Pipelines, the trade war and ‘Harry Potter’ financials: The key economic takeaways from the first leaders' debate
The French language leaders’ debate kicked off on Wednesday night with U.S. President Donald Trump’s trade war one featured as one of the first topics discussed. Participants included Liberal Party leader Mark Carney, Conservative Party leader Pierre Poilievre, Bloc Québécois leader Yves-François Blanchet and New Democratic Party leader Jagmeet Singh. The leaders exchanged barbs on energy, affordability and who is the best person to handle Trump. Here, the Financial Post breaks down five key economic takeaways from the debate.
Supply management will not be sacrificed in trade war
Trump’s trade war and the need to reach some sort of agreement with the U.S. in order to put an end to tariffs was one of the night’s big topics. Poilievre said if elected, he would attempt to fast-track such an agreement with the Americans, but added that Trump is hard to control. Carney had previously promised to begin negotiations on an economic and security agreement with the U.S., if elected. While both leaders were short on detail on how to achieve this, the question of whether Canada’ supply management would be subject to any future negotiation was asked. All party leaders promised that supply management would not be touched, despite concessions being made on the three last trade deals negotiated by Canada, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Canada-United-States-Mexico Agreement (CUSMA). Blanchet said Trump wants to flood the Canadian market with Wisconsin dairy, which he says is less regulated and contains more hormones.
More oil production and more pipeline projects
Both Carney and Polievre said they would like to see an increase in oil production in Canada, with Poilievre wanting to see more pipelines built to get Canadian oil to market. Carney said “we need to have pipelines” while also investing in other technologies like carbon capture. Blanchet and Singh would only like to see increased investments go to green energy technology. The question of jurisdiction and regulations as it relates to pipelines and major energy projects became a contentious part of the debate when Blanchet accused Carney of planning to use executive powers to get major projects approved, without consulting the provinces. Carney clarified that he would use executive powers to fast-forward federal approvals, but that projects will still require sign-off from provinces and First Nations. When asked if he would impose a pipeline even if First Nations and provinces did not want it, Poilievre brought up the example of the now-cancelled Northern Gateway Project, which he noted was supported by 80 per cent of First Nations, while 20 per cent were against. He argued that a case like that should be “majority rules.” Both Poilievre and Carney said Canada should wean itself off the reliance on the U.S. for imported oil and become energy self-sufficient.
Housing at the centre of affordability crisis
Housing dominated the debate on affordability among the leaders. Carney has promised to double housing construction, bringing the amount of homes built yearly to 500,000. The Liberal Party has said it will achieve this by creating a new agency called Build Canada Homes, cutting municipal development charges in half and invest more prefabricated and modular homes. Polievre has promised to build 15 per cent more homes each year, cut the goods and services tax on new homes up to $1.3 million and sell 15 per cent of federal buildings to be redeveloped for affordable housing. During the debate, Singh attacked both Poilievre and Carney’s credibility when it comes to solving the housing crisis. Singh pointed to Poilievre’s time as housing minister under former prime minister Stephen’s Harper’s last government, with Singh claiming he built just six homes. Poilievre interjected arguing 200,000 homes were built under his tenure and the average house price was $450,000. Singh also pointed to Carney’s ties to Brookfield Asset Management, an investment firm Singh argues has benefited from the housing crisis by driving up rents in the properties it owns.
Cap on immigration until economy can catch up
There was a consensus among all the leaders that Canada’s immigration system is not working, noting long processing times and lack of capacity when it comes to absorbing the levels of immigration in Canada over the last few years. Carney said the immigration system is not working, especially after the pandemic, and that he would keep the cap on immigration for a couple of years. Poilievre blamed the Liberal government’s immigration policies for causing a housing crisis in Canada and said immigration should go back to levels where population does not surpass housing, jobs and resources in healthcare. Singh and Blanchet also brought up the abuses in the temporary foreign worker program, arguing corporations should not have use of the program, and fraud in the program should be brought to an end.
“Harry Potter” financials?
All leaders were grilled for not producing fully costed platforms ahead of the first leaders’ debate. Poilievre promised his party will release a costed platform in the “coming days” and Carney promised the Liberal plan will become public this weekend, teasing it will create $500 billion of investment in the Canadian economy. Carney, Poilievre and Singh have all promised middle-class tax cuts for Canadians, but have been short on details on how they plan to pay for them. Carney and Poilievre have also promised to make cuts to the government departments, with Poilievre promising to make cuts to consultants and bureaucracy, while Carney says he will make cuts by attrition and keep transfers to individuals and the provinces untouched. Blanchet called these “Harry Potter” financial frameworks that will require “magic” in order to work. When the question of whether more programs like Pharmacare should be the federal government’s priority or increases for the Canada Health Transfer to the provinces, Singh was in favour of both, while the remaining three leaders choose the latter.