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If you’re interested in foreign affairs, tonight is the only chance to hear the leaders debate it

News

Welcome to The Hub’s Federal Election 2021 Policy Pulse, where we’ll be tracking all the policy announcements from the major parties, with instant analysis from our crew of experts.

With the election scheduled for Sept. 20, we’ll be monitoring 36 days worth of policy ideas, so watch out each morning for the day’s live blog where we’ll be tracking every announcement as it happens.

4:15 p.m. — If you’re interested in foreign affairs, tonight is the only chance to hear the leaders debate it

By Amal Attar-Guzman, The Hub’s associate editor

At tonight’s French-language debate, five major topics will be debated:

  1. Indigenous peoples and cultural identity
  2. The cost of living and public finances
  3. The environment and climate change
  4. Justice and foreign policy
  5. The pandemic and health care

And in tomorrow’s English-language debate, foreign policy is the only topic out of the five that will not be debated by the five party leaders.

That means if you are interested in Canadian foreign policy and foreign affairs, you will have to tune in to tonight’s debate.

Here are two main foreign policy issues to look out for:

  1. China

Labour Day weekend marked the 1,000th day since the two Michaels — Michael Spavor and Michael Korvig — were imprisoned in China. Around 150 Canadians in Ottawa attended the “March for the Michaels” to mark the day.

Foreign Affairs Minister Marc Garneau issued out a statement on the sombre milestone, expressing the unjust detention of the two Michaels and demanding that they “must come home.” Because of the milestone and its acknowledgment from the government and party leaders, issues surrounding China-Canada relations should be at the top of the agenda for the foreign affairs segment of the debate.

  1. Afghanistan

Afghanistan will also surely be a big issue tonight. The same day the writ dropped, Kabul fell. From mid-August towards the end of the month, CAF were deployed in the Afghanistan for evacuation efforts. More than 3,700 people got evacuated and the government committed that 20,000 Afghans will be resettled in Canada.

The government’s response and evacuation efforts has been criticized all throughout the crisis. In fact, the Globe and Mail’s editorial board has criticized Canada’s response in a piece published today. Foreign Affairs Minister Marc Garneau has even accepted such criticism on Canada’s response as fair. With 1,250 Canadians, permanent residents and Afghans with ties to Canada still remaining in Afghanistan, Canada’s role and efforts in Afghanistan should be scrutinized tonight.

If you don’t speak French, do not fret. Live translations will be available on various different formats.

3:00 p.m. — Boosting the Canada Workers Benefit will improve the lives of workers and their families

By L. Graeme Smith, The Hub’s content editor, and Sean Speer, The Hub’s editor-at-large

Both the Liberals and Conservatives have made promises to expand and improve the Canada Workers Benefit in the campaign. Most recently, Conservative Party leader Erin O’Toole profiled his party’s plan to double the CWB which would increase the maximum benefit to $2,800 for individuals and $5,000 for families.

The Conservatives characterized the increase as the equivalent of a $1 dollar per hour raise for low-income Canadian workers earning between $12,000 and $28,000 annually per year. 

The Conservative policy backgrounder doesn’t provide any estimates or analysis on the possible effects on poverty rates or the long-term outcomes for children in Canada, but new research from the United States may provide some window into its broad-based impact.

A bit of a background: The CWB is broadly modelled on the Earned Income Tax Credit (EITC) in the United States, which was enacted in 1975 during the Ford administration and has since been expanded on multiple times, with support from both Democrats and Republicans.

Because the EITC has been around much longer than the CWB, the empirical research, including its anti-poverty effects and benefits for children, is much richer. Consider the following:

  • A 2019 study, for instance, estimated that in 2018 the EITC lifted about 5.6 million people out of poverty, including about 3 million children.
  • The EITC is directly connected with positive employment outcomes, such as encouraging large numbers of single parents to enter the workforce, contributing to higher wage growth, and even resulting in higher social security contributions and benefits. It also drove a 4-percentage point rise in mothers’ employment.
  • More than 60 percent of those who received the EITC between 1989 and 2006 did so for only a year or two at a time.
  • Research suggests that EITC contributes also to a broader range of benefits for children living in these households. Increased EITC payments have been associated with reduced psychological stressimproved physical health, and increased use of prenatal care among low-income expectant mothers. These benefits were, in turn, passed along to babies, who were less likely to have low birth weights—a risk factor for health problems later in life.

The upshot: Canada’s political consensus in support of the CWB, like the American consensus in favour of the EITC, seems rooted in a clear set of evidence that these types of targeted income supplements for low-income workers can produce significant short- and long-term benefits for the affected worker and his or her family.

1:00 p.m. — Two big francophone issues that could feature in tonight’s French-language debate

By Antonia Maioni, a political science professor at McGill University

A week in politics is a long time, as we know. Tonight’s second French-language debate could reflect that. There are plenty of policy issues that raised hackles in the first debate last week — child care, gun control — but there are also a couple of non-scripted events of the past few days reported in francophone media that may have particular resonance in Quebec.  

The “book-burning” episode at an Ontario school commission targeted French “bande-dessinées” (comic books) such as Tintin and Astérix that, while obviously carrying plenty of outdated baggage, are part of the fabric of francophone culture. While this project has been roundly denounced by all party leaders, it still leaves an opening for some push and pull on questions of reconciliation and different political means by which to achieve it.   

And, more language wars could be looming. In addition to the federal election, municipal elections are underway in Quebec. A candidate for former mayor Denis Coderre’s party, who is also chair of the English Montreal School Board, was shown the door for his active opposition to a major language reform effort that the Quebec government wants to enact to strengthen provincial language laws.

The EMSB is urging the feds to refer Bill 96 to the Supreme Court in the hopes it will be declared unconstitutional.  But francophone Quebecers are resoundingly in favour of enhanced language protection, and they will be watching how federal party leaders react to what Premier Legault has labelled a “radical” response from the English-language community. 

11:30 a.m. — The Canada Workers Benefit represents rare consensus on a benefit with a pro-work bias

By Sean Speer, The Hub’s editor-at-large

Over the weekend, Conservative Party leader Erin O’Toole announced that his party would double the Canada Workers Benefit (CWB). (He previously announced that the Conservatives would also double the disability supplement in the CWB.)

The design of the CWB is a bit complex and wonky. Most Canadians are probably not familiar with it. It’s still a relatively small program: Only about 1.4 million people currently claim the CWB each year.

The basic idea is to provide an income supplement for low-income workers for two main reasons: (1) to ensure that the trade-off between employment income and public benefits doesn’t leave workers and their households worse off and (2) to boost the market wages of the working poor.

One might think of the CWB as a basic income with a pro-work bias. It represents in this sense a useful synthesis of the Left’s concern for people’s material needs and the Right’s understanding of the non-material benefits of work.

It’s perhaps no surprise therefore that the CWB was enacted by the Harper government and subsequently expanded by the Trudeau government with ongoing NDP support. In this election, both the Conservatives and Liberals have committed to further improvements — including automatic enrollment and increasing the frequency of CWB payments.

This political consensus in favour of a federal anti-poverty efforts that tilt in favour of work and self-actualization is a positive development.

As University of Victoria economist Rob Gillezeau and I wrote in Policy Options in 2016: “That the WITB has become a point of ideological convergence represents a positive nod in the direction of broad support for social mobility and for evidence-based policy.”

10:30 a.m. — Before looking at foreign competition for Canadian telecoms, we need to solve some structural problems first

By Vass Bednar, contributor at The Hub

The Conservatives recently announced a plan to lower cell phone bills.

While O’Toole acknowledged that, “a big reason for pricey cell phone bills is a lack of competition,” as I have described, there are significant structural problems that impede more robust competition in the telecom business. The very composition of how we deliver telecom — allowing providers to compete on both facilities and services — has inherent tensions. 

The O’Toole pledge promises to allow international telecommunications companies to provide services to Canadian consumers. I believe that suggesting we infuse foreign telecoms into the landscape without addressing the structures that limit the terms of competition is just recycling an old idea. As it stands, a foreign company can buy a Canadian telecom if they have less than 10 percent of the market and there is only a cap on foreign players growing through mergers and acquisitions.

Further, asking new providers to potentially build their own networks is economically inefficient. Incentivizing telcos to share their networks with smaller, independent providers will do more to help provide Canadians with more choice and lower prices. 

Experts and advocates have been clear that one of the most powerful interventions in the telecommunications space would be a pledge to reverse the 2021-181 CRTC decision in order to revert back to the evidence-based 2019 broadband wholesale rates. Another bold move would be to allow Canadian companies access to the cell phone market via MVNOs (mobile virtual network operators) like Data On Tap Inc.

Competition issues can be challenging to talk about in simple terms. The general policy space is not well understood and can be difficult to have a common conversation about. The barrier(s) to entry in the telecommunications space are slightly higher, given that it is doubly regulated by the Canadian Radio-television and Telecommunications (CRTC). 

Promising to lower cell phone bills isn’t a new idea, and the potential tactics to accomplish this are in dispute. Last election, the Liberals put forward their own vision to lower cell phone bills in 2019. The Government of Canada now reports on this quarterly; but there are a lot of empty boxes on the tracking sheets. Both the Liberals and the Conservatives are proposing a “use it or lose it” approach to purchasing wireless spectrum, which is something the UK and the US has adopted and that then-Minister of Industry James Moore cautioned in 2013.

It may be the wrong overall approach, but interrogating the factors that influence cell phone and internet prices is the right idea. The O’Toole platform speaks to competition issues and opportunities in the most direct way of all the party platforms. Keeping all of these proposals open to intellectual competition and inputs will be critical to refining their potential approach and achieving more meaningful policy action(s).

8:30 a.m. — Allowing foreign telecoms to compete in Canada is not a silver bullet, but it’s a step in the right direction

By Sean Speer, The Hub’s editor-at-large

Yesterday’s announcement by Conservative Party leader Erin O’Toole on liberalizing foreign ownership restrictions in the country’s telecommunications sector reflects an ongoing policy debate dating back to when now-People’s Party leader Maxime Bernier was industry minister in the Harper government.

It’s easy to forget that before Bernier was a polemical populist calling for a “revolution over tyranny”, he was a quirky yet conventional libertarian whose tenure as industry minister represented a short-lived attempt to free up the telecommunications sector from a distortionary combination of heavy-handed intervention and protectionism.

In 2006, then-minister Bernier issued a directive to the Canadian Radio-television and Telecommunications Commission requiring that it “rely on market forces to the maximum extent feasible” and “when relying on regulation, [to] use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary.”

He described the underlying policy thinking of the directive as follows: “it is not the role of government to decide how this increasingly complex market should evolve. It is up to you — producers and consumers.”

In subsequent years, though, the federal government’s policy deviated from this basic insight. Instead, successive governments pursued a combination of spectrum set asides, mandated facilities-based access, and other direct and indirect subsidies to try to create more competition in the telecommunications market. The so-called “fourth player” policy has been a shared project of both Conservative and Liberal governments.

Judging the overall outcomes of this series of market interventions can be a bit difficult. On one hand, it’s true that consumer prices have fallen due in part to the pressure of new market entrants. On the other hand, most of the new entrants never climbed the “ladder of investment” and have since sold out with windfall gains that represent in at least part an investment arbitrage from the design of the spectrum auctions.

The implication, of course, is that the additional competition was always artificial and would only persist as long as the government continued to intervene on its behalf. The risk is that, in the meantime, these interventions have diminished the conditions for private broadband investments (including possibly requiring greater public subsidies than would have otherwise been the case) and led to a transfer of value from taxpayers to investors.

O’Toole’s promise to liberalize foreign ownership restrictions for companies based in countries that grant reciprocal treatment for Canadian firms amounts to a potential return to something approximating the Bernier directive. It would pursue the goal of market competition through the unwinding of government intervention as opposed to its escalation.

That would be a positive development after years of layering interventions on top of another which culminated in the Liberal Party’s bizarre 2019 campaign promise to cut the cost of cell phone and wireless services by 25 percent.

Foreign investment liberalization isn’t a silver bullet. It’s hard to know if the Canadian market is big enough to attract foreign firms or what the market consequences may be if it was. It could even possibly lead to further market consolidation which would then need to be subjected to a competition review.

But if the Conservative Party’s promise is a part of a broader rethink of the federal government’s telecommunications policy in the name of “rely[ing] on market forces”, it would be a good step in a less distortionary and ultimately more sustainable direction.

7:00 a.m. — Where the leaders are today

All the leaders will be participating in the French-language debate tonight.

The real magic of new housing is that it frees up old housing

News

Welcome to The Hub’s Federal Election 2021 Policy Pulse, where we’ll be tracking all the policy announcements from the major parties, with instant analysis from our crew of experts.

With the election scheduled for Sept. 20, we’ll be monitoring 36 days worth of policy ideas, so watch out each morning for the day’s live blog where we’ll be tracking every announcement as it happens.

4:00 p.m. — The real magic of new housing is that it frees up old housing

By Chris Spoke, contributor at The Hub

A whopping 84 percent of Canadians say that housing affordability is somewhat or very important to them, according to a new survey conducted by Public Square Research for The Hub, and 80 percent would be happy if housing prices went down.

Housing affordability has emerged as a top issue this election season, and maybe even the top issue for Canadians living in big, expensive cities.

Only 15 percent of those same Canadians surveyed, however, support the idea that governments should help fast-track builders to get more housing built faster. For context, in Toronto, it can take five to eight years to get a development project through the entitlement process, construction, and occupancy.

So what’s the disconnect?

Many Canadians appear to be skeptical of the idea that new market-rate housing contributes to housing affordability for the simple reason that new housing is expensive. After all, it’s new, with (typically) better finishes and amenities.

The real magic, as we know, takes place in the second-order effects, as, for one thing, people move into new housing from old housing, freeing up their old housing for new people. Despite the existence of a vast and growing academic literature on the topic, these second-order effects have not yet been fully internalized.

3:00 p.m. — Canada’s spending on education continues to outpace enrolment and inflation

By L. Graeme Smith, The Hub’s content editor

The ongoing federal election campaign is far from the only thing happening in Canada at the moment. Millions of kids are also headed back to school. 

And while there may not be much focus on education during the campaign, mostly because it is a provincial jurisdiction (though not like that is a deterrent to the parties these days), it is surely an issue that is still top-of-mind for parents. 

A new Fraser Institute report assesses trends in educational spending across the country, finding that despite the oft-repeated narrative of cuts, Canada’s education spending has actually increased in public schools beyond what was required to account for enrolment and inflation. 

The study’s authors, Joel Emes, Nathaniel Li, and Paige MacPherson, examine the period from the 2014/15 school year to the 2018/19 school year in this study to find that enrolment in public schools increased by 3.2 percent nationally. After accounting for enrolment and adjusting for inflation, per-student spending saw an increase of 2.6 percent nationally over this period, with per-student spending (inflation-adjusted) having increased in seven of ten provinces.

Newfoundland & Labrador, Saskatchewan, and Alberta were the three provinces who experienced a decline in real per-student spending. 

The largest increases were to be found in Nova Scotia at 9.2 percent, Quebec at 7.3 percent, and Prince Edward Island at 5.1 percent. 

The authors note that if real per-student spending had remained constant from 2014/15 to 2018/19, total spending would have actually been 3.3 percent lower, rather than the 2.6 percent growth we have seen. 

The biggest contributing factor to this total growth in spending was a 13 percent increase in compensation spending over this period, including salaries, wages, fringe benefits, and pensions.

2:00 p.m. — Housing affordability will continue to be a problem if we don’t get serious about the solutions

By Ben Woodfinden, contributor at The Hub

Interesting polling released exclusively by The Hub this morning might help shine some light onto the counterproductive and, at times, actively harmful measures that governments have been taking in recent years to address housing affordability.

Canadians are worried about housing affordability and recognize the issue is ultimately exorbitant house prices divorced from any economic fundamentals. However, while people recognize the problem, the same cannot be said of the solutions. Most Canadians reject proposals that will ultimately help increase supply and get prices under control. 

Eight in 10 Canadians say they would be happy if home prices went down, with that number rising to nine in 10 for people aged 18 to 34 years old. Housing affordability also ranks as a top issue for Canadians. In theory this would be the basis for political action and solutions and parties have undoubtedly taken notice. 

But while this might sound like good news to housing advocates, it might be something of a double-edged sword. The most popular solutions are ones that will do little to actually reduce prices. Forty percent of Canadians think there should be a tax on unoccupied homes and 45 percent think non-residents should be banned from buying homes in Canada. Thirty-five percent of Canadians are supportive of providing tax credits for home buyers or providing incentives for first-time home buyers. This may explain why the current government has already tried first-time buyer subsidies. The problem of course is that subsidizing demand will not only reduce prices, it may further inflate prices by pumping more capital into the real estate market. 

What’s concerning however is that very few Canadians support real solutions. Only 15 percent of Canadians think it’s a good idea to fast-track development and only 18 percent think it’s a good idea to free up existing land to allow more houses to be built. Without increasing supply and density in the urban areas where housing is most in demand, prices are only going to keep going up.

The polling pretty succinctly captures the political conundrum we’re in. We recognize the problem and want solutions, but only support bad policy decisions that do nothing to address the underlying problem. Parties are not ignoring the housing affordability issue so much as giving people what they seem to want to address the problem. Until we see more widespread recognition and support for more building and increasing supply, housing is likely to remain a problem without serious solutions. 

1:00 p.m. — Canadian cellphone bills are extremely expensive

As we’ve previously noted on Policy Pulse, Canadians pay a lot for mobile data and the Conservative plan announced today aims to lower those prices with increased telecom competition.

Here’s the extent of the problem the party is trying to solve:

A report released this summer from the Sweden-based mobile analytics firm Tefficient found Canada is an extreme outlier when it comes to how much consumers have to pay for mobile data. It is a sobering document for Canadians, emphasizing just how expensive our rates are compared to global averages

Canadians, in fact, pay the highest total revenue per gigabyte in the world (utilizing data from 2019), at 14 Euros in mobile service revenue per gigabyte, or about $20 CAD. In comparison, most other countries studied paid in the range of zero to seven Euros, or about $10 CAD at the most.

12:00 p.m. — Exclusive poll: A huge majority of Canadians want home prices to go down

By Stuart Thomson, The Hub’s editor-in-chief

Canadians are so worried about housing affordability that even many homeowners would be happy if real estate prices dipped.

Eight in 10 Canadians say they would be happy if home prices went down, with that number rising to nine in 10 for people aged 18 to 34 years old. According to the poll, 60 percent of Canadians own their home, with 33 percent renting and seven percent living rent free.

Liberal supporters are less likely than the average person to want house prices to come down, with only 73 percent saying they would be happy with a drop.

Even though drastically increasing the supply of houses has been pegged by many experts as the solution to the country’s housing woes, Canadians are highly skeptical of more development.

The Conservative plan is ranked most favourably by poll respondents, but its key idea of fast-tracking development and providing incentives for more density is not popular. Only 15 percent of Canadians think it’s a good idea to fast track development and only 18 percent think it’s a good idea to free up existing land to allow more houses to be built.

Forty-seven percent of Canadians like the idea of the government building more affordable housing units. Forty percent of Canadians think there should be a tax on unoccupied homes and 45 percent think non-residents should be banned from buying homes in Canada.

Thirty-five percent of Canadians like the idea of providing tax credits for home buyers or providing incentives for first-time home buyers.

Housing affordability is in the top three issues for 23 percent of Canadians and 84 percent of Canadians say housing affordability is either very or somewhat important to them.

The election campaign has seen the parties repeatedly sparring over housing policy and revisiting the issue with multiple policy announcements.

The Conservative platform, which respondents to the poll rank as slightly better than the other parties, promises to get one million homes built in Canada over the next three years. Conservative leader Erin O’Toole says he will require municipalities receiving federal infrastructure money for public transit to build denser housing near the funded transit.

The Conservative plan would also ban foreign investors who don’t live in Canada from buying a home for at least the next two years.

The Liberals promised to build, repair or preserve 1.4 million homes over the next four years, along with a plan for a “first-home savings account,” which provide a tax-free way for young people to save for a down payment. The Liberals would also double the Home Buyer’s Tax Credit.

The NDP’s plan centers around a plan to build 500,000 affordable housing units over the next 10 years and a 20 percent tax on the sale of homes to people who are not Canadian citizens or permanent residents.

More than half of Canadians who own a home are concerned about a possible hike in mortgage rates and “everyday affordability” has also polled as an important issue in the election.

A third of Canadians rent their homes, with a third of renters having trouble paying their rent and 22 percent finding it hard to find affordable housing in the past two years. Thirty-two percent of Canadians say they’ve had some trouble paying rent recently due to the pandemic.

There is also a significant percentage of renters who either never want to own a home or consider it to be impossible.

Forty-two percent of renters say they will never be able to afford a home and 16 percent say they might buy a home in the next two years. 

The number of Canadians who think it’s a bad time for an election is 70 percent, which has been steady over the past week. Liberals are most likely to think it’s a bad time for an election, with 75 percent agreeing with that statement.

This research was conducted with an online survey of 1,500 Canadians on Sept. 1 who were selected from the Maru Voice panel. Although the data have been weighted to reflect the make-up of the country, no estimates of sampling error can be calculated because the respondents originally self-selected for the panel.

11:30 a.m. — Breaking down the Conservative plan for “super EI”

The back-half of the federal campaign is underway, and so far many of the biggest and flashiest issues have received sustained attention, from housing to vaccine mandates to planning for the coming economic recovery. 

But digging a little deeper, the Hub’s editor-at-large Sean Speer spoke to Yahoo Finance’s Crisis Management podcast about a Conservative proposal to adopt the little-known “Sahm Rule” in Canada’s EI system. The Tories propose to create a “super EI” that would automatically take effect if a province goes into a recession and sees a 0.5 percent increase in its unemployment rate.

You can listen to the breakdown on the podcast here.

10:30 a.m. — O’Toole announces plan to allow foreign telecoms to compete in Canada

Conservative leader Erin O’Toole was in Ottawa to announce a plan to allow international telecoms to provide services in Canada, provided Canadian companies are allowed to compete in the company’s home country.

The Conservatives also highlighted a promise to connect all Canadians to high-speed internet by 2025 and a plan to promote investment in local wireless and broadband projects.

9:15 a.m. — Trudeau highlights Liberal housing plan in Montreal

Liberal leader Justin Trudeau was in Montreal this morning to highlight his party’s housing plan.

The Liberals want to stop “renovictions” and deter “unfair rent increases,” introduce a rent-to-own program, create a tax-free home savings account for young Canadians and tax vacant foreign-owned homes. The Liberal platform also promises to ban foreign investors from buying residential property in Canada for the next two years.

8:30 a.m. — NDP promises $4.4 billion to modernize public transit

NDP leader Jagmeet Singh was in Toronto this morning promising to spend $4.4 billion to “modernize and expand public transit,” in a bid to fight climate change.

The NDP platform says the emphasis will be on low carbon transit projects, like zero emission buses and electric trains, with a plan to move toward electrifying transit fleets by 2030.

7:00 a.m. — Where the leaders are today

Liberal leader Justin Trudeau will make an announcement at 8:30 a.m. in Montreal.

Conservative leader Erin O’Toole will make an announcement at 10:30 a.m. in Ottawa.

NDP leader Jagmeet Singh will make an announcement about climate change at 8:30 a.m. in Toronto.