Month: March 2006

This morning, our friends at The Globe and Mail reported:

… the former public works minister, a potential contender for the Liberal leadership, sent an e-mail to one of CIBC's employees the day before Ottawa announced its much-anticipated policy on income trusts last November, in which he suggested the recipient would likely be pleased by the decision …

This afternoon, Scott Brison held a press conference to release the full e-mail exchange (with the names and other identifiers of his correspondent blacked out) and to read the following statement:

First and foremost, I had no advance information about the timing or the substance of Mr. Goodale’s announcement on income trusts before I sent the e-mail in question.
In this e-mail to an acquaintance, on another matter, which I am also releasing today, I briefly speculated on information which, at that point, was already in the public domain.
On Tuesday, November 22, at 11:41am, [Note from Akin here: – On Tues Nov. 22 at 11:41, the federal cabinet was meeting] I initiated an e-mail conversation with an employee of CIBC, to track down a phone number. During the course of the conversation, this individual expressed displeasure with the overall state of the equity markets in Canada, and that the government had brought them to a ‘standstill’. At 5:53 pm, I wrote, “I think you will be happier very soon…this week probably.” This exchange continued the next evening following Mr. Goodale’s announcement on income trusts.
At the time of this exchange on late Tuesday afternoon, Mr. Goodale had made comments to the press regarding income trusts after Question Period that day. These comments set off speculation about the timing of an announcement, particularly in light of the impending election. This issue had already been the subject of intense public discussion and speculation in the preceding weeks. Many in the investment community had speculated that an announcement coming before an election would undoubtedly be good news, largely because it would end uncertainty in the markets. My correspondence with the CIBC employee conveyed nothing more than what was being publicly speculated at the time.
On the morning of January 18, I met with the RCMP, at their request, in Wolfville, during which meeting the e-mail exchange was discussed. I have not since spoken with the RCMP since that day.
Yesterday, I returned a phone call from a Globe and Mail reporter, without knowing the subject he wished to discuss. At the time, I was reluctant to discuss what I knew to be the subject of an RCMP investigation. I acknowledge that I should have been more clear in my comments.
I have made it a practice in public life to be open, honest and direct about myself and when dealing with issues. This is why I am taking this step today to clear up any confusion.

For a while at the beginning of this decade, interest rates were low, employment levels were improving, and economists were moaning that Canadians were not saving enough and were piling up too much debt. Not anymore.
As Merrill Lynch's top Canadian strategist David Wolf notes in a recent note to clients, Canadians are putting some of their newfound wealth in the bank. That's good news for the economy because it means that consumers will be better able to weather any economic slowdown, when and if that day comes.
Here's what Wolf had to say:

Canada has benefited from a hugely positive terms of trade shock that represents an inward transfer of income from the rest of the world. Like a worker who gets a big raise, doesn't know if it'll stick and only gradually adjusts, so a good bit of Canada's upside national income surprise has been saved rather than spent.
We calculate that Canadian gross national savings hit 23.4% of GDP in 2005, the second highest rate of the past thirty years. Since 1993, Canada's national savings rate has gone from the G7's lowest to its second-highest (behind Japan), rising 10 [percentage points]; no other G7 country has seen its rate increase more than 1 [percentage points].

Last night, my colleague Robert Fife reported that Prime Minister Stephen Harper is looking to replace Bernard Shapiro, Parliament's Ethics Commissioner. Today Fife asked Harper about that issue. Here's the exchange that took place in the foyer of the House of Commons this afternoon:

Fife: Prime Minister, the Ethics Commissioner announced that he’s going to be investigating you and Mr. Emerson because he switched parties. I’d like to know what your view is, (what) your assessment of that investigation is and whether you’re going to cooperate with him and what do you think of Mr. Shapiro?
Harper: Well, it’s difficult for me to make an assessment because there’s aspects I’m not clear on. But let me just say this. The power to make cabinet appointments is a power that resides in the office of the prime minister as the highest elected, democratically-elected official in the country. And this prime minister has no intention of ceding that jurisdiction in any way, shape or form to any government official. And I’ve conveyed that view to the Ethics Commissioner.
Fife: May I ask you another question, sir? Mr. Broadbent says there had been discussions with him about possibly replacing Mr. Shapiro. He can’t do it because his wife is sick. Is it fair to assume that if you have your way Mr. Shapiro will not be working as Ethics Commissioner for much longer?
Harper: Well, I think as you know there have been some concerns some time around that post and I don’t want to get into that today. I will simply tell you, Bob, that I’ve had only one conversation on this subject and that was with Mr. Broadbent. I haven’t had any other conversations, you know, and obviously I that’s I think a question for another day.

Other members of the gallery were interested in this issue as well. In the next exchange, Sean Gordon of The Toronto Star follows up on the issue of Shapiro's status:

Gordon: Mr. Harper, … your office said on Friday that you were loathe to cooperate with a partisan process launched by — and those are their words — by Mr. Shapiro. Now you’re saying that you have had conversations with him or that you’ve at least transmitted your point of view. I’m wondering what has changed?
Harper: Nothing’s changed. We’ve conveyed — we’ve conveyed our response to Mr. Shapiro’s letter. As I say, there’s some doubt in my mind what exactly he is pursuing but we certainly conveyed to him the view and there should be no mistake about the view, the power to name cabinet ministers is in the hands of the prime minister. It’s not in the hands of a government official.
Gordon: But Mr. Shapiro is an officer of parliament and by not cooperating I mean how is that not sort of flouting the wishes of Parliament by refusing to meet with him?
Harper; Well, we’ve conveyed our views. We’re operating within the ethics code and we expect everybody, including the ethics commissioner, to operate within the code.

The last Parliament included the famous debate and vote on Canada’s same-sex marriage legislation. When that legislation came to a vote in the House of Commons, the NDP caucus was “whipped” to vote in favour of the bill. In other words, NDP caucus members were not allowed to vote however they pleased on the issue. Despite that edict, Bev Desjarlais (left), who was the NDP member for the northern Manitoba riding of Churchill, voted against that legislation.

Because she ignored the direction of her party’s whip, Ms. Desjarlais was stripped of her critic’s responsibilities. Shortly after that, she resigned from the caucus and finished the Parliamentary session sitting as an Independent.

She ran unsuccessfully in the Jan. 23 election as an Independent, losing to Liberal candidate Tina Keeper.

Ms. Desjarlais, though, will continue to work on the Hill.

She has been appointed Director of Parliamentary Affairs to the Minister of Veterans Affairs Greg Thompson.

Other staffers hired to date by Thompson, who represents Southwest New Brunswick, include Jacques Dube who will be his chief of staff, and Robert Smith as Senior Policy Advisor. He has not yet hired a director of Communications.

 

Kevin Lynch was appointed the Clerk of the Privy Council last month. It’s the top civil service job in all the country. And it pays all of $239,000 to $280,000 a year.
He takes over from Alex Himmelfarb. Himmelfarb becomes a Special Advisor to the Prime Minister. His salary, too, is $239,000 to $280,000 a year.
UPDATE on MARCH 7:

PRIME MINISTER ANNOUNCES DIPLOMATIC NOMINATION OF FORMER CLERK OF THE PRIVY COUNCIL
OTTAWA – Prime Minister Stephen Harper today announced the nomination of Mr. Alexander Himelfarb, former Clerk of the Privy Council and Secretary to the Cabinet, as Ambassador of Canada to the Italian Republic with concurrent accreditation to the Republic of Albania and the Republic of San Marino, and as High Commissioner for Canada to the Republic of Malta . . .

Toronto-Dominion Bank Chief Economist Don Drummond — a former mandarin in the Department of Finance in Ottawa — believes the Conservative government plan to pay for some campaign promises by finding ways for Ottawa to save money may be a bit ambitious. In a report published by the Bank yesterday, Drummond says “the savings required are heroic, far surpassing what was identified by the Expenditure Review Committee for the 2005 Budget but more modest than that of the watershed Program Review in the 1995 Budget.”

During the campaign, the Conservatives promised to find $22.5–billion in savings over five years. Drummond (picking up on a point the Liberals tried to hammer home during the campaign) said the Conservatives offered few details during the campaign about how they would achieve those savings. 

Drummond goes on to say that there are some other unexplained holes or assumptions in the Conservative plan. For example, he believes it will cost $500–million more than theTories originally estimated to make good on their promise to cut the GST.

“The magnitude identified in the Conservative Plan will not be easy to secure. It will certainly take more time than is available before the first Conservative Budget, which we believe is likely to be in mid-to-late April. That suggests that this budget will either plug in the assumed savings without identifying details, or the budget will only have a short timeframe, perhaps 2 years rather than the tradition in recent years of extending to 5 years.”

I had a chance today to ask Prime Minister Harper about this today. Here’s what he said:

Well, I can simply tell you that it's the intention of the Government of Canada and the new government to do two things.  One is to deliver the commitments we made to Canadians and also to otherwise ensure that the Government of Canada lives within the means of the taxpayers.  In terms of those means, as we said during the election campaign, outside of priority areas we intend to hold the Government of Canada to a general rise in spending that's no greater than inflation plus population growth in this country because, frankly, we can't grow our government faster than we grow our economy and it has been for the last few years.  So, you know, I think this will be done … I don't see it as a major exercise.  It will simply be part of an ongoing exercise to ensure that Canadian tax dollars are used wisely.