharmacare advocate on board</h2>
<p>There has been only one example of a major expansion in Canadian health insurance since public hospital insurance was first introduced: <a href="http://www.jstor.org/stable/10.3138/j.ctt14bth7j">Nationwide medical insurance in 1968</a>. However, this required federal-provincial cooperation, an attentive public pressing for change and significant political will from then-prime minister Lester B. Pearson. </p>
<p>A promising sign of political will is the choice of Eric Hoskins to chair the council. Hoskins has been a <a href="https://www.thestar.com/opinion/commentary/2014/12/15/eric_hoskins_the_time_for_national_pharmacare_has_come.html">longtime advocate of national pharmacare</a>. </p>
<p>He presided over the 2017 expansion of Ontario public drug programs to cover children and youth up to age 25, and he left his position as Ontario’s minister of health in order to helm the new council. </p>
<p>The budget calls for the council to learn from “domestic and international models” of pharmaceutical insurance, but lessons from our own experience should not be ignored. </p>
<p>Understanding the successes of other pharmacare programs will be helpful, but successful implementation will depend on understanding and addressing the barriers faced by past attempts at reform here in Canada, particularly the erroneous but entrenched idea that pharmacare is fundamentally unaffordable. </p>
<h2>Keeping the pressure on</h2>
<p>Everyone can contribute to making the advisory council a success and a national pharmacare program a reality. </p>
<p>Experts need to clearly communicate the evidence about how good pharmacare systems work and how much they cost. </p>
<p>The public needs to evaluate that evidence against their own values regarding public health care, and keep the pressure on their leaders for results. </p>
<p>The advisory council needs to be careful in its analysis of the evidence and bold in its recommendations. </p>
<p>Finally, politicians need to have the courage to seize this once-in-a-generation opportunity to make a real difference to the health of Canadians.</p><img src="https://counter.theconversation.com/content/92646/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Katherine Boothe receives funding from the Social Sciences and Humanities Research Council of Canada.</span></em></p>Will Ottawa’s new advisory council on pharmacare amount to “just another study,” or is a national program truly within reach?Katherine Boothe, Associate Professor, Political Science, McMaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/848122017-10-04T22:00:10Z2017-10-04T22:00:10ZWhy we should listen to people angry about their taxes<figure><img src="https://images.theconversation.com/files/188419/original/file-20171002-12132-wxxpqy.jpg?ixlib=rb-1.1.0&rect=0%2C4%2C3000%2C2169&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Finance Minister Bill Morneau is not the first Canadian politician to hold the job who's been confronted with outrage over tax reform proposals. But it's time to listen to people who get riled up about tax increases. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Andrew Vaughan</span></span></figcaption></figure><p>Is it too much to expect people to talk calmly and reasonably about tax changes? Yes. Yes, it is too much.</p>
<p>As a historian of tax in 20th century Canada, I have read thousands of letters to ministers of finance, and they are often ferociously angry – similar to some of <a href="http://www.cbc.ca/news/politics/morneau-town-hall-1.4313754">the outrage being expressed now</a> by opponents of the Liberal government’s tax reform proposals.</p>
<p>It’s hard not to dismiss them as hysterical.</p>
<p>But we shouldn’t. The rocket-fuelled fury of the worried taxpayer is a constant feature of tax culture for good reasons.</p>
<p>In the <a href="http://collectionscanada.gc.ca/ourl/res.php?url_ver=Z39.88-2004&url_tim=2017-10-02T01%3A27%3A39Z&url_ctx_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Actx&rft_dat=35&rfr_id=info%3Asid%2Fcollectionscanada.gc.ca%3Apam&lang=eng">archives of finance ministers</a> since 1942 (when Canada got its mass income tax), I’ve seen how tax debate draws in free-floating anger and focuses it. On the surface, tax rage is about money. But it’s also about deeply held personal identities and hard-to-reconcile views on government. Angry tax talk tells us about more than just tax policy.</p>
<p>In observing our <a href="http://www.cbc.ca/news/canada/toronto/rally-tax-reform-morneau-1.4315740">current debate,</a> I’ve been especially reminded of the furore over the Benson White Paper. Launched in November 1969, the <a href="http://publications.gc.ca/site/archivee-archived.html?url=http://publications.gc.ca/collections/collection_2016/fin/F32-169-1969-eng.pdf">Benson tax proposals</a> formed the basis of the modern federal income tax act of 1971. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/188285/original/file-20171002-28509-15o3pj3.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/188285/original/file-20171002-28509-15o3pj3.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=805&fit=crop&dpr=1 600w, https://images.theconversation.com/files/188285/original/file-20171002-28509-15o3pj3.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=805&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/188285/original/file-20171002-28509-15o3pj3.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=805&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/188285/original/file-20171002-28509-15o3pj3.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1012&fit=crop&dpr=1 754w, https://images.theconversation.com/files/188285/original/file-20171002-28509-15o3pj3.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1012&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/188285/original/file-20171002-28509-15o3pj3.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1012&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Benson White Paper of tax proposals.</span>
<span class="attribution"><span class="source">(Shirley Tillotson)</span></span>
</figcaption>
</figure>
<p>What the government put on the table included full taxation of capital gains — a real challenge for high net worth Canadians, investment firms and pensioners. Another flashpoint was a proposal to eliminate the small business tax rate on annual business profits under $30,000 (<a href="http://www.bankofcanada.ca/rates/related/inflation-calculator/">$196,733</a> in 2017 dollars). Consultation took the small business rate off the table and modified the capital gains proposal.</p>
<p>The Benson changes also included tax relief for millions of very low income earners whose income tax payments truly cut into subsistence spending. In the end, abut 60 per cent of Canadians, many of them poor, saw their federal tax bill lowered, though less than originally proposed.</p>
<h2>Vows to move to Mexico</h2>
<p>In some quarters, this proposal inspired a furious response. Small business wanted to keep its lower tax rate (a sacred tradition since 1949). Middle-of-the-road Liberal Edgar Benson was called a radical and a socialist. Doomsayers predicted that the tax changes would kill the Canadian economy. Threats to move to Mexico were heard throughout the land.</p>
<p>Benson, who had been national revenue minister earlier in the 1960s, was accustomed to abuse, though it was usually pitched at a lower volume. Revenue ministers had been hearing since 1917 that income taxes were too high, tax compliance too complex, tax administration too inflexible.</p>
<p>Mitchell Sharp, Benson’s predecessor in Finance, called the annual review of letters from the public during the budget process a mixture of “interest, amusement, and boredom.” I’ve read the same letters, and <a href="http://www.ubcpress.ca/give-and-take">wrote about them</a> in my book <em>Give and Take:
The Citizen-Taxpayer and the Rise of Canadian Democracy,</em> and I know what Sharp meant. </p>
<p>The special pleading is snooze-makingly predictable. Colourful invective and crackpot remedies provide some comic relief.</p>
<p>But sometimes the letter writers went beyond the usual grinding of axes. Sometimes, and especially during the White Paper debate, they took a personal risk, and told the politicians something real about their lives and their communities.</p>
<h2>‘Lack of respect’</h2>
<p>One woman saw the big chain stores coming, and spoke for the local dress shops, independent gas stations and corner drug stores that added creativity and care, not just jobs, to their communities. Facing these threats in her business environment, she found the thought of an additional tax burden intolerable.</p>
<p>Others described how their business success was about more than money. A widow supporting her six children with modest investments in real estate was proud of how she had achieved independence through the exercise of her brains and energy. She saw in the tax changes a lack of respect for the effort that she had made.</p>
<p>And a father, stressed by having had to spend much of his disposable income on insurance premiums to protect his seven children and wife, worried that his father’s legacy to him, a trucking business, would not be passed on to his sons. </p>
<p>His concern about taxes cutting into his business’s income was about money, of course, but he and others who wrote that they were “frightened, angry, and frustrated” were also expressing their feelings as parents.</p>
<p>These types of letters made it clear that small business ownership was not just an economic interest but also an honourable personal identity, something that one tax reformer belatedly recognized was “as sacrosanct as motherhood.”</p>
<p>Pensioners also brought something bigger than money into the conversation. Many of them, born within a few years of 1900, shared a strong generational identity. In letters to Benson, they wrote something like: “We lived through two World Wars, the Great Depression, and now … galloping inflation.”</p>
<p>Some of them were proud of having saved in spite of these obstacles. But in the 1960s, even the thrifty savers saw inflation turning their comfortable living into mere subsistence. People who hadn’t been able to save depended on the Old Age Security pension. Its value had been steadily shrinking in relation to prices.</p>
<h2>Tax anger linked to personal identity</h2>
<p>Most weren’t wealthy, but they lived on the income from small savings. Some lived close to the bone and were easily alarmed. The 20th-century generation had endured so much. They really did need to catch a break.</p>
<p>Small business people and pensioners were not the only Canadians who brought to tax reform a point of view that went beyond economic interest into the realm of personal identity. </p>
<p>Letters to Finance, both for and against the reforms, came from artists, amputees, the mentally ill and their families, students, people living in the North, foster parents, First Nations, female professionals, firefighters, ultra-Protestants, parents of young children and more.</p>
<p>They saw in the federal income tax a tool that could help them or hurt them in any number of ways. They called for fair tax treatment, and they meant not just a financial break, but recognition and respect for their struggles.</p>
<p>Many fears find a focus in blistering tax talk. When that anger takes the form of mud-slinging and misrepresention, it’s unfortunate.</p>
<p>But if we look for the honourable sentiments in tax outrage, we can see where impersonal forces of change are making for personal stresses.</p>
<p>In 1969, a lot had changed since the introduction of the mass income tax in 1942. The age of easy money was ending, and it was time for Canadians to talk seriously about what the state should and could do and how it should be financed.</p>
<p>Today we should ponder the same questions. </p>
<h2>Small businesses have suffered</h2>
<p>The battering of credit markets in 2008 and the bumpy economic ride since then, including austerity programs and their failures, have landed hard on small business and savers. </p>
<p>It’s a good time to ask whether we can do better, as a community and through government, to collect revenue fairly and to spend it in ways that support security for all Canadians, including small business.</p>
<p>Tax reform, then and now, brings out deeply felt competing positions on these questions, and helpfully so. Rage at taxes can get in the way of good answers by making our objective too simple — lower taxes. </p>
<p>But if we listen to the stories that people tell when they’re angry about high taxes, we can learn about more than merely taxes. What we learn might lead to meaningful changes both inside and outside the tax system.</p><img src="https://counter.theconversation.com/content/84812/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shirley Tillotson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Outrage over tax reform is nothing new. But if we can’t be calm about tax, we can at least learn from the stories spoken in anger.Shirley Tillotson, Professor of Canadian History (retired), Inglis Professor of University of King's College, Dalhousie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/845052017-09-21T22:47:44Z2017-09-21T22:47:44ZDown on the farm: tax reforms will hurt family businesses<figure><img src="https://images.theconversation.com/files/187135/original/file-20170921-30334-1rcssu4.jpg?ixlib=rb-1.1.0&rect=35%2C27%2C843%2C589&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Dairy cows at a family farm in Chilliwack, B.C. Sylvain Charlebois, a noted academic on food policy issues, says the federal government's proposed tax reforms will hurt family farms.</span> <span class="attribution"><a class="source" href="http://www.cpimages.com/fotoweb/cpimages_details.pop.fwx?position=1&archiveType=ImageFolder&sorting=ModifiedTimeAsc&search=11767271&fileId=7ED4E565C8CEED27AEA6EAB315B987A8EB1B023AB80A6779EEECB0F082709652BF4B180AE6F446F48ACB7DB1B8CDE7E37BF497D18515FAB7C57815DF9C7E71E1737892DD5BA3F69052E833AF84B460A366C5C783F97C728CB910651727E2C0824659CEF5EB788C83C532767AD380F645D77BAD04B306FF8CCC68F7125A9EC36CA762C230427A2B3A2574B0EB54ACE3B3">CANADIAN PRESS/Jonathan Hayward</a></span></figcaption></figure><p>Until recently, two things were certain in life: death and taxes. We can now add a third one: botching the promotion of a <a href="https://www.fin.gc.ca/n17/17-066-eng.asp">tax reform</a> for political gains. Finance Minister Bill Morneau’s tax reform has been a <a href="https://www.thestar.com/opinion/editorials/2017/09/15/tone-deaf-rollout-of-liberal-tax-reforms-a-lesson-in-how-good-ideas-go-sour-editorial.html">communications disaster</a>. </p>
<p>Claims about Ottawa’s intentions to revamp our tax system for small corporations have been ridiculous. Some predict a recession due to the changes proposed, while others declare the end of entrepreneurship as we know it. We should all take a collective deep breath and figure out how changes will affect our economy. </p>
<p>What needs to be underscored, though, is how Morneau’s vision for taxing small corporations will impact our agrifood sector.</p>
<p>Generally, the tax system is not really about pensions, legacy and social programs. Yet for a family-owned business, it is — and there are thousands of them in agrifood. In farming, Canada now has more than 43,000 incorporated farms, compared to around 23,000 incorporated farms in 2001.</p>
<h2>Proposed tax changes penalize families</h2>
<p>Despite the fact that we have <a href="http://www.statcan.gc.ca/daily-quotidien/170510/cg-a001-png-eng.htm">fewer farms overall today than in 2001</a>, more of them have opted to convert their operations into a corporation to provide an incentive to the next generation to take over the farm. </p>
<p>Proposed changes on capital gains would make it more expensive for a current family member to acquire the farm than for a third party. This is a critical piece of a highly complicated puzzle: <a href="https://beta.theglobeandmail.com/report-on-business/2016-agriculture-census-on-canadian-farms-older-hands-till-larger-fields/article34949582/">keeping families and jobs in rural Canada is not an easy task</a> and many agricultural producers are using our tax system wisely to secure the future of their businesses.</p>
<p>In food processing, retailing and in the food service sector, countless family businesses are wondering how family values immeasurably embedded in anything the corporation does can survive the next generation.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/187134/original/file-20170921-9750-1bc8nsy.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/187134/original/file-20170921-9750-1bc8nsy.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/187134/original/file-20170921-9750-1bc8nsy.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=331&fit=crop&dpr=1 600w, https://images.theconversation.com/files/187134/original/file-20170921-9750-1bc8nsy.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=331&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/187134/original/file-20170921-9750-1bc8nsy.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=331&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/187134/original/file-20170921-9750-1bc8nsy.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=416&fit=crop&dpr=1 754w, https://images.theconversation.com/files/187134/original/file-20170921-9750-1bc8nsy.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=416&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/187134/original/file-20170921-9750-1bc8nsy.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=416&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Agriculture in Canada continues to decline.</span>
<span class="attribution"><a class="source" href="http://www.statcan.gc.ca/daily-quotidien/170510/cg-a001-png-eng.htm">Handout/Statistics Canada</a></span>
</figcaption>
</figure>
<p>Income sprinkling is another issue Morneau is attempting to address. Presently, corporations can hire family members who work for the enterprise, which reduces the tax rate for everyone. Current rules about who can be compensated and at what level are ambiguous, at best. Morneau wants to change that, and for a good reason. </p>
<p>Several small corporations pay family members, who do not necessarily work for the company, to pay less taxes. This practice should stop but family businesses are really a different breed. </p>
<p>Defining tasks in a family-owned business can be difficult. Many of the contributions made by family members are ad hoc and not easily categorized. Recipes, tricks of the trade, family traditions all matter a great deal to whatever a small food outlet is doing. It is nothing like being an accountant, a doctor or a dentist. </p>
<p>A family business is like — well, a family. The enterprise survives daily by relying on favours and duties as assigned. On a family-owned farm, a restaurant or in a small food processor, job profiles are vague, at best.</p>
<h2>Condescending, awful rhetoric</h2>
<p>This political nightmare began in July when Ottawa launched a consultative process on how best to address tax planning practices that it believes are being used to gain unfair tax advantages. Individuals set up corporations to pay less in taxes in a variety of ways. Ottawa’s intentions are noble, but it is the bombastic tone used as a backdrop to promote the plan to Canadians that has been less than effective. Consultations end Oct. 2.</p>
<p>What has really caused many of the problems is the awful, condescending rhetoric coming out of Ottawa, labelling small business owners as a group of cheats and greedy tax evaders trying to dodge the system by using loopholes. That was simply insulting.</p>
<p>The government anticipates that the new regulations will bring in barely $250 million a year. For those thinking that the Liberals are looking for ways to increase revenues to pay for a ballooning deficit, they are wrong. This is really about politics, purely and simply.</p>
<p>Prime Minister Justin Trudeau’s egalitarian agenda to serve the so-called middle class is motivating the government to implement these changes. The tax regime needs change as some small corporations are using current tax rules to save money unjustifiably. </p>
<p>Most opponents have been quite vocal in recent weeks, but their corporations will survive the changes. However, <a href="http://www.cbc.ca/news/canada/toronto/family-farm-aging-farmers-canada-1.4207609">the stakes are much higher in agrifood and farming</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/187133/original/file-20170921-7480-xaux3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/187133/original/file-20170921-7480-xaux3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/187133/original/file-20170921-7480-xaux3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=776&fit=crop&dpr=1 600w, https://images.theconversation.com/files/187133/original/file-20170921-7480-xaux3g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=776&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/187133/original/file-20170921-7480-xaux3g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=776&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/187133/original/file-20170921-7480-xaux3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=976&fit=crop&dpr=1 754w, https://images.theconversation.com/files/187133/original/file-20170921-7480-xaux3g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=976&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/187133/original/file-20170921-7480-xaux3g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=976&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Highlights of Statistics Canada’s 2016 Census of Agriculture.</span>
<span class="attribution"><a class="source" href="http://www.statcan.gc.ca/pub/11-627-m/11-627-m2017010-eng.htm">Handout/Statistics Canada</a></span>
</figcaption>
</figure>
<h2>Agriculture, food sector at risk</h2>
<p>This is not about being unwilling to pay more taxes. Rather, it is about the viability of an entire economic sector. Our tax regime should differentiate and give our rural economy and family corporations some level of immunity. </p>
<p>Ottawa should think of fiscal incentives the agrifood sector can use to grow. Right now, it is not clear how this can be achieved. As Ottawa is attempting to bring more fairness to our fiscal landscape and fix what is largely an urban issue, it shouldn’t penalize our agrifood sector.</p>
<p>Despite Morneau’s disgraceful performance as a tax reform salesman, changes will most likely happen, to the despair of many. Changes to our tax system are obscure concepts for most Canadians who have never had a company. Even Canadians with corporations would have a hard time understanding what is being proposed. </p>
<p>The confusion that has led to the hysteria we are seeing today is really the government’s fault and no one else’s. When it comes to taxes, painting everyone with same brush is unacceptable.</p>
<p>Ottawa will get its way in the end, but it should at the very least accommodate the unique intricacies of our agrifood sector.</p><img src="https://counter.theconversation.com/content/84505/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sylvain Charlebois does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Family farms, restaurants, other food businesses and the rural economy will suffer under federal tax proposals for small businesses,Sylvain Charlebois, Professor in Food Distribution and Policy, Dalhousie UniversityLicensed as Creative Commons – attribution, no derivatives.