International trade is weird

As expected, Donald Trump has levied some more tariffs on Canada, in response to Canada's counter-tariffs to Trump's earlier tariffs. I know, it sounds like a kid's game, doesn't it?

The new tariffs, generally speaking, are in the sectors of dairy products, alcoholic beverages and motorcycles, a pretty random-seeming mixed bag, although I'm sure some thought has gone into them (albeit not by Trump).

When you think about it, though, some of the products are pretty surprising. "Molasses products, including invert and cane molasses"? We export molasses to the USA? We don't have any sugar production, apart from maybe final refining. Why are we exporting molasses, and to the US of all places?

Ditto rum and tequila. Don't we import them from Mexico, and probably from the USA? What are we doing exporting them to America?

And, for that matter, motorcycles. We export motorcycles to the land of the Harley Davidson?

International trade is weird.

If there are more sanctions to announce, why weren't they announced before?

Every now and then, I read about a new sanction that is being brought to bear on one of the world's pariah states. The latest such is Canada, France and the UK are sanctioning Israel in a small way by banning the import of goods from the illegal settlements in the occupied West Bank. 

My first thought was "What? We buy things from the occupied West Bank? They can actually grow things there?" My second thought, though, was "Why the hell did we not impose these sanctions before?"

It's the same with Russia. Canada and most of the civilized Western world has imposed various sanctions on Russia since its invasion, and its ongoing bombing, of Ukraine. As recently as June of this year - four-and-a-half years into the war - Canada imposed new sanctions on 162 "people, entities and vessels". 

Which raises the questions of "why now?" If these are legitimate sanction targets in relation to Russia's illegal war, why were they not sanctioned four years ago? Why were the earlier sanctions not designed to include all possible targets, for maximum effect? Why wait until now to announce a few more piecemeal sanctions? Was it just for the sake of having something to announce, to be seen to be doing something?

It does seem to be more about playing politics than a serious attempt to bring about a halt to the war. And I'm not saying that only Canada is guilty of this - all countries seem to be doing it.

Extending gas tax relief is a cynical exercise in populism

The Carney government, which for the longest time liked to call itself "Canada's new government" in order to distance it from the old Trudeau-led Liberal government, continues to show just how distant it is from Trudeau-era philosophies, particularly where the environment is concerned.

Mr. Carney's latest transgression is to extend the tax cut on gasoline, aviation fuel and diesel that it brought in in April of this year, and which was supposed to die an ignominious death this week. Now we are stuck with it until the end of March 2027 at least.

It's a conservative-inspired populist sop, advertised as a cost-of-living/affordability measure designed to help poorer people cope with the increased costs caused by Trump's war in Iraq.

But it takes a good chunk of government money to finance this kind of feel-good measure.. Esimates are that the tax cut will cost the government (and therefore the country) about $5.3 billion. That's more than the entire annual budget of the Correctional Services of Canada, more than the Department of Agriculture's annual budget, and the Department of Natural Resources'. It's more than what Ottawa plans to invest in its critical minerals strategy, slightly less than is budgeted for "trade diversification and infrastructure strategies" over five years, and a bit less than its investment in defence industrial strategy over five years.

You get the idea: it's a lot of money. And this is not some kind of tax reform measure, funded by tax increases or spending cuts elesewhere. This is just out-of-pocket spending that the country can ill afford. It goes straight on to our deficit and our national debt. It is lowering the cost of filling up your gas-guzzler SUV by borrowing and topping up the national debt. 

It works like a carbon tax in reverse: the more you drive, the more you save. If you can't afford a car and use public transit, or if you are environmentally responsible and drive an electric car (like me), you get no benefit at all, but pay for the debt servicing costs anyway out of your taxes.

This is no less cynical than the "temporary" gas tax cut Ontario Premier Doug Ford instituted back in 2022, which of course is now permanent. It is a similarly cynical populist move, just on a bigger scale.

There was a time when Mark Carney was a committed environmentalist, particularly active on climate change issues, but those days are long gone. This move will enable an increase in fossil fuel use, and an increase in greenhouse gas emissions. Carney knows that, and went ahead anyway, because he likes the power and wants to stay as Prime Minister. Of course, he would say, like Doug Ford, that he is saving the man in the street money, but it will certainly not trickle down to the poorest of the poor. 

And anyway, at what cost to the environment does it come. It's interesting that it was announced at the same time as the government issued (rather secretively) its latest Changing Climate Report, which concludes that Canadians are feeling the effects of climate change - from floods, wildfires and heatwaves to vanishing glaciers and melting permafrost - much more, and much more seriously, than projected just a decade ago, and that those trends are likely to be much more pronounced in the future. Since 1970, it notes, Canada has warmed nearly twice every as fast as the global average, and the Canadian Arctic three times as fast.

The report makes grim reading. And the Prime Minister's response? Let's just make it worse.

"Your entire nation has a lower GDP than Texas"

"Your entire nation has a lower GDP than Texas". Not Donald Trump this time, but US Representative Brandon Gill of, well, Texas.

And his point? Er, not sure.

Canada goose 1 : American Eagle 0

I should know better than to respond to Trump's nocturnal ramblings on social media. But worth mentioning that I already dealt with this one long before it even happened.

In this episode... Trump has cherry-picked part of a photo sequence by a Canadian photographer of an encounter in Burlington, Ontario between a bald eagle (symbol of America) and a Canada goose (kind of a symbol of Canada, for our sins).

The photo seems to show the eagle dominating and savaging the goose. The rest of the photo sequence, though, shows very different outcome: after a protracted scuffle, the goose survives, rallies and threatens back against the shocked eagle. As I posted many months earlier, a different cherry-picked photo from the same sequence shows the goose rampant and a rather sorry-looking eagle.

Be careful with your source material Mr. Trump (or Ms. Harp, or whoever comes up with this guff).

Does Canada have any alternatives to retaliatory tariffs?

As Canada invokes dollar-for-dollar retaliatory tariffs on the USA, one can't help but lament how Canada is getting dragged into Trump's own silliness. On both sides of the border, prices will go up, plants will close, and jobs will be lost. As one journalist put it, this is "fighting stupid with stupid". Protesting that "we didn't start it" doesn't change that.

I mean, think about it: Canada now has tariffs on the same exports to the US as the US has tariffs on its exports to Canada. How daft is that? We may as well just keep those products and use them here in Canada, rather than making them more expensive, exporting them to the USA, and then importing the same products back again from the USA (after they have made them more expensive). Franz Kafka would have had a field day with this stuff.

There again, what choice do we have? Doing nothing would signal surrender, and give Trump carte blanche to extend or ramp up his tariffs. Hardly anyone is advocating that.

Some - including the Alberta Federation of Labour, much to many people's surprise - have suggested levying export taxes on our exports to the US. After all, that would put the financial burden on American importers, not Canadian exporters, right? The problem is, export  taxes raise the prices for importers, who would probably then look eslewhere for their imports. It would reduce the attractiveness of, and demand for, Canadian products, and probably result in scaled-back production and job layoffs. 

Predictably, others - the Canadian Association of Petroleum Producers, for one - have strongly counselled against such a move. Oh, and export taxes are also explicitly prohibited under the CUSMA/USCMA agreement with the US (although, arguably, Trump has flouted the spirit if not the letter of that agreement many times).

Which leaves us with retaliatory tariffs, or some other non-tariff option. BC Premier David Eby has called on Mr. Carney to consider other strategies, like reconsidering the plan to buy American F-35 fighter jets, and to levy export taxes on exports of coal to the US, but only in adddition to retaliatory tariffs, which he says he fully supports.

Canada nonplussed by Trump's threat to change Lake Ontario name

Family overseas are asking us how Canadians feel about Donald Trump threatening to rename Lake Ontario as Lake America. (Could he not think of anything more creative?) Well, the word that springs to mind is "nonplussed". Generally speaking, we have learned to ignore Trump's bloviations and his childish outbursts as much as possible.

Besides, he just can't do it. Even a US president can't unilaterally change the name of a bi-national lake. Any change he proposes (assuming he is serious, which is far from clear) would only apply to US federal government publications and maps. The current name is recognized internationally and appears in federal legislation on both sides of the border.

Lake Ontario - an Indigenous name that predates either country, incidentally - is governed jointly by Canada and the USA, through a whole series of treaties, commissions and bi-national agreements. To change the name, Trump would first need to go through the US Board on Geographical Names. Assuming he could cajole, browbeat and threaten them to go along with his childish prank, it would then need to be ratified by the Geographical Names Board of Canada and Ontario's Ministry of Natural Rreources and Forestry and Indigenous Communities, which is consulted on culturally significant names.

So, not going to happen. 

Mr. Trump may be able to force the US government to change the name on its own maps and reports. But then, US government maps will be wrong and everyone else's will be right. How does that constitute a win, even by Trump's warped standards? You can just imagine government functionaries rolling their eyes, as they consider the prospect of all that extra work just to accommodate another Trump hissy fit.

Canada-US trade talks fall through

Well, the Canada-USA trade talks fell apart at the eleventh-plus hour.

Prime Minister Mark Carney blamed the Americans for "last-minute changes in US proposed terms [that] were unfair, uneconomic and called into question the reliability of any deal". That sounds about right from past experience.

US Trade Representative Jamieson Greer, of course, blamed the Canadians for "new demands and walk-backs of other commitments by Canada [that] have upended the careful balance reached in the past days". That sounds less convincing.

So, the 50% Section 338 tariffs on about $28 billion of Canada's exports to the US (about 5% of total exports) are set to go ahead forthwith. That sounds pretty bad, but an RBC analysis estimates the fallout at just 0.4% of Canada's GDP, and a separate Capital Economics study puts it at 0.6% of GDP. So, not good, but not disastrous, in the scheme of things. The burden would not fall evenly on the economy, though, with apparel and electrical goods being most badly affected (20% of production and jobs in those sectors could be hurt).

Canada has vowed to retaliate "dollar for dollar", Trump has vowed to up the ante should Canada retaliate, and we now have an all-out open-ended trade war. And we haven't even started negotiation on the renewal or otherwise of the CUSMA/USMCA free trade agreement!

But, I'll tell you what, it actually pretty good to be standing up to the bully to our south. The only other country that has stood up for itself in this way is China. Although, granted we are much more in a David and Goliath situation.

Elbows up, anyone?

Canada probably needs to retaliate against US tariffs, even if it's self-defeating

Just hours before the next batch of Trump tariffs almost certainly comes into force, affecting a long list of Canada-produced items, there is still talk of retaliatalory Canadian tariffs. The question is: why?

Despite what Donald Trump wants you to think, tariffs are a tax on the levying country. Everyone else underatamds that. So, why would we want to do that to our own hard-pressed consuners and businesses?

The answer apparently, has nothing to do with economics. Economically, it makes no sense for us to levy counter-tariffs, even targeted tariffs. But not to retaliate would send a bad political message, and open up the possibility of further tariffs down the road, imposed apparently with impunity.

I get it: doing nothing implies weakness, and Trump punishes weakness. But I'm not totally convinced that responding with force is necessarily going to deter future escalations.  Retaliation or no retaliation, further threats and bullying is always a possibility with Trump, who is never satisfied.

Perhaps even more pertinent, though, is the matter of optics for Mark Carney and his Liberal government. Carney was explicitly elected on a platform of standing up to Trump, of not rolling over, and the polls are clear in their portrayal of Canadians as expecting some show of strength, some "elbows up". Carney's responses to Trump so far have been distinctly mixed, and many Canadians think he has already gone too far down the road of appeasement. So, a strong response is particularly important this time. And, for most Canadians, that means retaliation, however ill-advised.

Even if USMCA falls through.completely, the Canadian sky will not fall

It's been a while since I posted about US tariffs and the USMCA negotiations. It doesn't seem much like news any more. But as the US and Canada ramp up negotiations ahead of the August 19th deadline (tomorrow!) for a new round of Trump tariffs, it's starting to become more real. 

It was timely, then, to read an article about how even the end of USMCA - often portrayed as an existential threat to Canada - actually night not be as impactful as most people assume. Yes, it would be bad, bad, not good for the economy, generally speaking, but terminal danger?  - probably not.

There have been several studies and modelling exercises over the past couple of years on the likely impact of Donald Trump tearing up the USMCA agreement he signed off on six years ago, almost all of which have concluded that, while unfortunate for both countries, it would not be catastrophic for Canada. 

The latest such comes from the Canadian American Business Council, and it concludes that "USMCA Breakdown" would probably reduce Canada's economic growth rate by just 1% in 2027, and the economy would be about 1.6% smaller in 2035 than if USMCA were renewed (and respected) and tariffs fell to near zero.

Furthermore, it would result in about 102,000 lost jobs. While this sounds pretty bad initially, bear in mind that Canada currently has 21.2 million citizens in paid employment. The 102,000 lost jobs would have the effect of increasing the unemployment rate from 6.4% to 6.9% (which is about where it was four months ago; indeed, it was at or above 6.9% for most of 2025).

So, not so bad, then. The country will not be bankrupt. Not so good for those 102,000 workers, of course, and bear in mind that the axe will not fall randomly - some sectors in particular will be disproportionately affected. But all this means that Prime Minister Mark Carney does not necessarily have to accept any old deal Trump throws at him; a bad deal could be worse than no deal

Carney's climate change announcent a drop in the bucket

If you are non-plussed by the Carney "Liberal" government's apparent complete abandonment of concern over climate change, as I am, you could do worse than to read a good article that appeared in the Globe and Mail last week, entitled "Not addressing climate change costs the economy more. When will we finally get this?"

It's nothing new, but it's well-written, well-argued and convincing. Unfortunately, it will have absolutely no impact on Carney's policies because, for now at least, he is focussed on fighting fires from south of the border, and he is all about short-term gratification right now.

As an indication of where his head is at, one of the very few climate initiatives he has announced - positive ones that is; he has made many announcements killing or paring back existing climate initiatives - was the recent announcement of $34 million for various projects to make Canadian communities more resilient in the face of climate change.

$34 million used to be a lot of money once upon a time. But, as has been pointed out, it amounts to one-thousandth of the money the government invested in the Trans-Mountain oil pipeline, and a similar proportion of the proposed West Coast pipeline. That certainly puts it in perspective. 

And even this paltry amount is focussed on mitigation of damage rather than aimed at reducing the ongoing need for such mitigation.

All those e-scooters you see? They're illegal

If you are becoming increasingly exasperated by those annoying and apparently lawless electric scooters, you are not alone.

Stats on e-scooter crashes with pedestrians are hard to find, but accidents resulting in e-scooter rider visits to hospital, and even deaths, are increasing exponentially, especially among children. There have been at least two deaths of e-scooter riders in July alone.

How does it make you feel, then, to know that pretty much all of the e-scooters you see zooming around our streets, sidewalks and bike lanes are doing so illegally?

Having said that, it depends on where you live. You see, there are no national or even provincial rules or laws in place regulating e-scooters. What rules do exist are municipal. (And when was the last time you saw municipal laws being enforced?)

Thus, in Mississauga or Brampton or Ottawa, e-scooters my be legal due to a six-year old provincial pilot program they are part of. Even there, though, they are only legal if the scooters are unable to go faster than 24 kph (can YOU tell?) and if the driver is over the age of 15 (again, can YOU tell?) Also, you can't ride with a passenger, under-18s must wear a helmet, you can't ride them on the sidewalk, and if there is a bike lane available you have to use it. In Mississauga specifically, you can't ride them on a road with a speed limit of more than 50 kph.

So, it's complicated, and most people you see are probably breaking at least one of those rules.

In Toronto, on the other hand, it's not complicated at all. Toronto is not part of the pilot project, and you can't legally ride an e-scooter ANYWHERE in Toronto except on private property (so up and down your driveway, for example). You can buy them, but you can't use them. Once again, no-one is enforcing this ban - e-scooters are everywhere.

Outside of Ontario, it's just as confusing. In Vancouver, Halifax and Calgary, for instance, e-scooters are allowed, at least in bike lanes. In Calgary, though, e-scooters are only allowed if they are rented/shared, not if you own your own e-scooter. Plus, you can use your (shared) e-scooter on some sidewalks in Calgary but not others. Like I said, it's complicated (and unenforced).

Does Canada really need high-speed rail?

Canada has been talking about a high-speed railway line for decades. You only have to visit Europe or Japan or China to experience the wonder of an ultra-high-speed train, but these things don't come cheap. And, in North America at least, they don't come quickly.

The current Alto plan for a high-speed rail link from Toronto to Ottawa to Montreal to Quebec City (possibly via Kingston) is about 1,000 kilometers in length, and is protected to cost between $60 and $90 billion. The fact that the estimated cost covers such a large range suggests that they actually have no clue how much it will cost. Alto, the Crown corporation tasked with developing the project, itself warns that these figures are "for planning purposes only and should not be considered as a project budget". As with every other large Canadian development project, cost overruns are all but guaranteed.

As for how long it will take to build, well, that's anyone's guess. Not much of any size gets built in Canada in less than 15 or 20 years. The experience of California's foray into high-speed rail is salient here: a line from Los Angeles to San Francisco (just over 600km) was proposed in 2008 but, eighteen years later, just a tiny stretch of track has been laid, with most of the rest still at the planning stage. Currently, projections are that a 260km stretch from Merced to Bakersfield is expected to be completed by 2032, but don't hold your breath.

The bottom line, though, is the bottom line: $90 billion (plus) is an awful lot of money for Canada. Think what just a part of that that kind of money could do for public transit in Toronto or Montreal. Think what it could do towards eliminating poverty or propping up ailing Trump-tariffed businesses. 

Many politicians, though, seem excited by such a large-scale "nation-building project". It's often pointed out that Canada is the only G7 country without high-speed trains (although, as mentioned, America's is marginal). But is this really the best use of taxpayers' money? Do we really want to spend $90 billion - and it would probably end up costing much more than that, it always does - to save a few wealthy businessmen an hour or two on their commute, or to cannibalize customers from domestic airlines. 

Because, make no mistake, the cost of a ticket will probably put it outside the budget of the average Canadian (or the average tourist, for that matter), so it could end up as the biggest white elephant in Canada, the ultimate vanity project of the kind that we regularly mock other countries for undertaking. Canada's population is much less concentrated than France's or Japan's, and the distances are greater - what works over there won't necessarily work over here. Maintenance in the Canadian Shield terrain, and through those long hard winters, is also a differentiating issue.

I don't buy the argument that it is somehow miraculously going to fix traffic congestion and reduce our carbon footprint. It will not suddenly become the no-brainer option for travelling from Toronto to Montreal or Ottawa to Quebec City - it will be too expensive for that, for one thing, and will probably only appeal to people who currently take the train anyway. Neither will it magically boost GDP and create national prosperity, let alone improve access to housing and jobs and - most improbably - advance reconciliation with Indigenous peoples, all of which Alto is promising.

Yes, high-speed rail is cool, and yes, it would be nice. But can we really justify jt? Call me small-minded and anti-development, but I think not. And, just think, $90 billion!

Ten years later, MAID in Canada is still strongly supported

At the ten-year anniversary of Canada's Medical Assistance In Dying (MAID) law, there has been a flurry of articles about how successful the initiative has been. In particular, there have been two competing opinion articles in the Globe and Mail, exemplifying the different attitudes to the service.

MAID, or assisted suicide, has been legal in Canada since June 2016, originally just for cases where natural death was "reasonably foreseeable". In March 2021, after much consultation, this was extended to people suffering intolerable whose death was not necessarily reasonably foreseeable. These two types of cases are now known as Track 1 and Track 2, although strict safeguards are of course still maintained, particularly in Track 2 cases.

One of the articles, by the regular Globe health critic André Picard, puts forward what is probably the majority view, that MAID has been an unalloyed good. Over the last ten years, about 100,000 Canadians have been spared unnecessary suffering, 95% of them in cases where death was "reasonably foreseeable" in the language of the law. Picard argues, "Life has not been cheapened by MAID. Dignity, choice and bodily autonomy have all been bolstered". Furthermore  it has not led to the "slippery slope" nay-sayers warned against, and continue to warn against, despite the extension to cases where death is not necessarily reasonably foreseeable (which continue to make up just a small minority of MAID deaths). The law is deliberately couched in very conservative and cautious terms for that very reason.

The other article, by regular contributor Robyn Urback, is more of a nuanced critique, alleging that, while the program has been generally successful, there has still been anecdotal examples where a small minority of Track 2 MAID deaths (where natural death is not necessarily probable) may - or may not - have been botched or mishandled. Improbably, Ms. Urback sees these isolated incidents as evidence that "life has become cheap in Canada", and that the extension to Track 2 MAID in particular is "eating away at the country's soul", a radical conclusion that does not seem to follow from her detailed argument. A few poignant sob stories do not negate the general good the 

My point here is that the negative argument is on much more tenuous ground, and is anyway not completely negative, but rather a relatively minor quibble against an otherwise highly successful initiative. Certainly in terms of general satisfaction, the Canadian public is quite happy with what was initially such a contentious issue. A recent Environics poll shows that between 81% and 89% of seniors and caregivers support MAID. Another recent poll found that 89% of Canadians support in MAID in cases of terminal illnesses, while 84% support MAID for people who are suffering intolerably even if they are not near the end of their lives.

When we get into the area of extending MAID to people whose sole underlying condition is a mental illness, however, the picture muddies considerably. But that is not currently part of Canada's MAID program, and a parliamentary committee recently voted that those with mental illness should not have access to MAID, at least for the foreseeable future. Now, that one IS contentious.

I'm OK with Canada's modest AI ambitions

Call me a Luddite, but I can't help but be extremely suspicious of the whole world's reckless infatuation with Artificial Intelligence (AI). I'm not saying the whole world is wrong and I am right - well, actually, I kind of am ... - but I just have this feeling that the level of obsession most people are exhibiting over it can't be healthy, and that we are likely headed down a dark rabbit hole of our own construction.

I can't help but feel that, much like 5G communications, we are adopting a huge, expensive and world-changing technology, just because it's there - because we can - not because we need it. AI adoption, and the number of huge, power-hungry data centres under construction, is not equivalent to economic output, or even productivity, although you'd be forgiven for thinking so from the media attention. 

AI is currently keeping the world's stock exchanges at near record levels, in spite of all the other crap happening in the world, but not for any good logical reasons. Almost all of the big IPOs hitting the stock exchanges are tech related (mainly specifically AI-related). Call it a bubble or whatever other label you prefer. The markets have almost completely decoupled from the economy, and are largely running on the fumes of potential AI profitability. I've seen this movie before; it doesn't end well.

I read so many articles bemoaning Canada's sluggish uptake of AI (here's just one example) compared to our peers. Well, usually compared to the US. 30% of the US's real GDP growth now comes from private investment in IT equipment and software, compared to 5% in Canada, we are told. Data centre construction has increased by 180% in three years in the USA, while Canada doesn't even separate the category out from other spending on transportation, utilities and communications buildings. But is that such a bad thing. Who has it right?

Indeed, there is outright opposition to US-style unregulated expansion of AI data centres (except in US-style unregulated Alberta). Manitoba recently nixed a huge data centre development because, as Premier Wab Kinew explained, "there's a big threat to the environment and not much benefit to.the economy". Well, he's got a point. A similar process played out in Hamilton, Ontario, where the city council voted to pause all data centre development in the area, and most other municipalities in Canada are studying their decision with great interest. Even ultra-conservative Olds, Alberta, is up in arms against data centres, although they're more concerned about local property prices than the environment.

An Angus Reid study suggests that 68% of Canadian would oppose a data centre in theIr own backyard, and only 15% would support it. 

Their main concerns? That they strain local electricity grids and water resources, drive up electricity prices, increase greenhouse gas emissions, generate noise and air pollution, negative affect local property prices, and the more general anxiety about the concentration of wealth and power among tech billionaires and the perception of an AI industry spinning out of control. Valid concerns all.

(For what it's worth, even in the US-style US, the rollout of data centres is meeting with increasing grass-roots push--back, from an unlikely alliance of Democrats, Republicans, environmentalists and just concerned citizens.)

Canada does have many AI data centres, hundreds of them, particularly in Quebec, and many more are being built as we speak. It's not like we have our heads completely in the sand. Do we have enough? Well, how long is a piece of string?

The huge bet south of the border on AI, and the all those data centres it relies on, is just that: a bet. The future gains from AI we keep reading about may not actually unfold as predicted, which would leave states, local governments and electricity payers on the hook for many decades.

Canada, generally speaking, is much more environmentally conscious than the US (despite Mark Carney's efforts to change that), and the environmental footprint of AI data centres has come under increasing scrutiny of late. AI requites massive electricity consumption, high water usage for cooling data centres, and heavy raw material extraction for hardware. It's no surprise that some of the strongest opposition to AI and, on a more local level, data centres is from an environmental perspective.

Another element, though, is the increasing Canadian distrust of AI: trust in AI is significantly lower in Canada than the global average, particularly as regards potential job losses. Data centres are the physical embodiment of AI and its perceived threat to society. That distrust of AI extends to the business community in Canada to some extent, which is investing much less in AI than the US.

Once again, is this necessarily a bad thing (as it is usually portrayed)? Is the helter-skelter scramble in the USA actually the right call? The US may be much more conservative than Canada in most respects, but Canadian business tends to be quite circumspect and risk-averse, and that's not always a bad thing (look at how Canadian banks dealt with the 2008 financial crisis compared the Americans).

Here's another thing. An analysis by the Federal Reserve Bank of Minneapolis found that the computer equipment, batteries, switchgear, copper wiring, etc, needed for the US's AI rollout amounted to 23% of all US imports last year, increasing its trade deficit by roughly $200 billion. Canada's AI-related imports, on the other hand, remained pretty much consistent with previous years, and much more manageable.

So, who has it right? History will probably tell, but that doesn't much help today's planners. Mark Carney is making some moves to at least be seen to be doing something on AI, but even his strategy is pretty modest in the scheme of things. And, you know what? I'm OK with that. 

Canada pledges to accelerate AI development just as others advise caution

It sometimes seems like half of all articles in the newspaper are something to do with artificial intelligence, sometimes something good, often something bad.

Canadian news outlets are all reporting and commenting on Prime Minister Mark Carney's big reveal of Canada's AI strategy yesterday, outlining the government's approach to what he calls "the defining technology of our era". Under the banner "AI For All", Carney's upbeat, if somewhat vague, presentation promises: protections for Canadians, young and old, from the risks and potential online harms of AI (through modernizing consumer privacy legislation, introducing online safety laws, watermarking AI-generated content, creating a Canada trusted AI certification program, protecting elections from interference, etc); access to free AI literacy training (an area where Canada particularly lags), including for post-secondary students; up to 90,000 AI-related job opportunities for young Canadians, plus another 250,000 new jobs through increased AI adoption by 2031; boosting business adoption of AI from 12% today to 60% by 2034; building a world-leading supercomputer by 2031; building up a multilateral alliance giving Canada "sovereign autonomy" in key AI capabilities; and $2 billion in direct investment to achieve these strategic aims.

It all sounds very forward-thinking, ambitious, even Panglossian, although what it is really is Canada trying to make up some lost ground on everyone else. Some Canadian tech companies like Cohere are extremely positive about the new policies, calling it "an incredible step forward", "a defining moment of opportunity", and "the beginning of the next chapter", particularly since Canadian researchers were at the forefront of AI's early development.

Critics of the strategy, though, have questioned how AI is supposed to create so many thousands of jobs rather than cost jobs, as many are predicting (Signal 49, for example, warns that AI and automation could lead to 550,000 Canadian job losses by 2030 as businesses restructure.) Others have complained that the government strategy is vague on timelines and specific safety measures. 

Be that as it may, the Canadian government had to make some kind of an announcement about how it is pursuing and dealing with AI, if only because everyone else is.  

It's interesting, though, that it comes hard on the heels of Pope Leo XIV's papal encyclical Magnifica Humanitas, which warns about the urgent need tor an ethical framework for AI to prevent it from becoming an instrument of domination and an agent of lethal autonomous warfare, to avoid the manipulation of reality (e.g. deepfakes), and to protect the rights of workers, the marginalized and the vulnerable.

It also comes just as major AI developer Anthropic warns that maybe there should be a coordinated and verifiable pause in all AI development, because AI systems are approaching the point where they can improve themselves, without human intervention, faster than society can manage the risks.

This, then, is the environment in which Canada is, somewhat belatedly, committing itself to accelerating AI development and adoption.

So, are we in a recession or not?

Why is it so hard to get a straight answer? Well, that's because it depends on who you ask, and what particular axe they have to grind.

The news that Canada is now in a "technical recession" has set political birds a-twitter, with Conservative opposition leader Pierre Poilievre squawking about the "Liberal recession" and the dire need for an immediate emergency debate in parliament. Mr. Poilievre, of course, is hysterical-complainer-in-chief, and will probably never amount to anything more than that. His whole job, as he sees it, is to expostulate that the sky is falling and that it is all the Liberals' fault, leaving Conservatives to hopefully conclude that it would all have been quite different had he been in charge. It's only a matter of time until Conservatives tire of his smarmy Grinch-like smile and his negativity.

But I digress...

Most non-conservatives and most economists of any (or no) political stripe have treated the news with much more nuance, cautioning that the idea of a "technical recession" (two consecutive quarters of negative GDP growth) is not actually that helpful, and not even an official label. Many economic institutes, including he widely-recognized traditional arbiters of recession-calling, the National Bureau of Economic Research in the USA, and the CD Howe Institute's Business Cycle Council in Canada, do not use that definition. 

Most economists are cautioning that the weakness in Canada's economy is not yet widespread or persistent enough to warrant the recession label. Even the Bank of Canada, which issued the news, warned against overreacting to the announcement. BoC governor Tiff Macklem was very clear about it: "We have not seen a significant braod-based decline in economic activity ... recession is not the word I woild use".

In the current case, real GDP by expenditure was actually pretty much flat over the last two quarters (Q4 2025 and Q1 2026). StatsCan produces many different variants of national growth statistics, but the one usually used for these purposes shows a 0.036% decline in Q1 2026, and 0.246% decline in Q4 2026. Annualizing the figures magnifies the quarterly changes somewhat to about 0.1% and  1% fall for both quarters, but these are all tiny percentages, well within the margin of error for a stat that often gets adjusted or revised in retrospect, as often happens.

Getting still more granular, it turns out that it was really only October 2025 and March 2026 that showed actual decreases in real GDP - growth was either flat or modestly positive for the four months in between. Early estimates for April 2026 also suggest quite a sharp rebound to 0.4% growth.

And pulling out for a slightly different view of things, real GDP per capita, which some say is a better measure of economic growth and productivity, actually expanded 0.2% in Q1 2026, after a tiny dip in Q4 2025, as the country's overall population shrank slightly. Tellingly, a year or so ago, Mr. Poilievre and other critics were focussed much more on GDP per capita; now, when it doesn't serve their purposes quite so well, they are downplaying it.

Recession is, to some extent at least, in the eye of the beholder. Remember the great non-recession of 2015? Towards the end of Stephen Harper's Conservative administration, Canada's GDP fell by 0.5% and then 0.8%. But the Conservatives of the day, with an election looming, "declined" to call it a recession, even of a technical nature - one euphemism was a "discrete sectoral downturn" - while the opposition Liberals of course insisted that it was most definitely a full-blown recession. After much deliberation, the CD Howe Institute ultimately ruled that that technical recession didn't qualify as a real recession because its impact was not broad enough.

According to CD Howe, the last real recession was 2008/9, often referred to as the "Banking Crisis" (although Canada did not experience any major bank failures, and it weathered the downturn much better than other G7 nations), with a deep but very short one - which I would have thought ruled it out as a recession, by their own rules) in March-April 2020, at the start of the COVID pandemic. Before that, we are talking about the early 1990s and then the early 1980s. Recessions are not very common, particularly in Canada.

So, what are we to conclude? You can berate statistics and damned statistics all you like, but the fact is that they can usually be manipulated to prove a point, any point. While it's clear that, in very general terms, Canada's economy is not particularly healthy - how could it be, with all the external pressures on it? - most economists and financial institutions (including, let it be said, the Business Cycle Council) are urging extreme caution on the use of the R-word. 

Sorry, Pierre.

Trump tries some new tariffs - well, why not?

The Trump administration is at it again with tariffs, this time against almost all of America's major trading partners, with the pretext being that they are not pulling their weight on preventing the importation of goods manufactured using forced labour, which unfairly disadvantages the USA.

After the US Supreme Court struck down Trump's "Liberation Day" tariffs (levied, illegally as it turned out, under the International Emergency Economic Powers Act), he needed to find another way to impose tariffs, because that seems to be the sum total of his economic policy. What his highly-paid lawyers and policy wonks came up with this time was to use Section 301 of the 1974 Trade Act to impose tariffs of 10%-12.5% on 60 countries (including Canada) that they say are not doing enough to enforce the import ban on goods produced using forced/slave labour (from Xinjiang, China mainly). Canada, however, should be largely protected from these tariffs due to its participation in the USMCA/CUSMA agreement.

It's a bit of a stretch, and it's hard to see the current US regime taking the moral high ground on ANYTHING. But, to some extent, in this area, they may be right. 

Canada does have laws around forced labour imports, and there are specific provisions built into USMCA/CUSMA which prohibit the importation of goods produced wholly or partly by forced labour. But enforcement does seem to be lax. While Canada has intercepted 50 shipments on suspicion of forced labour contraventions since 2020, just 2 were ultimately turned away. The Coalition Against Forced Labour has called Canada out on this, and auditors from PwC agree that enforcement has been far from perfect. This will all no doubt also come up in some detail at the USMCA renegotiations later this year.

I confess, the first thing that occurred to me after I heard the news about the new tariffs was, "I bet America doesn't enforce their forced labour rules any better than we do!" Former Liberal MP John McKay, who was involved in the original implementation of the Canadian laws on forced labour, notes that the US still allows private American firms to make exports using prison labour, and it does not adequately enforce its own laws on forced labour imports, such as the Biden-era Uyghur Forced labour Prevention Act.

Actually, though, the US does seem to be enforcing that specific law quite well, as well as the terms of the Tariff Act of 1930 insofar as they relate to the products of forced labour. Some 6,300 shipments were denied entry into the US in 2024 alone (although that was pre-Trump; figures for 2025 do not seem to be available).

That said, most people seem pretty sure that the Trump regime is not doing this out of moral indignation. They are doing it as "an excuse to impose the tariffs that they wanted to do anyway", as one European diplomat put it, adding that it's completely implausible that all these US trading partners are equally guilty - all 60 major trading partners appear to have failed to meet the bar the US has arbitrarily set - and there seems to be little or no proof being offered. Human rights groups also caution that, while the problem of forced labour does exist, the US tariffs are not the way to deal with it. 

I have looked previously at the whole issue of forced labour in Xinjiang, China - because that is essentially what we are talking about here -  and it is not as black-and-white an issue as it might appear. But the bottom line is, Trump is effectively using any justification he can to impose tariffs (because he's a "tariff guy", don't you know?), and if he can also engineer a hit on China at the same time, then all well and good.

These new tariffs cannot be imposed immediately, but must go through a period of public comment and review, starting with hearings in July. Given how many legal set-backs Trump has experienced in recent months, the tariffs are not the slam dunk they may have been even a year ago.

UPDATE

A new law proposed by the Liberals to placate Trump and his buddies on the matter of blocking imports produced with forced labour was tabled this week (mid-June), designating a list of specific goods, producers, countries or regions where there are "reasonable grounds to suspect" forced labour involved. The government maintains this was not in direct response to the Trump tariff threat, and that it had been innthe works since 2024, but the timing sure is propitious.

It all sounds a bit woolly, especially as the bill puts the onus on shippers to prove that their goods are free of forced labour components. How is that going to work, I wonder? Proving the absence of something is always fraught.

Kamloops residential school burials investigation is proceeding, just very slowly

Can you believe that it's been 5 years since the announcement in May 2021 of the discovery of the remains of 215 Indigenous residential school students - some as young as three years old, we were told - at an apple orchard near Kamloops, British Columbia, once the site of a notorious residential school for First Nations kids.

The news marked a watershed moment in Indigenous relations for Canada. Huge sums of money were allocated by the Liberal government of Justin Trudeau towards further investigations. There was an unprecedented period of national mourning and much heart-searching. National flags were maintained at half-mast for nearly five months. A National Day For Truth and Reconciliation was established, and people held vigils and tied orange ribbons to poles and fence-posts. Pope Francis made an official apology on behalf of the Catholic Church for its role in Canada's residential school system as a direct response to the discovery.

The hundreds of "anomalies" identified by ground-penetrating radar at Kamloops were initially described as "the remains of 215 children" in a "mass grave". The press repeated this description avidly and unquestioningly, e.g. "Remains of 215 children found buried at former BC residential school", "Canada mourns as remains of 215 children found at Indigenous school", etc. 

Gradually, as cooler heads prevailed, they were reframed as "probable burials" or just "anomalies", and they were said to be "consistent with" the size, depth and layout of human burials. The number of suspected graves was reduced to around 200. But it was still a shocking and humbling discovery that merited further investigation, and it set off a frantic search in many other parts of Canada for more evidence of hidden burial sites and residential school atrocities.

Five years and hundreds of millions of dollars later, though, and there is still no hard evidence of what actually lies beneath the apple orchard. The Tk'emlúps te Secwépemc leadership are still resisting actually digging up the "probable" dead, and some people are starting to become suspicious that something is being hidden. Chief Rosanne Casimir has equivocated with unsatisfactory statements like, "While the investigation has been more complex than we initially thought, we are making progress and will continue adapting our methodologies and information as it advances". 

Interpreting ground-penetrating radar readings is an imprecise science, to put it mildly. Rocks, water and roots can appear as indistinct radar blips requiring interpretation. A ground-penetrating radar investigation of a potential mass grave in the US some years ago ultimately turned up nothing more than construction debris, artifacts and dirt, but no bodies. Other confirmatory technologies exist - human remains detection dogs, LiDAR (a remote sensing method using laser pulses), and soil spectroscopy - and it seems that some of these are also being used in BC.

Nevertheless, five years is a long time, and it's not clear what "advances" have been made. The ongoing uncertainty has given rise to skeptics and even denialists. One theory, based on historical blueprints of the residential school, is that the "anomalies" are actually part of a defunct septic system. Some denialists (or were they skeptics) have tried to break into the orchard in the middle of the night with shovels. Some have gone so far as to call the whole thing a big hoax, and one ex-MLA called it "the greatest lie in Canadian history". There are hashtags and slogans in some corners of the Internet like #StopTheGrift, "Every Hoax Matters" and "Dig Up or Shut Up". Some critics have called for the millions of dollars of taxpayers' money to be returned to Ottawa with interest.

These are the words of a small minority of mavericks and outliers, of course, but the media blackout and the cult of silence around Indigenous investigations are not helping the official case from a PR perspective. One poll found that 63% of Canadians won't accept that children are buried at the Tk'emlúps site until excavation provides further evidence. Some Indigenous leaders believe that there is a risk that the secretive, closed-door policy might lead to further division between Canadians and Indigenous people.

In fact, it does seem that investigations are proceeding, under federal guidance and according to a detailed plan to dig the site by 2027 (pending consent from around 120 First Nations communities throughout Western Canada that sent children to the school). DNA samples from First Nations are being collected to help with potential identification. Iron-clad legal protections against misuse are required. So, the work is proceeding, but this is a mammoth undertaking of great complexity, and the Tk'emlúps leadership is playing it very close to their chest. Precise timelines remain very uncertain.

And if the area is eventually excavated, and no children's bodies are found, what then? Well, we'll cross that bridge if and when we get to it.

What's in a name? Where laws are concerned , quite a lot, it seems

Some of Vladimir Putin's most outspoken opponents are engaging in a full court press in Canada. And what they are campaigning for might surprise you.

The two activists are: Vladimir Kara-Murza, a Russian activist who has survived two poisoning attempts and a stint in a Russian jail; and Bill Browder, an American financier, who has led a high-profile (and dangerous) global campaign for targeted human rights sanctions, ever since his Russian tax advisor Sergei Magnitsky was beaten and killed in captivity for uncovering a massive fraud scheme administered by Putin officials.

The two men are currently campaigning in Canada, and their main demand is merely to rename one of Canada's laws. The Special Economic Measures Act (SEMA) has been Canada's main economic sanctions tool since it was first brought in back in 1992. Kara-Murza and Browder are arguing that the law should be renamed to include the name Magnitsky. They argue that the name is now globally synonymous with holding governments to account for human rights abuses, and that including the Magnitsky name would add "clarity" and give the law "a statement of moral purpose". 

There is currently a private member's bill, C-219, going through Parliament to exactly that effect, as well as to expand the current law to include transnational repression (where foreign states harass or harm vocal critics in order to silence or stifle their activism).

Now, I don't have a major problem with the proposed legislation, except that we already have a Sergei Magnitsky Law on the statutes, also known as the Justice for Victims of Corrupt Foreign Officials Act, and things could get confusing.

But mainly, I was surprised at just how important these two world-renowned activists consider the name of the law to be, that they would contemplate travelling here to specifically campaign for it.