As part of its weeks-long pre-budget rollout, the Liberal government has sent Finance Minister Chrystia Freeland out to announce a host of new measures on everything from housing to contraception. In each speech, she has returned to the same theme: that the promise of Canada, the chance to do as well as your parents if not better, isn’t being realized by enough people.

“We have arrived at a pivotal moment for millennials and gen-Z,” she told a Vancouver audience on March 27. “These Canadians have so much talent and potential. They need to see and feel that our country can work for them — that the promise of Canada can still be reached.” This isn’t so much an insightful observation as it is a long overdue concession to the reality that helps explain the Conservative Party of Canada’s increasingly massive lead in the polls. But it also raises an important question that the next election will help answer: how, exactly, do we go about fulfilling the promise our country offers to so many people?

Over at The Line, Andrew Potter suggested a return to Canada’s more elemental configuration might help. The federal government would withdraw from areas like health care, childcare and climate change and instead focus on “its core areas of concern and jurisdiction, including internal trade and security, national defence, immigration and international trade.” This, Potter says, would mirror the broader global retreat of international defence agreements, trade deals and other institutional expressions of globalization. “Some places can’t be renovated, they need to be gutted and rebuilt from the ground up, on the original foundations,” he writes. “Canada itself feels a lot like that these days.”

I’ll take the other side of this argument. I’m not necessarily disputing Potter’s premise here, which is that Canadians feel more and more like their country isn’t working as well as it ought to. From immigration and climate policy to health care and housing, Canadians have real and legitimate concerns that deserve a hearing.

What I will happily dispute is Potter’s assertion that the federal government is the source of these problems — and that, as he put it, Canada needs to be “gutted” as a result. I’d suggest the exact opposite: we need more Canada, not less.

We need a federal government that’s more willing to stand up to provincial mischief and malfeasance than ours has been of late, and better able to push back against their ongoing attempts to weaken the federation in the name of their own provincial self-interest.

In other words, we need a federal government more like the one Pierre Trudeau ran. He articulated a clear national interest for the country and supported it with a variety of ambitious programs and policies, from official multiculturalism and the National Energy Program to the repatriation of the Constitution and creation of a Charter of Rights and Freedoms. Above all, he was happy to campaign for the idea of more Canada, not less — and willing to lose elections over it if necessary.

That’s especially true right now, given the ongoing efforts by various provincial governments to tear at the fabric of Confederation. In his piece, Potter writes, “Federalism in Canada has turned into little more than a coast-to-coast festival of recalcitrance, recrimination and regional grievance,” but then goes on to blame “the vaccine mandate, the carbon tax, and other federal manipulations.”

This is just silly. The federal vaccine mandate only applied to federal employees and institutions, and the provinces all had their own provincial vaccine mandates. The carbon tax, meanwhile, seeks to address a national problem with a national policy that provinces could easily avoid by implementing their own climate plans. Instead, we have governments in Alberta and Saskatchewan determined to oppose any federal attempt to drive the greenhouse gas reductions we’re committed to making under the Paris Accord. Danielle Smith even tried to blame solar energy for a recent power grid failure that saw rolling blackouts in Edmonton in early April that began before the sun had risen.

These are not, in other words, serious governments, and they should not be trusted to address the increasingly serious challenges we’re facing. In the next federal election and the months leading up to it, Justin Trudeau’s Liberals should present Canadians with a clear choice. They can vote for a federal government that’s trying to fix national problems like housing, health care and climate change, or a party that will defer to the very provinces that are making all those problems worse.

That might not save Trudeau from his apparently inevitable fate, but at least it would help clarify what’s at stake for Canadians — and what they might stand to lose. Yes, his government hasn’t done a good job lately of helping enough people realize the promise of Canada. But at least he and his party still believe in it.

Remembering “Scribulatora”

I never got to know Catherine Jamieson, who died of cancer last week at the age of 61. But I was very familiar with “Scribulatora,” the Twitter alter-ego that thousands of Canadians knew (and loved) her by. She was a former Red Tory, a passionate defender of reason and science and an articulate champion of progressive values and politics. As bad as Twitter/X has become, she was one of the accounts I most looked forward to interacting with, and I will miss our mostly friendly and supportive exchanges.

Her death is a reminder of the importance of telling the people you love and respect that you do, in fact, love and respect them. It’s also a reminder that people you meet online can often have a bigger impact on your day-to-day existence than you sometimes appreciate. We’re all part of these ever-evolving online communities, to varying extents and degrees, and we come to count on the presence of certain personalities. When they leave, either because the digital platform in question has become irredeemably toxic or because of their own health or circumstances, we experience a loss that’s unique to our time in history.

I will remember her as someone who fought the good fight and inspired others to do the same. I will remember her as someone who loved dogs, loved gardening and loved the basic decency that she saw in most people. I will remember her as someone who had unbridled (and increasingly undisguised) contempt for liars, dissemblers and deceivers, and who reserved her harshest condemnation for those who abused the truth to advance their own political objectives. She wasn’t everyone’s cup of tea, I’m sure. But she was certainly mine, and I wish I’d taken the opportunity to tell her that.

If there’s a heaven — and alas, I don’t think there is — I’d like to think she’d be there with my dad in some eternal garden, talking about politics and their children and surrounded by a dozen very good dogs. This spring, whenever it finally decides to show up in Calgary, I’ll plant a new hibiscus bush (which was apparently one of her favourite flowers) in my own little garden as a tribute — and a reminder.

A kicked dog will holler: Budget 2024 edition

Most of the cats in Chrystia Freeland’s budget bag were out before it was officially tabled Tuesday, in large part because the Liberal government decided to start doing politics and controlling the agenda. But the increase in the capital gains inclusion rate got the headlines, and with good reason — it stands to raise $19 billion from Canada’s wealthiest people.

Breathe easy, National Observer readers. The first $250,000 of capital gains income you earn as an individual each year will still have the same 50 per cent inclusion rate (which means you pay taxes on half of it), while anything above that gets hit with the new two-thirds rate. And to sweeten the deal for the so-called “job creators,” they’re increasing the lifetime capital gains exemption for small business owners to $1.25 million.

As the federal government notes, “Next year, 28.5 million Canadians are not expected to have any capital gains income, and three million are expected to earn capital gains below the $250,000 annual threshold. Only 0.13 per cent of Canadians with an average income of $1.4 million are expected to pay more personal income tax on their capital gains in any given year.”

That’s 99.87 per cent of the population that isn’t impacted by this change. But, oh, is that 0.13 per cent ever letting us hear about it.

The president and the CEO of Shopify, both of whom have many millions in stock options that would be impacted by this change, tweeted their concerns. David Baskin, the CEO of a wealth management firm that specializes in people with more than $1 million in assets, said that the changes would “of course discourage the formation of domestic capital just when it is needed most.” And Matt Spoke, a real estate investor in Toronto, said, “I woke up this morning feeling a sense of loss. I’ve known for years that Canada wasn’t under the right leadership, but something about #Budget2024 really cemented it for me.”

That something, of course, was a tax measure targeting real estate investors like him. But that was kind of the whole point — to discourage real estate speculation and treat the gains that arise from it more equitably. As UBC economics professor Kevin Milligan noted, “If we're going to tax capital income, we should tax it the same through all channels: dividends, capital gains, interest.”

There’s a pretty wide consensus among economists that this is a good decision. The difference between this and, say, the carbon tax — also a hit among economists — is that it’s also good politics. Pierre Poilievre has made plenty of hay with his populist appeal to working-class voters, but he’ll surely be tempted to criticize the government here and side with the one percenters who are complaining most loudly. If he does, he’ll give away his game: that his talk about doing what’s best for the working- and middle-class was all an act, and he’ll cut taxes for the rich at the earliest opportunity if elected.

Even if he stays quiet — and that’s not exactly a high-probability outcome — he’ll essentially be ceding the floor to the Liberals and NDP on the question of income inequality and fairness. As EKOS Research’s Frank Graves noted, “Our polling showed a major shift to favouring more active government and taxing the wealthy. This was much stronger amongst under 40 voters where LPC were struggling. CPC can't go there. Could be a game changer.”

Time will tell whether the Liberals continue to press this advantage in the months ahead. Maybe next year they could even bring forward some sort of modification to the lifetime capital gains exemption for homeowners on their principal residence, one that disproportionately benefits wealthy boomers. Hey, a guy can dream.

David Eby might be tempted to axe his own carbon tax

A race that looked like a potential runaway victory for the BC NDP — and potentially a mirror of the 2001 provincial election that saw the BC Liberals win 77 out of 79 seats — is now starting to look much more competitive. With a provincial election scheduled for this fall, and the BC Conservative Party suddenly nipping at his government’s heels, Premier David Eby might need to try something bold. Might he entertain the idea of axing his own province’s carbon tax?

Remember, B.C. has never fallen under the federal umbrella, and its carbon tax dates back to Gordon Campbell’s BC Liberal government in the late 2000s. The NDP at the time opposed it, and has opposed it in subsequent elections. This is a political baby that Eby has inherited, in other words, and may not feel nearly as much loyalty towards it as it might otherwise seem. Now, with federal NDP Leader Jagmeet Singh mooting the possibility of moving away from a carbon tax, is it time for Eby to do the same?

British Columbians, after all, pay the highest gasoline prices in the country. That’s due to the carbon tax, a regional transit levy in the Lower Mainland, and the relative absence of refineries in the province. What if, for example, Eby pledged to scrap the consumer carbon tax, increase the transit levy, and use the funds to build more transit infrastructure in the Greater Vancouver Regional District? Would the federal government really go to war with him over a climate plan that retains a price on industrial emissions and increases transit spending in the most transit-oriented part of the province?

That’s a path that new Manitoba Premier Wab Kinew seems to be charting. He’s said that he’s lukewarm, at best, on the carbon tax, and would prefer to design something that works better for Manitobans. That would include more ambition from Manitoba Hydro, which could build new dams and create new sources of clean electricity. That electricity could then be connected to Saskatchewan through expanded interties, which would help that province decarbonize its dirty electricity grid. And Kinew’s plan clearly involves bigger opportunities for economic participation from Indigenous communities, which would deliver the sort of meaningful reconciliation the federal government has long said it wants to see.

As the Globe and Mail’s editorial board said, “Mr. Kinew may be forging the start of a cross-partisan consensus of what durable climate policy looks like in Canada. He’s not impressed with the carbon tax’s textbook theoretical approach yet he’s ambitious about what clean power can do for Manitoba’s future — environmental and economic. It’s a Prairie pragmatism, focused on what it’s for rather than what it’s against.”

Eby could help advance that consensus in his province, if he wants to. British Columbia also has major hydro assets it could expand that would allow Alberta to firm up its wind and solar and build far more of it — so long as it drops its ideological opposition to renewable electricity. With Kinew and Eby both pushing in the same direction, Ottawa’s clean electricity goals might yet be within reach.

In the process, Eby could take a potential political irritant off the table — or at least reduce the ability of his conservative opponents to weaponize it against him. The BC NDP was never sold on a carbon tax. Maybe it’s time for them to sell voters on something else instead.

Required Reading

In The Tyee, my friend Jared Wesley writes about Danielle Smith’s Pierre Poilievre problem. Smith, like Jason Kenney, Ralph Klein and Peter Lougheed before her, has benefited enormously from having a government in Ottawa led by a Trudeau — one, in both cases, that had an interest in Alberta’s oil and gas industry. (Don’t even get me started about the irony in Conservatives who used to rail against the National Energy Program now longing for … a national energy program.)

That benefit will disappear if the polls hold and Poilievre’s CPC wins in 2025. I am pretty clearly on the record in thinking that would be bad for Canada, but it might be very, very good for Alberta. That’s because it would remove the crutch that UCP leaders have been using to prop their otherwise scandal-ridden governments and force them to more fully account for their own choices and decisions rather than constantly blaming the guy in Ottawa. That could be very good news for a Naheed Nenshi-led NDP in 2027’s provincial election.

In The Walrus, Justin Ling shared an intimate look at Trudeau and the way he sees his government’s recent performance. It’s an accurate read, I think, on the mistakes and missteps this government has made — and the political blind spots it still seems to suffer from. It’s also a useful reminder that Trudeau is both his own worst enemy and best asset.

And finally, the CEO of Stellantis had some words of warning for anyone who thinks the decline of global oil demand will be slow and gentle. “The magnitude of the Chinese offensive, the competitiveness that they can demonstrate and the massive arrival of all of their best carmakers is a significant change,” Carlos Tavares told Bloomberg in a recent interview. “If the automotive industry doesn’t move, this industry will disappear under the offensive of the Chinese industry.”

Stellantis is the multinational auto manufacturer that owns brands like Fiat, Chrysler, Opel, Dodge and Peugeot. It recently struck a deal with the federal government on a new electric vehicle battery plant in Canada. And its CEO clearly understands that China’s EV companies are about to take over the world in the same way Japanese and Korean carmakers did in the 1980s. This time, though, they’ll all be electric — and they’ll force other automakers to adapt or die.

It’s not hard to figure out what this will do to economies like Alberta, which still depend so heavily on the sale and export of petroleum products. The only thing that is hard to figure out is why its government isn’t taking this threat more seriously.

That’s all for this week. There won’t be a newsletter next week since I’ll be in Vancouver and Victoria with my family enjoying the spring weather and flowers and introducing my son to the ocean and the joy (not sarcasm, I promise!) of travelling on BC Ferries. Here’s hoping there isn’t still snow on the ground in Calgary when we return.