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Trevor Tombe: Inflation will fall in 2022

Commentary

To close out the year, we’ve asked our contributors and staff to make a prediction about 2022. You would think, at least since the early days of 2020, that we’d have learned our lesson about making predictions, but we couldn’t resist. Feel free to save these if you want to embarrass us with them later.


Making economic predictions is often a fool’s errand—especially now, thanks to COVID—but at the risk of future embarrassment, I’ll make one here: by late 2022, Canada’s inflation rate will ease back into a normal range of between 1 to 3 percent.

The reason I say this is simple: the single largest contributor to the 4.7 percent inflation rate in November is high and rising energy prices. Excluding energy, the 4.7 would have been 3.3—and excluding all the cascading implications of energy prices on goods and services throughout the economy, it would have been even lower still. For perspective, each 10 percent rise in energy prices increases Canada’s overall CPI by nearly 0.7 percent. Recent energy price increases are also an outlier. Across all goods and services, the median price increase in November was 2.8 percent—half of products saw a smaller increase and half saw a larger one. So while there’s certainly pressure on prices—from supply chains to droughts—when it comes to the overall high rates we’ve seen recently, energy is (almost) the whole ballgame.

As an Alberta resident, to be clear, I hope energy prices rise even further (prices at the gas pumps be damned!), but this doesn’t appear likely. Through 2022, energy prices are poised to decline. In November this year, the average oil price was over $79 per barrel. Markets (at the time of writing this in mid-December) expect that to be around $67 per barrel by November 2022. Rather than adding to inflation, this means energy prices may pull down the average—potentially by a full percentage point. This alone appears sufficient to bring overall inflation down to normal.

Of course, so much is uncertain. But appreciating the basis for my prediction may, at the very least, help us better understand why measured inflation is high today.

Howard Anglin: Abandoning the Notwithstanding clause won’t save us from politics, but it will make our rulers less accountable

Commentary

One of medieval Europe’s most peculiar folk beliefs was that, under pressure, a beaver will chew off its own testicles. For some reason, this legend comes to mind a lot these days. The most recent prompt was an article by Andrew Potter, one of our most thoughtful and percipient thinkers, that called on the federal parliament to repudiate the use of the Notwithstanding clause “always and everywhere, no matter the province, no matter the government, no matter the reason.”

He’s hardly the first. In the 2006 federal election, a desperate Paul Martin unsuccessfully tried to wedge Stephen Harper by pledging never to use the clause. Before that, in the throes of Meech Lake negotiations, Brian Mulroney criticized it as “that major fatal flaw of 1981.” That was all political grandstanding. No one really doubted that, faced with a court decision that truly offended national sensibilities or obstructed essential public policy both leaders would have gratefully reached for section 33 of the Charter.

For parliament to renounce the use of section 33, even symbolically, would be an extraordinary act. It would be an admission by our elected representatives that, spavined by responsibility, they no longer trust themselves or the people who elected them to decide contentious political questions, or even which questions are so contentious that they should be spared the work of resolving them. Extraordinary, but perhaps not surprising. Parliamentary democracy in Canada has been moribund for some time—surrendering its last vestige of authority, the last reminder of what it was like to be a governing body, would probably come as a relief.

The catalyst for the current wave of democraphobia is the case of Fatameh Anvari, the Grade 3 teacher removed from a Quebec public school classroom because she was wearing the hijab, which is prohibited under provincial law. I can understand why frustration with the government of Quebec has spilled over into frustration with section 33, which the government used to shield the law from constitutional review, but the confusion reflects a short-sighted view of law and politics. It also misunderstands of the role of section 33 in mediating between them.

The old saying is that hard cases make bad law. Apparently easy ones do too, if you are really prepared to throw out the idea of self-government over a single offensive law. If you are willing to hand final policymaking power to judges in all cases “always and everywhere … no matter the reason” over one instance of injustice, then what will you say in the face of a manifestly unjust or irrational judicial decision? By the same logic, you should abjure the system of judicial supremacy after each offensive court decision. Which would leave us precisely nowhere.

Section 33 is a neutral constitutional provision, and those who disclaim its use on one question may find themselves wanting to reclaim it for another. If courts were invalidating COVID-19 restrictions as unjustified infringements on personal liberty, many of the people calling for section 33 to be repudiated over Bill 21 would be demanding that Trudeau and the premiers use it to protect vaccine passport schemes. The proper response to bad democratic decisions is not less democracy, but better democracy. And the answer to bad judicial decisions is the same. That is why we have, and why we need, section 33.

Many of today’s opponents of section 33 forget that the wind blows in different directions at different times.

Reading most commentary today, you would think that section 33 is a puzzling anachronism, a sort of constitutional appendix that we only notice when it gives us appendicitis. Part of the fusty impedimenta of the Old Canada that should have been swept away when Pierre Trudeau modernised the constitution and retrofitted it with the shiniest modern conveniences of fashionable thinking circa 1980. You wouldn’t know that it was intended to preserve just some of the parliamentary power that still persists mostly unchallenged in other Westminster democracies like the United Kingdom, Australia, and New Zealand, or that its pedigree is more progressive than conservative.

Potter gives the credit for section 33 to Alberta, but Peter Lougheed was only one of many co-authors. At various times during the negotiation of the Constitution Act, 1982, Saskatchewan NDP premier Allan Blakeney, Manitoba premier Sterling Lyon, and Ontario Attorney General Roy McMurtry all pushed to retain a democratic safety-valve.

Blakeney later wrote an article explaining why. He was old enough to remember the Lochner Era in the United States, when the Supreme Court nullified labour laws intended to protect workers with minimum wages and maximum hours on the grounds that they violated the constitutional right to freedom of contract. Blakeney knew what many of today’s opponents of section 33 forget: that the wind blows in different directions at different times, and the court that is your friend today could be your oppressor tomorrow.

I can’t find any evidence that Allan Blakeney was familiar with the work of JAG Griffith, but if the two philosophical allies didn’t know each other, they should have. A legal scholar and a social radical, Griffith was also a passionate defender of democratic self-government. In his 1978 Chorley Lecture, he summoned the zeal of the Welsh nonconformist chapel (his father had been a Baptist minister) and the pawky realism of the LSE functionalists (his mentors included Ivor Jennings and Harold Laski) to his defence of the right of the people to know who their rulers are and, if necessary, to toss them out on their ears. “I believe firmly that political decisions should be taken by politicians,” Griffith wrote, and “this means by people who are removable.”

Although he would live to see successive Conservative and New Labour governments dismantle policies he approved and enact laws he opposed, Griffith stuck to his principles. First among these principles was that, for all its genteel formalities, “law is politics carried on by other means,” which means “law is not and cannot be a substitute for politics.” Responding to proposals for a British Bill of Rights, he objected that “[t]o require a supreme court to make certain kinds of political decisions does not make those decisions any less political.”

Give the old socialists of the LSE this: when it came to power, they were clear-eyed and hard-nosed. They had lost political fights in the courts and at the ballot box, and they knew that they had a better chance of a rematch in the latter case. They were also rightly suspicious of attempts to hide the real sources of power and to keep them away from the people. They knew that, whether you dressed it up in robes or dressed it down in rags, the project of governing is politics all the way down, and all the way up.

Another person who knew this from hard experience was the late Tony Benn, a member of the British parliament for more than 50 years and the conscience of the British Left from the 1950s till his death in 2014. Benn had five questions that he said should be asked of anyone who exercises power, which he would scrawl on classroom chalkboards and recite at rallies:

  • What power have you got?
  • Where did you get it from?
  • In whose interests do you use it?
  • To whom are you accountable?
  • How do we get rid of you?

The last question was, of course, the most important. A stirring obituary in The Nation recorded that Benn believed: “Anyone who cannot answer the last of those questions does not live in a democratic system” and that is why, “no one with power likes democracy.”

Most skeptics of self-government are content to trust policy-making to the courts because they assume judges generally think the same way they do about politics.

Protesting silkily that in a “liberal” democracy, of course, some questions are so important that they should be decided in cool marble courtrooms rather than in the noisome squalor of the agora doesn’t take the politics out those questions. It doesn’t even take the questions out of politics: it just removes them from one political body and hands them to another, unaccountable, one. There is also something strange about insisting that the interpretation of rights should not be resolved by crude majoritarianism and then declaring the 5-to-4 decision of a court beyond demurral.

It is hard to escape the suspicion that most skeptics of self-government are content to trust policy-making to the courts because they assume that judges generally think the same way they do about politics. Whether say it out loud where the people might hear, or even admit it to themselves, they believe that a judge with a graduate degree and a smooth progression to the top of his profession is more likely to share their assumptions and their prejudices than the general population and the people they elect.

But before we appoint judges as our moral or philosophical arbiters, can we at least ask: is there any reason to think they are particularly good at moral or legal philosophy? Having attended law school, I can’t imagine a worse way to prepare someone to resolve contentious social questions. The practice of law may qualify a judge to opine on regular matters of law, but the Charter is not a regular sort of law and there is nothing particularly legal about the methods our judges use to decide Charter cases.

The Supreme Court of Canada decides Charter cases using something called the Oakes test, which is named for the 1986 case of R. v Oakes in which the Court concocted it. Since then, it has so assumed the status of constitutional writ that a judge friend tells me that some of his colleagues are surprised to learn that it is not actually in, let alone required by, the constitution. The test is a form of proportionality review, a multifactor balancing test that the Court likes describe as a rigorously empirical exercise. In practice, it is an exercise of balancing incommensurable values in which the scales exist only in the judges mind. For all the show it makes of the programmatic weighing of evidence, it is less like principled or evidence-based decision-making and more like sticking a finger in the philosophical wind.

It doesn’t help that many Canadian commentators, and especially Canadian lawyers who should know better, make the mistake of talking about Charter rights as though they were something fixed and easily knowable. The provisions of the Charter are not self-enforcing. They were deliberately framed in abstract terms and their application to a specific case is a matter for reasonable disagreement. Even judges looking at the same set of facts often disagree on whether or how the Charter applies, which is why we have judicial dissents. We shouldn’t hide from this ambiguity, either by pretending that the Charter is something that it is not or that it must mean only whatever the Supreme Court of the day’s wet finger says it does.

Disagreement in a society over the proper balance of individual rights and common good is healthy. In any event, it is inevitable. We are individuals who are also social animals and the process of living with others creates conflicts that cannot be resolved by appealing to the aspirational statements in the Charter. How those principles should be interpreted and applied are, as Griffith said, “the very questions which divide not unify opinion.” Everyone can agree that protecting free speech is important, but ask where the line should be drawn between offensive speech and hate speech, for example, or what qualifies as obscenity, and the consensus quickly fractures. We are back to Tony Benn and the real questions of government: who decides, how, and for how long.

More than a century ago, James Bradley Thayer explained why the answer to those questions matters to the health of a democracy. He described how, as societies get used to deferring difficult questions of policy to judges, they abandon the habits of free people. Over time, he said, political institutions lose the “political experience, and the moral education and stimulus that come from… correcting their own errors.” The result “is to dwarf the political capacity of the people, and to deaden its sense of moral responsibility.”

We can see this atrophying of moral and political muscle here in Canada in calls to refer contentious bills to the Supreme Court even before parliament has begun debating whether they are good policy. Rather than do the job they were elected for, it seems that some of our politicians would rather delegate hard work of lawmaking to judges. This makes sense if they really do believe that it is up to courts and not parliament to decide how to accommodate individual rights to government for the common good. But, in that case, why do we keep electing them?

You will rarely hear anyone complain that Canada suffers from a surfeit of democracy. In fact, there is a cottage industry of scholarly and journalistic articles bemoaning our low voter turnout, our lack of civic engagement, and our withered and atrophied democratic institutions, starting with the federal parliament. (And that is just Andrew Coyne!) The contrast with the United Kingdom, where I live part-time these days, is striking. There, parliamentary debates are still a front page affair. Government ministers and members of the shadow cabinet still appear on morning radio and evening television news shows where they are subjected to intrusive interrogation of the kind Canadian politicians might only see during a federal election. Members of parliament still regularly vote against their party and—hold on to your seat—even publicly criticize their party policy and leadership.

Concern for the powers of parliament is also very much alive in the United Kingdom. The popular Brexit slogan “Take Back Control” was about returning power from the European bureaucracy to British MPs. And, just last week, the government tabled a bill to repeal the 1998 Human Rights Act and replace it with a new British bill of rights that could not be used by judges to overturn legislation (the current act doesn’t give them this power either, but it explicitly ties the interpretation of rights to a European convention, which the new bill would end).

There is an historical irony here. Responsible government—the idea that those who govern us must do so with the consent of the people through their elected representatives—started here in Canada. After the Durham Report of 1839 recommended that the colonies of British North America be permitted to control their own government through their elected representatives, the Canadian example was used to consolidate the same principle in the mother country. It is now considered a defining principle of the Westminster system around the world.

Two hundred years after we introduced the idea of responsible government, the British parliament is debating ways to strengthen its powers; back in Canada, the beaver is debating whether it really needs its testicles after all.