Listen Up! Come election time I will opt for a more pragmatic, realistic and less flashy PM

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Dave Wilkin, Listen Up! guest contributor

2019 Election – High Stakes, Stark Choices

This fall Canada faces a consequential election, with high stakes and stark choices. They can opt to continue down Justin Trudeau’s “Sunny Ways, Postnational state” path (lacking core identity/identity politics driven) or shift to a down-to-earth, pragmatic one, like that espoused by the Conservative’s Andrew Scheer.

I am very concerned with the path Justin Trudeau is leading us down and here’s why:

Canadian economy is faltering
While the US economy has been red-hot over the last two years, ours languishes at approximately 65 per cent of US growth, and slowing. Comparing the US and Canadian stock markets (a good economic performance/outlook proxy), Canada’s TSX is up a paltry approximately 9 per cent (barely keeping pace with inflation) under Trudeau, vs. the US Dow Jones Index which is up  approximately 47 per cent. Add in a slowing world economy (led by China), things are not looking good. Ten years since the last recession, and nothing to show for the record-high deficit spending. Now is not the time for growing deficits – $21.3 Billion in 2019/20, unbalanced until 2045 (vs. 2019 as promised). Compounding this, is shrinking Foreign Direct Investment (falling 65 per cent in 3 years), and lagging innovation (stemming from failing innovation policies). Canadians should demand more responsible fiscal management from government.

Canadian trade at risk
Over 66 per cent of our GDP is tied to trade, yet under Trudeau’s leadership, we have seen widening trade deficits ($2 Billion in November). The trajectory of our flawed climate/energy policies, a less business-friendly environment and the US becoming a net energy exporter, combine to create big economic headwinds. Sadly, Trudeau’s virtue signaling/criticisms of the US president have led to a deteriorated US administration relationship, despite it representing 76 per cent of our trade. Historically, Canada has had a small trade surplus with the US, but the new USMCA (NAFTA 2.0) could change all that. Only time will tell. However, there are real risks it could get worse, as US congressional approval is pending.

The necessity to diversify trade beyond the US is clear, but turning towards untrustworthy China, already our second largest trading partner, would be most unwise. They are communist, lack rule-of-law, abuse rights, steal intellectual property, and ignore WTO trade rules. Going decades unchecked, their actions drove rapid growth to become the number two global economy, and a 0.5 Trillion US$ global trade surplus. Canadians clearly understand this, witnessing China’s recent threats and abuse of our citizens over Huawei’s CFO arrest and their rejection to real security risks over its 5G networking gear. Team Trudeau continues to botch the China file, with the firing of Ambassador McCallum being just the latest debacle. The US, Japan, Australia and others don’t trust Huawei (under state control), and neither should we. Love him or hate him, Donald Trump deserves credit for being the only world leader to take strong actions to counter/change China’s decades of misbehaviour. In contrast, Trudeau has done little, perhaps worse if he chooses to “engage, deepen and improve our trading with them ”.

Beyond the US, Canada runs trade deficits with many countries making up the remaining 24 per cent of our trade, led by China ($36B), and the EU (approximately $14B despite a new 2016 trade agreement Trudeau signed). Confidence in his government to properly manage the trade file is diminished. We can only hope the recently ratified CPTPP turns out better for Canada.

Tax increases
Trudeau’s much hyped middle-class tax cuts never happened. Instead, taxes increased for most families, after quietly removing some tax credits and deductions. As for the tax increases on the top 1 per cent, instead of growing tax revenues as promised, they actually declined. It was a grand illusion.

Migration and refugee issues
Last year, approximately 68 million people were considered displaced (37 per cent refugees), historically centered in Europe, the Middle East and Africa, but now we see a growing Latin America migration crisis. To understand its scale, the failed socialist state Venezuela alone has seen 3 million flee, with 5 million more likely to follow. Combined with a porous US-Mexico border, the risks to the US and now Canada becomes evident. Trudeau’s naive and reckless tweeted invitation to “refugees” in early 2017 (virtue signaling to contrast himself to Trump) opened the flood-gates leading to a doubling of refugees to 49,000 in 2017, with 2018 to exceed 50,000. Over 36,000 avoided border checkpoints. The majority were from Nigeria, Haiti and Congo, so most should not qualify to stay under the Safe Third Country agreement, yet just one per cent have been removed. It will take years to process them, costing tax payers over $340 million last year (excluding provincial costs) and it continues to rise. It has made a mockery of our once admired immigration system.

Europe’s recent failed refugee experiment clearly demonstrated that welcoming too many too quickly, without adequate planning/resources, brings trouble and backlash. It was a primary factor leading to UK Brexit, the demise of Germany’s Chancellor, the collapse of left/centrist parties in Austria, Italy, France, Hungary, Poland, and rising anti-EU and nationalist sentiments across Europe. Trudeau’s vision lacks border respect, showing he learned little from the recent European and USA decades’ long immigration fiasco. Recklessly welcoming the world’s displaced people is not the answer to this crisis. More broadly, a discussion about long term sustainable immigration rates is overdue. I plan a future article on this important topic.

Flawed climate-change and energy policies
Trudeau’s “bold” climate-change action plan, with its carbon-tax center-piece (he disingenuously calls it “taxing pollution”) is a sham. Not surprising, since he along with other leaders were played in the Paris Climate Agreement by China – committing impossibly large carbon emissions reductions that will clearly hurt the economy, while letting the worst offenders (China and India and others) off entirely. There are much more responsible & effective actions than a symbolic carbon tax to drive CO2 emission reductions. Trudeau is flat wrong to claim fighting climate-change and growing the economy go “hand–in–hand”, significant costs and trade-offs are a reality.

So it turns out Justin Trudeau’s “Sunny Ways, Postnational state” was a “naive dream”, now exposed by a disappointing track record of few accomplishments, broken promises, and stumbling on important national and international files. Now is the time to start examining the leaders’ promises, plans and actions on issues that matter most. As for me, I’ve already decided. Facing an increasingly uncertain future, I will opt for a more pragmatic, realistic and less flashy PM.

Dave Wilkin is a UofT graduate with a Masters degree in Electrical Engineering, and a professional engineer. His career spans 40 years mostly in technology, consulting and banking.  He has worked at IBM, Scotiabank, and a number of  Canadian technology and professional services companies, in consulting or senior management roles. He is semi-retired, now living in Huntsville, but keeps active in consulting as a founding partner in a new consulting firm.

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16 Comments

  1. Mr. Wilkin, I don’t pretend to be as knowledgeable as you in these various fields; but that hasn’t ever stopped me before from expressing an opinion. Mr. Trump should not be held blameless regarding the comparison to the U.S. economy, and our trade issues. Certainly, his imposition of the ludicrously high (is it 18%) tariff on Canadian steel and aluminum; and the American energy surplus derives largely from our exports of crude oil to them for refining. (That particular policy certainly predates Trudeau’s years in office). At the same time, the President’s demand that Canada detain Ms. Wanzhou (on decidedly weak grounds); and then to not demand her extradition to the States, has caused peril to some of Canada’s detained citizens; and an impasse to any furtherance of Sino-Canadian trade relations. To increase taxes for the wealthiest 1% of our populace wasn’t necessarily wrong: merely it should have been a “wealth tax” (on net worth), rather than an income tax. The Prime Minister may have been naive in welcoming refugees to Canada: but can you honestly say that Mr. Trump’s insistence on a $15B wall, and subsequent stationing of 15,000 soldiers at the border to defend against mostly women and children (predominately with legitimate claims as refugees) was more admirable? And please don’t forget his gut-wrenching division of families by interring young children in not much more than cages. Also, his record on climate change is abysmal. So much of his support derives from the coal-mining states (and his wealthy industrialist friends, who use coal as their prime/only energy source); that he has ignored the EPA as they have essayed to prohibit this ongoing disaster.
    .
    It would be interesting to hear Mr. Scheer speak as eloquently as you on these topics. But we have a large portion of Canada’s population in a Tory Ontario; awaiting daily for the next cut out of Queen’s Park. The Premier started almost superficially, but very meaningfully and mean-spiritedly, by firing the Child Advocate, the Environmental Commissioner, and the French Services Commissioner. But he was just getting warmed up: $25M out of the budget for at-risk youth and persons with severe disabilities (most notably, autism). Then he simultaneously “robbed Peter to pay Paul” with respect to post-secondary education; giving a pittance, and cancelling the grant system. Lately, he wants to increase class sizes from kindergarten through Grade 3 (the child’s most formative years, especially socially). Teachers will be unable to identify early problems with respect to behaviour and disability. Of course, he removed long ago any element of sex education in the schools: if learning in the pool hall, was good enough for Doug, it’s good enough for your children. The 14 LHIN’s will become 5 “regions”; Lord knows what will happen to district/regional government. And now, the boldest stroke of all: Let’s privatize health care.
    .
    “The man doth bestride this narrow world like a Colossus.” There is no argument here that both our deficit and our debt had reached outrageous proportions. But this much, this fast, and some of it extremely short-sighted and ill-considered, has many folks very worried. Can Mr. Scheer differentiate himself from Mr. Ford? And does he want to? I believe that those answers will determine our next PM.

    • Thanks Rob, appreciate the feedback. A couple of points of clarification to consider. If you haven’t seen my response to Marc below, you may find it of interest.
      Specifically, on a few of your points: The US is not dependent on our oil exports. Last year they became a net oil exporter, driven largely by Trump lighting up their entire fossil fuel sector – mostly through tax & regulation cuts – but also from years of US energy companies fracking technology investments (to compete after OPEC cut oil prices in a global price war). Sadly, US energy companies only take our oil at a 40-60% discounts to WTI prices, & only if it makes business sense for their refineries to do so – meaning sufficient global demand for their refined product must remain.
      Second, re Huawei’s CFO, Trump is leaving the case to his DOJ, as its inappropriate/not up to him to have demanded either her arrest nor her extradition. Oddly though, his weighing in by suggesting she might be used as a future bargaining chip with China over trade disputes, in my humble option, was plain dump, potentially weakening the DOJ case against her. I could be proven wrong on this though.
      Ontario is in a tough spot for sure, as you suggest. The big problem is where to find the savings or additional tax revenues. Ontario can’t continue to spend & run big deficits like the last 15++ years. Growing out of it seems unlikely, given a slowing world economy, and recent aggressive US trade, regulation and tax policy changes, all putting downward pressure on our exports. Raising taxes broadly slows consumer spending & domestic business investment and therefore growth. (Note that in Canada, the top 1% pay about 22% of all tax; top 10% pay 55%; and top half pay 95%.) This, and along with declining FDI, all will work to push future tax revenues down.

      No one wants to see service cuts, or their taxes increase, but some combination eventually must happen. So, the million $ questions are (no pun intended!) – From where? Who pays? How soon? The political battle rages on..

      • Thank you again, Dave, for your thoughtful and informative response. As I prefaced my comments, I do not profess to be nearly as knowledgeable as you in these matters. I appreciate your “constructive” criticism; without, in any way, demeaning me.

  2. Mr Wilkin,

    While PM Trudeau is far from perfect, and there are many things he has dropped the ball on, let me present you with some facts you seem to have excluded for some reason.

    The TSX (up 8.6%) has outperformed the S&P 500 (7.8%) so far this year.

    President Trump’s continued spending is adding a record 1 Trillion dollars in government debt annually. By comparison, that would be the same as Trudeau adding $100 million annually to our debt. The US debt now exceeds it’s GDP-that’s the first time that’s happened since WW2.

    Here in Canada, Trudeau has cut business taxes to a record low 9%.

    The national unemployment rate is also at near record lows, as is it in the US.

    This, despite Trump trying to harm our economy by saddling some our industries with significant tariffs, under the ruse we are a national security threat.

    He has alienated traditional geopolitical allies in favour of autocrats and dictators.

    He lies repeatedly.

    So have many of his campaign officials-who incidentally-are now either in prison, of facing prison for acts of dishonesty and treason.

    Meanwhile, Canada has recently been listed as the best country in the world to live in.

    It’s not nearly as bad here as you seem to want us to believe.

    Marc Lanter

  3. Marc, thanks for reading my piece and commenting. My response to your comments:
    First, I wasn’t judging the US/global economy big picture. However, I am very worried. Globally, we see massive & expanding bubbles (both asset & debt), driven by excessive spending, and a decade of cheap money (e.g. quantitative easing). Consider that US, China, Japan (combined 50% of the world economy) and Canada all have total debt/GDP around 300%. US corporate + consumer debt exceeds 2x all government debt combined. Massive deleveraging is coming, making the next down-turn real nasty, thus why Canada needs to be much more cautious on spending & deficits than we currently are.
    A few other points re your comments.
    • A 1/2 % difference in 1 month of market performance is not a meaningful metric. The US S&P is correcting from a small YE dip after rising over 50% in 3 yrs. The comparison over the 3-year Trudeau period is the right one to make. Given the strength of the US economy/markets, and the blessing of being their best neighbour and largest trading partner, our economy & markets should have done considerably better.
    • Overall Canadian Federal corporate taxes were not cut to 9%, as you say. That cut applied to small business only. The overall corporate tax rate was recently “effectively” reduced from 17% to 14%, through tax write-offs/investments, in response to Trump cutting US corporate taxes from 30% to 19%. Total Canadian business tax rates remain 20% above the US.
    • Canada’s 5.6% unemployment is good news, however it’s 30% lower in the US. Also, unemployment is not a forward looking metric. A better one is the Labor Participation Rate direction – Canada’s is still dropping vs. rising in the US under Trump. Equally important, Wage Growth is up to 4% in the US vs declining to 2% in Canada (i.e. negative real wage growth).
    • Trump was elected on his “America First” platform – focused on flawed trade deals behind their $0.5T global trade deficit and their disproportionately large global foreign aid (ODA) and defense spending shares. So we see: slapping tariffs on China, more balanced NAFTA, EU trade deals, calling out NATO partners for not meeting defense spending commitments, & exiting the imbalanced Paris Climate agreement. Even the steel & aluminum tariffs remaining on Canada are partly to thwart China & others continuing dumping practices. Everyone that is on the losing end understandably complains, including Canadians.
    • I don’t see evidence supporting your claim Trump has favoured autocrats/dictators over allies. In fact, I see the opposite: he has been much tougher on China, Russia, Iran, N. Korea, Cuba, Venezuela etc. than any recent US president. What about Trudeau though? His track-record, not so good.
    • The entire Trump-Russia saga is a sad tragedy, dividing the US. The Trump campaign officials you mention are in trouble for lying to the FBI (often a result of perjury traps), tax fraud from years ago, or possibly campaign contribution violations (common in Washington, seldom charged), & no one charged with treason! In all, absolutely nothing to do with Trump-Russia “collusion”. Muller is doing what all special councils do… search for crimes, whether there was real evidence of a crime or not… its all political. The whole thing was initiated by the Clinton funded phony ‘Russian Dossier’, sourced through an x-British Trump-hating spy (Steele) from mostly Kremlin agents, then used by corrupt Obama left-over senior DOJ/FBI officials to try to stop/discredit Trump. Those officials leaked constantly to the liberal MSM, who then breathlessly ran with it 7×24, to this day. If any one colluded with Russia, it was HRC, but alas, in today’s US 2-tier justice system, she & the disgraced x-Obama officials will probably never face justice.

    Marc, respectfully, may I suggest you look for news beyond just CNN, MSNBC, WP, NYT, VOX, Guardian, CBC, Tor Star etc? They all push politically left leaning “reporting” & are seriously anti-Trump biased/blinded. Yes, Trump is loud, brash, often annoying, exaggerates & lies at times (as most politicians do), but he was elected to be the ‘disruptor-in-chief’ and is getting results Americans care about. Until the US Dem’s start learning from their 2016 loss, & shift focus to what voters actually care about (not selling socialism & identity politics), they will lose again in 2020. Right now, it doesn’t look to be the case.
    Indeed, Canada is a great place to live, we are all blessed to live here. I would like to see that continue, which is why I wrote the article as I did.
    (PS.. apologies for my long reply)

  4. Murray Christenson on

    A well thought out piece Mr Wilkin, thorough and well researched. I am seeing an increasing number of these kinds of editorials and stories across the media spectrum in Canada. Without rehashing what you’ve already covered, Mr Trudeau’s performance on the international stage has been an embarrassment to Canada and difficult to watch as a proud Canadian.
    Equally, if not more important, is the situation within our country itself. Not since the fiasco that was the elder Trudeau’s mandate have we seen such divisiveness within the country to the point that western separation voices are growing louder. The talk in comments above about how well our economy is doing would be shot down in a heart beat in western Canada. I believe Justin Trudeau may well be the most despised politician since his father out there. We will soon see an overwhelming victory by the Alberta conservatives joining Saskatchewan, Manitoba and Ontario as ruling provincial parties. I believe I will be joining you in a vote against “sunny ways”.

  5. Dave
    A well written column and concise replies. Unfortunately, you express yourself so well that you must now replace the current MP for Muskoka Parry Sound.

  6. Jim Logagianes on

    Thanks for your thoughtful insight . But we should remind the readers that all mainstream parties in Canada insisted on changing the electoral boundaries. We Canadians elected more people Federally and Provincially . Why would anyone increase the cost of Government when they can’t operate without running deficits. So inevitably they increased the overall cost to run each level of Government. So now our economy is in a slump and the reality of additional costs is hanging over our heads. This type of rational is why Greece and Venezuela are now impoverished. We must insist that all levels of Government are reformed in Canada. As we see in the news everyday people are suffering around the world as the confidence in Government declines.

  7. Dave, one’s opinion of leaders and leadership depends on whether you are looking through the big lens or the small lens. The world has 3 major and clearly unsustainable underlying problems that drive everything else. Neither the extreme right or the extreme left have the answers. I will support political leaders who demonstrate some understanding of these problems and who will make some credible attempt the help solve them, as well as improve their own country. Trump is not one of those leaders. Would you put someone who has never flown an aircraft in the cockpit of a loaded Boeing 777?

    1. Global population is growing by 83 million per year or the equivalent of 2.2 Canadas per year. This is driving unsustainable consumption of water, food and finite resources like oil and gas as well as unsustainable levels of greenhouse gas emissions. Trump withdrew support for UN initiatives to mitigate population growth. These initiatives were championed by Stephan Harper at the 2010 G8 in Huntsville.
    2. Global emissions are causing global warming, melting of glaciers, rising sea levels and increased severity of severe weather events continue to grow at an alarming rate. Trump withdrew US initiatives to mitigate global warming. Thankfully, most states are ignoring him.
    3. Inequity is growing at an unsustainable rate. There are now 26 billionaires (most of them American) whose worth is equivalent to half of all humanity. The US stock market gains provided those 26 billionaires (among the top 0.1%) with a gain of $900 billion in 2018 alone. That is roughly equivalent to the US deficit that is driving the government to cut services, except for the military.

    Trump’s thinking (or the lack there-of) will make every one of these global problems worse. But that should not be a surprise since that is a continuation of the selfish and devious route Trump has followed for his entire life, and always at the expense of others.

    Most of Trump’s base seems to be gullible to his misinformation. In truth, Trump is not helping his own citizens, other than the top 1% who benefit from stock market gains. While understanding and cooperation are needed to solve world and domestic problems, Trump is flying by the seat of his pants and sewing division among his own people and around the world. Could it be that only Fox News, Steve Bannon, Rush Limbaugh and Ann Coulter know the truth, and that all the other credible media and leaders around the world have it wrong?

    Trudeau while not perfect, is at least making some attempt to help solve these overarching global problems as well as some long-standing domestic problems. That is difficult for a country with a small and shrinking share of the global population. Yes, Trudeau has been a bit of a showman, but Andrew Scheer is finding out that unless people know who you are, you have no influence at all.

    The big problems are very complex and can only be solved by cooperation among careful centrist thinkers. Personally, I will reserve my judgement on who to vote for until I see Andrew Scheer’s platform. So far, he seems to be keeping it under wraps like Doug Ford did, in order to minimize the time for people to scrutinize it. Clever politics, but is it honest?

    Sometimes the devil you know is better than the devil you don’t know.

  8. Interesting points of view, especially since the PM’s platform seems to be based on Wind and Sun – Aesop’s fable, hence “sunny ways” depicted in the Star cartoon and animations galore. How Elementary? And what do you think of our 60% forever discounted energy, including service innovations; e.g., fracking process exported to to the south? Then we have Andrew Sheer drinking from the Great Canadian milk box, (where is Miss Manners on that front?), which by the way isn’t on the greatly fan-fared “new” Canada Food Guide from Health Canada, “opined expensive” for Canadians by some Nutritionist’s?
    What’s Missing here? Where is Responsibility, Respect, and Fairness for the People of Canada? Finally, where is the Freedom from international interference in our Economy via various funding envelopes that continue to disrupt our country’s direction, business and individual prosperity?
    Is this bias? I love pigs by the way, always have – they’re intelligent, one of the cleanest animals, bring luck and wouldn’t this be a good year to acknowledge these qualities here in Canada?

  9. Regarding the markets performance, the U.S. markets up to mid November were dramatically outpacing the TSX throughout 2018. Due to specific factors largely driven by market confidence emanating from Administration decisions the main U.S. indices plunged from mid November to year end. Since the beginning of 2019 the TSX has gained 8.3% (2018 losses of 11.7%), the S&P has gained 11.3% (2018 losses of 10.8%), the Nasdaq has gained 11.6% (2018 losses of 7.7%) and the Dow has gained 7.4% (2018 losses of 7.7%).
    It is more than likely that the U.S. markets will once again significantly outpace the TSX by all estimates.
    Keep in mind that the U.S. and Canada do NOT calculate unemployment statistically the same way so one must factor in a conversion to compare the two.

  10. Sandy McLennan on

    “lacking core identity/identity politics driven” ? Enough said (or not, as it were). And your core identity is?

    • Sandy, “Lacking core identity” are Trudeau’s words, not mine, I am only quoting him from his NYT interview -“There is no core identity, no mainstream in Canada,” Did you not read that article in the link? It is very telling about his vision and thinking. His use of identity politics is beyond doubt, and he has been widely called out on it. I would say he has mastered it.

      Core identity refers to Canada – a nation – not an individual. Canada’s identity is defined by our unique history, 2 official languages, strong cultural traditions, values, rights & freedom guaranteed in our charter, and reflected in our laws and system of parliamentary government.

      What point are you trying to make, it’s unclear to me..

  11. Dave Wilkin

    How refreshing and hopeful to read your commentary where you express the reality of Canada’s worst prime minister in history, Justin Trudeau, who has, with intent put our country in huge jeopardy as he diligently works to establish a Socialist Utopia, a post national country with lost sovereignty and democratic rights and freedoms in which he, as a member of the Elitists will reap the benefits. Everything about this Liberal Leftist is fake. It really is a tale of two countries, one with a remarkable President who, despite unjustified and relentless abuse continues to work with determination for the American people and put them first in every way, while in Canada, a prime minister, who fraudulently and manipulatively gained office from which to betray, with intent and equal determination, the Canadian people in every conceivable manner.

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