The Weekly Look-Ahead

July 8, 2019

The House of Commons rose on June 20th and the Senate followed on June 21st. Major regulations on carbon pricing and edible cannabis have been finalized and posted. Canada Day came and went.

It’s summer in Ottawa.

In a typical year national political news moves to a slow burn once the barbeque circuit begins in earnest. There are always issues, of course, but it’s harder for the government and opposition parties to attract notice to big announcements.

That all changes in an election year. This year, the summer months will be used to trumpet achievements, announce funding, promote platforms and showcase leaders. In effect, the campaign has already begun and each news cycle will be assessed with one overarching frame of reference: did it increase or decrease the odds of success for Political Party X in October.

These are the stories that Sussex’s anticipates will shape the discourse this week.

1. China

Canada and China remain at a serious impasse stemming from the arrest and possible extradition of Huawei CFO Meng Wanzhou and the continued detention in China of Michael Spavor and Michael Kovrig. President Trump committed to raising the matter with President Xi on June 29th during a G20 meeting in Osaka, Japan. But the details of the conversation – and how assertively the President pressed Canada’s case – remain murky. Prime Minister Trudeau and his team, including Foreign Affairs Minister Chrystia Freeland, continue to insist that a diplomatic approach is working. But as China continues to ratchet up pressure, its officials in Ottawa have called this approach naïve. Canada needs its allies to step up in a more visible way, and soon. Anything short of a shoulder-to-shoulder display of solidarity (and consequences) will leave Prime Minister Trudeau looking weak on the global stage.

2. Infrastructure funding announcements

The Liberals have unapologetically run $20 billion+ deficits over their four-year term in office. The investments are needed, they say, to boost the economy and replace aging infrastructure. But with the election only months away there is still much money to be spent. To take just one example, the Champions Stream of the Low Carbon Economy Fund committed $450 million towards projects that will materially reduce greenhouse gas emissions. Only about $50 million of that fund has been publicly awarded. Similarly, the Canada Infrastructure Bank, which has $35 billion to lend, has financed only three projects to the tune of $3.8 billion. Many in Ottawa expect a flurry of funding announcements over the next few weeks to show that federal money is being put to work.

3. Federal Response to Ontario Carbon Pricing System for Large Emitters (EPS)

On Friday the Government of Ontario released the final regulation (O.Reg 241/19) regarding the Ontario Greenhouse Gas Emissions Environmental Performance Standard (EPS), along with amendments to the Greenhouse Gas Quantification, Reporting and Verification regulation (O.Reg 390/18). If this system is deemed by the federal government to be equivalent to its own backstop mechanism, the Ontario system will come into force. If, however, the federal government determines that the Ontario mechanism is not equivalent, or that such a determination can only be made during the formal review period in 2022, the federal system will continue to apply in Ontario. This week may be too soon to get a read on where the Liberals in Ottawa will land on this issue, but many – including the Sussex team – will be trying to read the signs and gather intelligence.