Thoughts on BC Politics and More

Higher gas prices driven mainly by the war in Iran pushed inflation higher in April but some economists argue the conflict’s looming costs haven’t been fully captured in the latest price data. Inflation rose to 2.8 per cent in April, Statistics Canada said Tuesday -- the highest annual inflation rate since May 2024. StatCan’s April report marks a jump from March’s inflation rate of 2.4 per cent, though a Reuters poll of economists had expected inflation would accelerate even more to top three per cent ... CLICK HERE for the full story 

IMAGE CREDIT :  CBC News   Prime Minister Mark Carney and Alberta Premier Danielle Smith announced a landmark agreement today committing Ottawa to designate a new pipeline to BC's west coast as a project of national interest by October 1, 2026, with construction approval targeted for September 1, 2027. The deal pairs the pipeline with a new industrial carbon pricing framework and a fall 2027 construction start. British Columbia, the province where the pipeline ends, where the jobs would land, and where the export terminal would be built, was nowhere at the table. "This is a nation-building deal, and the BC NDP have been locked out of the room," said Trevor Halford, Interim Leader of the Official Opposition.  "While the Prime Minister and the Premier of Alberta were doing the hard work of growing the Canadian economy, the NDP is on the sidelines calling this pipeline a 'fiction' and an 'energy vampire.'  He chose petulance over partnership, and now BC ...

How do nations generate wealth? That was the question Adam Smith sought to answer in his seminal 1776 work, The Wealth of Nations , which laid the intellectual foundation for modern capitalism and economic policy. The key, argued Smith, was in free markets and coordination through prices, rather than state intervention, using the “invisible hand” to match supply with demand. We now have 250 years of data to support Smith’s thesis. Free markets are not perfect, but they outperform state interventionism in the long term and provide greater prosperity and human development than any other system. This is newly relevant as Canada considers how it might generate wealth once again ... CLICK HERE for the full story  

As 2025 wraps up, Canada faces big economic changes. Years of building pressures have collided all at once, reshaping how businesses and governments operate. This isn’t temporary either. It’s the start of a new era—one that will shape economic outcomes and policy choices for decades. The sharp turn in U.S. foreign policy raises fundamental questions for Canadian security . But many other challenges are closer to home: rising uncertainty and the restructuring of global production, widening regional divides, a decades-long productivity problem, and mounting fiscal pressures that limit what governments can do. Each deserves a closer look ... CLICK HERE for the full story  

The Canadian economy topped expectations with a sharp rebound in the third quarter as a stronger trade balance helped fuel the recovery from a tariff-driven contraction. Statistics Canada said Friday that real gross domestic product rose 2.6 per cent on an annualized basis in the third quarter of 2025. That’s well above expectations from both the Bank of Canada and a poll of economists heading into the release for 0.5 per cent annualized growth. The figures mark a rebound from a contraction at an annualized rate of 1.8 per cent in real GDP for the second quarter as U.S. tariffs took hold on the Canadian economy. Those results were revised two tenths of a point lower from earlier StatCan reports ... CLICK HERE for the full story 

The numbers Canada uses to set policy don't add up -- Canada’s biggest policy mistakes come from treating complex systems as simple math By Roslyn Kunin   Here is an old story with a valuable message. In the directed economy of the USSR, it was the government, not markets, that decided what and how much was to be produced. Take metalware for the kitchen: mugs, mixing bowls, pots, pans, dishpans and washtubs. The government decided how much people needed and ordered the industry to produce that many tons at the lowest possible price. Quotas were met, the appropriate tonnage was produced and costs were controlled. But no mug, pot or dishpan was to be found. The industry found that the easiest way to meet its cost and quantity requirements was to produce nothing but washtubs. It is a valuable reminder today for Canada: when policymakers rely on a single number to steer complex systems, they almost always get the wrong results. There are at least three reasons why we need bett...

Listening to some commentators examining the fallout of the 2025 Budget, I am increasingly concerned that Finance Canada’s estimates of corporate tax competitiveness are being swallowed hook, line, and sinker without understanding the limitations of the analysis. The budget claims:     The productivity super-deduction will reduce Canada’s [marginal effective tax rate (METR)] by more than two percentage points, strengthening our competitiveness with the U.S. following measures implemented in the One Big Beautiful Bill Act (OBBBA). Moreover, Canada will have the lowest METR in the G7 and below the OECD average. This means that businesses can invest and scale more easily and that Canada will remain an attractive destination for investment . As I explain below, we are not as “tax competitive” as we think ... CLICK HERE for the full story

In a speech last week, Prime Minister Mark Carney repeated a line he had used to great effect earlier this year: “This decades-long process of an ever-closer economic relationship with the United States is now over.” As a consequence, he went on to say, “Our goal for Canada is to double our non-U.S. exports over the course of the next decade,” from roughly $300 billion today. And as if to reinforce the point, President Trump (though seemingly in response to an innocuous TV ad by Ontario) ended all trade negotiations with Canada the next day and increased the tariff on some of our exports by 10 percent. There has been no shortage of analysts unpacking whether doubling non-U.S. exports might be possible. Unlike much of what has already been written, though, I tend to think the goal is easy. Yes, easy. But in terms of boosting Canada’s economy, it won’t do much ... CLICK HERE for the full story

This week marks 10 years since that sunny fall day when the new Trudeau government was sworn in at Rideau Hall and Canada optimistically embarked on a decade of transformative social change. Ultimately, this agenda was not moored to any commitment to serious fiscal discipline or other economic fundamentals—it was policy outcomes, not their price tags, that were prioritized. This free-spending spree was disrupted by international events, including a pandemic, that only accelerated these tendencies. Ending Canada’s decades-long national consensus on the benefits of immigration by rapidly increasing the country’s intake numbers was a Hail Mary response to kickstart a moribund economy struggling to recover ... CLICK HERE for the full story 

The Canadian economy is weakening. The sluggishness—characterized by slow GDP growth and unemployment edging beyond 7 percent overall, with rapidly increasing joblessness, particularly among those between 15 and 19, at around 11 percent—is becoming harder and harder to wave away. The consensus now is that in 2025, growth measured by change in GDP will range from 1 percent to 1.8 percent. Yet even those alarming data don’t tell the full story. Tracking total GDP change as a leading indicator of how our economy performs risks understating the depth of the challenge we face ... CLICK HERE for the full story 

Canada’s weak growth, low investment and lagging innovation point to the need for a more modern regulatory philosophy that balances both protection and progress, according to a new report from the C.D. Howe Institute. In “Pruning the Rulebook: Canada’s Financial Regulatory Scorecard, Year Two,” Gherardo Caracciolo’s updated findings revealed similar results to last year's scorecard: despite mounting economic challenges, Canada’s regulators have largely maintained the same priorities. He finds that consumer protection and financial stability continue to dominate, while competition and innovation remain secondary concerns ... ... report highlights how countries like the United States, the UK, and Australia deliberately embed economic dynamism and efficiency among their regulatory goals. Canada’s more protection-focused approach reveals a sharp contrast, reflected in the administrative burden and steadily rising compliance costs faced by businesses ... CLICK HERE for the full story 

The Canadian economy is weak and struggling to find its footing as the trade war with the United States drags on. But, early indicators appear to show it has, against the odds, dodged an outright recession. "While the Canadian economy is under clear stress, the current contraction does not meet the definition of a recession with the data we have available," said Jeremy Kronick, co-chair of the C.D. Howe Institute's Business Cycle Council. GDP numbers set to be released on Friday will likely confirm that diagnosis ... CLICK HERE for the full story 

Canada’s economy shrank in the second quarter of 2025, but conditions do not yet meet the definition of a recession, according to a new Communiqué from the C.D. Howe Institute’s Business Cycle Council (BCC). In “Canadian Economy Contracts, But Does Not Meet Recession Definition,” the Council notes that real GDP fell 0.4 percent in Q2, driven by declines in exports and investment in machinery and equipment. The Bank of Canada responded with a policy rate cut, and the combination of a contracting economy and weak employment data has stirred recession fears. While one quarter of contraction meets a necessary condition for a recession, it was neither pronounced enough nor yet prolonged enough to qualify fully as a recession ... CLICK HERE for the full story 

Last weekend, Prime Minister Mark Carney prepositioned that federal revenues have fallen since last year’s economic and fiscal update, and the annual deficit will be bigger when his government tables its own budget next month. It prompts the question: What’s a good rule-of-thumb for revenues considering Canada’s deteriorating economy? Different methods will, of course, produce different results, but one common approach suggests that revenues could fall as much as $12.4 billion this year alone ... CLICK HERE for the full story 

Earlier this month, Statistics Canada reported that employment fell by 66,000 jobs in August. That headline caught attention—and rightly so—but it’s important not to overreact to any single month of data. Labour force surveys can be volatile and subject to revision. What matters more is the broader trend. But, unfortunately, that looks even worse. And Canadians are feeling it ... CLICK HERE for the full story 

A few months back I wrote that Canada cannot win a trade war with the United States and that we were dependent on their market for our goods.  That's still true today, and it's put us in a weaker position with negotiations. There's always a but though, and this time there's a good ‘but’. Maybe Canada and its federal government should pause all negotiations with the United States for the next year or two. Sound radical?  Shocking?   It is. But, there's no point in negotiating with Donald Trump's regime. Just ask Japan.  They had a deal for a framework to begin formal negotiations and then Trump broke it levying new tariffs. Worse, Japan's government thought they'd get a preferred access to the US market only to find out that the base rate on tariffs would be 15% and other countries would be getting that anyway. Canada isn't going to get much of a deal with Donald Trump today. He's got it in for us, and he thinks he's in the better position. In...

New federal polling from Pallas Data explores Canadians’ attitudes toward economic patriotism—their willingness to sacrifice prosperity or comfort in favour of national economic independence. This marks the first in a series of planned surveys on the topic by Pallas, and it comes at a timely moment, given the tense state of trade negotiations with the Trump administration. The results reveal generational, regional, and especially striking partisan divides. According to Pallas’ methodology, the Economic Patriotism Index (EPI) is based on four core questions ...  CLICK HERE for the full story

“Some resilience” — those were the two words Bank of Canada governor Tiff Macklem used last week to describe how the Canadian economy is holding up under the weight of U.S. tariffs. Just a few days later, U.S. President Donald Trump added 35 per cent tariffs on Canadian goods to a running tally that includes hefty duties on steel, aluminum, automobiles and, more recently, semi-finished copper. With tariffs piling up over the past few months, economists say Canada’s economy is starting to show cracks — but few signs of collapse. TD Bank economist Marc Ercolao conceded it’s a “bit of surprise” to see the economy holding up against a massive disruption from Canada’s largest trading partner ... CLICK HERE for the full story ...

That was an intense six months for Canadian businesses, consumers, and policymakers alike. Not quite the shock and urgency of the pandemic, or the existential peril of the Global Financial Crisis. But it was right up there. The first half of the year exposed Canada’s economic vulnerabilities. It gave Prime Minister Mark Carney not only an election victory but a wide berth to pursue his promised economic transformation. And we may have even seen the Canada-U.S. relationship fundamentally altered. Yet the crisis Carney warned of—the greatest of our lifetimes—has not materialized, at least not economically. And it may never will ... CLICK HERE for the full story 

Prime Minster Mark Carney came into office promising to move fast to rebuild a Canadian economy suffering from 10-years of mismanagement. He vowed a more clear-eyed, businesslike approach. But since his election victory, his public statements have often been hedged and shrouded in ambiguity.  In this incisive analysis, economist and veteran policy advisor Robert Lyman and C2C Editor-in-Chief George Koch look at the choices Carney faces on the big economic issues of the day and lay out the sensible decision in each case. Carney says he has the determination to turn the ship of state around. But does he have the courage to soften and even ditch the ideology that increasingly gripped the Liberal Party during the Justin Trudeau era?  CLICK HERE for the full story