National
The elements of Marc Garneau – A special report from Paul Wells
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He was trained to admit every error. Then he went into politics. A feature interview with the retiring MP for Notre-Dame-de-Grâce—Westmount
Introduction
When you resign your seat in the House of Commons, you get to keep your phone for 90 days. The deadlines for cleaning out your offices on Parliament Hill and in your riding are tighter but still civilized. Soon Marc Garneau will leave his constituency office on the third floor of a nondescript office building in Westmount, the affluent anglophone enclave west of downtown Montreal, for the last time. But there’s no rush, so he met me there on Monday.
Trying to get politicians to speak frankly while they’re still in office is not always rewarding, It gets easier quickly once they leave. So I thought a visit with Garneau was worth the drive to Montreal, even though he’s been cagey in his remarks to journalists since he announced his retirement on March 8. I’ll cut to the chase: His interview with me wasn’t the work of a rebel either. Garneau remains a gentleman and a Liberal. He offered only praise for Justin Trudeau. But on several issues — communications philosophy; the handling of the Freedom Convoy occupation of Ottawa; and the proper attitude toward one’s own fallibility — he drew occasional sharp distinctions between his attitude and the Trudeau government’s.
I took the scenic route to get to that stuff. Garneau was the first Canadian to fly in space. He was a national celebrity before Trudeau finished high school. And while that’s a historic distinction, Garneau shares with many more parliamentarians a long career outside politics that preceded, and informed, his career in elected office. Not all of that is the stuff of every conversation, but this one was valedictory in tone. I thought it best to start at the beginning.
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1. Water
I began by asking him about the year and a half he spent as a combat systems engineer on the HMCS Algonquin. When he arrived on board, it was the newest destroyer in the Canadian Navy.
“It was what I had dreamt of from the beginning of my life,” he said. “My first love was the Navy.” His father’s family was francophone Quebecers, soldiers from way back. His father fought in the infantry in WWII and was posted in Germany for two years as the Cold War settled in. “I crossed the ocean with my parents in 1956 coming back from Germany,” he said. “We came back on a ship that was on its last voyage, the Samaria, and I just fell in love with the ocean. A few years later, we went back to England on the Empress of Britain. Those confirmed for me that I wanted to be in the Navy.”
The Algonquin, a big boat with 280 crew, spent three months doing exercises as part of STANAVFORLANT, NATO’s multinational Standing Naval Force Atlantic, which would pretend the Soviet Union was up to various kinds of risky business and figure out ways to respond. Off Puerto Rico he led tests of the new Sea Sparrow missile system. Around Newfoundland’s outports, the Algonquin took the province’s lieutenant governor on an annual tour.
Young Garneau wasn’t particularly interested in moving up the ranks. “I’m an engineer. I didn’t want to be the ship captain. I wanted to be the engineer that kept the equipment going. That may not sound very exciting. But for me that was exciting, because it’s quite a job to keep all that equipment operational in case you had to go into conflict.”
2. Air
Advancement for its own sake held no appeal. But when he saw a nondescript ad from the National Research Council calling for applicants for Canada’s first astronaut corps, that sounded better than a promotion. “Wow. The idea of possibly going into space just blew me away. At the same time, I thought my chances [of being chosen] were pretty close to zero.”
In May of 1983 there were 4,200 applicants. Six months later, six remained. It became clear pretty soon the program wasn’t just looking for technical expertise but for — well, for heroes. Or at least for people who wouldn’t screw up the illusion.
“They wanted us to write essays about why we thought that we were particularly well suited. Did we realize that we would become public figures? And were we ready for that? And did we think it was important for Canada? Medical [exams] like you’d never had before. Every single thing checked, because you had to be 100% fit. Then they brought us in for the last week and and they subjected us to a whole bunch of things.
“We had to give presentations in front of the selection board. Any attempted humour was met with a stone-cold face. I remember coming out of it thinking, ‘I’ve totally bombed this.’ But they’d all been trained not to react to anything.
“Do you remember somebody called Keith Morrison?” I sure do. TV reporter and anchor, CTV to the CBC to NBC. He actually interviewed me once, when that was an odd thing to do, and I remember he was good at it. “Well, Keith was hired for the week. And he put us through our paces, sort of doing the interview thing. So that was another thing they wanted to know, if you’d be able to do that. They had us in social settings, like a cocktail kind of thing. [They wanted to see] whether you were relatively comfortable in the company of total strangers, that kind of thing. So it’s a pretty thorough week. And by the end of that, they said, ‘Look, stand by your telephone between five and seven on the third of December and you’ll get a call.’ We’re 20 at that point. ‘It’ll either be to say, sorry you didn’t make it, or, you made it.’ And I was fortunate to be one of the six chosen. They called about six o’clock. They didn’t beat around the bush. ‘Look, you made it. Congratulations. Keep it private and we’ll trot you out on the following Monday.’ Which they did.”
When you know what happened next in Garneau’s career, all this prodding and profiling and media scrutiny takes on a different meaning. He started to meet prime ministers.
Pierre Trudeau: “Man of powerful intellect. Everyone knows that. There are warmer people than Pierre Trudeau. But very cordial.”
Brian Mulroney: “Mulroney had just been elected. He wanted to meet Ronald Reagan right away… I was summoned, along with two of my crew members, Bob Crippen and Kathryn Sullivan. Which, by the way, is a total no-no. You do not take the next crew that’s going to fly in three weeks out of their bubble of training and getting ready. Except if it’s POTUS. Reagan thought it was good idea, so we were summoned. I spent time in the Oval Office with with Reagan, whom I liked right away, and Mulroney, whom I also liked right away…. I was even at the Shamrock Summit a couple of months later in Quebec City. I wasn’t quite so happy with what PMO told me to do, which is to come up through the floor on a thing that was raising me up with smoke and lighting on me, dressed in my flight suit, and having to say, ‘Take me to your leader,’ which the crowd liked. And I thought, ‘I’m making a fool of myself here.’”
On the first trip, Garneau was a payload specialist, which meant he had responsibility for a suite of Canadian scientific experiments and little else. But he had two audiences he wanted to please. NASA was the first. “I had to make a good impression so that, based on a sample of one, they’d say, ‘Okay, he did pretty well. Let’s keep inviting Canadians to fly.’ And quite a few Canadians have flown.”
Canadians were the second audience. “I wanted Canadians to be proud of me.”
Both audiences gave him the thumbs up. Today there’s a high school in Toronto named after him. In 1992 Garneau and Chris Hadfield reported for training to become mission specialists, with much broader responsibility for mission success. It took another year of training before Garneau was eligible for his second flight, in 1996. His third and final mission was at the end of 2000. There were Russians waiting at the International Space Station when the shuttle Endeavour delivered Garneau and the others. Relations with Russia were as warm as they’ve ever been. “It was more than cordial. Frankly our lives depended on one another.”
It was a longer acquaintance with higher stakes than most of us ever experience. “One of the things I loved the most about NASA was that if you fuck up” — he paused before using the salty word — “you confess. That is the culture there.”
Probably this does not need to be spelled out, but here goes anyway. This culture of honesty was not a simple preference. Shuttle crews rode a lake of liquid fuel and twin towers of solid fuel at speeds their own ancestors could not have imagined. If a bug slipped into the system it could kill them and set spaceflight back decades, as indeed it did, twice. Owning up to error was the primary method of keeping colleagues, and the dream of spaceflight, alive.
“I did hundreds of simulations. I was the first non-American CAPCOM ever. CAPCOM’s the guy who talks to the crew in orbit for Mission Control. And we did hundreds of simulations. I covered 17 missions, just as CAPCOM. And after every simulation, where the crew, perhaps, had not picked up the problem and had not reacted properly to it, we’d do a post mortem.
“And that culture of honesty and openness, which you absolutely need in the space business — you can’t have people making excuses or trying to hide things — that’s what I love the most. And I wish it existed in all facets of life, including the one I ended up in.”
3. Earth
Garneau first ran for Parliament in 2006, just west of Montreal Island, and lost, in the first of three elections when losing was most of what Liberals did. He was interested in Outremont in a 2007 by-election. So was Justin Trudeau. Stéphane Dion was the leader, though, and he thought a political scientist was just the ticket. Dion’s designated nominee, Jocelyn Coulon, did not fare well.
In 2008 Garneau inherited the Liberal nomination, essentially a Wonka golden ticket, in Westmount, as solid a Liberal fortress as any in Canada. Only a catastrophe could lose Westmount for the Liberal. In 2011 it almost happened — Garneau beat the New Democrat by only 642 votes in the party’s worst national defeat in since Confederation. Soon Peter C. Newman had a book out proclaiming the Liberals were history.
“There’s something intimate about being only 33 [MPs in the Liberal caucus], Garneau recalled. “We got to know each other in a kind of a relationship that you don’t get when you’re 150 or 160. So I really enjoyed the collegiality of having that small, small group. Although of course I was hoping it wouldn’t last too long.”
In 2013, Garneau, who hadn’t been interested in commanding a ship, decided to try his chances with a political party. He ran for the Liberal leadership. He had competition.
“I personally believe that I had good policy that I put in the shop window. What I didn’t have — what I still don’t have — is charisma. I’m not interested in charisma, by the way. I’ve lived my life very well without charisma. And I’m not saying the electorate chooses on a superficial basis. But there was something about Justin Trudeau that was incredibly appealing to people.”
Garneau bowed to the inevitable and dropped out of the race. Eighteen months later he was co-chair of the Liberal Party’s “International Affairs Council of Advisors,” with a threefold mission: Figure out the party’s foreign policy; teach foreign policy to a leader with extremely limited experience in the field; and be seen showing interest in foreign policy. The group met regularly. “Trudeau only came occasionally to meet everybody and to sort of stir stir things up and have a really good discussion,” Garneau said.
4. Fire
As co-chair (with Andrew Leslie) of Trudeau’s Council of Advisors, Garneau figured he had a good chance to become foreign minister. He got Transport.
“You know, I’ve lived 17 years of my life abroad. And I love foreign policy. I wasn’t expecting Transport. And it turned out to be a job I loved. Although at first I thought, ‘Why’d he put me in transport?’
“When I got the call that, you know, ‘The Prime Minister wants to meet you,’ I thought — This is after the vetting process, ‘Are there any skeletons in your closet?’ — I thought, ‘What’s he going to put me in?’ I thought, Defence because of my background. I was in the regular forces. Or I thought, then, maybe Industry, because I was the president of the Canadian Space Agency and I worked for the Minister of Industry, Science and Technology at the time. And maybe even Foreign Affairs, because he’d had me in this job for the past two years. I wasn’t expecting Transport.” Garneau chuckled at the incongruity of it. “But now, after a little while, I saw the logic of it. I was in the Navy, ships, so I know the marine environment. I know the air environment. And so there is a certain logic to it. And it’s a job that I came to love.” He held the post for five and a half years. Only David Collenette and Lionel Chevrier lasted longer.
The new governing caucus had five times as many MPs as the Liberal caucus it replaced. “It was a heady experience,” Garneau said. “And there was a certain amount of chaos, which is understandable because it takes a couple of years to learn the basics of your job.”
It must have been a management challenge for the Prime Minister’s Office, I ventured. To have a finance minister, health minister, justice minister, defence minister who’d never been Members of Parliament before, let alone cabinet ministers. How did the PMO handle that? “It was a little bit like when you see kindergarten children all tied up with ropes, going down the street.”
Did the control ever chafe? “I had some times where I felt one way and and I felt that the centre did not necessarily agree with it. Yeah. That comes from the dynamic. If you’ve got your mandate letter, and you interpret that mandate letter the way you feel it must be implemented — you know, the vast majority of the time, no problem. But there was the odd occasion. You’ll forgive me if I don’t go into details on it. But I was very conscious of the fact [that] you have a chief of staff, your chief of staff is a key person for you. But that chief of staff reports to you, but also must report to the chief of staff of the Prime Minister. I made an indirect reference to it in my parting speech, that I sometimes made their life difficult because I might have wanted to go one way whilst the center didn’t necessarily want to go that way.”
We had been talking for more than an hour. I asked Garneau about the Freedom Convoy of January and February 2022, which has been on my mind. Specifically, I asked Garneau about his Liberal caucus colleague Joël Lightbound, who held an astonishing news conference in the second week of the Ottawa siege to say the Liberals’ COVID policy “stigmatizes and divides people.”
“I definitely took very much note of it,” he said of Lightbound’s surgical sortie. “Some of what he said is true. There were people on the Hill that were not extremists. They were just there because they felt that their rights were being not respected.” He faced his share of verbal abuse as he made his way to and from the Hill, but even still —
He paused. “I’ll be very candid. I don’t think we handled it as well as we could have.”
In what sense? “I think there was a sense that, ‘We’re not going to talk to you people. You’re just a bunch of troublemakers.’ I had always been brought up to not avoid dealing with difficult issues. This was an incredibly difficult issue.” Another pause. “So that’s just my personal comment.”
The other thing I wanted to ask him about was the tremendous controversy he and two other back-bench Liberals have stirred up over the interaction between Quebec’s newly beefed-up language law and Bill C-13, which proposes amendments to the federal Official Languages Act. This has put Garneau and his colleagues squarely on the side of Montreal’s anglophone population against a majority of Quebec’s elected politicians. And it’s brought Garneau in for some unaccustomed criticism. Barely two weeks before he resigned, he was complaining about the rough ride from Quebec commentators on Twitter.
12:40 PM ∙ Feb 18, 2023
Garneau’s comments on this were long, and would constitute inside baseball for most readers outside Quebec, but he didn’t like seeing Quebec’s language laws incorporated by reference into a federal bill. “I have very rarely disagreed with my party, but I disagreed with them on that.” It got worse for Garneau when he read 88 amendments introduced by the Bloc Québécois, five of which said that in case of a conflict between federal and provincial legislation, Quebec’s should predominate. Those amendments were eventually rejected, but by then Garneau was already on the record with his concerns. “I’m always ready to face criticism, but it got personal. And I think that’s sad.”
The controversy has been a much bigger deal inside Quebec than outside, but Garneau insisted it’s not why he’s leaving politics.
The reason I’m leaving is because I made that promise to my wife, and to my family. I actually told him after the 2019 election that that was my last election. I had been reappointed to Transport. And I thought, ‘Okay, this is a lovely way to finish.’
“Then in January of 2021, to my great surprise, the Prime Minister [shuffled Garneau.] I think it was motivated by the fact that Navdeep Bains pulled out. The Prime Minister, I personally think that he said, ‘Okay, I want François-Philippe to take over from that. And there’s a bit of musical chairs and I ended up in foreign affairs.
“But seven months later, an election was announced. And I felt, in all good conscience, that after seven months in that portfolio — to now say, ‘Sorry, I’m leaving,’ when I had been the fourth appointed in under six years, it just wouldn’t have been right.
“Now, if the prime minister had told me, ‘Mark, after this election, you won’t be in the cabinet,’ I wouldn’t have run. But he didn’t tell me that.
“I ran hoping to go back into that job. Because Lord knows there were things that I wanted to do. With respect to Afghanistan, China, the Indo-Pacific strategy, I’d been working all that stuff. But the bottom line was that he said, ‘You’re not in cabinet anymore.’
“And so, at this point, I felt it would be really not acceptable for me to say, ‘Okay, thank you for electing me three weeks ago, I’m leaving.’ So I felt I needed to put in some time. To my great personal satisfaction, I was given two things that I really enjoyed. One was to be chair of the Indigenous and Northern Affairs Committee, which I think has an important role with respect to reconciliation. And the other one was kind of unexpected… medical assistance in dying, where I was co-chair with a senator on this special mixed committee.”
That committee presented its final report in February. Garneau resigned three weeks later. He was already in the history books before he ever ran for office. Would he run now, in the atmosphere of today’s politics, if he were just starting out? Is there still room in politics for an engineer who just wants to make things work better? These are eternal questions, and I had already asked Garneau enough questions for one day.
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Crime
Mexican cartels are a direct threat to Canada’s public safety, and the future of North American trade
From the Macdonald Laurier Institute
By Gary J. Hale for Inside Policy
RCMP raided a fentanyl ‘superlab’ in Falkland, BC, with ties to a transnational criminal network that spans from Mexico to China.
On October 31, residents of Falkland, BC, were readying their children for a night of Halloween fun. Little did they know that their “quaint, quiet, and low-key little village” was about to make national headlines for all the wrong reasons.
On that day, RCMP announced that it had raided a fentanyl “superlab” of scary proportions near Falkland – one that police called the “largest and most sophisticated” drug operation in Canada. Officers seized nearly half-a-billion-dollars’ worth of illicit materials, including 54 kilograms of finished fentanyl, 390 kilograms of methamphetamine, 35 kilograms of cocaine, 15 kilograms of MDMA, and six kilograms of cannabis” as well as AR-15-style guns, silencers, small explosive devices, body armour, and vast amounts of ammunition.
They also found massive quantities of “precursor chemicals” used to make the drugs. This strongly suggests that the superlab was tied into a transnational criminal network that spans from Mexico to China – one that uses North America’s transportation supply chains to spread its poisonous cargo across Canada and the United States.
The Canada-US-Mexico relationship is comprised of many interests, but the economic benefits of trade between the nations is one of the driving forces that keep these neighbours profitably engaged. The CUSMA trade agreement is the successor to NAFTA and is the strongest example globally of a successful economic co-operation treaty. It benefits all three signatories. This level of interdependence under CUSMA requires all parties to recognize their respective vulnerabilities and attempt to mitigate any threats, risks, or dangers to trade and to the overall relationship. What happens to one affects all the others.
The supply chain, and the transport infrastructure that supports it, affects the balance books of all three. While the supply chain is robust and currently experiences only occasional delays, the different types of transport that make up the supply chain – such as trucks, trains, and sea-going vessels – are extremely vulnerable to disruption or stoppages because of the unchecked violence and crime attributed to the activities of Mexican Transnational Criminal Organizations (TCOs). These cartels operate throughout Mexico, from the Pacific ports to the northern plains at the US-Mexico border.
The sophistication of the Falkland superlab strongly suggests connectivity to multi-national production, transportation, and distribution networks that likely include China (supply of raw products) and Mexico (clandestine laboratory expertise).
For most Canadians, Mexican cartels call to mind the stereotypical villains of TV and movie police dramas. But their power and influence is very real – as is the threat they pose to all three CUSMA nations.
Mexico’s cartels: a deadly and growing threat
Mexican cartels started as drug trafficking organizations (DTOs) in the 1960s. By the late 1990s they had evolved to become transnational enterprises as they expanded their business beyond locally produced drugs (originally marijuana and heroin) to include primarily Colombian cocaine that they transported through Mexico en route to the US and Canada.
Marijuana and the opium poppy are cultivated in Mexico and, in the case of weed, taken to market in raw form. While the cartels required some chemicals sourced from outside Mexico to extract opium from the poppy and convert it into heroin, the large-scale, multi-ton production of synthetic drugs like Methamphetamine and today Fentanyl expanded the demand for sources of precursor chemicals (where the chemical is slightly altered at the molecular level to become the drug) and essential chemicals (chemicals used to extract, process, or clean the drugs.)
The need to acquire cocaine and chemicals internationalized the cartels. Mexican TCO’s now operate on every continent. That presence involves all the critical stages of the criminal business cycle: production, transportation, distribution, and re-capitalization. Some of the money from drug proceeds flow south from Canada and the US back to Mexico to be retained as profits, while other funds are used to keep the enterprise well-funded and operational.
In Mexico, the scope of their activities is economy-wide; they now operate many lines of criminal business. Some directly affect Mexico’s economic security, such as petroleum theft, intellectual property theft (mainly pirated DVDs and CDs), adulterating drinking alcohol, and exploiting public utilities. Others are in “traditional” criminal markets, such as prostitution, extortion, kidnapping, weapons smuggling, migrant smuggling and human trafficking. Organized auto theft has also become another revenue stream.
Criminal Actors
The Cartel de Sinaloa (CDS or Sinaloa Cartel) and the Cartel Jalisco Nueva Generacion (CJNG) are the two principal TCO’s vying for territorial control of Mexico’s air, land, and maritime ports, as well as illegal crossing points. These points on the cartel map are known as “plazas,” and are often between formal ports of entry into the US. By controlling territories crucial for the inbound and outbound movement of drugs, precursors, people, and illegal proceeds, the cartels secretly transport illicit goods and people through commercial supply chains, thus subjecting the transportation segment of legitimate North American trade to the most risk.
That is giving the cartels the power to impair – and even control – the movement of Mexico’s legitimate trade. While largely kept out of the public domain, incidents of forced payment of criminal taxation fees, called “cuotas,” and other similar threats to international business operations are already occurring. For instance, cuotas are being imposed on the transnational business of exporting used cars from the US to Mexico. They’re also being forced on Mexican avocado and lime exporters before the cartels will allow their products to cross the border to the US and international markets. This has crippled that particular trade. Unfortunately, the Mexican government has been slow to react, and the extortion persists throughout Mexico. It is worth repeating – these entirely legitimate goods reach the market only after cartel conditions are met and bribes paid.
The free trade and soft border policies of the US of recent years have allowed cartel operatives to enter that country and work the drug trade with limited consequence. In May, the U.S. Drug Enforcement Administration (DEA) published the National Drug Threat Assessment 2024, where it reported that the Jalisco and Sinaloa cartels operate in all 50 US states and are engaged in armed violence in American cities as they fight for market shares of the sales of Methamphetamine, Fentanyl, and other drugs sourced from Mexico.
The DEA’s findings should sound alarms in Canada. Canada and the US have similar trade and immigration policies, which allow the Mexican cartels to easily enter and control the wholesale component of the drug trade. The long-term effects of the drug trade are the billions of dollars gained that allow for the corruption of government officials. Canada should be on guard: Mexican drug cartels in Canada could begin to not only kill ordinary Canadians by knowingly selling them deadly drugs like Fentanyl – their operatives can also embed themselves in Canadian society, as they have in the US, leading to ordinary citizens on Canadian streets being victimized by the armed violence cartels regularly use to assert their position and power.
Organized crime and Mexican governance
Canada faces these threats directly, but the indirect ones that the cartels present to Mexican governance are no less consequential to Canada in the long term – and likely sooner. Illicit agreements between corrupt Mexican government officials and the cartels assure that the crime organizations retain control of territory and have freedom to operate.
That threat is becoming increasingly existential. Cartel fighters are well disciplined, well equipped and strong enough to challenge Mexico’s military, currently the government’s main tool to fight them. Should the TCOs come to dominate Mexican society or gain decisive influence over government policy, Mexico’s government risks being declared a narco-democracy and the US may come to see the cartels as a threat to national security. That in turn could lead to a US military intervention in Mexico – not an outcome desired by either side.
While that scenario may be considered extreme, it is not as far from reality as many may think. While in many respects the US-Mexico trading relationship remains unchanged, the overall political context has become testy – and could be a real flashpoint for the incoming Trump administration.
Political developments in Mexico have played a role. After his election in 2018, former Mexican President Andrés Manuel López Obrador (commonly referred to his initials, AMLO) demonstrated a disdain for all things North American. This included frequent complaints of US interference or violation of Mexican sovereignty – complaints that were more about keeping Mexican government domestic actions out of the public eye. To retain a shroud of secrecy over government corruption, Mexico under Amlo started in 2022 to limit the activities and numbers of US federal law enforcement agencies operating there, particularly the FBI, DEA, ATF and ICE. These agencies formerly enjoyed a close relationship with the Mexican Federal Police – a force AMLO disbanded and replaced with the National Guard. The AMLO administration reduced the number of US assets and agents in Mexico, particularly singling out the DEA for the most punitive restrictions.
During his administration, AMLO placed the army and navy in charge of all ports of entry and gave them responsibility for all domestic public safety and security by subordinating the Guardia Nacional (GN), or National Guard, to the army. The GN, the only federal law enforcement agency, has been taken over by military officials who are sometimes corrupt and in league with the cartels.
Mexican President Claudia Sheinbaum, who took office in 2024, has continued AMLO’s organizational moves. Sheinbaum comes from the same political party and has so far extended carte blanche to the military, whose administration is opaque and now operates with impunity, under the guise of “national security” and “sovereignty” concerns.
It is expected that Sheinbaum will continue to shield American eyes from Mexico law enforcement and judicial affairs. The fear in the US law enforcement and national security community is that Sheinbaum may even declare DEA non grata, much as then Venezuelan President Hugo Chavez in 2005 and Bolivian President Evo Morales in 2008 did in their countries. Both were anti-American leftists of the same mindset as AMLO and Sheinbaum, who feared detection of their connections to the illegal drug trade.
Sheinbaum has publicly demonstrated disinterest in the consistent application of the rule of law against the TCOs by stating that she will continue the “hugs not bullets” (“abrazos, no balazos”) non-confrontational, non-interventional posture towards organized crime. Agreements with corrupt government officials will allow the cartels to expand their business and to operate with impunity. Through intimidation, bribery, and murder, the cartels affect decision making at the municipal, state, and federal levels of Mexican government. That leverage, while performed outside the public eye, has the potential to negatively affect supply and demand among the three countries at the very least, and at worst, to signal that cartels in Mexico are directly or indirectly involved in the formulation of government security, immigration, drug, and trade policy.
AMLO enacted constitutional changes that will provide Sheinbaum with the powers of a dictator, giving her administration unchecked control of the executive, legislative, and judicial branches of government. As a result, the judiciary in Mexico is in crisis mode with 8 of 11 Supreme Court Justices resigning in October 2024 to protest the unconstitutional disregard for due process that started with AMLO and continues with Sheinbaum thanks to a “voting for judges” law that she and AMLO have rammed into operation without debate. This development portends even more corruption.
Without the existence of an independent judicial system, these institutional changes could give pause to US and Canadian negotiators when it comes time to renew CUSMA in 2026.
Beyond 2025: Mexican organized crime as a threat to the US and Canada, and Greater North American implications
Most worrying, the cartels will be in a yet stronger position to affect and even dictate the pace and volume of legitimate trade between the US and Mexico under Sheinbaum. This makes Mexico the weakest link among the three CUSMA members.
The US and Canada should therefore be concerned about the strength and power of the cartels because the current trajectory could provide them a greater role in Mexico’s performance as a trade partner. Should this trend continue, the US would likely begin to see Mexico through the lens of a threat to critical components of its national security: 1) the public safety of US citizens being killed in epidemic proportions by the drugs produced by citizens of Mexico; 2) the negative impact or increased cost of commerce that supplies goods to the American market; and 3) the CUSMA relationship that sustains the economic strength of all three participating countries.
This worrisome evolution requires proactivity by Canada and the US to insist that Sheinbaum reverse the gains that the cartels have made to influence policy and erode the government’s monopoly on territorial control and the use of violence, and reverse Mexico’s limits on drug enforcement co-operation with what should be its partners to the north. Pressure should also be applied to demand a return to a drug policy model that includes international law enforcement co-operation and a continuation towards the transformation of the Mexican judicial system from a mixed inquisitorial or accusatorial system to an adversarial system that employs the use of juries, witness testimony, oral hearings and trials, and cross-examination of witnesses, as opposed to a system where cartel-influenced elections could dictate judicial outcomes.
The implications of the further development of a Mexico narco-democracy for US-Mexico-Canada relations would be devastating. Co-operation on public safety and security would cease completely, allowing the cartels to take full control of commercial supply lines, significantly reducing trade between the three nations – likely causing the CUSMA trade deal to fracture until governance returned to duly elected civilian officials.
Continental security and Canada’s contribution
The continued success of CUSMA lies with Mexico more than any other country. Should Mexico continue on its path to autocracy, it could upset the trade deal, crucial to the prosperity of all three countries. Canada is not immune from what on the surface may appear to be mostly bilateral, US-Mexico issues, because, regardless of the commodity – whether it’s consumables or manufactured items – the cartels are positioned and empowered to affect imports, exports, trade, and migration throughout North America.
For the foreseeable future, Mexico is not going to voluntarily change its security posture. This enables the cartels to remain persistent threats, especially to trade. Canada and the US need to continue to jointly insist that Mexico take a stronger stance against organized crime and that it take steps to strengthen the judiciary and the rule of law in that country.
Gary J. Hale served 31 years in the Drug Enforcement Administration (DEA), retiring as an executive-level intelligence analyst. In 2010, he was appointed as Drug Policy fellow and Mexico Studies Scholar at the James A. Baker III Institute for Public Policy at Rice University in Houston, Texas.
Business
Broken ‘equalization’ program bad for all provinces
From the Fraser Institute
By Alex Whalen and Tegan Hill
Back in the summer at a meeting in Halifax, several provincial premiers discussed a lawsuit meant to force the federal government to make changes to Canada’s equalization program. The suit—filed by Newfoundland and Labrador and backed by British Columbia, Saskatchewan and Alberta—effectively argues that the current formula isn’t fair. But while the question of “fairness” can be subjective, its clear the equalization program is broken.
In theory, the program equalizes the ability of provinces to deliver reasonably comparable services at a reasonably comparable level of taxation. Any province’s ability to pay is based on its “fiscal capacity”—that is, its ability to raise revenue.
This year, equalization payments will total a projected $25.3 billion with all provinces except B.C., Alberta and Saskatchewan to receive some money. Whether due to higher incomes, higher employment or other factors, these three provinces have a greater ability to collect government revenue so they will not receive equalization.
However, contrary to the intent of the program, as recently as 2021, equalization program costs increased despite a decline in the fiscal capacity of oil-producing provinces such as Alberta, Saskatchewan, and Newfoundland and Labrador. In other words, the fiscal capacity gap among provinces was shrinking, yet recipient provinces still received a larger equalization payment.
Why? Because a “fixed-growth rule,” introduced by the Harper government in 2009, ensures that payments grow roughly in line with the economy—even if the gap between richer and poorer provinces shrinks. The result? Total equalization payments (before adjusting for inflation) increased by 19 per cent between 2015/16 and 2020/21 despite the gap in fiscal capacities between provinces shrinking during this time.
Moreover, the structure of the equalization program is also causing problems, even for recipient provinces, because it generates strong disincentives to natural resource development and the resulting economic growth because the program “claws back” equalization dollars when provinces raise revenue from natural resource development. Despite some changes to reduce this problem, one study estimated that a recipient province wishing to increase its natural resource revenues by a modest 10 per cent could face up to a 97 per cent claw back in equalization payments.
Put simply, provinces that generally do not receive equalization such as Alberta, B.C. and Saskatchewan have been punished for developing their resources, whereas recipient provinces such as Quebec and in the Maritimes have been rewarded for not developing theirs.
Finally, the current program design also encourages recipient provinces to maintain high personal and business income tax rates. While higher tax rates can reduce the incentive to work, invest and be productive, they also raise the national standard average tax rate, which is used in the equalization allocation formula. Therefore, provinces are incentivized to maintain high and economically damaging tax rates to maximize equalization payments.
Unless premiers push for reforms that will improve economic incentives and contain program costs, all provinces—recipient and non-recipient—will suffer the consequences.
Authors:
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