Mid June Update

Ford hurting Scheer

If you’ve been following polls closely, it is pretty clear Doug Ford is not too popular in Ontario and his unpopularity is weighing Scheer down thus making his chances of winning a majority a much steeper hill to climb than it was a few months ago.  Thanks to the large deficit the Wynne/McGuinty Liberals left, tough decisions had to be made, but Ford has been very sloppy about the cuts and totally unfocused.  Austerity is never popular, but if you explain it properly and it is done with a long term goal in mind, you can minimize the backlash.  That is why all along I stated the party needed someone more competent as there was a tough job ahead and for that you really need someone who knows what they are doing.  While Ford may cost Scheer the election, Scheer still has options.  He can emphasize spending cuts are never popular, but if the Liberals stay in power for another term they will be that much worse, so better to defeat them now when the deficit can be tamed without too much pain, than wait longer and be forced to endure even more painful cuts.

Pharmacare Report

The pharmacare report is out and it calls for the government to go big and establish a single payer pharmacare, not just fill in the gaps.  Skimming through the report, I feel it only looked at one side of the equation which is what will make prescription drugs more affordable, they didn’t look at the other side of how we are going to pay for it.  I always believe if you want to develop a new program, you need to clearly state how it is going to be funded and the report didn’t go there which was disappointing.  It is my hope if the Liberals and NDP in their platforms provide details on how it will be funded.  Voters deserve the whole picture as almost anyone likes the idea of cheaper prescription drugs, but are people willing to pay more taxes for it?  My personal view is while single payer is probably better overall and if starting from scratch that might be the way to go, you don’t blow up a whole system, better to make incremental changes than wholesale so if something goes wrong it can easily be corrected.  As such due to the high price tag and the fact 80% already have coverage and this could mean for some coverage for fewer drugs (a common problem in countries with universal coverage for prescription drugs), I believe filling in the gaps makes more sense.  Never mind good luck getting all the provinces to buy in, especially based on current fiscal situations and ideological leanings of current premiers.  My other concern is if prescription drugs are now covered, many companies may decide to drop supplemental health coverage altogether for their employees meaning things like dental care, eye care, ambulance fees, private and semi-private rooms are no longer covered.  I would personally be worse off as I got coverage through my previous employer, but carried it over now that I am self employed and as someone who typically spends 30+ days every year outside the country, my plan covers travel abroad so I personally wouldn’t benefit, but like with any policy I don’t just look at myself, I look at bigger picture.  To cover the $15 billion, taxes will have to go up somewhere and that could be a tough sell and problematic too.  Of the options, raising top marginal tax rates or corporate taxes won’t come close to covering the $15 billion and will just further erode Canada’s competitiveness.  Raising income taxes on all brackets will also be bad for the economy as low and middle income individuals have high marginal propensity to spend so that reduces consumer spending hurting economic growth.  Higher payroll taxes are a bad idea as this will hurt small businesses on top of the already increases for CPP.  There are really only two options I could support that would cause minimal economic disruption.

  1. Raise the GST back to 7% which would bring in $14 billion, but I believe this would be a tough political sell, but smart economically.
  2. Introduce an employer’s health tax similar to BC which would exempt small businesses and only apply to large businesses many who provide employee coverage so overall cost to business would be neutral since higher taxes would be offset by lower costs on employee benefits.  BC is able to get $2 billion a year here so when adjusting for population this might work.

My preference to bring down prices and make prescription drugs affordable for all would be to follow the Quebec model which is establish a public option with reduced or no premiums for low income individuals and allow individuals to freely decide if they wish to keep their private coverage or switch to the public option.  This would be self financed so no cost to taxpayers and those who like their plan could stay with it.

C-69, C-48, and national unity

I oppose both bills and believe they are bad for the economy.  Yes we need to take action on climate change and that is why I support a revenue neutral carbon tax.  But trying to throw up as many barriers as possible to prevent us from getting oil to market is not the way to go about it.  It is demand, not supply that drives oil production and if we don’t supply it, someone else will.  In developed countries, oil consumption is declining, but in developing countries it is increasing as with strong economic growth there unlike the developed world, you have an emerging middle class who couldn’t afford a car in the past but now can.  As such we are cutting our nose off by not supplying.  I believe the complaints of the six premiers are quite legitimate and Trudeau’s comments about them hurting national unity are uncalled for.  Just as Trudeau was elected on a mandate to take action here, the premiers were also legitimately elected too and I can say as someone with family in Alberta, the anger towards Trudeau is really palpable and while separatism is largely a fringe element, when a region is upset better to listen than turn a blind eye.  Trudeau also needs to understand while he may have had it easy in first few years with mostly like minded premiers, in Canada more often than not provinces tend to vote opposites of federal government.  Negotiations and working cooperatively is no doubt a challenge, but both sides need to be willing to listen as while it may be good for partisan purposes to pick fights with another level, it is not good for the country.

 

2 thoughts on “Mid June Update

  1. The latest federal polls (Ipsos, Angus Reid and Leger) seem to suggest things have stabilized overall. However, I noticed in the Angus Reid poll something that would be devastating for the Liberals: their lead in Quebec is entirely due to running numbers up in Greater Montreal (hence they’d gain next to nothing overall as they would likely lose seats elsewhere in Quebec, mostly to the Conservatives), while in Ontario they have a strong lead in Toronto (the 416) but are trailing significantly in the rest of the province (which likely doesn’t even account for pockets of support like Ottawa). If those are both correct, and with the Greens eating away elsewhere, I’d think we’d see a Conservative majority even at 36, 37% support due to wasted Liberal votes.

    The problem is that Trudeau really has nowhere to grow – the west is largely sunk except for perhaps the City of Vancouver, the Ontario marginals are likely gone leaving them mostly with Toronto and Ottawa, Quebec is too polarized to make the gains they need and the drawbridge has definitely opened wide on the Atlantic fortress. At this point, I wonder if their strategy might be to work with the NDP and Greens to try to hold the Conservatives to a modest minority? I think the key to a workable Scheer government will be if CPC > LPC + NDP + GPC, but if the Conservatives have a higher popular vote than the Liberals, there may be a sense (especially in the West) of a stolen government. I think the Bloc will be irrelevant in coalition calculations since they would be toxic for anyone, but if Quebec is a 2-party race, they likely won’t end up with more than a small handful of seats anyway.

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    1. My guess is that much like in BC if the Tories don’t win a majority, Liberals will team up with NDP and Greens to keep them out. If they have to rely on BQ things could get interesting. I agree such arrangement much like 2008 will be divisive and probably improve the chances of a Tory majority next time around, but if the Greens or NDP let Scheer become PM, they will pay a big price amongst their supporters. In Europe, everytime a progressive party has propped up a conservative one, they’ve paid a huge price the following election. So I think things could get quite interesting.

      As for what will happen, a lot can change in 128 days, so while at this point I think a Liberal majority is a very long shot, I’ve seen parties come from further behind in the polls. Trudeau’s biggest concern though should be his low approval rating. His approval rating is similar to what Stephen Harper was in 2015, Philippe Couillard last year and lower than Rachel Notley was when defeated. By the same token Dwight Ball had similar approval ratings and still got re-elected while Christy Clark and Brian Gallant did too and both would still be premier if they just got a few extra votes in the closest riding, so his approval ratings are low enough he is vulnerable, but also high enough he could still win if people think alternatives are worse. That being said if Trudeau’s approval rating falls any lower he is toast. General rule of thumb is approval over 50%, get re-elected no matter what, approval rating in 40s, usually get re-elected unless one of the opposition leaders really connects, in 30s, usually lose unless opposition is lousy; while under 30% lose no matter what. Trudeau’s approval rating is in low 30s now.

      If Tories get 36% or 37%, its possible they could get a majority due to NDP and Greens getting a lot of votes (low to mid teens for both so two combined 25-30%) but not translating those votes into seats; that is especially the case for the Greens who could get 15% but only around 5-7 seats. On the other hand the Tories have a lot more wasted votes than Liberals as there aren’t many ridings Liberals will be getting over 60% and possibly none over 70% whereas the Tories will get over 60% in a large chunk of ridings in Alberta and Saskatchewan and will probably top 80% in some of the rural ones so more cases of Tories running up the margins than Liberals.

      By region, I think Atlantic Canada will be a lot more competitive this time around and certainly the Liberals won’t sweep it again, but will it be a repeat of the 90s (In 1993, Liberals won all but one seat in Atlantic Canada, but lost 2/3 in 1997) or will it just be a few traditional Tory seats in New Brunswick swinging back? Will have to see how things play out. The NDP will lose most or all of its seats in Quebec, so any Liberal gains there will probably come here. BQ has rebounded a bit, but hard to say if that sticks. For Tories their vote is very concentrated in the Quebec City region, so they have to either fall below 15% to start losing seats or go above 30% to start gaining a whole bunch, but Quebec often shows its cards in the final two weeks so it won’t be until early October we have any idea how it is going. As for Ontario, polls are mixed and many suggest Tories might be polling below the 35% they got in 2015. Doug Ford is a real anchor on Scheer so he will probably limit the gains, still enough low hanging fruits that the Tories can probably gain 20 seats, but not 30 or 40 seats like they were earlier hoping for. Prairies should go largely Tory and asides from Ralph Goodale, I don’t see the Liberals winning anything outside Winnipeg and even there I think they will lose some but not all of their seats there. BC is a tough one as it is the strongest province for both Greens and NDP so lots of potential for Tories to win many seats with only 1/3 of votes if they get the right splits, but also have groups like Dogwood and Leadnow who coordinate strategic voting so will depend on how much strategic voting there is. I think Interior will go largely Conservative, Vancouver Island be an NDP-Green battle while Lower Mainland a mix with Liberals winning several although I don’t see them picking up anything they don’t already hold. So in sum I think a Liberal majority is very unlikely; Liberal minority still possible, Tory minority also possible although I suspect if that happens Trudeau remains PM with NDP and Greens propping him up, only if the BQ holds the balance of power does it become difficult to predict. Tory majority possible, but not easy and in many ways Doug Ford’s unpopularity in Ontario is probably the biggest thing standing between Scheer and 24 Sussex. Now if there is a Blue wave in Quebec, then he can win a majority, but that will be tough to do, but could happen but way too early to make any firm predictions as Quebec voters tend to be known for massive swings and often do so close to e-day. If Scheer can get Legault to endorse him (not likely) that could be a big help as unlike Ford, Legault is quite popular in Quebec.

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