What emerges, to my reading, is confirmation that:

• the United States’ negotiating team thought there was a deal on Tuesday (based on principles? verbal agreement? vibes?), but was surprised when Canadians expressed concerns with the specifics of the text presented on Friday; Isn’t the first rule of negotiations that there is no deal until there is ink? Gaaaahhh!

• the United States’ negotiating team generally seems to hold the positions that Prime Minister Carney publicly cited as concerns, but is also kind of baffled that Canadians would see these things as concerning; Again it’s like Clavicular is running the U.S. side of negotiations, but at least now we know.

• the United States’ negotiating team had raised serious issues (language and cultural protections) that it now says it would have negotiated down on and thought the Canadians would have kept talking; In my house, we call this the “I was just kidding” approach to negotiations. It’s one thing to use it over who gets the last scoop of ice cream. It’s another to use it over items that one party views as a threat to sovereignty in a trade deal. Again, the Americans don’t understand Canada and don’t feel they have to.

Unfortunately, even after this interview, we still have no clue what the USTR thinks it was selling in its Saturday social media post, still pinned to its profile (sad, low energy), bemoaning the lost opportunity for a deal with Canada on “national security partnership to cooperate on export controls, combat transshipment, enhance digital trade, and align certain external tariffs […] supply chain coordination on aerospace, complementary actions to address unfair trade practices, critical minerals cooperation, increased enforcement against imports produced with forced labor, and the announcement of formal U.S.-Mexico-Canada Agreement (USMCA) negotiations.” I would note that the alignment on external tariffs and complementary actions sure sounds like aligning Canadian trade policy with the U.S.. Again, this is likely what they hear in “Fortress North America”. We might not want to keep using those words if we don’t mean what the U.S. hears.

Here’s the transcript, with my highlighting, interrupted (in blue italics, scroll to the end to see the notes) with my annotations:

BARTON: Ambassador Greer, nice to see you. Thanks for making the time for Canada today.

GREER: Happy to be here. Thank you for having me.

BARTON: You know, it was just a week ago, incredibly, that you and your counterpart, Dominic LeBlanc, shook hands outside — seemed pretty confident that there was a deal to be had. From your perspective, what happened that caused the talks to collapse over the following two days after that?

GREER: Well, I will say from the U.S. side, we felt very, very confident in the deal we had struck late Tuesday night, shortly before a deadline, and we felt confident enough that we let it sit a few extra days to just get everything down on paper. We had agreed to — as I’ve shared before in the press [see:

] — really the best deal available to any country on the planet, with respect to Canada. And then, you know, Minister LeBlanc went back to Ottawa, and they spoke with premiers, spoke with the Prime Minister, and when they came back, they had some additional views, some additional requests — some additional things that were too much for the United States. It wasn’t something we could do at the time. We felt that giving them the best deal in the world would have been enough to get us over the hump and put us on a positive track to even bigger and better things.

BARTON: Okay, and I will get to some of the issues that certainly Canada has raised in the media, but I also want to point to the fact that the President himself was asked yesterday in an interview whether the U.S. had added some things at the last minute, and he didn’t deny it — he even said, “Hey, that sounds like me.” So, were there things that the United States added in those last couple of days, and why were they added at that point?

GREER: Yeah, no, they weren’t — and I think anyone who watches the clip or hears what the president told CNN, it was off the cuff. He said, “That sounds like me.” [JR1] The reality is the last time the President spoke with Prime Minister Carney was Tuesday night, and there was some meeting of the minds. And so, the Canadian story has been, well, it was later in the week that, that things were uh added. Um, and that’s you know, we felt, you know, the President, we all felt so comfortable that there was a meeting, that there were agreements on specific rates, specific percentages, et cetera — hard to, hard to change those things, um after a given time.

BARTON: Okay, well, let me go through some of the things that the Prime Minister and the Canadian government have raised as issues — some of which, they say, uh Secretary Lutnick added, um sort of at the end as well — but I’ll go through the issues to start. First of all, the issue of excluding medium and heavy-duty trucks from this deal. That would have an enormous impact on Canada, as I’m sure you would understand — job losses, plant closures. Given that, is the goal of the Trump administration to remove auto manufacturing from Canada entirely? Because I think that was the fear from the Canadian government.

GREER: Well, just a couple things here. The U.S. goal, and its entire trade policy — because, remember, it’s global, it’s not like Canada alone or something — we are trying to reindustrialize 25 years of suffering from globalization, where we lost five million jobs, 70,000 factories. So with respect to this issue of medium and heavy trucks, you know, for weeks, when I’ve been speaking with my Canadian colleagues, I’ve been clear about what we believe we could deliver, including about autos. We have a Section 232 measure on autos and pickup trucks, and there is a separate action on medium and heavy trucks that is separate, distinct, and different — the economics are different, the way it operates is different et cetera, the effective tariff rates are different. Um, so to bring that in at the end and say, “Well, when we say autos, we really mean everything from a little Escort to the biggest truck you can think of” — it’s less a matter of excluding it and more a matter of, you know, an effort….and I understand. I understand, you know, why the Canadians want to have as much as they can get and try to expand concessions from the U.S., but we are focused on doing what’s good for America, and accommodating Canada to the extent we can.

BARTON: Yeah, and I get what you’re trying to do from an industrial policy perspective. But, of course — and you’re applying it to all countries, certainly — but the integration between Canada and the U.S. is different, and that’s what makes the impacts, as you would well know, so much more severe. So, just to go back to, whether you understand that Canadians, and the Canadian government, might see that exclusion on those trucks as a sign that the United States is not interested in having an integrated auto production industry?

GREER: Well, I certainly think — and I don’t think this is any secret — we believe that the process of globalization for the United States, of integrating with other economies, even our close neighbours with whom, you know, we trade a lot, has had some negative effects, especially in places like Michigan, and Ohio, and Pennsylvania, Wisconsin. Again, we saw five million manufacturing jobs go away, and a lot of those went to Mexico, China, Vietnam — some to Canada. But I have to say too, Canada, they’ve done the globalization thing as well, and you’ve lost half a million manufacturing jobs over the past 20 years. So it’s not something where the United States alone is having a challenge.

BARTON: No — except, on this issue, and I’ll move on after this, Canada remains the largest customer for U.S. cars, for American-built cars. So it’s not like you’re not getting anything out of that integration in the industry there.

GREER: Well, remember, back in the ‘60s, you know, Canada did a very Trumpian thing and they said to the Big Three — the American Big Three — if you’re gonna’ sell in Canada, you have to build factories here. And at the time, you know the Big Three had a lot of influence; they said, fine, we’ll do this, we think maybe we can do some things cheaper up there. If there’s gonna be this approach from the Canadian side that says “you have to build here to sell here” — so that was not natural economic growth, that was a deal, the Canadians did a very savvy thing. And now, after many years of the Auto Pact, NAFTA, USMCA, we have been able to see, we still need to have, we have a big gap in our manufacturing employment here, and autos is a big part of that.

BARTON: Okay, I’ll move on to another issue that the Prime Minister raised — that Canada says the United States wanted language in new trade deals that it would be pursuing, particularly that you wanted to review, and even in certain instances dictate, terms for future deals — which the Prime Minister viewed as a sort of attack on Canada’s sovereignty. Is that something you were asking for, and why did that make sense to you, Ambassador?

GREER: So, no, it’s not, and I think that characterization goes far beyond anything we discussed. For a year and a half, we’ve had Canadian officials, at both federal and provincial levels, coming to America and saying, “We want to create Fortress North America” — their term, not mine. And they’ve talked about this. And to us, what does that mean? It means that if we are going to lower the tariff barriers we have in place for national security — to protect sectors like steel, aluminum, cars — if we want to get better treatment, like we were offering to Canada, the best treatment in the world, we expect other countries to also protect their borders. Canada has done a safeguard on steel; we think they need to do more to protect the North American market. Ch.. ah Mexico itself has been raising tariffs on various Asian goods to protect the North American market. I would say in USMCA originally, there was actually a provision in there, where Canada, Mexico, and America all agreed that if anyone ever joined a free trade agreement with a non-market-economy country like China, that country could be kicked out of the deal. So there’s a long history of trying to defend the North American market. It’s bizarre to me to hear this suggestion — that they say “Fortress North America,”, you can say it, but when it get down to brass tacks, and you want to actually collectively protect this market and these critical sectors, that they’re not gonna do it.

BARTON: So, but just to be clear — you did not view this as asking Canada to refer to you, or to go back to you, consult with you, if it struck a new trade deal around the terms of it? Or were you expecting that? Was that part of what you—

GREER: We didn’t have any text like that, right? You know, we talked about, let’s coordinate on a bilateral basis, right? It wasn’t Canada shall or anything like that.

BARTON: Okay.

GREER: Let’s talk about this, but when it comes to things like steel and aluminum—the idea is, if we’re going to lower our tariffs and give you the best deal in the world on steel and aluminum, we can’t have Canada be a place where you get flooded with steel and aluminum from other countries and be used as a back door into the U.S. It’s just economics and protection. You know, again, our view was, there’s a way to bring Canada along, but it has to, we have to have mutual protection.

BARTON: Okay, on the issue of discoverability — which is something maybe people don’t talk a lot about, but it’s essentially discoverability in French, so that when people in this country log on looking for, on streaming services, for French-language programs, that that was an issue. Was there ever an agreement on that from your perspective? Did it change at the last minute? What actually happened on that front, because it’s not clear to me.

GREER: Sure, so first of all, and importantly, President Trump, myself, and the U.S. government recognizes the importance and sensitivity of the French language in Canada — in Quebec, in areas in the Maritimes, in some areas. And we know this is quite sensitive and quite important. And we actually champion the use of French — I mean that’s part of Canadian-Quebecois identity. Now, there have been, in the past, discriminatory laws that target U.S. streaming companies, that say you have to give 5% of your earnings to fund competitors. And then there’s this issue of discoverability, about promoting it. This is something where the United States, we’ve always have questions about. This is something we talked about, but we showed a lot of flexibility, and our view is there is no way we would let a good deal go by for something like this. [JR2] So this is not something we, you know, push hard or condition, or red line. It’s like the furthest thing from a red line. It wasn’t focused on the taxes. That your first on the taxes.

BARTON: I understand that Ambassador, but I understand it wasn’t a red line, but it was an issue you raised with the Canadian government — that you wanted some change on to.

GREER: We highlighted it, right? Our view is you should let capitalism do its thing and let people pick. But we know this is important to Quebec. So we, you know, for us, this is not a red line. It’s been presented in the Canadian press like some big thing we held the line on — that’s not true at all. I mean, we don’t, it’s totally fine. We understand why you would want discoverability for francophone material.

BARTON: Okay, just to go back to the timeline a little bit — again, you said that the President and the Prime Minister spoke on Tuesday. But it does, from the Canadian perspective, sound like changes were made between Tuesday and Friday, when the Prime Minister had to pull the plug, he believed. So are you telling me there were no changes made from your perspective, over the course of those couple of days — whether you or Secretary Lutnick – who offered new things, that put new thing on the table, even just details?

GREER: So that’s right. I meant, the Prime Minister and the President had an agreement — we had agreement about tariff rates, right?. Canada would go from 25% to 15% on autos, with the possibility of going down to 7%. On aluminum, you go down from 50 to 25. On steel, 50 to 25 for most of what’s sent here. On derivatives, taking down, you know, 25 to 10 percentage points off it. That all the case. You know, when we got down to talking about what the text could look like, our Canadian colleagues, you know, they told them where they used was concerns, right? I won’t go into too much more detail, because we try to respect the confidentiality we extend to each other. You know, in their view, they thought the, it might be fair to say that they believe the implementation of our agreement that they disagreed with. But in our sense when you say, when I say, I’m giving you the best deal possible — you know, let’s take your idea of Fortress North America and work with it. We can put to the side things like discoverability and a variety of other things, and we can soften language here and there. To me, there was an agreement, there was a way to get to it. I don’t know what ended up happening. You know, you read things in the press about premiers and politics going on, I don’t know. All I know is, this was a great, .. Canada’s had the best deal. We offered an even better deal. It would have been a springboard for future progress for us, and now that’s gone away.

BARTON: I mean, it’s a better deal than what happened, uh you know, yesterday, but it’s not a better deal than when CUSMA itself was being respected by the United States — which is not the case now, Ambassador, as you know. And one of the things the Prime Minister also raised was this issue of reliability. He points to the fact that other countries have made deals with your country that looked like they were signed in pencil, because they’ve changed overnight. So why would Canada sign a deal without any guarantee that you would continue to respect it, given that you haven’t respected CUSMA?

GREER: So, which deal is that, that we haven’t respected — that we’ve signed over the past year? Like I’m just not familiar with that. I mean, we have made — a dozen deals — [JR3] [JR4] [JR5]

BARTON (overlapping): You’ve added tariffs.

BARTON: I’m talking about Canada. You’ve added tariffs, right, above and beyond the free trade agreement — and that sort of contradicts what a free trade agreement is, of course.

GREER: So we have USMCA, and we built into it a six-year review, because in our view you can’t just sign an agreement and never revisit it. If you have it eternally, like if I’m a business person — which we try to be in the American government, we try to think about what’s good for workers and companies — you don’t have an agreement that goes on forever without ever being revisited. We have not renewed USMCA. USMCA includes specific exclusions for national security measures, and steel, aluminum, autos are all national security measures for us that fall within those exclusions within USMCA. So we’re doing what’s right for the United States. We’ve offered to bring Canada along — wasn’t good enough for them, and so we are where we are.

BARTON: So what will it take to get back to the table, Ambassador? Who makes the first move here, in your mind?

GREER: Well, the Canadians, you know, put out a press release saying they were suspending the talks. The Canadian side is proceeding with additional retaliation and a variety of things like that, so it’s not clear to me on that front. I mean, the reality is we have a trade policy that’s global in nature. We’re proceeding with it. If there’s further retaliation from the Canadian side, we’re not going to just sit down and take that. Our view is, don’t retaliate — but I know how people are feeling in Canada and what they think. So it’s unfortunate, but it is what it is, and we’ll proceed with it in the way that’s best for the United States.

BARTON: You say you know how people feel about it in Canada — I’m sure you’ve seen and heard things. But Canadians are, I think, rightly very frustrated and upset that it has come to this with our closest trading partner and neighbour — particularly frustrated with some of the rhetoric from your boss, even a meme today from the White House Instagram account of an eagle attacking a Canadian goose. I mean, does that not kind of make it harder to get a deal, to get to a place where people can actually make sense of what this relationship is going to be going forward?

GREER: I would just say my job is quite narrow — on the trade relations side, it’s quite narrow, right, it’s about economics. Again, we have a situation, we have a global trade policy. Canada is the only country to retaliate against us besides China — and even with China, we’ve kind of settled out. So really, at this point, it’s just Canada. Canada has banned the sale of U.S. liquor and spirits — we haven’t banned anything from Canada. They’ve capped the type of autos we can bring in, they’ve banned certain goods and services from procurement in the provinces. We’ve never done these kinds of bans — it’s quite extreme. [JR6]

BARTON: But — Ambassador — do you, would you have expected Canada to just sit back and take it? You’re a businessman — that’s not how business is done. You don’t just accept something that’s imposed on you.

GREER: Well, no — that’s why we’re having a negotiation. That’s why we had a negotiation. We agreed, fine, we understand, you want a better deal — you have the best situation and you want it to be better, and so we did that. If you look at every country in the world — I mean, we have countries with 250 million people, you know, trillion-, two-trillion-, [JR7] four-trillion-dollar economies. The EU, who we’ve been able to come to terms with, and I’m not saying people like it, right? I understand that, but I’m doing what’s right for America. Other countries do what’s right for them. And anybody who has some kind of trade dispute, or something, eventually it ends in a negotiation where you settle out, and each side thinks, “well, I would have rather had this,” but you find a compromise position. I don’t know, we’re not there with Canada.

BARTON: Okay, I’ll just quickly end. Are you still talking to Minister LeBlanc? Are you hopeful you can get back to that negotiation?

GREER: Uh, I would say we don’t have open channels, uh, right now. I have a good relationship with Minister LeBlanc, but right now I think the Canadian side is, you know, talking about their next steps.

BARTON: Okay, Ambassador Greer, it was good of you to make the time. I know a lot of Canadians wanted to hear from you, so thanks for doing it with us.

GREER: Thank you very much.

[JR1] Trump’s full quote was: “That sounds like me. They have to pay a fair amount. If they don’t pay a fair amount, we won’t make a deal. That’s fine.” https://www.cnn.com/2026/08/25/business/canada-us-tariffs-american-consumers?cid=ios_app

[JR2] The USTR has listed Quebec language laws, both Bill 96 (expanding Bill 101 on labelling), and added Bill 109 (prioritizing French content and settings) to its most recent list of trade grievances. Can-con rules were listed during Trump 1.0 in the 2019 USTR list of grievances. https://robsonj.substack.com/p/when-did-things-change

[JR3] Signed an agreement with Japan, after which President Trump claimed that he will unilaterally control how Japan’s FDI commitments are met in the United States: https://www.cfr.org/articles/tracking-trumps-trade-deals

[JR4] Threatened to impose 25% tariffs on the EU, over the 15% baseline rate agreed to in 2025, when the EU objected to Trump’s desire to acquire Greenland. https://www.cfr.org/articles/tracking-trumps-trade-deals

[JR5] Changed the terms of the nuclear deal with Saudi Arabia, after signing, to require that the country sign on to the Abraham Accords: https://www.cnn.com/2026/08/26/politics/trump-saudi-arabia-nuclear-deal

[JR6] It’s more complicated. The shelf-bans on U.S. alcohol introduced in March 2025 were in response to U.S. tariffs against Canadian goods. Ontario’s procurement policy does appear to penalize U.S. firms in provincial procurement, but only if they don’t employ 250 or more full- time staff in Canada. https://cassels.com/insights/buy-canadian-policy-buy-ontario-act-federal-and-provincial-procurement-is-going-local/ The United States does maintain preferential procurement policies for U.S. firms under “Buy America” rules at national, state, and local levels. Canadian firms are not always able to compete equally with U.S. firms. https://www.tradecommissioner.gc.ca/en/market-industry-info/search-country-region/country/canada-united-states-export/u-s-government-procurement/buy-america-requirements/sector-specific-information/construction-projects.html

[JR7] Canada’s economy is (USD) $2.32 trillion. https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=CA

He named: 1) arbitrary exclusion of Canadian content exemptions for heavy-duty trucks, impacting selected Canadian auto plants from the emerging provisions to reduce friction in cross-border movement of auto parts and vehicles; 2) limits on Canada's ability to enter into trade agreements with other countries (unspecified); 3) demands to restrict Canadian language and cultural protections.

I'm trying to sort through whether and when there were early warning signs.

Disputes over our stumpage fees on softwood lumber were in briefing notes crossing my desk when I worked in government in the 1990s. Disputes over how we're implementing the tariff-rate quotas (TRQs) on dairy go back to at least Biden. The alcohol shelf-ban was used as justification for the s.338 tariffs and might actually help the U.S. courts establish the validity of their first-ever application of that section in U.S. trade law, whereas a consumer boycott wouldn't give them a legal leg to stand on.

The text of CUSMA (see 32.10) does create a provision for advance notice and review if a party intends to enter into a trade deal with a non-market economy, where any party to CUSMA seems to be able to call a country "non-market” so long as none of the three CUSMA countries already have a free trade deal in place with that country. I don't know how much the text the White House wanted reflected this same provision, or maybe it wasn't limited to "non-market”, or maybe there wasn't a reciprocal agreement tying all parties to not cut deals with "non-market” economies or empowering all parties to name a country “non-market”. I have to expect that trade officials at the table would have briefed-up on where the U.S. exceeded CUSMA.

I've gone back to the USTR annual reports on trade barriers in 2019 (last year of Trump 1.0), 2024 (last year of Biden), as well as 2025 and 2026 (under Trump 2.0). I find these reports really useful ways of seeing what's constant (dairy), what track Trump 2.0 started laying early, and what they may have conjured at the last minute.

In 2019: Can-Con, limits on foreign broadcasters and telecoms licenses, streamers contributing to Canadian media production, the Investment Canada Act, IP protection, issues with seed imports, public procurement, aerospace support, dairy, and front-of-package labeling on prepackaged foods, are all listed. They also aren't keen on provincial liquor monopolies. Autos, language laws, and trade deals abroad are not mentioned.

In 2024: Dairy TRQs are back. IP protection is back. So are seed imports, provincial liquor monopolies, licensing foreign broadcasters, and what has by then become the Online Streaming Act. The Digital Services Tax (now defunct) is named. Autos, language laws, and trade deals abroad are not.

In 2025: Dairy TRQs are back. They don't like the Canada Border Services clearance software. My dudes, who loves government software???? They also have beef with Alberta over letting in Montana electricity. They aren't down with single-use plastics rules. Quebec's language rules under Bill 96 are named for the first time. Rules on seed imports are back. IP protection, provincial liquor monopolies, licensing foreign broadcasters, and the Online Streaming Act are also all back. The now-defunct Digital Services Tax is there, as is the Online News Act. Autos and trade deals abroad are not.

I also have to see the beef with Quebec's Bill 96 in the same light as the new beef with Alberta's electricity grid — pick regional things to poke at the regional power dynamics in the Canadian federation.

In 2026: The GST/HST makes an appearance! Dairy TRQs are back. CBSA software is back. Pharmaceutical pricing mechanisms make an appearance! Alberta's electricity system gets another shout-out. Issues with aircraft certification make a first appearance, next to regulations on cosmetics. Beef with single-use plastics rules makes a comeback, as do seed import rules. Canadian PFAS rules are singled out. Government procurement rules enter the chat, as does a Canadian sovereign cloud. IP protections are back again, alongside foreign broadcaster rules and the Online Streaming Act. The U.S. adds Quebec's Bill 109 (which asks streamers operating and digital devices in the province to prioritize French-language content or settings). The defunct Digital Services Tax comes back, as does the Online News Act. But there's more! MOAR! In 2026, the U.S. has added new complaints that Canada doesn't take serious action to address non-market policies or practices on forced labour. Autos and trade deals abroad are not mentioned.

You'll note that the summary paragraphs expand in the Trump 2.0 reports. There are a lot of new grievances — including on longstanding and sovereign Canadian policy, like what system we use to register imports/exports and what consumption taxes we levy. There are selective claims against specific parts of the federation maybe more vulnerable to anti-federal sentiment.

I think we can understand the White House's 11th hour and/or cumulative language and cultural protection demands in that vein. These aren't necessarily real trade irritants, but in a report where you have to come up with a list of grievances for Festivus, more is MOAR.

It's probably a misread of Canadian public sentiment in this moment and/or a bet that the Canadian feeling of unity won't last. This last is up to us fellow Canadians.

Regardless, the 11th-hour demands on autos and other trade deals don't really line up with the USTR’s own established written concerns, at least not based on the recent public reporting.

The USTR's own statements yesterday and today of what they say was being offered is also kinda tone-deaf. The account seems amazed that anyone could say no. It's like Clavicular is running U.S. trade policy and he's come to a foreign city, amazed to find that the local dames can resist him.

I assume at some point someone will start leaking text from the last exchanges at the negotiating table. But not even that will necessarily shed much new light. The current American administration doesn't seem to really understand Canada. They don't seem to feel they need to.

There are competing narratives from our side and theirs on what went wrong. The USTR says Canada walked back commitments and issued new demands. PM Carney says the US introduced “last-minute changes” which “were unfair, uneconomic, and called into question the reliability of any deal.” The Trump administration has, of course, a habit of making last minute or even post-deal amendments. Reports that Howard Lutnick, U.S. Secretary of Commerce, played a role in scuttling talks have highlighted autos, but he and his family firm have elsewhere been active in a series of critical minerals deals. The USTR statement listed critical minerals cooperation among the terms of the deal. And there was a lot more in the USTR list of terms:

As I’ve said before and will say until I’m blue in the face, that list is really about China and making Canada adopt certain policies to align with the U.S..

When the PM says last minute changes were uneconomical, unfair and unreliable, he may want to tell Canadians more specifically what the problems were. Otherwise, the USTR is shaping that narrative unchallenged.

The PM also assured Canadians that additional support is on the way. On this, specifics are no doubt coming soon. Here’s what I hope will be in the next wave of supports:

• A broader effort to temporarily reduce entry barriers to regular EI. S.338 tariffs will be more diffuse in their effects than 232, and purely sectoral or regional relief won’t work. We also still only have the tools we have (gaaaaaaahhhh!!!) so something like a manual adjustment to the local unemployment rate used in EI will be needed to let the system respond fast enough.

• Coordination with provinces delivering LMDA & WDA programs to pivot services towards trade adjustment.

• Proactive outreach so more employers know about Work Sharing Agreements to reduce layoffs, rather than just focusing on helping repeat users regain access.

• Crosswalking programs/services between ESDC(Service Canada) and ISED (including all the agencies). Ideally this means concierge service to navigate programs, but I’d settle for better sign-posting and simplified navigation tools. You shouldn’t need a degree in public admin to find your way around government programs in a time of crisis.

• Don’t launch more coordination tables. Repurpose the Workforce Alliances to focus on trade adjustment but get them actually moving.

• Any work on a pilot to deliver a $15K benefit for mid-career workers (well, up to 100,000 of them), as per the LPC platform, should be repurposed to look for a more flexible approach for re-skilling tariff-affected workers (who will be a diffuse group). Also, look at ways to make the Canada Training Credit payable outside of tax time.

• Finally, if there are more big defense procurement projects with domestic production, now would be a great time to get those out the door. Skilled manufacturing for autos can maybe pivot to skilled manufacturing for drones, for example.

The U.S. is about to head into a very ugly midterm season. I’m not confident that talks with the Trump administration can or should resume between now and November, and then there’s going to be the immediate aftermath of that vote. So, this could be the new normal for a bit. In any case, this is just one round in a chronic condition we have to manage.

In an asymmetric conflict, the smaller party doesn’t have to inflict major wounds on the larger opponent. It just has to show it can withstand pain long enough for the larger party to tire and have incentive to settle. We can do this Canada, if we act collectively. That’s what governments are for.

Elsewhere, a U.S. right-wing tech entrepreneur complained that “no comparable national-origin ban was applied to anyone else’s liquor” in Canada. While his analysis of the potential legal and political resilience of the section 338 tariffs is worth a read, he has completely memory-holed why it was that the provincial shelf-bans were put in place in March 2025.

I’ve taken note of the media stories covering data from individual provincial liquor authorities noting the steep decline in imports from the United States. I’ve noted the public opinion data saying that Canadian consumers don’t expect to go back to buying U.S. alcohol anytime soon.

Let’s try to look at some hard data on Canadian behavior, shall we?

First, it’s important to recall that licensing the sale of alcohol is a provincial responsibility, and that some, but not all, provinces have crown corporations that operate monopolies on retail alcohol sales, with differences by jurisdiction in licensing other importers. There isn’t one unified Canadian consumer market for U.S. beer, wine and booze.

Second, lost in all of this is that the shelf-bans imposed by provinces were accompanied by federally-imposed counter-tariffs of 25% on U.S. This all took place in March 2025, following American tariffs on Canadian goods based on janky drug smuggling claims in February 2025, and roughly concurrent with American tariffs on Canadian steel and aluminium, with American tariffs on autos following soon after. This law firm has a good timeline of events.

Although (ok because) I should be doing other work things, I spent a bit of time this evening with the detailed import data to look at what has been happening in each of the provinces vis-à-vis U.S. beer, wine, and liquor. I’ve looked at the most recent 24 months, the period of July 2024 to June 2026 (the most recent month available), using only the HS codes for beer, wine, vermouth (and similar fortified wines), as well as spirits and liqueurs less than 80% proof.

Here’s the raw time series for monthly imports of these alcoholic products, by province of destination, from the United States:

I think it’s worth noting that imports of alcohol from the U.S. were taking a nose-dive well before the shelf-ban or counter-tariff. If anything, the import data will be a lagging indicator of consumer demand since orders have to be placed in advance and transported to the final destination. By the time of the closing weeks of the U.S. presidential campaign, imports of U.S. alcohol were already down. Canadians are generally a wise people.

And now some analysis of the period-to-period changes. The shelf-ban came in March 2025, along with the federally-imposed counter-tariffs. Only Alberta and Saskatchewan lifted their shelf-bans in June 2025, while they are still in place in other provinces. The federal counter-tariff was lifted in August 2025. When a policy change takes place within a month, I exclude that month from the “period” average to try to keep the results as clean as possible, given that daily data isn’t available (or desirable).

Here’s a comparison of the imports into most provinces (except Alberta and Saskatchewan) in the months leading up to the shelf-ban, and since, as well as the period only since the counter-tariff was lifted:

If we back out the difference in average monthly sales for September 2025 to June 2026, from the April 2025 to June 2026 average, ending the counter-tariffs has a pretty small effect, with some noise in the direction, suggesting the real effect is closer to zero. Even relative to the pre-ban period that included declining imports, the shelf-bans still in place in these provinces seem to be associated with an average of a 92% decline in imports of U.S. wine, beer and liquor. Why not 100% across the board? Look, there will still be some private individuals or businesses who place a direct import order and don’t rely on the retail stock in the nearest LCBO or Liquor Mart.

Now, for the data for Alberta and Saskatchewan, where shelf-bans were lifted in June 2025:

Despite the lack of a shelf-ban, imports are down in both Alberta and Saskatchewan, and by a substantial amount. In fact, Saskatchewan’s import data looks a lot like other provinces where shelf-bans are still in place. My data suggest a much larger decline in Saskatchewan than the -40% reported in the media and based on provincial sales data.

Even in Alberta, where private retail rules the distribution of booze, sales are still down a monthly average of nearly -17% since the shelf-ban and counter-tariffs were both lifted. What’s mainly keeping the Alberta market for U.S. alcohol afloat is, as far as I can tell, a particular taste in Alberta for U.S. wines — maybe they really love those big California chardonnays out in Wildrose country. Spirits are essentially back to their pre-March 2025 levels, wines are up, but beers are way down.

I feel reasonably confident in saying that Alberta has a unique taste for American wines because the U.S. is the third (or sometimes fourth) most common country of origin for international wines imported into the province, while in most other provinces it ranks much lower, after places like Italy and France (of course), but also Chile, Argentina, and sometimes even New Zealand.

So, if there are concepts of a plan for a deal that The Donald is willing to ink with his ridiculous black sharpie on Wednesday this coming week, and if that concept of a plan includes a commitment to putting U.S. alcohol back on provincial retail shelves (preferably with really, really prominent country of origin signage), I’m not persuaded that this would, itself, in practice, be a real bending of the Canadian knee (or elbow).

I’m reasonably confident that no one in the U.S. administration reads this blog — DO NOT ENCOURAGE THEM PEOPLE! So, if we need to moan about accepting American booze to give Trump, and GOP Senators and tech entrepreneurs a sense that they have “won” something, fine. The booze can be allowed to sit on the shelf. They can’t require us to buy it.

Let’s worry much more about the overly vague allusions in media reports to clauses granting U.S. preferential access to Canadian energy and critical minerals, as well as influencing Canadian defense procurement decisions. Those might be tolerable terms, but the details matter. A LOT. And it matters what we would get for them, which is always uncertain and unreliable in negotiating with Donald Trump’s America.

More on that as soon as possible, as I try to follow up on my promise to run some numbers…

• Canadian steel, copper and aluminum, at rates between 10% and 50%.

• Canadian lumber at 10%.

• Canadian autos, trucks and autoparts at 25%, but only on the non-CUSMA compliant portions.

• Canadian buses at 10%.

• Canadian cabinets and furniture at 25%.

• Some Canadian semiconductors and derivative products, at 25%, unless they are for priority US uses like data centres.

The 338 tariffs would apply to a very weird list of things, including Canadian dairy and booze, but also things we don’t make here but might re-export to the U.S., like agar-agar and tequila.

The Canadian concessions on the table are reported to include:

• An end to the provincial bans on U.S. alcohol — something that various U.S. political leaders, from California to Kentucky, have raised as a concern.

• Changes to provincial procurement rules — presumably the ones that prioritize domestic sources.

• Changes to how the tariff-rate quota for U.S. dairy is interpreted and applied in Canada.

The relief on the 232 tariffs might be in the rates applied, an expansion of carve-outs for CUSMA-compliant goods, or a tariff-rate quota approach (ie: X amount enters at Y tariff rate; after that the tariff rate rises to Z). The larger CUSMA revamp talks would be separate, and move forward later. The goal would be an interim agreement where everyone gets something. As I wrote in my last note, Trump needs to be seen to get a win (US booze and dairy would give him that), but so too does Canada.

Is it worth agreeing to put U.S. booze back on the shelves for sectoral relief and a general turning down of the temperature? Maybe. I say just make sure that it’s prominently labeled for country of origin. Let’s see how the market goes. But this isn’t the Government of Canada’s call to make and requires provincial buy-in.

Is it also worth changing provincial procurement rules for the same reason? Again, maybe, particularly if historic supply chains and transportation costs make it cheaper to do all of this planned building across the country with a more diverse set of construction goods. For example, moving steel across Canada by train can be expensive, but it floats in container ships for a lot less money (which likely works to the benefit of Chinese firms that are already dumping low cost product). Again though, provincial procurement rules aren’t the Government of Canada’s call without provincial agreement.

As a sidenote, I do find it passing strange that none of the media reports mention federal procurement rules being on the table. On jointly funded federal-provincial projects, the feds have also been looking to treat federal rules as having primacy. Maybe there is some pathway that would permit greater intergovernmental coordination inside Canada. That’s an arguably bigger win than anything the U.S. administration could possibly offer.

And on dairy, Canada did partly lose the 2023 CUSMA panel hearing on the application of the tariff-rate quotas negotiated under Trump 1.0 in 2018. Yes, Joe Biden was the American President when that dispute went ahead. If I understand the dispute correctly, the U.S. wants food retailers and food service providers to become eligible to get an annual quota for importing from the U.S. The U.S. wants changes to how the quota is calculated and it isn’t keen on our current reporting requirements for quota applicants and holders. We lost on all three of these points in a 2021 panel. There are probably technical solutions here, and if the Trump administration really wants to see American cheese in Canadian grocery stores, I’m sure we can again find a solution that requires clear country-of-origin labelling and let Canadian consumers do their thing.

On the one hand, there is a strong likelihood that even if there is a technical solution to be had and a term sheet that could be agreed on by the Canadian and U.S. negotiators, Trump is not trustworthy. He’s likely to wake up one morning and decide to threaten tariffs on Canadian agar-agar (not something we make here) because we’re “nasty”.

There is no such thing as a conclusive deal with this administration. There are only consecutive rounds of bargaining, the passage of time, and the meandering attention of a distractible leader.

On the other hand, it might be good, strategically, to command a little less of Trump’s attention for a bit as he heads into what are likely to be very bad midterms for the GOP.

Relief on the section 232 tariffs is something that Canada wants, in our own interests. If the price of the concessions is equal to or less than the value of the tariff relief from the U.S., then maybe these are concessions worth making. Look, we’ll all have to tell Trump the price was higher than the value of the relief; that doesn’t make it true.

I cannot, on a Friday afternoon, tell you how the math actually maths. I’ll try to get to that soon. But, I do think it’s progress that we’re finally talking about getting something for giving something.

As I write this, the chyron on my TV screen is showing “Premiers disagree on how to handle Trump’s threatened tariffs”. Congrats White House. That’s maybe the win up here you were looking for, though I’m not sure that’s what you actually got.

I also switched over to watch the recording of U.S. Trade Representative, Jamieson Greer appearing before a Senate panel earlier in the day, in which tried to assure U.S. senators that his team is “moving with all due speed” on CUSMA, and that he is “hopeful before the end of the year to have options for President Trump to consider potential interim arrangements or things that Canada can do...”. The “interim” meaning there would be longer-term accommodations that would be needed to deal with issues of “rules of origin” from “non-market economies with excess capacity” (ie: China), where Greer expressed an intent to discuss these with Congress next year.

There was also an awkward tell when Senator Blackburn (R, Tennessee) used her time to say “We’re so frustrated by the actions Canadians took to pull U.S. distilled spirits from the shelves. […] Now that pressure has been applied, what will come next? What do you anticipate to be the next step? How do we get the Canadians to put Jack Daniels back on their shelves, rather than allowing them to continue talking this thing and not reaching a resolution?” The Senator held her pencil carefully, using it as a guide to help her read the prepared question, word by word, exactly as it had been written for her.

Now that “pressure has been applied”.

Senator Blackburn meant Monday’s tariff announcements. Mr. Greer is now off to Mexico.

Scott Bessent is who will be sitting down with Canada’s representatives now. On Monday, the New York Times aired an interview with Mr. Greer. At the very end, the NYT used some extra tape in which Mr. Greer is showing off a photo of himself with President Trump during the “Liberation Day” tariffs, remarking that the President had praised him that day. “That’s a good one,” says Greer. “Just with any boss, you have the longer you work with them, the more comfortable they get with you, unless they fire you, right? So far, not fired, so that’s good.”

So, a USTR who doesn’t sound or look super confident he has the U.S. President’s ongoing trust, but trying to assure Senators that progress is coming, while Republican Senators read carefully prepared statements noting the “pressure” that has been “applied” to “get Canadians” to do a very short-term thing.

It’s with that context that I am looking at the data on the White House’s threatened section 338 tariffs of 50% on some 500 goods if they enter the U.S. from Canada, regardless of CUSMA certification.

I used U.S. data to estimate this would impact a total of about USD $20 billion or 5.3% of all Canadian exports into the U.S.. The USTR also came to an estimate of USD $20B. Joseph Steinberg (University of Toronto) came up with the same 5.3% estimate, so I feel pretty ok with my data.

Among the 500 or so goods, there are 40 where Canada’s exports, according to the USTR’s own data, were $0 in 2024, $0 in 2025, or $0 in both years. These are things like “natural sponges of animal origin”, beet seeds, agar agar, and tequila. We don’t make these in Canada. We might send them on to the U.S., but hitting us in the re-export business isn’t really where our soft underbelly is.

Among those goods facing new tariffs that had positive values in the U.S. data for both 2024 and 2025, the top five in 2025 were:

• 85371091 Other boards, panels, consoles, desks, cabinets, etc., equipped with apparatus for electric control

• 85176200 Machines for the reception, conversion and transmission or regeneration of voice, images or other data

• 39232100 Sacks and bags (including cones) for the conveyance or packing of goods, of polymers of ethylene

• 39269099 Other articles of plastic, not elsewhere specified

• 94019910 Parts of seats, other than of wood, not elsewhere specified, for seats of a kind used for motor vehicles.

Those five account for USD $4.5 billion of the USD $20 billion total, and yes, this time using Canadian data, the United States is by far the largest customer for each of these goods from Canada. The last may be another wound to Canadian auto-parts manufacturers, but I’m fairly sure the big issues are elsewhere. No doubt there are Canadian firms in the electrical control boards or polymer bags business who were previously ok under CUSMA but could be hurt by Monday’s edicts.

There are other items that touch on wood, pulp and paper products, that may hurt more in B.C.. Honey is on the list, where 40% of production comes out of Alberta. Lead is on the list, where the Yukon is Canada’s leading producer. Make-up is on the list which may upset American consumers of The Ordinary among other brands. Down-filled parkas are on the list, which may upset American consumers of Canada Goose jackets.

As U.S. Senator Whitehouse (D, Rhode Island) said today, “anybody who’s got a small business or who’s going to buy something that has a component that is manufactured in Canada that now has a 50% added cost associated with it, I think is going to have a real problem.”

That’s right Senator Whitehouse. American consumers pay tariffs imposed by the Government of the United States of America.

But this isn’t a laser-focused list, custom-built to bring Canada to heel. You don’t throw in agar-agar (made from red algae and seaweeds which don’t grow in our waters), cotton linters (we don’t grow cotton), or citrus oils (we don’t grow citrus) if what you’re really trying to do is get Canada to yell “uncle!”.

The use of section 338 is already a bit of a “spaghetti on the wall” move, since it’s never been used before, though was threatened against 1935 Germany (yes, that period of German history), and there is no jurisprudence. The items on the list are likewise pretty scattershot.

Maybe the more important thing is that the three White House declarations on Monday said that the CUSMA carve-outs wouldn’t apply.

We still need to see the detailed guidance on how the U.S. Customs and Border Protection plans to enforce these s338 tariffs, if/as they come into force. I suspect it will be messy. I suspect it will, by virtue of the long and semi-random list covering small-value items, regardless of country of origin, create uncertainty and maybe gum up the works a little more when goods try to enter the U.S. from Canada.

At 5.3% of total annual U.S. imports from Canada, this isn’t nothing, but it isn’t everything either. Greer even asserted today that these measures will still leave Canada with “the best trade agreement, even under the trade treatment, even under the President’s trade policy since last April, the vast majority of what they’re sending to us has come in preferentially. It’s remained that way. It’s been consistent that way. Even now, with the tailored actions we took this week.”

Is there any sense in any of this? No. But there is politics.

The title of this blog comes from a scene in The Apprentice, the fictionalized account of Donald Trump’s rise to fame. The fictionalized Trump is parroting, with only minor rephrasing, the rules he learned from his mentor, Roy Cohn.

On both sides of the border, political leaders are facing pressure to be seen to be making progress. On both sides of the border, there are questions about whether their coalition will hold.

Both parties in a negotiation want to increase pressure and weaken internal support.

These tariffs are making the world a little messier still — and isn’t it something that this is still even possible, given …. everything. The White House declarations, of course, ignore the truth about how this trade dispute started. In the short run, they let the White House claim they have a victory.

In the medium and longer term, the White House will need more to show. But so will the Government of Canada. It’s this latter fact that seems to escape U.S. officials.

To get to the longer-term goal of talking about rules of origin (ie: China … it’s really mainly about China), Trump’s administration needs to claim a victory over Canada, but they also need to let Canada and Mark Carney have enough of a win too.

A veritable who's who of the discipline has signed on to a joint declaration on artificial intelligence. You can check the list here: https://www.wemustactnow.ai/. It’s impressive. It’s also attracting signatories from other disciplines — even one of the godfathers of A.I. himself, Yoshua Bengio.

These are serious people who understand complexity and who have done real things that have impacted the world, lest you worry this is just some fancy people who only write unintelligible things in journals read by a vanishingly small share of the population.

The statement is remarkably short for a group of academics. Questions cleverly disguised as statements at academic conferences often use up more words.

It states that A.I. “may become radically more powerful” soon, that power could bring radical costs and benefits to us all, and we should “act now to understand” the potential effects and “build the incentives, guardrails, and institutions needed to steer AI” in a way that will benefit society.

But that’s about it.

It’s fundamentally a call for a policy research agenda — by which I mean a programme of research intentionally constructed to inform public policy — without the outlines of an actual agenda. Why? Because that’s likely where the consensus would start to fray. Even academics know that tents with high tops hold more people.

But if you are, for example, a national government that has recently put out a similarly high-level strategy on A.I., you might view this statement with some disappointment because it’s not immediately useful. It doesn’t point in a clear direction that would let you, as policymakers, say “we’re making progress along the lines suggested by the experts”.

I try to keep up with the policy-relevant info on A.I. and, maybe like the signatories of the declaration, it leaves me feeling humbled by how little we seem to know to be able to clearly inform policymaking.

For example, for A.I. to have the potential massive labour market effects that many worry about, and some A.I. firms are even promising, the models and tools not only need to demonstrate certain competencies, but employers need to adopt them and alter their labour/capital allocations. We seem stuck in a “low hire, low fire” job market where A.I. is cited as one, but not the only driving force. A.I. adoption and automation seem to appear with increasing frequency in reports to shareholders, but I can’t tell if this is real or a sort of kabuki-theatre meant to keep shareholders happy. A.I. tools are already embedded in a bunch of enterprise-level software packages where the A.I. add-ons can be turned off or avoided. Is that purposeful “adoption” or something else? There’s an entire policy-research agenda to be found in just disentangling the gap between what employers say on A.I. and what they are really doing.

For A.I. to continue to advance, there are a remarkable number of physical resources needed. A lot of political energy right now seems to be focused on the data centres and the demands on local power grids they require. But are policymakers seized with the full extent of the supply chain implications of A.I. infrastructure? Export restrictions on tungsten, for example, may prove to be a pinch point in the production of the chips that go into those data centres. Even the most pro-A.I. accelerationist agenda will have to grapple with the full supply-chain implications and it’s not clear these have been well mapped out for policy-makers to be able to see the inputs required, the current sources on hand, and the costs of potential alternatives. There’s another full policy-research agenda right there.

And then there’s the geopolitics. On the same day the academic declaration seems to have launched, former White House trade guru Peter Navarro is out in the Wall Street Journal assuring readers that China’s posture on critical minerals, including but not limited to tungsten, will be defeated by the might and ingenuity of the U.S. military-industrial complex. Meanwhile, U.S. Under-secretary of War, Eldridge Colby, is out on social media warning middle powers that they better not leave the safety of the U.S. advanced tech ecosystem. This is, I gather, the same guy who invoked the Avignon Papacy as a warning shot to the current Pontiff. We can deduct points for lack of solemnity, but it’s also not clear that the underlying geopolitical tension over tech ecosystems goes away with a new U.S. administration. Which countries should have power and clout when it comes to A.I.? Are market forces in Western countries aligned on this question when models from China are so much lower cost? Again, there’s another entire and rich policy-research agenda there.

For my part, I wouldn’t hold it against Stiglitz, List, Krugman, Stevenson, Acemoglu or others that their joint statement didn’t lay out the policy research agenda they called for. It’s just too wide to keep the top of their tent aloft.

Instead, the call for policymakers to get more serious — to ask hard questions and make investments in evidence to inform decision-making — that’s the part of the declaration that I think matters most. Ok, it’s implied. In typical academic form, they stepped all over their own lede. But it’s there and policymakers should take note.

The diagnostique at the front end of the full document is worth your time. Weak retail market competition, limited processing capacity (especially relative to our production capacity), and heavy reliance on imported foods are all big parts of the problem on top of input costs (where, let’s be clear, carbon pricing is just not an important driver).

Let’s stick with the reliance on imported foods for a second. This table is something I pulled together last year using national trade data (for 2023, the most recent complete year at the time). And it’s not just that we import a lot of our groceries, it’s also who we import it from.

So long as the U.S. continues to make their own food production and distribution more expensive by deporting important shares of the farm labour pool, making it more difficult to obtain key fertilizers and then tariffing some even when they have a secure supply, or by dramatically reducing the capacity of the U.S. Department of Agriculture, some of that cost will be passed along to Canada.

So, a strategy to boost national food sovereignty makes some good sense to me. I like the general direction on some key supply-side .

There’s a focus on expanding domestic food processing capacity. Yes please! My estimate is that we produce about 200 tonnes of wheat for every tonne that we process into something you could actually eat or turn into something edible.

There’s a focus on expanding year-round production of fruits and vegetables, both in quantity and diversity of products. Yes please! And if you would like to invest in my proposed indoor citrus grove (with a side hustle in year-round companion mange-tout peas and cut flowers) business, call me!

And there’s a focus on building on the capacity of Farm Credit Canada to “catalyze” (the PM’s favorite word, not mine), innovation in Canadian agriculture — something we’ll need to navigate climate change, geopolitical instability and just to maintain our comparative advantage. Again, yes please!

As always, dear reader, you know my niche: nit-picky policy questions about how to turn ambitious announcement into practical and feasible delivery. And there are some.

• Who will benefit from the $750 million for the Controlled Environment Agriculture Growth Pathway? Ag&Ag pays a lot of attention to size and capacity of production, but they don’t seem to track ownership. Much of Canada’s existing greenhouse infrastructure has been a very affordable acquisition for U.S. buyers. Will any foreign ownership rules apply if it is true (and I think it is) that, as the PM’s release stated “[a] country’s sovereignty depends on its ability to feed itself, fuel itself, and defend itself.”

• Who will step up to be the project proponents of plan to expand the number of food terminals? The one big one we have, the Ontario Food Terminal is actually run by a provincial crown corporation, the Ontario Food Terminal Board. It does make a bit of money, $1.7 million last year, but is that a proof of possibility that other provinces (BC? Quebec? New Brunswick?) would be willing to latch onto? Would we be open to a private sector operator? If so, why should government be subsidizing their capital expenses without a public stake?

• On food processing, one of the big challenges for expanded capacity is the skilled labour supply. The strategy today offered $400 million in new funding to bolster food processing capacity in Canada, on top of existing funding ($500 million). But the mentions of labour pointed back to the red seal trades announcement in the Spring Economic Update. If only the Government of Canada had invested in a body that had tried and tested scaleable approaches to workforce strategies specific to the food and beverage processing sector that it could again turn to as a complementary measure….

Finally, I bet there will be many who are disappointed by the supply-side approach in this strategy. The document does nod to and re-announce the School Food Program and the Groceries and Essentials Benefit (formerly known as the GST Credit). But there isn’t new money for demand-side in this national plan. It’s not that new Benefit and the School Food Program aren’t important. But tackling immediate, moderate and severe food insecurity (while we wait for long-term change to food production, processing and distribution to improve, which may or may not actually reach those at risk of food insecurity) would require a benefit worth a lot more than the current GEB. More on that at a later date.

Managing the process of organizational change and, more importantly, acceptance of change is part of leadership. You have to bring people along with you. Otherwise, one day you bravely call out “follow me!” and turn around to realize it’s only your pet dog still behind you because everyone else has had enough.

And so, media stories of a national Liberal caucus, or some members of that caucus, who may have some concerns about some of the new management style at the centre of the Government of Canada have come out in the last week. These stories aren’t necessarily unexpected. In some circles, the stories are even welcome signals that dad is finally home and he’s taking names.

I think there’s likely a more nuanced take.

First, I have to point out that some of us did warn you that “governing like a business” isn’t likely to work out, certainly not any better than just governing well. Second, as Carleton MPM program fellow and sharp political observer Marci Surkes has noted in a recent Globe & Mail story, the PM and LPC caucus are still getting to know each other.

My unsolicited advice is that the PM needs to designate a caucus listener. Someone whose main job is to pay attention to and build relationships with the 171 members of his caucus. Whatever the PM’s feeling about all of them, or maybe most of them, or maybe just some of them, he’s only the PM for as long as enough sitting MPs agree that he can be PM. They aren’t shareholders. They aren’t a board of directors. They are more like faculty — peers in a self-governing body.

No, I don’t mean a listener as in a caucus spy who will tell the boss all the tea. No, I don’t mean a caucus handler who will have order and discipline by whatever means necessary.

And no, it doesn’t work if this person is also part of the same caucus. The PS to the PM has other jobs and would no doubt like to keep hers. The regional and national caucus chairs have other jobs and would like to keep theirs. The Chief of Staff has too many jobs. The deputy Chief of Staff likewise and, in any case, is rumoured to be interested in joining the LPC caucus as an elected MP. And if you try to insist that this function is already being fulfilled by someone, well, I hate to break it to you but it’s probably not being fulfilled very well, otherwise there wouldn’t be media stories.

This person should be a staffer — someone outside of the fray, with no power over nomination papers, Cabinet appointments, or party-paid polling and events. Someone who isn’t a competitor for jobs in caucus. It should be someone who would be entrusted by the PM to hear the ideas and concerns from caucus, digest them all and translate what is shareable (not all of it will be or should be) for each policy, parl affairs, comms and opps purposes.

But this staffer also has to be someone with some gravitas so that elected officials feel there is a measure of mutual regard when they meet. I’m sorry, but this isn’t a task for an early-career special assistant or even Director. It should be someone who has done enough in their career that they aren’t going to be intimidated by meeting with MPs or the PM, but who understands and has respect for the fact that all members of caucus are peers in a house that belongs to all Canadians, where no riding is more important than any other. It needs to be someone who doesn’t care about keeping the job but wants to do a good job.

But maybe most importantly, this needs to be someone who is interested in people — MPs are, at the end of the day, people. How they are treated by “the centre”, or even how they feel they are being treated becomes part of the dynamic in the relationship they build and maintain with the PM.

I get the impression that this government has a very clear sense of mission and purpose. The PM is pretty clear in saying that complaints about the mission aren’t of interest. Ideas and input on how best to achieve it could be. But how do you keep the useful ideas and input flowing if people are getting reluctant to say much of anything?

I also get the impression that this government has an aversion to adding steps or layers to process. This means that building mechanisms to institutionalize caucus liaison into their ways of working are unlikely to be adopted or effective. For example, Stephen Harper added a mandatory caucus consultation step on Cabinet items as a way to let some hot air out of the room. I don’t see that happening and wouldn’t recommend it. The solution has to be fit for purpose.

The media stories suggest that the open mic sessions at caucus have been a particular locus of friction. I can recall Jean Chrétien as PM reassuring his staffers that it was reasonable and totally ok for caucus members to say things that were hard to hear at the mic in caucus because, as he would repeat, they are elected (or appointed) and have a right to have their say. He’d been a long-time MP and minister and could probably empathize. Honestly, he maybe also had fewer f’s to give.

If this is a PM who might have more f’s to give, but who is already hyper-scheduled on what he feels are mission-critical files, then making time and space for listening, the emotional labour of empathizing, the relationship work of being in and leading a caucus may not be something he has much bandwidth for. However, a good leader knows when and how to delegate.

I’ll let the marketing gurus weigh in on whether the fund’s name will drive recognition (and hopefully demand) or acid reflux behind politely-closed lips.

Thankfully the Committee didn’t ask me for my hot take on a press release because it took me until 6:45PM, while on mom-taxi duty, to look at the limited info the government’s comms. I know tomorrow is the SES, but let’s not get excited that “all shall be revealed” given that the substance of today’s announcement was effectively:

-The Government of Canada plans to make a new fund in a Crown Corporation.

-It will be consulting on how to make the fund and let you invest in it.

-There will be a transition period.

-Please stay tuned.

I think of this more like a non-YouTube “Forward Guidance” update from the PM.

It is true that the Government of Canada appears to be using deficit financing to create the initial $25 billion over 3 years capital fund for this new vehicle. According to the latest pre-Spring Economic Update publication from the Department of Finance, the feds are at a $25.5B deficit, so far, in the fiscal year, ending on Thursday.

In accounting terms, especially under the new federal approach, this $8.3B per year over 3 years (assuming smoothed amortization), the “spending” of the endowment will be offset by the value of the asset (likely at book value until the fund really gets going in the market), so it’s an accounting wash. Don’t yell at me. That’s just solid, boring public sector accounting. Public assets offset public liabilities.

What will matter is what real world investments the fund makes and whether these generate market returns or, and I submit of far more importance, PUBLIC VALUE. As Lindsay Tedds and Gillian Petit have argued, we’re really good in this country at counting the value of revenue collection and the costs of public spending, but we almost never ask what do we get for that? What is the marginal value of public spending, in various contexts, in various forms?

Any fair evaluation of a mission-driven sovereign wealth fund should probably be able to say something about what public good happens because of the fund, not just the market rate of return.

Let me come back to the “Forward Guidance”-ishness of the announcement.

Let’s pick up the PM’s Sir Isaac Brock statuette.

In the First and Second World Wars, there were campaigns to promote Victory Bonds, the same financial vehicle that eventually became dull, drab, “Boomer-Beige” (I want citation cred on that one Millennials!!) Canada Savings Bonds.

The sale of CSBs stopped several years ago. Given the transaction costs of selling them to individual and retail investors, it just didn’t make sense anymore when institutional investors were more plentiful. In 2026, any interest on older CSBs stopped accruing and holders just have to figure out how to redeem them (on which please check here: https://www.unclaimedproperties.bankofcanada.ca/app/processing-bonds).

But selling debts to institutional investors comes with its own benefits and risks, especially when the investors aren’t Canadian or are insurance and pension funds with their own imperatives in portfolio management. Sidenote - Since Q2 2023, non-resident investors have resumed their role as the main holders of federal debt while insurance and pension funds (in Canada) remain the main holders of provincial debt.

Before the sale of the staid CSBs stopped, foreign investment limits on tax-preferred savings were lifted. That was a Budget 2005 decision (Martin government, in case you’re keeping track) and in the last 21 years, no government, neither red nor blue, had dared muck with the imperative that tax-preferred savings (RRSPs, RESPs, PRPPs, TFSAs, RDSPs, FHSAs) should be free to do capitalism wherever they want to. The genie is not going back into that itty-bitty living space.

So, if you are a federal government looking at the capital investment needs of your economy, and you look at the extant sovereign-wealth fund or fund-like institutions you have (CPPIB, the Caisse, the CIB, heck the whole Maple 8), you may be struck by the fact that:

1. Each of the extant funds has a prime directive (like “maximize returns for pension members” or “to invest, and seek to attract investment from private sector investors and institutional investors, in infrastructure projects in Canada or partly in Canada that will generate revenue and that will be in the public interest” (see s.6 of the Canada Infrastructure Bank Act) that means market returns and revenue are of primary interest, even if the value of public funds might be relevant;

2. Interested individual investors need not apply. If you are paying into the CPP (if you are working), if you are in pension fund paying into the Caisse de Depot, if you are employed by as an employee of an Ontario municipality (OMERS), or the Ontario Teachers Pension Plan, or if you are in Alberta and patient with the Heritage Savings Trust Fund, then you benefit from existing domestic institutional investor decisions. If you aren’t, you don’t and you can’t.

Canada already has some of the most influential institutional investment organizations in the world. But they have other jobs that have often incentivized investments outside of Canada, and the distribution of access to these pooled funds across household investors is decidedly uneven.

In equity and investment fund shares, Canadians (institutional, corporate and individual investors) hold more than $3 trillion in equities and investment funds outside of Canada (Stat Can, Table 36-10-0368-01), most of which ($2.5 trillion) is in the United States. As of Q4 2025, individual Canadian households have over $8.5 trillion in financial assets (outside of pension funds and life insurance policies) that could be directed/re-directed by resident investors.

So, what should we do, as a country, to pull domestic investment back into Canada?

Even I can accept that foreign investment limits on tax-preferred savings are probably politically too unpopular and practically unwieldy. We could try a foreign investment limit in registered savings (it’s generally one policy for all registered accounts when it comes to investment types), but I imagine wealthy investors would pay good money to be given options by investment professionals. The real benefit of wealth is choice.

“Crowding in” the household crowd with savings or creating a stakeholding vehicle for more Canadians?

A lot of the discussion of the merits of deficit-financed sovereign wealth fund will naturally focus on the investment decisions of the fund, the opportunity costs of not using the same money for other purposes and, I hope, the projected value of public investments made by a large scale fund that might be freed to focus on mission-oriented goals rather that returns or new revenues, divorced from the “how” and “what” that public investors should really consider.

More than that, I think it’s promising that this is the first time in ages that a Canadian government has bothered to think about stake-holding - the idea that ownership matters and that private individuals in Canada might be interested in a financial stake in the future of their country.

Here the details of the final terms of the fund and investment distribution will matter. Upper income folks like me, already pondering where to put a Canadian flag tattoo visibly on their person before another international trip (for reals), might not need much convincing. Lower and modest income investors might likewise need little convincing so long as administrative obstacles to smaller investors aren't terrible. But we collectively may not amount to big money.

There is big money out there in household financial assets in Canada.

The tradeoffs, in my view, will be trifold: pursuing a public mission that crowds-in patriotic savings but only generates market returns over the long-term, if at all; pursuing investments that woo other domestic investors to redirect financial assets back into the domestic sphere and out of the politically-complex and economically volatile U.S. market; and creating a fund that has a redistributive potential to enable small investors to share in the benefits.

No other sovereign wealth fund (or similar) is currently doing all of that in Canada.

So, inasmuch as the Carney government aims for that kind of trifecta (attractive crowding-in, redirecting domestic investment, and redistributive potential), I would say there’s a decent case for a new and purpose-built sovereign wealth fund, even if it is deficit financed.

Let’s wait to see what happens in practice.

I’ve been noticing some back and forth, on a range of platforms, about whether or not the numbers of exempt staff (the folks working in PMO and ministerial offices) should be cut alongside reductions in the federal public service. For example, Donald Savoie has argued yes. At least one former staffer has called for an increase (across all parties, not just for those in Cabinet).

I am so far behind on so many projects that I don’t really have time to write this, but I also feel professionally and ethically obligated to say something and to try, dear reader, to insert some evidence and analysis into the conversation.

What do we know about the growth of staffers vs public servants?

Headcount rates of the core and peripheral federal public service are published annually by the Treasury Board Secretariat, so it’s pretty easy to track overall changes in that population. There’s already been a lot of ink about the 40% increase in the size of the public service, though a little less about the decline in the share of federal spending that goes to personnel expenses (see Table 8). The Workforce Adjustment process now underway has already meant more than 25,000 federal public servants have been notified that they may be losing their employment. That sounds like it should mean a substantial reduction in the count of public servants, in keeping with the targets set in Budget 2025.

There is no comparable population count of federal exempt staff. Unlike the PS, MINOs and PMOs aren’t organized according to standardized roles or “boxes” that get filled (or not filled) by an employee. The Treasury Board sets the annual budgets, and members of Cabinet get to organize their teams as they prefer, within the total budget and in keeping with the TB Policies on Ministerial Offices, which don’t appear to have been updated since 2011. But total annual spending on staffers is reported by Minister and for the government, as a whole, in the Public Accounts of Canada (Volume III, section 10 fellow nerds). So, with a bit of math, we can make some inferences about growth rates.

So long as Cabinet is following its own policy, then jobs in MINOs and the PMO are benchmarked to PS classifications and rates of pay. The Chief of Staff is meant to be an EX 01 or EX 02-equivalent, a Director of Policy is an AS 08-equivalent. These are the highest paid jobs among exempt staff and would be most likely to pull-up total spending without increasing the headcount of the staffer workforce. For reference, in the Public Service, an EX 01 is an entry-level executive, a Director, usually with several direct reports and a larger team below. The AS 08s that I’ve met in the PS have been senior administrators, often managing a Deputy Minister’s office. The rates of pay for the these occupational groups is published, so we can back-out the change in the rate of pay from the overall change in spending as a way to separate wage growth from workforce growth.

Because I don’t have time to do a whole paper on this (and let’s be real, academic publishing timelines suck), I’ve taken a sample of reported annual spending on staffers from the Public Accounts for the years 2015, 2016 (capturing the turnover from Harper to Trudeau), 2019 (to get a pre-COVID level) and then 2024 and 2025 (the most recent years and marking the Trudeau to Carney turnover). Below I report for a selected number of portfolios that include “the Centre” as well as “line” portfolios, as well as the roll-up for the whole of government. Yes, when there are multiple MINOs, like MINO for ACOA and MINO for DEQ and ++++, I’ve added them all together for the broader (in that case ISED) portfolio. This makes the rows comparable over time. I’ve used nominal values (not reported below, but available on polite, respectful request), and converted them into an estimate of y-y rates of change as well as the cumulative change for the period 2015 to 2025. I’ve also worked out the rate of change to the nominal pay bands for the EX-01 and AS-08 groups, taken the average and subtracted it from the observed whole of government change in spending on staffers. Results are below.

TLDR: On a nominal basis, spending on staff increased an eye-watering 73% between 2015 and 2025. However, after backing out the effects of salary increases (25% over the 10 years 2015-2025 which is less than inflation over the same period, don’t get your knickers in a twist), spending on staff increased by 48% between 2015 and 2025. If we take this as an estimate of the rate of growth in volume (which I think we can), then the growth in federal staffers outpaced the public service by nearly 9% between 2015 and 2025.

When I last did a full study using the Public Accounts data, I concluded that you couldn’t explain spending on staffing as counter-balance to the PS. There is a model that says, effectively look, government is big and complicated and Ministers in bigger jobs need more help managing the principal-agent problems that inevitably crop up between a Minister and their department. But there wasn’t really a relationship between the count of public servants and the spending on staffers under Harper measured between ministries, and there isn’t really a clear relationship here either. It would be difficult to argue that, for principal-agent reasons, Cabinet needs to grow much faster than the PS it is also agreeing to increase.

How should we interpret the growth of staffers?

Another way to understand the growth of staffers is instead about equipping ministers to just keep up with the volume of work they have to do — stakeholders to meet with, committees to appear at, Cabinet items to present or weigh in on, fundraisers to attend, doors to knock, correspondence to answer, speeches to give, announcements to make, roundtables to host, funding agreements to sign, QP to prep for, and on and on and on. A minister’s time is chock-a-block. If they might also want to, oh I don’t know, sleep, eat, bathe, and maybe see their loved ones, additional eyes/ears/hands to help are non-negotiable. But it has long been true that busy Ministers are really busy, lack free time, and need help. Sometimes, when my former boss wanted to carve out time to work on his own speech, it was at 2 AM. I know, I was there with him! But this argument doesn’t get you out of the fact that the Minister can’t delegate all tasks to staffers. More staffers may be involved doing more work to prep the Minister for QP, but they can’t appear at QP for the Minister, so there’s a limit to the delegation argument.

Yet another argument for why there are more staffers now is that they wouldn’t be so necessary if the PS just sucked less badly. I hear this particularly when it comes to policy roles. A minister has no choice but to create their own think-tank because the PS has stopped thinking. I sometimes hear it when it comes to stakeholder relations — that because the PS is so scared of its own shadow, staffers have to pick up the slack and meet with the Canadians who reasonably expect to have access to their government.

Ok, maybe these are worth considering. Without passing any judgement on the quality or culture of the PS, it may be the case that the political side has concluded the system is broken and if they want anything done, they’ll just have to do it themselves. Much as this appeals to my gut instinct for DIY, this also signals that something has gone very, very wrong. Worse, a choice to bolster the ranks and roles of the political staff — without addressing gaps in state capacity and governance — is likely feeding, not fending off, the downward spiral.

A break-down in trust and governance

When a staffer needs information to help them develop a policy option for their minister, or when they need background before meeting with an outside stakeholder, they can do their own research (drawing on their own networks, Google search and probably LLM queries these days), and they can ask officials in their department. Under the informal (relies on norms and conventions), approach to governance of staffers, codified only in an aspirational but non-binding set of guidelines from the PM (last updated in 2015), staffers can ask for information and convey the wishes of their minister, but cannot give direction to public servants. Let’s take it on face value that this is how good staffers are conducting themselves. But let’s also acknowledge that the line between “conveying the wishes” of a busy minister to whom most public servants have no line of sight and “giving direction” isn’t always crisp and bright. Good staffers don’t freelance. They know their boss’s thinking, and they don’t represent their own direction as their minister’s.

But let’s ask what happens when a staffer asks officials a question. Are there unintended consequences?

Much (most?) of the time, staffer’s requests for information are now treated as a formal tasking, a “MINO-Q”. These get answered in written notes or in organized briefings. Those taskings get logged, assigned and tracked by public servants. The outputs don’t change the price of eggs or build more housing. But the work involved is work. More staffers asking more MINO-Qs = more taskings. Sometimes, a sophisticated staffer or public servant will buck the trend, figure out ways to get and give information with less friction and at lower marginal cost to the overall system. They build relationships of trust, so that they can have the “meeting after the meeting” and everyone comes out alive. But why don’t more staffers work that way? As far as I can tell, sometime in the last 30 years, DMs decided that any interaction with a MINO was risky and needed the formality of process and documentation.

There is a long paper/book/edited series to be written, with evidence, about how we got here. I would argue it probably starts with at least the Rivard Affair, continuing through Al-Mashat, Sponsorship, Senate expenses, and the We Charity cases, but it seems that the political side has become more mistrustful of the PS and the PS has become more mistrustful of the political side. When systems don’t have trust, they substitute with rules.

Yet weirdly, the PS side also seems far more responsive to staffers than it maybe needs to be. Supply can, after all, create its own demand. At some point along the way, DMs decided (agreed?) that the officials they lead should write notes for and give briefings to staffers as well as ministers. So now, volume + formality = more activity but low productivity work. I long for a time-use study in the federal public service! Lots of “feeding the system” without regard to who is actually supposed to be calling the shots and accountable for them (the Minister!) or the costs involved.

DMs could say no to MINO-Qs. After all, staffers are just ghosts in the system — they are the temporary visitors with no delegated authorities, but also no formal public accountabilities, operating in a weird governance regime that may no longer be fit for purpose, or up to date with jurisprudence (more on that in another post). Senior public servants could experiment with relaxing some of the formalities, cultivating an environment of trust, and also insisting on having a DIRECT relationship to their Minister so they can know the Minister’s mind at least as well as the MINO’s Special Advisor for Saskatchewan and the North (excluding Nunavut), which they will also share appropriately with their department.

Chiefs of Staff in a MINO can lead by example, making sure that their teams understand the swim lanes, approach their jobs with humility, and they appreciate the value as well as the limits of their power in serving their minister. This might include, ***ahem***, investing in professional development so that staffers who have particular expertise in regional politics, specific policy areas, or stakeholder communities are also required to develop a solid understanding and respect for our system of responsible government. PMO, in particular, provides a beacon, signalling throughout the system what is expected, what is tolerated, and what will be rewarded. Are your ministers and their teams doing the right kind of work that really advances your priorities? Not all activity is productive after all.

And our elected officials, on ALL sides of the aisle, bear some responsibility here. Spending on the PS, just like spending on staffers, has to be signed off by members of Cabinet. It is subject to oversight by Parliamentarians, backbench and opposition. They are accountable for the votes they cast, the hiring choices they make and the spending they agree to. Staffers and public servants didn’t multiply because someone let them get exposed to water. People we elected to public office signed off on this.

FTR, I’m also not suggesting that officials or staffers be deprived of food after midnight.

This debate about staffers should be so much better informed by evidence, with a critical eye for what roles we expect them to play. Staff do fulfil functions that the PS can’t and shouldn’t. But bringing a system back into balance, with high capacity on both sides of the political and public service divide, should be the focus.

Enough for today. Time to get back to my regression analysis.

Please accept this letter as a response to the request for comments on the “Automated Benefits” proposal contained in Budget 2025. Let me begin by extending my support for the general intent of the proposal. I recognize that this is a more ambitious step, relative to related efforts by previous federal governments to promote tax filing for access to benefits.

As an academic researcher who has published on the topic of non-filing and eligible non-participation in income-tested benefits, my comments are informed by my past research and analysis. While my analysis is also informed by my experience as a member of the Government’s Automatic Tax Filing Advisory Group, none of my comments below make use of confidential information provided to me as a member of that group. Finally, I note that I am submitting this letter as an individual and I do not speak on behalf of my employer or any other organization.

Comments on the draft Income Tax Act (ITA) amendments

• At 150.2(1)(c) and again at (f), I would strongly encourage the Government to consider reducing the two waiting periods from the proposed 90 days to 60 days, or preferably even 30 days. I recognize that the Canda Revenue Agency (CRA) will have operational constraints and there is a desire for a clear behavioral signal by individual Canadians. However, the CRA’s data on late filing suggests that more than half of late filers who do eventually submit a return do so within 57 days of the deadline to file, suggesting that a 90 day waiting period may not be appropriate as a behavioral signal. Furthermore, the combined effect of the two 90-day waiting periods could effectively delay a return to have been deemed to be filed by up to six months. This will most definitely result in an interruption in CRA-administered benefits, such as the Canada Child Benefit, Canada Workers’ Benefit and the GST-Credit (soon to be renamed the Groceries and Essentials Benefit). A six month delay may also risk continuation of access to other programs that require the Notice of Assessment to maintain eligibility, including subsidized housing and provincial drug benefit programs. The risk of such interruptions should be minimized in the design of the deemed filing service.

• In a related vein, the opt-out mechanism for the deemed filing service that is contemplated in 150.2(1) could also be designed to accept proactive eligible opting-in, enabling the CRA to move forward more quickly on eligible returns, rather than waiting for a passive behavioral signal, as currently contemplated in the legislation. The Internal Revenue Service’s Direct File program enabled interested Americans to self-screen for eligibility before using the service. A similar user-experience model could be adopted for an eligible opt-in mechanism.

• The proposed eligibility criteria for the deemed filing service appears to implicitly exclude first-time filers. This would include, for example, filers where information slips might be available to the CRA, but no prior return has determined residency, eligibility for the Age Credit or Disability Tax Credit. For greater certainty and transparency to Parliament and the public, I would suggest making the requirement for a past return an explicit part of the eligibility criteria for the service.

• The eligibility criteria contemplated in the legislation include a requirement of Canadian tax residency throughout the year. At present, the CRA relies on self-declaration of tax residency, including self-declaration for dates of any change to tax residency. It is not clear how the agency might verify or enforce this provision of the text. For example, the agency might contemplate tracking traveler exit and re-entry data. However, I would urge caution given the recent example in the United Kingdom where exit and re-entry data was used in reviews of eligibility for Universal Credit, with unacceptably high rates of error. I would note that disaggregated and real-time e-payroll information might be a more promising source of data to support verification of this portion of the legislation. Absent that system, I would suggest amending this text to remove the reference to “throughout the year” at 150.2(1).

• The eligibility formula for taxable income, as drafted, does not appear to include an eligible claim for the Disability Tax Credit for a dependent under 118.3(2) and I would encourage the Government to amend the legislation to include both the DTC claims for self as well as for eligible dependents.

• At 150.2(2), the draft legislation proposes to invalidate a deemed return if the individual later proves to be ineligible for the service. This process would also likely result in benefit reviews for CRA-administered benefits, and depending on information sharing agreements, may also retroactively impact other income-tested programs that use the Notice of Assessment. Given the complexities and costs of the benefit reviews, particularly if/as an impacted individual then files a return and requalifies for most or even substantially all of the benefits under review, a reasonable time limit for the determination of ineligibility would seem to be reasonable and efficient. The ITA at 152(4) already sets a general limit of three years for reassessments. I recommend that the proposed amendments at 150.2(2) be brought into alignment with that same principle.

• The success and accuracy of the deemed filing service will rest in large measure on the completeness of the information slips received by the CRA. I would suggest adding text to the draft legislation to enable the Minister to enter into information-sharing agreements with provincial governments as may be required to enhance the accuracy, speed, and expand eligibility for the deemed filing service.

• The Fall Economic Statement in 2024 had proposed to “amend the Canada Revenue Act so that the Minister of National Revenue’s responsibilities include advancing the simplification and automation of individual tax filing in Canada.” This would be a sensible amendment to make as a complementary measure for the amendments currently proposed to the ITA.

Comments on implementation issues following the legislative changes

• The proposed legislative changes will create an obligation on the part of the Minister to provide a copy of the filed return to any individual benefitting from the deemed filing process. This is a reasonable and welcome requirement. However, the legislation is silent on the mechanism to be used. There are only imperfect options available. While the MyAccount service is secure and a lower cost avenue for the CRA to transmit information, many beneficiaries of the deemed filing service will likely struggle to log into the service. Many will not have an online banking partner to verify their identity. Many will not have records of recent past tax returns since, by virtue of being eligible for the deemed filing, they have had an interruption in their recent returns. Many will not have access to a computer with a secure internet connection. For these and similar reasons, I strongly recommend that the default option be a printed copy sent to the mailing address on file in the CRA’s records.

• I anticipate a related series of challenges in the various interim communications actions required by the legislation including:

1. individuals notifying the CRA of a desire to opt-out of the deemed filing (or opt-in as per recommended amendments, above);

2. the CRA providing a copy of the pre-completed return to individuals; and

3. individuals notifying the CRA of any changes to the pre-completed return, including, for example, changes to their family structure.

For the same reasons stated above on providing a copy of the completed return, I suggest that the default mechanism for the CRA to send information be printed correspondence. However, I would also recommend that the CRA take steps to enable affected individuals to communicate with the agency as easily as possible. A dedicated 1-800 phone line, rather than the general personal income tax inquiries line, could facilitate faster response times and more tailored service for this population. This will only work, however, if there are administrative protocols to enable agents to accept information over the phone, something the agency appears to have moved away from in recent years. The interface for the digital pilot of the File My Return service might also be useful as another optional mechanism, but with recognition of the challenges of digital access for this target population.

• To enable public accountability for this new service, there should be a clear commitment to annual public reporting by the CRA on at least the following indicators:

• the count of individuals eligible for deemed filing in a tax year,

• the proportion of eligible individuals who opt-out of the service, including counts of filers (through other methods) and non-filers,

• the average time (in days) to complete the deemed return process, starting at the annual deadline to file a personal return,

• the aggregate annual value of CRA-administered refundable credits paid to individuals who received the deemed return service, and

• counts of eligible individuals disaggregated by income range, age range, gender and geography, for both eligible participants and non-participants in the service.

• Particularly during the initial introduction of the deemed filing service, I anticipate that community organizations offering free tax filling services will see an increase in demand outside of the usual Community Volunteer Income Tax Preparation clinic season. Some individuals who have received pre-completed forms may seek support from trusted non-profit organizations to interpret and review the information provided by the CRA. Services provided by these organizations will almost certainly increase the effectiveness of the CRA’s deemed return service, but at a cost to these agencies. While it is welcome news that the CRA will be extending the modest grant program for CVITP providers in the 2026 tax filing season, the program only recognizes returns attached to the organizational COIN identifier. Further, the uncertainty of the grant renewal as well as the timing of the grant application period mean that service planning is more difficult for organizations. The CVITP grant program should be made a permanent program of the CRA and activities eligible for the grant should be expanded to include supports to individuals using the deemed filing service. The Canada Revenue Agency Act could also be amended to provide the Minister with authority to make grants and contributions in support of their responsibilities.

Thank you for the opportunity to provide these comments. I would welcome an opportunity to discuss these at any time.

The PM’s announcement includes various measures to support food banks, deal with immediate pressures on food supply chains, and encourage more year-round domestic food production. Maybe, like Iceland, Canada could become self-sufficient (or close to it) in the production of greenhouse-grown tomatoes and even other fruits and vegetables.

But for this blog, I’m going to zero-in on the part of the announcement that revamps the GST Credit.

The Government is renaming it the “Canada Groceries and Essentials Benefit”. I suspect most of use will keep calling it the GST Credit for a while to come. Canadians who are getting the benefit this year (July 2025 through June 2026), will get a one-time top-up of half their annual benefit sometime by June of this year. Canadians who qualify for the benefit will see the dollar value rise by 25% for the next 5 years. I’m taking this to mean 25% over and above the annual indexation for inflation.

A quick refresher on the Credit. It’s a refundable tax credit that is income-tested and paid in 4 installments over the year. What you get depends on family size and income. For example (and I’m rounding for simplicity), a single adult with no partner or children can receive a maximum of $533 this year, but that value declines as their income rises over $11,300; while a single parent with one child can receive a maximum of $717 with the amount declining as their income rises over $45,000. It’s also the case that the income concept used by the CRA (which administers the credit) doesn’t really line up with the way that most people might think of as “what you make” or “all your income”. But I don’t have time right now to explain Adjusted Net Family Income so please google if/as needed.

To receive the Credit, you MUST file a tax return. In 2020, Saul Schwartz and I estimated that, in the 2016-17 benefit year, 1.7 million non-filers in Canada missed out on $364 million in GST Credit. In a separate stream of policy work, the federal government is also promising amendments to the Income Tax Act to permit deemed filing in some cases, for some eligible Canadians, so that fewer people would miss out on thing like the Credit because they didn’t file a return. I’ll try to post something more detailed on that in the days ahead.

In the 2024-25 benefit year (again July 2024 to June 2025), the CRA reports that a total of $5.6 billion in GST Credit was paid out to 11.7 million benefit units. In many cases, the benefit unit is the same as the “family” or “household”, but in other cases it isn’t. For example, two lower income roommates would be treated as two separate benefit units. Bear this in mind in the data below.

The GST Credit is not really designed to be a food security benefit. The original intent was to offset federal sales tax for lower and modest income households who generally spend a larger share of their income and have less capacity to subsitute away from essentials if/when prices rise. As Gillian Petit, Lindsay Tedds and I pointed out in 2022, when a temporary bump to the GST Credit was introduced, the Credit is pretty well-targetted when it comes to reaching people in lower income households, even if it isn’t generally enough to raise incomes over the poverty line. Further, increasing the very modest capacity of lower income Canadians to pay for essentials is unlikely to generate wider inflationary pressures across the economy. In fact, an excellent paper by the Bank of Canada noted that food inflation in particular is effectively higher for lower income households than for middle and higher income households.

But is a bump to the GST Credit, …sorry, the Canada Groceries and Essentials Benefit, likely to do much to reduce food insecurity?

My estimate is that the 25% increase will bring the maximum value of next year’s GST Credit, I mean CGEB (it just doesn’t really roll off the tongue), to about $670 for singles and $914 for a single parent with 1 child. Below is the same table on average household spending on food from stores that I used last year, and you can see that, no matter the family size, even a bigger maximum credit would cover a very small share of average grocery expenses (note: many groceries are GST-exempt). To really make a dent in food insecurity, the value of a benefit would likely have to be much higher.

But is the Credit going to go to Canadians who are most at risk of food insecurity? Here, I’ve used the Statistics Canada 2022 Canadian Income Survey, which includes an indicator on food insecurity as well as household income and size. I’ve re-organized the observations into the “benefit unit” definition that the CRA uses and I’ve looked at whether or not they were getting the GST Credit.

Overall, 17% of benefit units report being “moderately or severely food insecure”. Benefit units not getting the GST credit are less likely (14%) to report being food insecure (moderate + severe), and benefit units getting the Credit are more likely to report being food insecure (22%). Further, GST Credit-receiving benefit units account for nearly two-thirds (61%) of all food insecure Canadians.

So, targetting on the GST Credit/CGEB is probably not a bad way to reach a majority of food-insecure Canadians. But a boost to the Credit alone is unlikely to reduce food insecurity, even if it can do some good more generally for many lower and modest-income Canadians.

The federal government has also promised a National Food Security Strategy, so I imagine there’s more to come…

But, governments can also accept amendments to legislation proposed at the Committee stage. In fact, I might argue it is good and right for Parliamentarians to do their job to improve government legislation when they have the opportunity, and governments should be open to advice and input from their Parliamentary colleagues.

As I’ve already said, there are some things in the omnibus bill that are good and much-needed public policy. But I also expressed some concerns regarding Div 5 of the bill, the section that makes major amendments to the existing Red Tape Reduction Act. It would create broad new executive powers to exempt designated persons, corporations, partnerships, or provinces, from any federal legislative or regulatory provision, other than the Criminal Code. You can read my previous post if you want a summary of this part of the bill.

I take it at face value that the federal government believes it must reduce regulatory burdens in Canada, as part of a whole-of-government effort to build new and more resilient economic relationships across the country and around the world. I start by looking at the evidence on Canada’s regulatory burden, relative to other countries, including some modeling from the same sources cited in the federal budget. Then I ask whether there was clear demand for the kind of legislative changes to The Red Tape Reduction Act that C-15 would make. Finally, I suggest some avenues to move forward that I hope might find support across party lines in Parliament.

Does Canada have a heavy regulatory burden?

The 2025 federal budget cites (see page 76) a 2025 Statistics Canada paper that uses econometric modelling to estimate the effect of cumulative regulatory burden on overall economic growth in Canada. That study adopts a new measure developed by Transport Canada and the consulting firm KPMG, which counted the number of regulatory requirements and used AI to estimate the incidence of these requirements across sectors of economic activity in Canada. This is different from just counting regulations, which is what the current text of The Red Tape Reduction Act directs the federal government to do with a supposed one-for-one rule to cap the growth in the number of regulations. You can read my previous post about the dismal track record of that legislation.

Side bar: Regulations have subjects (entities that have to comply with the regs) and objects (things those entities have to do to be in compliance). A government that makes regulations is required to implement them—which means education, investigation, and compliance enforcement, which means that regulations impose costs not only on regulated businesses, but also on governments (and therefore all taxpayers). The estimated cumulative effect of regulatory burden on economic growth is what the government cited from the Stat Can study, but I find it noteworthy that the same study finds that the count of regulatory requirements on government grew by 46% between 2006 and 2021, much faster than the growth in regulatory requirements on industry (37%) over the same period.

As the Budget accurately quotes, the Stat Can study estimates that the increase in regulatory requirements on industry over the study period (2006 to 2021) has been associated with a cumulative decline in GDP of 1.7% over the same period. The same study estimates that business investment in tangible assets (including construction) declines by about 0.06 percentage points for a 1% in cumulative regulatory requirements, after controlling for things like the size of the firm and cyclical factors. But, and this is important, the model only identifies changes in investment among firms doing any investing to begin with. That is, the impact is at the intensive margin, not the extensive margin: increases in regulatory requirements don’t seem to push firms that are investors into halting investment. Instead, additional requirements might just reduce what investment those firms are already doing by a little bit. In fact, another study has found that, particularly when firms look at their neighbouring peers, regulatory burden (alongside political uncertainty) can actually incent firms to invest more in research and development. This might not make sense until it does.

All administrative burden is relative, and firms have to weigh the costs and benefits of being where they are, compared to where they think they could go (in addition to all of the other ways that place is sticky). It has been the norm to evaluate Canada’s regulatory burden in comparison to the United States of America. On the one hand, we share a long border and have enjoyed a highly integrated market for decades. On the other hand, there is a lot, I mean A LOT, of very worrisome stuff going on in America right now. And as the Prime Minister himself recently pointed out, to much international acclaim, Canada generally enjoys (international interference efforts notwithstanding), a high degree of political stability, as well as predictability and transparency in our governance. Maybe, especially for larger established firms and their investors making medium and longer-term wagers, that stability and transparency might have value. But, in the current unstable geo-political environment, it is understandable that a Canadian government might not want to rest on laurels, but instead find ways to promote new sources of economic opportunity for Canadians. In that light, is there a case that Canada’s regulatory burden is too high and the kinds of measures in C-15 might be needed?

Maybe, but it depends on what you want out of deregulation.

One perspective is that regulatory barriers for new entrants are too high, making it harder than necessary for entrepreneurs to launch and for some succeed. And in fact, one frequently-cited international benchmarking report on entrepreneurship notes that Canada’s regulatory barriers to entry are less conducive to new start-ups than comparable countries, though I note that “government bureaucracy” is not so much of a problem. However, a lot of new small businesses don’t make it, and not because the regulatory environment was the problem.

Another perspective is that regulation inhibits overall innovation and investments, particularly among established businesses, reducing competition and growth in the economy. This seemed to be more the line of thinking of the federal government in Budget 2025. In addition to the proposed legislative changes in C-15, the budget also committed to a major review of federal internal processes to streamline, delegate authorities, cut back on unnecessary or duplicative reporting, and cut down on the internal red tape of government (p.218). At the same time, the government seems to have acknowledged the need to make sure that administrative penalties and fines (one of the main tools for getting the subjects of regulations to comply) are meaningful and not just written off by non-compliant firms as a cost of doing business (p.218 again). That’s a more nuanced perspective on regulatory burden, and one we are told Budget 2026 will say more about.

Now let me turn to the OECD data that is also cited in the Budget. In contrast to the Stat Can cumulative requirements approach, the OECD Product Market Regulation measures (on an annual basis, rather than cumulative) a wide range of regulatory barriers, both to new entrants and to greater competition, at both economy-wide and sector-specific levels. Chart 30 on page 55 of the 2025 budget reported on Canada’s overall PMR score, relative to other selected countries. I’ve included a copy of that chart below:

According to this data, Canada might want to look to European countries rather than the United States as comparisons to learn from. I would also note that when the OECD annual data are indexed to 2006, they suggest that Canada’s regulatory burden has been declining (which Stat Can reports in the same study cited above). I would also note that the PMR scales have a maximum value of 6, so take that into account as you interpret the Y-axis.

But what about the sectoral-level results? The OECD reports on regulatory stringency for each energy, transportation and telecommunications (they call it e-communications) sectors. Below is a chart I’ve generated, using the same 2023-24 annual PMR data, and compared to selected countries, but at the sectoral level. In this case, I’ve chosen G-7 countries, the OECD average, and Mexico, given that regional and sectoral comparisons seem to matter to investment decisions.

So, whether a government wanted to pursue smart deregulation to encourage new entrants or to encourage more innovation and investment, I think it’s fair to say that the international benchmarking data suggest there’s room for improvement, but maybe not an emergency that could otherwise tank Canada’s efforts to chart a new economic and geopolitical course.

Is there demand for what C-15 is offering?

I went back through the pre-budget consultation records to look for written evidence that there has been a constituency asking for the amendments to The Red Tape Reduction Act that C-15 is proposing.

The latest pre-budget consultations held by the House of Commons Standing Committee on Finance received 948 separate briefs. I’m not currently able to see a copy of the traditional Committee summary and recommendations to the Government of Canada on the Committee website. In fairness, the Committee was under very tight timelines owing to a Spring election and a new fall budget target date.

Instead, I have gone through as many of the 948 submissions as I could manage with the aim of looking for evidence that there were documented calls for the flavour of deregulation that C-15 would offer. I did find voices keen on regulatory harmonization and deregulation more generally. Here’s a sample:

The Moving Economies Coalition (which includes the Mining Association of Canada, the Canadian Federation of Agriculture, Global Automakers of Canada, the Railway Association of Canada among others) called for “timely transparent, and predictable decisions for infrastructure, resource, and industrial projects,” but this took the shape of calling for clearer timelines, better coordination between jurisdictions in Canada, and more efficient public consultation processes.

Innovative Medicines Canada called for streamlining drug approvals in Canada, cross-jurisdiction coordination in pharmacare, and encouraged Canada to accept trusted foreign regulatory reviews as equivalent to domestic processes.

Food, Health and Consumer Products of Canada called on the government to mandate an economic lens for federal regulators, better cross-jurisdictional cooperation on drug products, separate regulations for prescription vs non-prescription drugs to enable risk-based approach, streamlining reviews of novel foods and food additives, and also suggested accepting assessments from trusted international regulators.

I suspect the Government of Canada may want to sidestep these calls for accepting “trusted” international regulatory reviews since we have regulatory cooperation agreements in place with the United States, and “trusted” requires stating which countries would qualify in a new federal policy.

FinTechs Canada called for financial sector regulators to adopt a mandate to promote competition.

The Council of Canadian Innovators made some sensible proposals on the main federal tax credit to support R&D (nicknamed SR&ED), like limiting access to only Canadian-controlled firms, and capping credits to avoid subsidizing zombie firms. But they didn’t pronounce on regulatory exemptions.

The Canadian Federation of Independent Business called for the one-for-one rule in The Red Tape Reduction Act to be turned into a two-for-one rule and that it be applied not just to regulations, but also to requirements in legislation and government policies. The CFIB also called for harmonized recognition of regulations across jurisdictions in Canada.

The Canadian Chamber of Commerce called for a new and mandatory economic competitiveness lens for federal regulators, interjurisdictional regulatory alignment and “eliminating red tape” more generally.

The Western Business Coalition called for regulatory excellence to be a priority and asked that the Government of Canada remove ministerial powers to designate a project for federal review, adopt a coordinated “one review” approach across jurisdictions, ensure that arm’s-length regulators make final decisions, not ministers, and it called for word and page limits on the amount of information a regulator can require. This generally seems pretty perpendicular to the text in C-15.

The Canadian Manufacturers and Exporters called for mandating economic growth as objective for federal regulators. Like the CFIB, it called on the government to “expand The Red Tape Reduction Act to include other compliance instruments such as legislation, policies, and guidelines to achieve more effective regulatory burden management and reduce the overall burden on companies.” The group also recommended that the federal government create a panel of industry and academics to review cost-benefit analyses of regulatory proposals, and that it use fiscal and other policy tools to incent interprovincial regulatory alignment.

I’m not sure that last one would past constitutional muster as a legitimate use of federal spending power, but let’s move on….

While there are a few of the submissions that point to The Red Tape Reduction Act as an instrument to expand, the calls are for a more general or horizontal (as in applying across the board to all subjects of regulatory burden) approach that would apply the one-for-one principle to more instruments, including laws and government “policy” (which I take to mean the more informal statement of interpretation or internal practices which are enabled by legislative powers). Again, the evidence on existing one-for-one rule is not great and the information/analytical requirements to expand reviews to other policy instruments may not be met by current systems.

There is also the published advice from the Treasury Board’s External Advisory Committee on Regulatory Competitiveness which issued a report in June 2024. It made a pretty sensible recommendation that the federal government invest in a public, digital and searchable database of requirements, including requirements from regulation, but also in legislation, “forms, guidance, and policy requirements”, which is likely a big but potentially very worthwhile endeavour. Not only could this help with transparency and certainty about red tape requirements, it might also help government and stakeholders identify priority areas for simplification and red tape reduction, along the lines requested by many of the business groups who took part in the pre-budget process.

The provisions that are in C-15 on regulatory and legislative exemptions do seem to be responding to demand from some voices for further progress on deregulation. But the text of C-15 goes much further than what business leaders have called for, at least publicly. There might well be wider demand for the direction that C-15 lays out that the government is aware of but that Parliament might not be.

But why would business leaders go on the record to call for this legislative change? After all, asking government to exempt you but not your competitors from a regulatory (or legislative or policy) requirement is tantamount to rent-seeking. Strategically, why would you do that out in the open of pre-budget consultations? Further, why would you call for that general power for the executive when you run the risk that the same executive might grant the exemption to your competitor, not you? As currently drafted, C-15 would take The Red Tape Reduction Act, a largely failed legislative initiative (in my analysis, again see this previous post), and turn it into something more like Gru’s free-ray gun.

The interests of businesses matter. The interests of the public, defined as inclusively as possible, matter far more.

How to move forward?

As of the time of writing, the Standing Committee on Finance has received just one written brief on the proposed amendments to The Red Tape Recuction Act contained in C-15. It’s from the Canadian Civil Liberties Association. The CCLA warns about several shortcomings in the legislation that it has identified: overly broad application to all sectors, too much flexibility for the government in publishing information on an exemption it granted and the reasons for it, the absence of a mechanism for Parliament to amend or revoke an exemption, and no requirement for consultations with other affected parties before an exemption is granted. But it doesn’t really make proposals for legislative improvements.

I started thinking about this blog with a view to suggesting the kinds of amendments that might address these and other concerns that have been levied. Amendments like:

• limiting the application of the legislation to a list of specified sectors that the Governor in Council would publicly designate, in advance, as priorities for industrial policy, innovation, and national security;

  • But this would require that the government have selected, ahead of time, those sectors that would benefit and those that wouldn’t. That requires a heavy lift in analysis and some bets on where federal industrial policy ought to focus. As an October paper from the IMF notes, industrial policy can jump-start domestic production in targetted sectors, but it’s really hard to predict successful candidates in advance. Moreover, as the same paper notes, there’s no guarantee that sector-level gains will spill over into the wider economy. I could see a case for designating some sectors as critical for national economic security, not dissimilar to powers to designate some sectors as “vital” as proposed (again) in Bill C-8, also before the current Parliament. But then, the logic of C-8 is to scope some sectors into new requirements, not out of existing requirements. So I talked myself out of this route.

-or-

• requiring that any Minister exercising powers under the law table in the House of Commons notice of an exclusion when a law of Parliament, or regulation required by a law, is at issue, within a set timeframe.

  • But, requirements to table in Parliament normally only apply to spans of days that Parliament is sitting. This could create perverse incentives for private firms and the executive to time exemptions to recess periods. Moreover, it shouldn’t matter if a notice has been formally tabled in Parliament or not - Parliament can and should hold the government accountable. I don’t know that C-15 needs an explicit mechanism, like tabling or referral to Committee, to ensure Parliamentary oversight. Those mechanisms, through order paper questions, oral questions, document requests, summons, Committee studies, and more are notionally already available to Parliamentarians willing to use them. But if the House, especially in a minority Parliament, were to pass a motion stating that an exemption granted by the executive was contrary to the will of Parliament, as expressed in its past legislative actions, then I don’t know how safe I would feel as an investor in a business that got a ministerial exemption. That’s definitely not a court case I would want to be party to. So I talked myself out of that route too.

-or-

• introducing a requirement for consultation by the Government of Canada with interested parties before the effective date of any exemption authorized under C-15.

  • But the government cannot accurately identify all interested parties. That’s part of why, for example, the current regulatory process includes a mandatory publication (in the Canada Gazette) and consultation period. For many regulated parties, this is part of the very red tape they dislike. See, for example, the pre-budget submission from the Moving Economies Coalition. Proceedural fairness and executive expediency aren’t always aligned. On balance, in a democracy, it’s probably better to err on the side of proceedural fairness, especially if part of the value proposition you are offering is political stability, rule of law, and transparency in your public policy. So I talked myself out of that route too.

I don’t think that the drafters (government lawyers who work to translate a government’s policy direction into legislative form) did the government many favours in the way they wrote this section of C-15. Achieving the stated aim of encouraging “innovation, competitiveness or economic growth while protecting public health and safety and the environment” might be better pursued through other approaches. There are some good ideas (like the changes to SR&ED, and a more realistic definition of regulatory burden that isn’t about a count of regulations) in the published advice the Government of Canada has already received. There may also be some promising ideas to be found in the same OECD PMR data that was cited in the 2025 budget.

The OECD has used the data to create a policy simulator, allowing users to model selected policy changes for their impact on overall regulatory stringency, even relative to other countries. I used it to generate the chart below, comparing Canada’s current overall PMR regulatory stringency score to a hypothetical score, and in comparison to Germany. Why Germany? Well, it’s more in the direction the government seems to want to move (per their own budget chart) than the U.S.. Further, while Germany has its economic challenges, those seem to be more about excess output than Canada’s issues of operating below potential. There’s likely a happier middle ground to be found somehere.

Here’s what the simulator generated:

The simulator covers several different policy domains that might create red tape burdens on business entry and competition. I chose to run the simulation squarely focused on the kinds of national regulatory burdens that C-15 and current text of The Red Tape Reduction Act are intended to tackle. You can see the impact visually as the dramatic reduction in the dark purple section of the overal PMR score. This reflects changes like:

• requiring government to publish a list of laws to be introduced, amended, sunsetted or renewed in the 6 months or so;

• creating the public and digital inventory of regulatory requirements the TBS’s Advisory Group recommended, but also requiring that the data is regularly used to find opportunities for simplification;

• creating a government-wide requirement that regulatory permit/licensing processes adopt a risk-proportionate approach, rather than a risk-averse approach;

• introducing a “silence is consent” for some designated licenses and permits;

• introducing a “tell us once” principle and enabling government bodies and regulators to more easily share information they have received.

Those measures would all move in a very different direction than C-15’s proposed changes to The Red Tape Reduction Act. This is beyond amendments to the BIA part 1. This would change, in pith and substance, the legislation as introduced. It would be a confidence issue, no doubt.

Rather than a standoff, my hope is that the government will agree to strike the relevant division from C-15 in exchange for a commitment by the FINA committee to return, quickly, with a study report on recommended legislative pathways to sustainably improve the federal regulatory environment to promote innovation, growth, competition while protecting public health and safety. That study might want to consider an option to repeal The Red Tape Reduction Act in favour of measures that will actuall work.

We’re in an economic war. It’s time for Parliament to act like it and find constructive ways to move forward, together.

This time it’s the Budget Implementation Act, Part 1. Welcome, fellow nerds!

This bill is not a total waste. But it has problems. I give it a maybe 6…7…

The bill does revive the provisions of the Fall Economic Statement in 2024 that would have made the new Canada Disability Benefit exempt from taxation. This is important. As some of us argued at the time, taxing an income-tested benefit payable to some of our most vulnerable neighbours makes no sense, and would lead to a Kafkaesque spiral in which benefits paid are taxable and reduce eligibility for the program next year.

The bill also does impose new requirements on Canadian financial institutions (FIs) to develop, communicate and implement policies regarding fraud against their clients. The legislation also touches on the responsibilities of FI’s to get client consent before extending new services or credit, and I have to hope that this would mean BOTH accountholders in cases of joint accounts. Dear reader, maybe in some future post I will be able to explain to you the depths of how personally those issues are currently hitting home. In my private and offline life, I am learning so much more than I ever wanted to about the limits of our financial services system when it comes to dealings with clients in cognitive decline. Boomers, and Boomer men very specifically, I hold you responsible for a massive failure of imagination, anticipation and action to plan ahead for the system-wide gaps in meeting your own needs through the caregivers you take for granted. But that is a future post.

There is a key section in the Act that I would like to highlight, with big a hat-tip to Raj. I can’t keep up with it all, but TorStar caught this one, which it seems Parliamentarians haven’t, and that should matter in reminding us of the important role of journalists in a democratic society.

Raj is right to warn Canadians about the potential impacts of a particular provision of the Implementation Act.

Specifically, Division 5 makes amendments to the Red Tape Reduction Act, a Harper-era piece of legislation that introduced a “one-for-one” requirement to reduce federal regulation. It’s been on the books since April 2015. Some of us have written about the rather mixed effects of that legislation and the conclusion, by federal reviewers, that the biggest gains for red tape reduction might be in the administrative burdens faced by private citizens, not businesses. The Budget legislation (C-15) adds a whole new section to that Act.

C-15 would amend the Red Tape Reduction Act to introduce a section premised on “Exemptions to to Encourage Innovation, Competitiveness or Economic Growth” (see C-15, Div 5, Part 2). The main thrust of these changes piggy-back on the existing legislative authorities of Cabinet (Governor in Council) to issue general directives on red tape reduction on regulations (ministerial, Treasury Board, or Cabinet) under the Red Tape Reduction Act, to exempt an entitity (defined in the bill as “an individual, a corporation, a partnership, an unincorporated association or organization and His Majesty in right of Canada or of a province”), from:

so long as “the minister is of the opinion that”:

But, a minister exercising this power must publish their decision and reasons, unless they don’t.

And, don’t worry, once a year, the President of the Treasury Board will table an annual report to Parliament to summarize who has been exempted from what and for how long:

Which the OGGO Committee (or other) will of course review after the fact and without any power to reverse a ministerial order, AFAICT.

The initial exemption order (under 12(1) of the Act) can be for a period of “not more than three years”, but can be extended (under 12(5)) for a “total period not exceeding six years”. Also, an initial order remains in place even if a testing period used to justify the exemption is wrapped up before the end of the initial order. For example, a clinical trial for a new drug is over, but the company running it maintains their ministerial exemption for the duration of the order.

Look, as I will say over and over and over again, we’re at economic war. We do need to do hard things and quickly. Others are saying the very same thing. At least the Build Canada Act had the transparency to offer greater clarity on the legislative intent and context for that intent. The proposed amendments to the Red Tape Reduction Act do no such thing. The government should be far more clear with Canadians in stating the risks it sees and the imperatives behind the legislative changes it is seeking.

I am writing this soon after watching the Canadian masterpiece Les Ordres, a fictionalized portrayal of the experiences of innocent residents in Montreal who were scooped up, detained and traumatized during police raids against the FLQ in 1970. The film was part of the REELPolitics Film Series (you should really check it out) and it closes with a scene over the snow-covered roofs of Montreal, warning that even small injuries to democratic norms can easily spread.

The threat is real. The full text of the budget bill isn’t terrible. And yet, there seems to be a poisoned pill that, once ingested, might affect many more organs of our democratic system.

As Raj points out, this seems at least something worth more parliamentary scrutiny than it has received.

The PMO website doesn’t say, and media coverage didn’t include it, but I’m guessing it was to a large lecture hall of students, likely in undergrad Poli Sci or maybe Economics. If so, some share of those students in the National Capital Region will have been hoping to move into the federal public service after graduating. It’s a natural thing to hope for when government is the major local employer and it mainly hires social sciences grads.

Those students may have been bummed to hear the message from the PM that his government will be “doing more with less”, while others may have questioned their choice of major given that the PM talked about seeing growing demand for engineers, military service personnel and skilled trades.

The message of “sacrifice” was clear in the PM’s speech, and I think it’s good and right to let Canadians know that this is what’s coming. But it’s also important to keep an eye on who is being asked to sacrifice and for what. Here the speech was less clear, but there are clues.

Selected economic sectors - energy, mining, IT- are the priorities. Judging from the speech’s reference to clean electricity, I’d bet the budget will include implementation details (and legislation) on the Clean Electricity Investment Tax Credit, first proposed in Budget 2023 and last seen in draft legislation in February 2025.

Notably the auto sector wasn’t mentioned, AFAICT. This when three major announcements to cancel planned production in Canada have happened in the last 9 days.

As a sidebar, I’m not sure that threats to sue are compatible with a policy of offering a stable and attractive investment climate. But I do think a good lesson from the Stellantis story might be that public co-investment may only make sense when government is assured of adequate domestic demand, or reliable export markets (less certain these days), or is willing and able to be the buyer of last resort itself — which it can’t be on cars and trucks but could be on things that have dual purpose use (military and civilian) and where the components have multiple applications: See, for example, drones.

The speech calls on Canadians to remain united and to look out for each other. That’s also good, important and right to say out loud. Job 1 has to be to keep the country united. But a large, diverse, decentralized federation likely doesn’t do that without some coordination. It’s a collective action problem we’re facing and government is how we resolve collective action problems that go beyond other social institutions or connections.

Here the PM laid out some examples of where his government will be willing to lead that collective action to help Canadians - selected programs that won’t be touched, and reducing administrative burdens to access them through easier tax-filing. This last is a good step forward in principle. Details will matter.

What seems to be missing are plans for what happens to the auto workers and the students in that room. If you hit the “hinge moment” in Canada’s history having built up years working in an industry that government may not be able to save, or if you’re a student who worries their new degree is suddenly less useful, will you be part of the “looking out for each other” or part of the “sacrifice”?

This pre-budget speech was ambivalent on that question.

These are terms that have fairly well-defined meanings in public accounting and in THE Public Accounts which are tabled in Parliament as a kind of wrap-up “what we actually did” report after the annual cycle of supply (which is how government gets quarterly instalments out of the Consolidated Revenue Fund to pay for all the things the Government of Canada does). So, among public budgeting/admin/political nerds, it has been a bit of a spectator sport to ask how the PM might layer his own approach to classifying public spending overtop the existing systems, rules and accounting standards. Well, today (ok, yesterday because it’s now Oct. 7) we got a bit more info.

The Department of Finance issued a press release and backgrounder, and offered a technical briefing to media. Better now than a month from now when the new framework will be used in a federal budget.

I’m not going to take issue with the idea that the federal accounting practice of only counting major tangible asset purchases by government as “capital” is far too narrow. That approach failed to account for the ways that government spending might influence (directly or through second order effects) who owns what in our country, or indeed who outside this country controls what assets inside of it. I’m not going to take issue with the argument that “costs of running government operations and services, including salaries and benefits” should be transparent, with scrutiny aiming to improve efficiency without unduly reducing effectiveness in those operations or equity in access to government goods and services. Once upon a time, the entire federal budget fit onto less than a full page in Hansard and you could see exactly what the public money was buying. That was a long time ago and citizens’ expectations of government have expanded considerably.

Two main things struck me as I read the government’s release today.

The first is, the Carney government doesn’t seem too picky about where the investment in the private sector comes from or where it goes to. More FDI is taken as a net good, especially when you look at Chart 1 in their backgrounder and read the text. This is about, we’re told, “capital formation” and “productive assets”. It’s the mid-1990s all over again… wheeeee!!!

Chart 2 kinda sorta flags that the US relative advantage on FDI is largely driven by their IT sector (politely rebranded as “IP products”). This sector now accounts for more than a third of the market value of publicly-traded companies in the US and is also winning some 40% of private equity investment in the country, The big US tech firms are big and looking to get bigger, particularly in a new era of deregulation and pay-to-play public policy on everything from export licenses to foreign worker permits, all while creating intangible products that offer some productivity gains with a worrying side of inaccuracy and a horrific spate of youth suicide.

Is THIS really the most informative comparison to help us figure out where public policy should try to drive investment in Canada?

Given that Canada is a major source of FDI in the US, what would it look like to set a path that made domestic investment more attractive instead of setting the US as the aspirational benchmark?

The second thing that jumps out in reading the presser & backgrounder is that HUMAN capital doesn’t count as “capital” in this framework. Incentives for private sector R&D and commercialization, THOSE count as capital. Incentives for public or 3rd sector R&D and commercialization do not seem to count. Investments in infrastructure, housing and private capital, those are all firmly in the “capital” column of the framework which will be allowed to grow. Investments in skills training and education to build “human capital” will be in the “operating” column which must be brought into fiscal balance.

It’s a funny thing to imagine that the best way to compete with an increasingly authoritarian behemoth that relies on politically privileged intangibles is to focus on private ownership of things and stuff instead of the competencies of people who can consume or create domestically resident intangibles and participate in the democratic norms, processes and institutions that safeguard the public good. But the mid-1990s is calling and it wants one more round. Maybe this time, given advances in tech, financial and physical capital can make more progress, given their renewed political capital. Human capital can take a backseat I guess.

Let me try this in talking points that might be more on message. (clears throat)

It’s time for a new approach to public budgeting and priority-setting. One that will catalyze transformational growth and secure future prosperity. A budget for the future, for an economy focussed on maximizing Canada’s productive capacity.

But maybe not so focused on its people.

The Government of Canada waived the waiting period (a bit like a co-pay in most insurance systems) so that benefits for qualifying claimants could get benefits sooner. And they also temporarily stopped the practice of counting some forms of separation pay (like vacation pay in lieu of leave, sick pay in lieu of leave, and severance pay) as income in the weeks since a claimant said they had stopped working. These two measures can make EI faster to get. One of the more material things the government did was to reduce the maximum number of hours to qualify for regular benefits from 700 insured hours to 630. To qualify for EI, you have to have a record of having worked in insured employment in which both you and your employer(s) were paying premiums into the EI system. The hours you need depend on where you live in Canada and the rolling monthly average unemployment rate in that region. The idea is that if the unemployment rate is higher, then it’s probably harder to move into a new job, and that fact should probably be taken into account when screening you for EI regular (ie, in cases of lay-offs) benefits, and also how many weeks of benefits you should get. The current table for regions is available here if you want to take a look: https://srv129.services.gc.ca/eiregions/eng/rates_cur.aspx

The bottom line is that a lower threshold of hours can makes it easier to get on and stay on EI if you are laid off. The hours rule, by the way, doesn’t do anything to sort out what happens when you thought you were in insured employment but your employer is a douchebag and tells you you’re an “independent contractor” (I’m looking at you, unnamed owner of a certain coffee shop with lots of plants in downtown Ottawa). And the hours rule doesn’t deal with the sometimes murky power issues that can lie between “laid off” and “fired with cause”. Note: fired with cause, or quit = not eligible for EI.

Did the change to the hours rule matter?

I’m not sure.

On paper, it should have, at least at the margin. But the government may have picked too small a slice of the margin.

Looking at the 2023 EI Coverage Survey (it’s the most recent I can get on ODESI, direct your complaints to someone with power over these things, not me), I find that an unemployed person (someone simultaneously not working, available to work, and seeking work in the survey reference week) who did not get EI* had a median count of 730 insured hours in the previous year. The mean is 961 insured hours. But the 25th percentile is just 230 insured hours. If 2025 is at all like 2023, this would mean that reducing the hours from 700 to 630 might help some laid-off workers at the margin, but it’s a pretty slim margin. In fact, when looking at the same 2023 data, among unemployed respondents (and this excludes new parents or those who are engaged in other caregiving, or who are themselves ill), the most common reason for not receiving EI benefits was that they hadn’t worked in the last 2 years (36%, so might be listed as having 0 insured hours), followed (at 11%) by those who “did not know enough about EI”. That’s right, as of 2023, the second most common reason for not getting EI if unemployed (but not because of parenting), is a gap in awareness of the program. No marginal shift in the insured hours rule is gonna’ change that.

Moreover, the change in the EI hours rule may not have worked.

The graph below plots the year-over-year ratio between the volume of new approved EI claims against the volume of new EI claims received in a month. There are always seasonal variations in employment and EI data, so this graph uses the same 3-month period for the last 3 years to rule out seasonal effects. In 2023, and 2024, the regular EI rules applied. In 2025, the temporary rules (to make the system easier to access) applied.

Comparing the year-over-year changes gives us something like a seasonally-adjusted estimate. Claims in April, May and June of 2025 would have all come under the Government’s temporary new rules. You can see the precipitous drop in June 2025. But, recognizing lags in the data, let’s average across the 3 month period. Across the same three months, the share of approved claims to new claims in 2023 and 2024 was 87%. By 2025, it had fallen to 84%. This is in a time when we’re making changes to make it easier to get EI. What happens when we stop?

What next?

On September 5, the current Prime Minister announced that two of the EI program changes would be extended. The announcement referred to the waiting period and the separation pay, not the rule on insured hours.

Maybe this won’t matter. Maybe the workers who are getting laid off now have so few insured hours, or so many insured hours, that this isn’t the main point in improving accessibility. But it seems like there are a non-trivial share (maybe about 40% as of 2023, using a back of the envelope estimate) who were just outside the tiny (10%) adjustment to the insured hours rule. They no doubt have other obstacles to getting access to this program, even if they were pay into it. On top of those things, long-term unemployment and lack of program awareness are two things that should be keeping policymakers up at night.

But if I were in a government looking to save money on operational costs, I might not be keen to make EI too easy to get. Yes, it falls under the “transfers to people” that the government has promised not to touch. But if you announce you are making EI easier to get, then more people might apply. And those applications will have to be dealt with. And you have to pay for the costs of receiving, processing, adjudicating, and implementing those claims somehow. Those costs are usually billed to the EI operating fund (funded via worker and employer premiums, not the Consolidated Revenue Fund). If you have to increase premiums on workers and employers, and in a downturn, that’s not good.

If you built it, they might come and actually use the program you’ve made…. (insert your own preferred emoticon here).

That’s one potential lesson to take away from COVID-19 benefits. It’s a useful lesson for protecting the fisc. It’s also a useful posture for discussion with private sector interests.

But if, as the leader of the government, you’re trying to shepherd a country through an economic (and social and clearly geopolitical) “rupture”, it might be important to address the sources of administrative burden citizens also face in accessing support from the programs they pay into. That means tackling a complicated web of rules, timidity in communicating to the public, and proceduralism — all things the current government has called out, but mainly in reference to projects of national importance and regulatory reform to promote economic growth.

There won’t be a national “Office for Major Social Programs”. But maybe there should be more attention to the automatic stabilizers and the social safety net that is meant to support Canadians through difficult transitions. Otherwise, what are we even doing? Performatively futzing around at the margins?

The announcement did not mention a minimum spending value to trigger the rule, though presumably the Government will want to introduce one to make this policy feasible to administer. Let me offer an example: My previous work computer was purchased with federal funding from the Social Sciences and Humanities Research Council (no folks, Universities don't always supply computers to faculty, even when they require faculty to work on a computer). I bought a MacBook Pro. I bought it from a Canadian distributor, but I don't imagine that any of the components were Canadian in origin, and I would be surprised if any of the final assembly took place here in Canada. At best, my purchase resulted in some profit to the local distributor and some paid hours for folks working in the courier service that shipped it. But if this same transaction were to take place again under the new Buy Canadian Policy, would the Government of Canada want federal public servants spending their time hounding me for proof of reasonable efforts to ensure "local content” in my foreign-made computer used for research and knowledge dissemination? Let's hope not.

What's "Canadian"?

So, let's agree there are still some details of this Buy Canadian Policy to be worked out, like maybe some sensible de minimis rules. The Government is also going to have to grapple with the question of what it means by "Canadian”.

Patriotic Canadian consumers in grocery stores across the country are already working through the distinctions between "Made in Canada” (98% Canadian content) and "Product of Canada" (51% Canadian content). That's in the rules for accurate labeling of consumer goods, both food and non-food items. However, the Government of Canada has a few different definitions of “Canadian” when it comes to the private sector.

For example, the federal Industrial and Technological Benefits program says any company incorporated and operating in Canada is Canadian, but it then looks at the Canadian Content Value (with a relatively complex but also flexible approach to calculating it) of the goods or services involved. The office of the Canadian Ombudsperson for Responsible Enterprise takes a different approach, based more on ownership and control over the business. By contrast, the Corporations Returns Act covers all businesses operating in Canada, and then uses three different criteria (ownership of assets, flows of operating revenues, and flows of operating profits) to determine the degree of foreign control.

As of 2022, there were 6.6 million enterprises incorporated in Canada, of which about 20,000 were foreign multinationals. Those foreign multinationals accounted for about 13% of private and voluntary sector jobs, 57% of Canadian merchandise exports, and 51% of Canadian commercial services exports (author's calculations using Statistics Canada Table 36-10-0356-01). When it comes to procurement, a "Buy Canadian” policy might be designed and implemented in such a way to favour the 13,000 Canadian multinationals (but maybe only with local content), plus the 3 million Canadian non-multinational firms, plus the 3.6 million private non-profit and charitable enterprises. But then again, the foreign multinationals that are in Canada, presumably employ Canadians and pay taxes on corporate income earned in Canada. Isn't that enough "local content” for policy-making, even if most (about 60%) of the foreign multinationals operating here are American-owned? The politics of this may be tricky, even if the economics of it should be straightforward. But I seem recall a PM who promised to govern in econometrics.

Just as it will make a lot of sense for the Government of Canada to establish a de minimis rule so it isn't policing country of origin on paper clips purchased by immigration settlement agencies, it probably doesn't want to be overly prescriptive in defining "Canadian”. But, I think there's scope for at least two more complimentary measures that could help the "Buy Canadian Policy” succeed in practice. After all, a press announcement is just that. What matters is the implementation.

Make it easy to certify

The economics here are a little messy. To get the best value for money, the Government should probably impose the fewest restrictions possible on procurement decisions made with federal funds. But we're now in a world where geopolitical risks are significantly higher. All forms of Foreign Direct Investment in Canada may not be equally valuable at the moment, and just as the more muscular Investment Canada Act gives the Government room to impose conditions on or wind-down market transactions for security (or other) reasons, there may be some goods and services that are safer to buy at home.

As a complement to a "Buy Canadian Policy", the Government might want to give thought to how it can support domestic businesses through the process of establishing their Canadianness, or validating "local content". Even with an inclusive and flexible definition of "Canadian”, this policy will still likely create a new administrative burden on enterprises, on federal public servants, and on third parties receiving and spending federal funding.

In addition to a de minimis rule, a simple and streamlined way to certify a supplier as "Canadian” or to establish their content as "Canadian” would probably be a wise addition to the policy package. On Friday, the Government announced help for smaller suppliers to access the federal procurement system, but that's not quite the same thing as creating a simple pathway so that companies can show they are "Canadian” for the purpose of this policy. And businesses will have to show this status over and over again, because this policy will apply to the whole of government and government spending, all federal departments and the third parties they deal with (like NGOs doing immigration settlement work, or friendship centres running programs for urban Indigenous youth) will also have to be able to easily distinguish "Canadian” suppliers.

One possibility would be to make use of the tax system. Is there a record that the supplier has registered with the CRA for GST and/or payroll remittances? Want to know if and how many people it employs in Canada as part of “local content”? The payroll remittance system can tell you. Boy, this sure does seem like yet another example where real-time electronic payroll would be a major public asset….

Eyes on the prize - maintaining domestic capacity

A big part of the federal policy goal here is reinforcing domestic sectors that are in trouble due to tariffs, namely auto, steel and aluminum, and softwood lumber. The Government of Canada just doesn't buy or fund the purchase of enough cars to make procurement changes a very meaningful support to that industry. But a government that is about to finance/co-finance a bunch of major national projects and housing will no doubt see important shares of federal tax dollars flow towards goods made of steel, aluminum, and lumber. On top of the workforce adjustment and business liquidity measures that were also part of the PM's announcement on Friday, and in addition to the steel import restrictions that were announced in July, is there something else a national government might do to preserve domestic capacity in strategically important sectors?

The UK government went so far as to nationalize its main steel producer, using emergency powers to take it out of the hands of its Chinese owners. In the US, the Trump administration has taken an equity stake in one of America's major IT firms, Intel, arguably a sector of equal (or better?) strategic value to steel. The Chicago school of economics seems to be taking a nap these days.

To close, I'm going to focus on the steel sector in particular because I think it's a really interesting case.

Trump is fond of musing that “if you don't have steel, you don't have a country” and his administration seems to be operating on that principle. I'm not sure I'd go that far, but there will be lots of reasons that Canadian policymakers want to preserve our domestic steel industry (along with other strategic sectors).

It's not like steel is a scarce commodity. In global terms, there's a problem of over-supply with less than 80% of global production absorbed in demand. The primary source of the over-supply is China, which produces over 1 billion tonnes of crude steel per year, nearly ten times the next highest producing country, India. Canada is a modest 16th in global crude steel production, at just 12 million tonnes per year.

According to the OECD, China's rate of industrial subsidization is about ten times that of OECD countries and this means there is a glut of excess steel looking for buyers in the international market, but also a glut of steel that isn't produced using cleaner, more sustainable technologies. While Canada isn't a top 10 global producer, it is somewhat cleaner with 41% of Canadian steel production using the more sustainable electric furnaces, and that might have some strategic value over the longer term.

What if, as part of the "Buy Canadian” package, and as part of what seems to be a growing effort by the US and its trade partners to curtail the effects of the oversupply of Chinese steel, Canada picked up a new tool from the policy tool-box? Rather than taking an equity stake or nationalizing, and rather than yet more liquidity supports, if the Government of Canada wants to build big and build using Canadian steel (and alumnimum, and lumber), is it time to consider a strategic national reserve?

The US Department of Defense War already maintains a national Strategic Materials reserve, for example. The rationales for strategic reserves are usually made in terms of price stability in cases of supply shocks (like our own maple syrup reserve, the only one of its kind in the world), and as buffer stocks to protect consumers from sellers’ inflation, as Isabella Webber has argued.

The global commodity market for steel is clearly not working as a well-functioning competitive market. Import restrictions and domestic cash subsidies might help at the margin as correctives, but the global market forces are probably too big for Canadian firms to manage on their own. If letting the sector go isn't an option, and if the Government of Canada really wants to make sure that most (?? all??) of the steel going into a new deep sea port, or a new pipeline or pick your favorite project of "national interest", then it could build up a strategic reserve and make materials from that reserve part of its contribution.

I realize this runs counter to most models in economics. But if China doesn't actually operate according to Western, capitalist principles, then this market may not clear anytime soon. Further, more than ratcheting up foreign (Chinese) import limits that China will see as hostile, a domestic reserve has the benefit of being neutral in its treatment of other trading partners.

I'm not totally sure that a national strategic reserve would work in this case, and I haven't been able to think about the math of how large it would need to be or the administrative details of how it would operate. Again folks, this is a free blog written in scraps of time in between the demands of my day job and parenting. But it seems like maybe it's time to start thinking more creatively and I haven't seen anyone, not even the steel industry association, publicly raise these options, so here they are, out there in the ether for others to consider — make it easy for Canadian businesses to comply with "Buy Canadian", and consider building up and carefully deploying strategic buffer stocks of the domestic goods you care about when international markets are clearly so flawed.

Many of us have been warning that the Employment Insurance system is overdue for substantive and administrative changes to drag it into the 21st century, especially now as Canada copes with the next wave of economic challenges (this time, brought on by Trump). Today, the unemployment rate in Canada ticked up once again and the Prime Minister announced some EI changes, with some additional background details here.

First, the ok, if imperfect, bits

The government is again extending the relatively modest changes that will make it a little bit easier for some laid-off workers to qualify for regular benefits. They are making temporary changes to lower the hours threshold needed to qualify. This is the third extension to the changes first introduced in March and April by the previous government.

More than half of unemployed workers don't qualify for EI benefits, often because of too few insured hours, or because of separation codes on the Record of Employment. This is a long-standing issue (see this, for example). As of August, there were 1.6 million unemployed workers and 750K active EI claims for regular benefits. The lay-offs recorded in August were primarily among part-time workers. I wouldn’t expect that the temporary tweaks to the EI rules on hours to qualify will do much for most of those newly laid-off workers.

Today, the government also announced that long-tenured workers who get onto EI after a lay-off will have a longer period to collect regular benefits, up to 65 weeks. As near as I can tell, the current EI definition of “long-tenured worker” is someone who has claimed less than 36 weeks of regular (or fishing) EI benefits in the last 5 years AND has paid in at least 30% of the maximum annual EI premium in the last 7 years. For reference, the average duration of regular benefits going back to 2019 is 19.2 weeks (with some skew in there for pandemic times), the maximum EI premium for a worker in 2025 is $1,077, and the cumulative minimum total of EI premiums paid to qualify at 30% of the maximum would be at least $1,491 in EI premiums paid. Given that the last 5 and 7 years include the pandemic period, it may be the case that there are far fewer “long-tenured workers” than in previous economic downturns when the Government has introduced special measures like extending the maximum benefits to 70 weeks (in 2016).

Now for the parts that should be generating ALL kinds of questions.

One of the conditions of receiving EI regular benefits is that unemployed persons have to take steps to show they are actively seeking employment. Per the Digest of Benefit Principles: “Claimants are expected to take advantage of any opportunity of suitable employment, or make good use of any favourable circumstances that might lead to immediate re-employment. They do so by showing interest and prudence in their dealings with potential employers, and by acting in a way that will encourage, rather than discourage employers from offering them suitable employment” (s.9.2.3). The EI Act makes it possible to disqualify someone from continuing to collect regular benefits if a government official reviewing their file determines they aren’t taking that obligation seriously (see excerpt below):

One of the changes the PM announced today is that the Government of Canada will be:

• automatically registering [regular ?] EI recipients for the existing Job Bank database maintained by the Government of Canada. Job Bank is a national publicly-operated database of job postings. As far as I can tell, registering for Job Bank is currently recommended but not required for EI regular beneficiaries, so long as beneficiaries are showing other signs of job search.

• “integrating AI on the Job Bank platform”, maybe using Cohere (based on a past MOU), it’s not clear, and “partnering with” private, for-profit “companies like Indeed, Jobillico, Career Beacon and Zip Recruiter”.

Maybe this is all benign. Maybe this is about reducing administrative burdens on EI recipients so that they get access to an additional service of the Government of Canada, that might give them info on available jobs, all while living up to the Government’s many legal responsibilities to protect individual private data. The Government is also promising that, by late November, Job Bank registrants will have access to a personalized “dashboard” to help them find work that aligns with their skills. The”dashboard” function on Job Bank already exists, but only for users who hand over additional personal data, like their social insurance number.

But maybe there are major shifts in public policy here that merit scrutiny. For example:

• What’s the functional role of the AI tool to be “integrated” and what is the training data for it?

• What happens to the additional data that same AI tool collects once deployed and who owns it?

• What are the roles of the for-profit employment advertising firms in this new partnership?

• How will the Government get informed consent for the use of personal data and what other bodies will have access to that data and for what purposes?

• With automatic registration, will job applications through Job Bank become mandatory, even if EI beneficiaries are using other methods to seek employment?

• In the worst-cast scenario, could a regular benefit recipient become disqualified from benefits if the AI tool integrated into Job Bank determines they haven’t applied for suitable employment?

Let’s hope not. But let’s maybe ask.

I haven’t been able to find any mainstream media coverage of this particular part of the PM’s announcement. To be fair, it was a major news dump on a Friday in the first week back to school. But this matters. This deserves more attention and good questions that the government, any government, should be eager and able to anticipate and answer.