Canada’s Parliamentary Budget Officer describes itself as “a neutral, non-partisan party independent of government.” But as the ever-deepening fiasco around its analysis of the carbon tax and rebate shows, that doesn’t mean it can’t get political. Its failure to proactively disclose a major error in its analysis — and the defensive way it responded to criticism of it — shows it has clearly taken a side in this debate: its own.

In April the PBO quietly posted an update to its website noting that it had accidentally included the industrial carbon price in its much-discussed modeling of the economic impacts of the federal government’s signature climate policy. That modeling, first released in 2023, quickly became ammunition for Conservative politicians and proxies, who have used it ever since to suggest the carbon tax was actively impoverishing Canadians. If the polls are any indication, the rhetoric is working.

Even without that error — and we’ll get to it in a second — the PBO’s economic math raised some questions. The report was premised on a comparison between the carbon tax and no climate policy and implied that doing nothing imposed no costs on Canadians. In a recent column, the Globe and Mail’s Tony Keller explained why this makes no sense. “Think of rules that force car manufacturers to put airbags in new vehicles. That makes cars more expensive, which means less money in consumers’ pockets, which diminishes other spending and economic activity. Under a model that considers only the cost of airbags, and not the health benefits, an airbag mandate is an economic drag that leaves everyone worse off.”

Ironically, this flawed reasoning was eventually rejected by none other than the PBO himself, Yves Giroux. “Anything we do with respect to addressing or trying to curb climate change will have costs,” he told the Canadian Press last year. “It's either a cost to the carbon tax or regulations to reduce the use of fossil fuel. Regulations also have a cost. Doing nothing would also have costs.” Weird that he didn’t include that in his economic modeling.

Now we discover the accidental inclusion of the industrial carbon tax in his calculations, which only further muddies the already murky waters. That’s because in Alberta, Saskatchewan, Ontario, British Columbia and Quebec, the federal industrial carbon tax has never been in force. And while the PBO’s Giroux has suggested that the unintentional inclusion of the industrial carbon tax in his modeling wouldn’t meaningfully change the figures, not everyone agrees with that analysis.

According to the Canadian Climate Institute, industrial carbon pricing will be the single biggest driver of emissions reductions in Canada by 2030. It’s hard to square that with the notion that it only represents a rounding error in the PBO’s analysis. As University of Calgary economist Trevor Tombe told the Globe and Mail’s Keller, “It’s entirely possible that the industrial system has more of an impact than the consumer system. I don’t have the proof but that’s my gut reaction.”

Alas, that’s all we have right now: gut reactions. If the PBO’s modeling was made available to other economists like Tombe, they could run their own analysis here or at least better understand what informs the PBO’s. Instead, it remains shrouded in mystery — one that’s compounded by the PBO’s suggestion that it won’t update its faulty figures until the fall. Why it would take them months to remove one input from their economic model is a mystery to me, but I suppose it’s just one of many here.

There is almost no chance that the eventual reveal here will change anyone’s mind about the carbon tax and rebate. The Conservatives are committed to the idea that it’s driving up the cost of everything in our lives, facts notwithstanding, and it’s unlikely that anything short of a full repeal will change their minds. The politics around the carbon tax are mostly set in stone, and they’re ones that may well sink the federal government.

But Canadians still deserve the truth here, even if some of us aren’t prepared to listen to it. We still need to know what the Conservative alternative to a carbon tax looks like and what costs it would impose on current and future generations, even if voters decide it’s not important to them. That’s work that the PBO, by its very nature, ought to be doing. Instead, whether by accident or design, it’s running interference for the Conservatives instead. In the process, it might be sealing its own fate alongside that of the carbon tax.

The Conservative silence on foreign interference is getting awfully loud

You might think, given the amount of time and energy they spent last fall pressing the federal government for a formal inquiry into foreign interference in Canada’s elections, that the Conservative Party of Canada would be eager to discuss the recent revelations made by the National Security and Intelligence Committee of Parliamentarians. So far, at least, you would be very wrong.

The committee’s latest report found that several sitting parliamentarians are ”witting or semi-witting” participants in foreign interference operations and some have even shared secrets with other governments. It’s not clear yet whether these activities rise to the level of indictable offences, and no names have been shared as yet. “Regardless,” the report says, “all the behaviours are deeply unethical and the committee would submit, contrary to the oaths and affirmations Parliamentarians take to conduct themselves in the best interests of Canada.”

This is explosive stuff. As I said on social media, we need to get to the bottom of this immediately and expose anyone who has put another country’s national interests above our own in the name of personal or partisan advantage. And yet, for some reason, Conservative MPs appear to be following a gag order on this issue. No questions were asked about it during Tuesday’s Question Period by the Conservatives — only Bloc Quebecois and NDP members brought it up — and Poilievre’s MPs refused to talk to reporters about the issue. As Liberal MP Nate Erskine-Smith pointed out, the same can’t be said about his party.

In fairness to Poilievre, his first question in Wednesday’s Question Period hit on this issue. He then immediately pivoted away from it. I’m not going to pretend I have any unique or interesting insights here, since foreign policy is way outside of my usual bailiwick. What I do know is this: there are clear efforts being made to influence our domestic political discourse, whether they’re coming from China and India or Russia and the United States. And Pierre Poilievre, who seems to have loud opinions about almost every subject on earth, is conspicuously quiet here. That, in and of itself, speaks volumes. We’d all do well to listen.

Why I didn’t sign the “Ottawa Declaration”

A little while back, one of the organizers behind the Macdonald Laurier Institute’s “Ottawa Declaration on Canadian Journalism” asked if I’d lend my name to it. I politely and promptly declined.

Having seen the list of people who did sign onto it, I’m not exactly filled with regret. Yes, I respect and appreciate the work of Andrew Coyne and Paul Wells, and I understand where they’re coming from here. I will note that, as long standing columnists with major audiences, they are less vulnerable than almost any working journalist in Canada right now to the changes that continue to roil the business. In some respects — hello, Substack — they may actually benefit from it.

But most of the names on the list are from organizations that seem more interested in promoting conservative values and politicians than good journalism. I am not convinced, to put it mildly, that folks such as TrueNorth’s Candice Malcolm, the Western Standard’s Derek Fildebrandt, or Quillette’s Jonathan Kay have any real interest in saving journalism. There’s also some clear irony in a few of those publications signing on, given the fact that they seem to have no problem with other forms of government subsidy.

But let’s take on the meat of the matter here: the declaration’s stated intention. “We encourage other digital news media outlets to sign this declaration and reject the payroll subsidies,” it reads. “In trying to “save” journalism, these subsidies damage the independence of the press, stifle much needed innovation and private investment, and fail to rebuild readers, listeners, and viewers’ trust in our industry.”

I agree that there are aspects of the current federal policy that miss the mark, whether it’s aggressively subsidizing existing print publication conglomerates like Postmedia and TorStar or failing to help the CBC rediscover its purpose. But the idea that eliminating all government support for the media would somehow produce a more robust version of it is ideological thinking run amok.

Conservatives — or some of them, anyways — believe in the purity of the market and its ability to ultimately create and reward success. This two-dimensional view misses a lot of the complexity out there in any number of industries or businesses, but it’s one that remains popular in certain quarters. The problem is that it has nothing to say about a situation like English Canada’s media market.

I’ve said this before, and I’m sure I’m not alone: the media market in English Canada might be the most hostile on earth. In it, you have the lethal combination of a technology that ruthlessly rewards scale — the internet — and a population that can’t really support it. You also have a market across the border that uses the same language and exerts enormous cultural and political pull over people living here.

It’s not like this in the Netherlands, Germany, Japan or even Quebec. They have obvious linguistic and cultural barriers that make selling news and information far more economically viable than it is in English Canada. Without direct government support, it seems obvious to me that most news gathering operations — that is, the part of the journalism industry that’s the least lucrative — will shrivel up and die.

Opinion columnists like me will be fine. So too will niche publications that target specific industries or interest groups. But the broader news gathering function — that sends a reporter to a council meeting or investigates a local scandal — will not be able to survive in an ecosystem that depends so much on digital scale. And that, I suspect, is exactly what some people actually want to see.

Case in point: NewsBreakApp, which is apparently the most downloaded news app in the United States, has its origins in China. It even put out entirely fictional news stories written by AI. This is what will fill increasingly large parts of the growing news gap in Canada going forward: nonsense AI-driven garbage that serves some ulterior purpose or agenda.

Here’s what I’d like to see the folks who signed this declaration do: make suggestions for how we can better support journalism in this country. I’d like to see progressives thinking more clearly and creatively about this as well. We are staring down the possibility of CBC’s elimination, or at least evisceration, in less than 18 months. We might want to think about what could come after, as unthinkable as that might be.

Some journalism, on the other hand, isn’t worth saving

I know, I know. I make a pitch for saving and supporting journalism only to turn around and proceed to trash the work of journalists? What can I say: I contain multitudes.

The story of the 93-year-old senior who didn’t plan ahead and got hit with capital gains taxes underscores many of my longstanding complaints about journalism and journalists. To my mind, they’re far too lightly educated in things such as statistics and economics and far too willing to trade clicks for credibility.

CTV News started things off with a piece on the Ontario senior who wanted to give some land to her daughter and grandson and ended up staring at a capital gains tax bill. Despite the fact that she would have paid the same bill back in 2014, the story tries to create a link to the proposed changes in the treatment of capital gains. “While Canadians have always been required to pay capital gains on properties that are gifted, the changes in the budget could mean that Diachun will have to pay a little bit more than she would have previously.”

This is unlikely, given that the value of the proposed gift would fall well under the senior’s lifetime capital gains exemption — one that clearly applies to farm properties like hers. And, of course, the 93-year-old in question can surely remember a time when the capital gains inclusion rate was higher than the proposed 66.6 per cent figure the Liberal government plans to levy on annual capital gains in excess of $250,000.

But that context was curiously omitted from the piece. The Ottawa Citizen then doubled down on the error, running the story with a picture of Finance Minister Chrystia Freeland as though the bill was somehow her doing rather than a statute that’s been on the books for decades. You can bet that the vast majority of the people consuming that story online assumed Freeland was responsible for the senior’s plight. Maybe that was the whole point of framing it that way.

This brings me back to another point I like to make about journalism, and my fellow journalists: none of us are neutral. We all have biases and beliefs we bring to the table and we should disclose those as often as seems relevant. I make no apologies for the things I’m biased towards: reliable data, good science and respect for the truth, along with the people and politicians who best represent these values. That doesn’t make my work impartial or impervious to error or exaggeration, but it does mean I tend to know when and why those things happen.

Maybe all journalists need to have their own disclosure statements that let readers decide where they’re coming from and whether their work is worth reading. If nothing else, it might help them understand why certain mistakes are being made.

And finally, in yet more journalism talk

I can hardly let this one slip by: the Epoch Times, which has been a clearing house in recent years for far-right “news” and opinions, got busted by the US Department of Justice for allegedly participating in some fairly major financial crimes.

In a recent press release, the DoJ accused Epoch Times CFO Bill Guan of laundering US$67 million through the media company. The details, which include the creation of a “Make Money Online” team and the use of multiple cryptocurrency accounts, are something else. “In or around the same time the money laundering scheme began, the Media Company’s internal financial accounting reflected an increased annual revenue over the previous year of approximately 410% — from approximately $15 million to approximately $62 million. When banks asked GUAN about the increase in transactions entering the bank accounts of the Media Entities, GUAN lied, including to two U.S.-based banks, and claimed that the increase in funds came from donations. However, in 2022, GUAN wrote a letter addressed to a congressional office falsely stating ‘donations’ constitute ‘an insignificant portion of the overall revenue’ of the Media Company.”

Whoops!

So much for the Epoch Times and its supposed growth story. One wonders what prominent Canadian contributors to it like Barbara Kay and Conrad Black are thinking right now. If nothing else, it speaks to the fact that finding a new revenue model for journalism isn’t quite as easy as some made it look.

The CPC doubles down on its bad holiday math

Plenty of people, including me, called out the Conservatives last week when they floated a proposed gas and carbon tax holiday for the summer — one they claimed would save the average Alberta family almost $1,000. For anyone who ran the numbers, they came back hilariously wrong.

That now includes Dan McTeague, the former Liberal MP turned “gas price wizard,” who is no fan of the carbon tax. As he told the CBC, “I am in the wilderness.” His best attempt to replicate the Conservative claim resulted in $210 worth of summer savings for the average Albertan. Others, such as economists Kent Fellows and Sara Hastings-Simon, were similarly lost when it came to connecting the Conservative claim to verifiable reality.

But since the current incarnation of the CPC refuses, as a matter of principle, to back down in situations like this, their director of media relations doubled down. Sebastian Skamski suggested that their math included the modeled economic impacts of the carbon tax, even though a) those are now clearly in dispute, and b) any suspension of the carbon tax would reduce the size of the average family’s rebates. As Hastings-Simon’s math notes, when the reduced rebate is taken into account the average family would have to drive their Ford F-150 44,213 kilometres this summer to hit the proposed savings figure pitched by Conservatives.

I’m a fan of a good road trip, but that seems like more trouble than it’s worth just to save a few (imaginary) bucks.

That’s all for this week, folks. We have one newsletter left before my self-imposed summer sabbatical, so if there’s anything you want me to write about, please send along a note to [email protected].