Business
With our economy becalmed, Good Ship Canada needs a new captain
From the MacDonald Laurier Institute
Output has been stagnant for five years now. Canada is ‘as idle as a painted ship upon a painted ocean’
One of my favourite poems is Samuel Coleridge’s “The Rime of the Ancient Mariner.” It describes a ship driven by storms towards the South Pole. An albatross saves the ship and crew but the Ancient Mariner kills it, an act of cruelty for which he is later punished, including by having to repeat the story to strangers for the rest of his life.
It is the verse “Day after day, day after day,/ We stuck, nor breath nor motion;/ As idle as a painted ship/ Upon a painted ocean” that became one of my favourites. It comes back to me periodically when life seems stalled.
Which is the case with Canada these days. Our economy is at a standstill. Interest rates are up and inflation, though trending down, remains stubbornly high. Real GDP growth these past four quarters (August 2022 to August 2023) was a feeble 0.9 per cent. Any growth we do have is from a policy-driven population expansion of close to three per cent. But per capita GDP actually fell 2.1 per cent over that period, which means Canadians are poorer today than they were a year ago.
And it’s not just this year. Canada has been a “painted ship on a painted ocean” for some time. From January 2018 to June of this year, our GDP per capita was flat, according to OECD data released this week. Add in July and August and Canada’s per capita real GDP has declined slightly — from $52,300 in January 2018 to $51,900 in August (in 2012 dollars).
With the pandemic and surging inflation after 2020, you might think other countries’ economies are also becalmed. But they aren’t. U.S. per capita real GDP is up 2.4 per cent over the past year and up 9.3 per cent since January 2018, from US$61,500 to US$67,200 (again in 2012 dollars). At today’s exchange rate, Canada’s per capita GDP is now just 56 per cent of America’s — ouch!
Nor is it just the U.S. we’re slipping behind. Compared to our own slight decline in real per capita GDP since 2018, the OECD average is up 5.6 per cent, though there’s considerable variation across countries. For example, resource-rich Australia’s real per capita GDP was up only 4.8 per cent — which was still better than here — but superstar Ireland’s was up fully 31.0 per cent.
Let’s face it: Sir Wilfrid Laurier’s famous 1904 prediction that “For the next 100 years, Canada shall be the star towards which all men who love progress and freedom shall come” seems hollow these days. It is not that we don’t have the potential to shine; it’s that we so often fail to. We do still attract immigrants, but they often leave — as much as 20 per cent of a cohort over 25 years according to the Conference Board. And if salaries here keep falling behind those in the U.S., will we still be able to attract the best and brightest?
Canada has always been a trading nation but exports as a share of GDP have been relatively flat this past decade. The oil and gas sector has been our most important source of export earnings, surpassing even motor vehicles and parts, but since 2015 the Trudeau government has actively discouraged its growth.
We have had our share of innovations over the years but R&D spending has slipped back to the same share of GDP as it was in 1998. It seems the only way for Canada to develop new things is to subsidize them to the hilt with multi-billion grants like the ones given this past year to three different battery manufacturers.
Our health-care system is a shambles, with long waiting lines and not enough doctors and health professionals. One index ranks Canada’s health system as only 32nd best among 166 countries (with Singapore, Japan, South Korea, Taiwan and Israel ranking highest). We know what the problems are, but we seemingly don’t have the will to fix them.
Our tax system is a mess, with high rates and far too many ineffective incentives. Canada now has one of the highest top personal income tax rates in the world but applies it at much lower incomes than elsewhere, beginning at only twice the average wage. One important driver of U.S. growth was the Tax Cuts and Jobs Act of 2017, which bolstered investment by 20 per cent, as shown in important research released last month.
We are a free rider in defence and security spending, at only 1.29 per cent of GDP, well below the minimum two per cent needed to fulfil our NATO obligations. Our financial contribution to modernize NORAD is lacking despite the growing importance of the Arctic to Russia and China. We have contributed little in the way of advanced weaponry or tanks to our allies in Eastern Europe or the Middle East. Europe is desperate for natural gas but instead of buying it from us it is having to import it from Qatar.
While regional tensions have always been a major part of Canadian history, we seem to have lost all sight of nation-building. National infrastructure projects are absent. Provincial trade barriers undermine internal growth but are hard to remove. Alberta, angry with a federal government intent on shackling its energy industry, is ready to pull out of the national social security system. Quebec is drastically hiking tuition fees on students from the rest of Canada who attend its anglophone universities.
To fulfill its remarkable potential, this country cannot remain a painted ship upon a painted ocean. Someone needs to move the ship forward.
Business
Long Ignored Criminal Infiltration of Canadian Ports Lead Straight to Trump Tariffs
Sam Cooper
Briefings to Liberal Government on Chinese Infiltration of Vancouver Port and Canada’s Opioid Scourge Ignored
Trump Tariffs Loom as Critics Decry Ottawa’s “Fox in the Hen House” Approach to Border Security
As President Donald Trump readies sweeping tariffs against Canada on Saturday—citing Ottawa’s failure to secure its shared North American borders from fentanyl originating in China—The Bureau has obtained a remarkable December 1999 document from a senior law enforcement official, revealing Ottawa’s longstanding negligence in securing Vancouver’s port against drug trafficking linked to Chinese shipping entities.
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The letter, drafted by former Crown prosecutor Scott Newark and addressed to Ottawa’s Security Intelligence Review Committee (SIRC), urged the body to reconsider explosive findings from a leaked RCMP and CSIS report detailing the infiltration of Canada’s “porous” borders by Chinese criminal networks.
Titled “Re: S.I.R.C. Review in relation to Project Sidewinder,” Newark’s letter alleges systemic failures that enabled Chinese State Council owned shipping giant COSCO and Triads with suspected Chinese military ties to penetrate Vancouver’s port system. He further asserts that federal authorities ignored repeated briefings and warnings from Canadian law enforcement—warnings based on intelligence gathered by Canadian officials in Hong Kong, who initiated the Sidewinder review.
Newark also warned that Liberal Prime Minister Jean Chrétien’s decision to dismantle Canada’s specialized Ports Police and privatize national port control had left the country dangerously exposed to foreign criminal networks, noting he had personally briefed the Canadian government on these concerns as early as 1996.
Addressing his letter to SIRC’s chair, Quebec lawyer Paule Gauthier, Newark wrote:
“As the former (1994-98) Executive Officer of the Canadian Police Association, I was assigned responsibility for dealing with the issue of the federal government’s changes to control of the national ports and policing therein.”
“This involved close examination of matters such as drug, weapon, and people smuggling through the national ports and, in particular, both the growing presence of organized criminal groups at ports and the ominous hazard control of those ports by such groups represented.”
Newark’s letter goes on to allege widespread failures in Ottawa that facilitated Chinese Triad infiltration of Vancouver’s port, revealing federal authorities’ reluctance to act on warnings from RCMP officer Garry Clement and immigration control officer Brian McAdam—former Canadian officials based in Hong Kong who had sounded the alarm, prompting the Sidewinder review.
Newark explained to SIRC’s chair that, during his tenure as Executive Officer of the Canadian Police Association, he prepared approximately fifty detailed policy briefs for the government and regularly appeared before parliamentary committees and in private ministerial briefings.
“I can assure you that in all of that time, no clearer warning was ever given by Canada’s rank and file police officers to the national government than what was done in our unsuccessful attempt to prevent the disbandment of the specialized Canada Ports Police in combination with the privatization of the ports themselves,” Newark’s letter to SIRC states.
The letter continues, noting that in October 1996, Newark met with Chrétien’s Transport Minister David Anderson—later addressing the Transport Committee—to highlight the imminent threat posed by Asian organized crime’s infiltration of port operations. Newark’s written briefing to the Minister underscored the gravity of the situation with a blunt question:
“Who exactly are the commercial port operators?”
Citing the Anderson briefing document, Newark’s letter to SIRC states that Anderson had been warned:
“We are, for example, aware of serious concerns amongst the international law enforcement community surrounding the ownership of ports and container industries in Asia and, in particular, Hong Kong, Taiwan, and the People’s Republic of China. There is simply no longer any doubt that drugs like heroin are coming from these destinations through the Port of Vancouver, moved by organized criminal gangs whose assets include ‘legitimate’ properties.”
The Anderson briefing also referenced a British Columbia anti-gang unit report, titled “Organized Crime on Vancouver Waterfront,” which made clear that the Longshoreman’s Union had been infiltrated by the Hells Angels.
“The movement of goods through Canada’s ports requires an independence in policing that is impossible without public control,” the report warned.
It concluded:
“This report should be taken as a specific warning to this Government that, prior to downloading operational control over the ports themselves to private interests, Government be absolutely certain as to who owns what—and that it can continue that certainty with power to refuse acquisition of port assets in the future.”
Scott Newark’s letter to SIRC then turns to new intelligence—gathered from Canadian and U.S. officials—that further underscored the vulnerability created by Chrétien’s border policies.
“To now learn that law enforcement and public officials in Canada and the United States have linked a company (COSCO), granted docking and other facilities in Vancouver, to Asian organized crime, arms and drug smuggling is, to say the least, disturbing,” Newark’s December 1999 letter states.
“That this company, its principals, subsidiaries, and partners have been associated with various military agencies of a foreign government—agencies themselves identified by Canadian and American officials as having unhealthy connections to Triad groups—makes a bad situation even worse.”
Newark next addressed the broader implications of Canada’s failure to enforce border security, particularly in relation to the deportation of foreign criminals—a process he had sought to reform while serving with the Canadian Police Association.
Drawing on his experience, he described a deeply flawed immigration enforcement system, one that allowed individuals with serious criminal records to remain in Canada indefinitely. The problem, he wrote, was twofold: not only were foreign criminals able to enter Canada with ease, but authorities also failed to deport those with outstanding arrest warrants.
Newark recounted how, in 1996, a Cabinet Minister requested that he meet with Brian McAdam, a former senior foreign service officer in Hong Kong who had spent years uncovering organized crime’s grip on Canada’s immigration system. McAdam’s detailed revelations, he wrote, had directly led to the launch of Project Sidewinder.
Newark told SIRC that even after leaving the Canadian Police Association in 1998, he remained in contact with McAdam and other officials working to expose this vast and complex national security risk posed by foreign criminal networks.
It was this ongoing communication that led to an even more alarming discovery. Newark wrote that he was stunned to learn that Canada’s government had not only terminated Project Sidewinder but had gone so far as to destroy some related files.
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Newark suggests SIRC’s chair, in her review of Sidewinder, should determine whether “Sidewinder should not have been cancelled … why such inappropriate action was taken and at whose direction this was done.”
He concludes that SIRC should also freshly examine why intelligence reporting from the Canadian officials in Hong Kong, Brian McAdam and Garry Clement had been ignored in Ottawa.
Newark’s letter to SIRC says these failures to act on intelligence included the “Inappropriate granting of visas to Triad members or associates” and “Granting of docking facilities with attendant consequences to COSCO”—and “Failure of CIC and Foreign Affairs to respond appropriately to the various information supplied by McAdam and Clement in relation to material pertaining to Sidewinder.”
In an exclusive interview with The Bureau, Garry Clement, who contributed to investigations referenced in Newark’s letter, corroborated many of its claims and provided further insight. Clement recalled his role in Project Sunset, a 1990s investigation into Chinese Triads’ efforts to gain control over Vancouver’s ports.
“I can remember having a discussion with Scott when he wrote that to SIRC because Scott and I go back a long time,” Clement said. “I knew about him writing on it, but I knew it was also buried.”
He described his own intelligence work during the same period:
“I wrote in the nineties when I was the liaison officer in Hong Kong, a very long intelligence brief on the Chinese wanting to basically acquire or build out a port at the Surrey Fraser Docks area. And it was going to be completely controlled by that time, with Triad influence, but it was going to be controlled by China.”
Clement expressed frustration that decades of warnings had gone unheeded:
“The bottom line is that here we are almost 40 years later, talking about an issue that was identified in the ‘90s about our ports and allowing China to have free access—and nothing has been done over that period of time.”
Newark’s urgent recommendation for SIRC to reconsider Sidewinder’s warnings on Vancouver’s ports was never acted upon.
“We still don’t have Port Police. We got nobody overseeing them,” Clement added. “The ports themselves, it’s sort of like putting a fox in the hen house and saying, ‘Behave yourself.’”
Finally, when asked about the Trudeau government’s claim this week that Canada is responsible for only one percent of the fentanyl entering the United States—a figure reported widely in Canadian media—Clement’s response was unequivocal.
“The fact that we’ve become a haven for transnational organized crime, it’s internationally known,” he said. “So when I read that, with the fentanyl—Trump is wrong in that there’s less than 1% of our fentanyl going to the United States. That’s a crock of shit. If you look at the two super labs that were taken down in British Columbia—I think there’s three now—the amount they were capable of producing was more than the whole Vancouver population could have used in 10 years. So we know that Vancouver has become a transshipment point to North America for opiates and cocaine and other drugs because it’s a weak link, and enforcement is not capable of keeping up with transnational organized crime.”
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That opinion is evidently acknowledged by British Columbia Premier David Eby, according to documents from Canada’s Foreign Interference Commission that say Eby sought meetings with Justin Trudeau’s National Security Advisor.
A record from the Hogue Commission, sanitized for public release, outlines the “context and drivers” behind Eby’s concerns, including “foreign interference; election security; countering fentanyl, organized crime, money laundering, corruption.”
The documents state Ottawa’s Privy Council Office—which provides advice to Justin Trudeau’s cabinet—had recommended that British Columbia continue to work with the federal government on initiatives like the establishment of a new Canada Financial Crimes Agency to bolster the nation’s ability to respond swiftly to complex financial crimes.
Additionally, the PCO highlighted that Canada, the United States, and Mexico were supposedly collaborating on strategies to reduce the supply of fentanyl, including addressing precursor chemicals and preventing the exploitation of commercial shipping channels—a critical area where British Columbia, and specifically the Port of Vancouver, plays a significant role.
Eby acknowledged the concerns again this week in an interview with Macleans.
“I understood Trump’s concerns about drugs coming in. We’ve got a serious fentanyl problem in B.C.; we see the precursor chemicals coming into B.C. from China and Mexico. We see ties to Asian and Mexican organized crime groups. We’d been discussing all of that with the American ambassador and fellow governors. That’s why it was such a strange turnaround, from ‘Hey, we’re working together on this!’ to suddenly finding ourselves in the crosshairs.”
Yet, despite Eby’s claims of intergovernmental efforts, critics—including Garry Clement—argue that nothing has changed. Vancouver’s port remains alarmingly vulnerable, a decades-old concern that continues to resurface as fentanyl and other illicit drugs flood North American markets.
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Business
Ottawa’s “Net Zero” emission-reduction plan will cost Canadian workers $8,000 annually by 2050
From the Fraser Institute
Ross McKitrick
Canada’s Path to Net Zero by 2050: Darkness at the End of the Tunnel
The federal government’s plan to achieve “net zero” greenhouse gas emissions will result in 254,000 fewer jobs and cost workers $8,000 in lower wages by 2050, all while failing to meet the government’s own emission-reduction target, finds a new study published today by the Fraser Institute, an independent, nonpartisan Canadian public policy think-tank.
“Ottawa’s emission-reduction plan will significantly hurt Canada’s economy and cost workers money and jobs, but it won’t achieve the target they’ve set because it is infeasible,” said Ross McKitrick, senior fellow at the Fraser Institute and author of Canada’s Path to Net Zero by 2050: Darkness at the End of the Tunnel.
The government’s Net Zero by 2050 emission-reduction plan includes: the federal carbon tax, clean fuel standards, and various other GHG-related regulations, such as energy efficiency requirements for buildings, fertilizer restrictions on farms, and electric vehicle mandates.
By 2050, these policies will have imposed significant costs on the Canadian economy and on workers.
For example:
• Canada’s economy will be 6.2 per cent smaller in 2050 than it would have been without these policies.
• Workers will make $8,000 less annually.
• And there will be 254,000 fewer jobs.
The study also shows that even a carbon tax of $1,200 per tonne (about $2.70 per litre of gas) would not get emissions to zero. Crucially, the study finds that the economically harmful policies can’t achieve net-zero emissions by 2050 and will only reduce GHG emissions by an estimated 70 per cent of the government’s target.
“Despite political rhetoric, Ottawa’s emission-reduction policies will impose enormous costs without even meeting the government’s target,” McKitrick said.
“Especially as the US moves aggressively to unleash its energy sector, Canadian policymakers need to rethink the damage these policies will inflict on Canadians and change course.”
- The Government of Canada has committed to going beyond the Paris target of reducing greenhouse gas (GHG) emissions to 40 percent below 2005 levels as of 2030 and now intends to achieve net zero carbon dioxide (CO2) emissions as of 2050. This study provides an outlook through 2050 of Canada’s path to net zero by answering two questions: will the Government of Canada’s current Emission Reduction Plan (ERP) get us to net zero by 2050, and if not, is it feasible for any policy to get us there?
- First, a simulation of the ERP extended to 2050 results in emissions falling by approximately 70 percent relative to where they would be otherwise, but still falling short of net zero. Moreover, the economic costs are significant: real GDP declines by seven percent, income per worker drops by six percent, 250,000 jobs are lost, and the annual cost per worker exceeds $8,000.
- Second, the study explores whether a sharply rising carbon tax alone could achieve net zero. At $400 per tonne, emissions decrease by 68 percent, but tripling the carbon tax to $1,200 per tonne achieves only an additional 6 percent reduction. At this level, the economic impacts are severe: GDP would shrink by 18 percent, and incomes per worker would fall by 17 percent, compared with the baseline scenario.
- The conclusion is clear: Without transformative abatement technologies, Canada is unlikely to reach net zero by 2050. Even the most efficient policies impose unsustainable costs, making them unlikely to gain public support.
Ross McKitrick
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