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August 31, 2021

Election Update

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On the campaign trail – Day 17

By Scott Munnoch, Temple Scott Associates

As the federal election campaign nears the halfway mark, one thing has become very clear – this election may not be decided until the final ballot is counted.

When Justin Trudeau called the election on August 15th, he must have been thinking that the mood of the electorate was inclined to give him another term – another term with an increased plurality and more seats in the House of Commons. Afterall, his approval numbers were high and his main rival, Erin O’Toole of the Conservatives, was still largely unknown and had shown no sign of catching on after a full year as party leader. The economy was in good shape, despite the pandemic and the government was getting credit for a successful vaccine program.

Well, right from the start, the Justin Trudeau assumptions proved wrong. The tragic situation in Afghanistan peaked on the same day the election was called. Trudeau either couldn’t or wouldn’t answer the fundamental question of why he called the election only half way through his mandate. Job numbers soon came out that were shocking to most and the rate of those getting vaccinated was down to a trickle.

Justin Trudeau had gambled that he could call the election and walk through the 35-day campaign on his own coattails.

As Mark Bonokoski, in a column on August 30th in the Toronto Sun observed: Trudeau had the NDP vowing to have his back until the end of his minority mandate. He got his budget passed as well as virtually everything he wanted. Again, he lacked reason…….What Trudeau never expected, however — because his ego blocked it out — was the growing strength of Tory leader Erin O’Toole’s campaign and, to a lesser extent, the campaign of NDP leader Jagmeet Singh.

Singh, touting that this was an unnecessary election, nevertheless released his platform before the election was called. O’Toole released his lengthy platform document in the early days. Trudeau – 17 days in and still nothing. No plan to run on, just daily announcements that to date have been overpowered by world events in Afghanistan and Louisiana and forest fires in British Columbia.

Trudeau finds himself attacking O’Toole’s plan – a sure sign that the Opposition Leader is setting the agenda.

And as we get into the slow days of the campaign, leading up to the debates, reports emerge of candidates saying or doing stupid things. Both leaders have had to defend their candidate’s comments and in O’Toole’s case one candidate had to be removed. Reporters are looking for something new and different and the dirt of the backrooms often moves to the forefront. Remember “Blackface” in 2019 – the timing was similar.

The polls are interesting too and reflect that this campaign is not what the Liberals projected. Today, again, new polls are showing tight races – the rolling overnight Nanos poll is literally changing daily between the Liberals and the Conservatives, today showing a Liberal lead of 0.7%. Of more interest, and a serious concern for the Liberals are the changing numbers when asked “who would make the best Prime Minister?” Trudeau started with a 20+ point lead but today Nanos is reporting 30.5% supporting Trudeau while 27.7% support O’Toole – an enormous swing in just 17 days.

And so, just as I started this column, one thing has become very clear – this election may not be decided until the final ballot is counted.

By the Numbers (as of August 31, 2021)

Courtesy of the CBC Poll Tracker

Note: Bracket indicates change since previous CFA Election Update

The Latest Polling

Conservative Liberal NDP Green BQ
33.5 (1.9) 31.4 (-0.8) 20.5 (+0.5) 3.5 (-0.6) 6.3 (+0.2)

Seat Projections (170 seats are needed for a majority government)

Conservative Liberal NDP Green BQ
131 (+11) 139 (-12) 40 (+1) 1 27


Odds of Winning

Liberal Conservative
Majority Minority Minority Majority
10% (-14%) 46% (-5%) 39% (+16%) 3% (+2%)

What it means

The Conservatives have a narrow lead over the Liberals, as their support has increased over the first two weeks of the campaign. However, the Liberals remain slightly favoured to win the most seats due to how the two parties' support breaks down across the country. The New Democrats are making gains but are still well back in third, while the Bloc Québécois is stabilizing. The Greens are dropping, putting them in fifth place behind the People's Party, which stands at four per cent.

The Liberals are a little more likely than the Conservatives to win the most seats, thanks to their leads in Ontario and Quebec. But the odds that the Conservatives win the most seats have increased to better than two-in-five, while the chances of a minority government have increased to nearly four-in-five. The NDP is poised to make the biggest jump in the seat count and has a good shot at holding the balance of power, while the Bloc and Greens could lose a few seats.

The Conservatives are leading throughout Western Canada. They have dropped in British Columbia but gotten a bump in Atlantic Canada. The Liberals are ahead in Ontario, Quebec and Atlantic Canada and have fallen further behind in Alberta. The NDP has moved into second place throughout the west, with sizable increases in support in B.C. and Alberta. The Bloc is holding second place in Quebec, while the Greens have fallen sharply in Atlantic Canada. The People's Party is ahead of the Greens everywhere but in B.C. and Quebec.

The Conservatives have been trending positively throughout the campaign and those trend lines are continuing to move up in Ontario, the Prairies and Atlantic Canada. The Liberals are dropping nationally and are have been trending down in Alberta and Quebec in recent days, though their slide in Ontario might have been arrested. The NDP is on the rise in B.C. and Alberta but falling back in the Prairies, while the Greens are sliding in most places, most significantly in Atlantic Canada.

Conservatives announce support for gig workers

Erin O'Toole says that a Conservative government led by him would offer support to people he claims were ignored by the federal programs launched in response to the global pandemic: gig workers.

O'Toole said those 1.7 million workers and their families were excluded from many of the benefits announced over the last year and a half. He said they often don't qualify for employment insurance because they lack the required insurable hours or payroll contributions.

The party's "Canada's Recovery Plan" would require companies that operate within the gig economy to make contributions to portable Employees Savings Accounts every time they pay a worker. Those contributions would be equal to ones made to the Canada Pension Plan and would grow tax-free. Workers could use the money in the accounts to pay CPP premiums or withdraw them to meet expenses.


Conservatives announce plan to rebuild Main Streets

On August 29, Erin O’Toole, introduced his plan to rebuild Main Streets across the country and help small businesses get back on their feet and create jobs.

The Conservative Plan includes the introduction of the Rebuild Main Street Tax Credit, a 25 per cent tax credit on amounts of up to $100,000 that someone personally invests in a small business over the next two years.

The Plan will also introduce the Rebuild Main Street Business Loan, which will immediately make available interest-free loans of up to $200,000 to help small and medium businesses, with up to 25 per cent forgiven depending on revenue losses.

In addition to the Rebuild Main Street Tax Credit and the Rebuild Main Street Business Loan, the Conservatives would introduce a Canada Investment Accelerator tax credit, which will provide five per cent back for any capital investment made in 2022 and 2023, with the first $25,000 to be refundable for small businesses.


Trudeau promises $1B to help provinces pay for vaccine passports

On August 27, Liberal Leader Justin Trudeau today announced a billion-dollar fund to help provinces create their own vaccine passports — credentials people vaccinated against COVID-19 can show to businesses to make everyday activities safer.

If a province requires that everyone at a local restaurant, gym or other non-essential business location be fully vaccinated and show proof of vaccination, Trudeau said, Ottawa would pay for the development and the rollout of that program.

Some provinces, notably B.C. and Quebec, already have created smartphone-based vaccine passports that people can use to prove their COVID-19 immunization status in commercial or public spaces — everything from bars and restaurants to bowling alleys and hockey rinks — where provincial law will soon require proof of a shot before entry. Manitoba is also expected to make its passport system mandatory for some nonessential businesses in the coming weeks.


Key dates you need to remember for voting in the federal election

Sept. 20: In-person voting on election day

For voters who wish to physically visit a local polling station and cast their ballots on the election day of Monday, Sept. 20, each polling station is open for 12 hours — but those hours vary by time zone: 

  • Newfoundland time zone: 8:30 a.m. to 8:30 p.m.
  • Atlantic time zone: 8:30 a.m. to 8:30 p.m.
  • Eastern time zone: 9:30 a.m. to 9:30 p.m.
  • Central time zone: 8:30 a.m. to 8:30 p.m.
  • Mountain time zone: 7:30 a.m. to 7:30 p.m.
  • Pacific time zone: 7 a.m. to 7 p.m.

Elections Canada says the exact voting hours as well as the assigned polling station address will be printed on the voter information cards mailed to voters, and will soon be published on Elections Canada's voter information service portal.

Sept. 10-13: In-person voting on advance polling days

Advance voting could be done on any one of the following four dates from 9:00 a.m. to 9:00 p.m. local time:

  • Friday, Sept. 10.
  • Saturday, Sept. 11.
  • Sunday, Sept. 12.
  • Monday, Sept. 13.

Those who opt for advance voting should go to the advance polling place that's specified on the voter information cards and Election Canada's voter information service portal. Elections Canada notes that advance polling places will be fewer than election day voting stations. 

Sept. 14: Deadline of in-person voting at Elections Canada offices

Elections Canada has promised it will soon open more than 500 offices across the country for people who want to vote with a special ballot — which doesn't list the candidates for a particular riding, but instead allows the voters to write their selection's name in a blank space. If you want to vote at Elections Canada offices, you can drop into any one of them — even one located outside of your riding — to receive and cast the special ballot by Tuesday, Sept. 14 at 6 p.m. local time. Elections Canada offices will open seven days a week during the following hours in local time:

  • Monday to Friday: 9 a.m. to 9 p.m.
  • Saturday: 9 a.m. to 6 p.m.
  • Sunday: noon to 4 p.m.

Sept. 14: Deadline for applying for mail-in voting

Whether in Canada or abroad, those who wish to vote by mail must apply online by Sept. 14 at 6 p.m. ET, or by contacting any local Elections Canada office by Sept. 14 at 6 p.m. local time. If you will send out the marked ballot while you're within your own riding, it must be delivered to a local Elections Canada office by the time the polls close in that riding on Sept. 20.

If you're abroad or still in Canada but outside of your riding, the marked ballot must be delivered to Elections Canada in Ottawa by Sept. 20 at 6 p.m. ET.

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Other News

Ontario court certifies class action against insurers related to COVID-19 losses

Ontario's Superior Court of Justice has certified a class-action lawsuit against fourteen insurance companies that denied business interruption claims related to COVID-19. The class action, launched by several small businesses, claims businesses across Canada suffered billions of dollars in losses after they were forced to close because of the pandemic.

Koskie Misky brought the class action forward along with Merchant Law Group LLP. To be part of the class action, a business has to have filed a business interruption claim with one of the defendants by Aug. 31 for business losses related to the virus specifically affecting their premises, or from the order of a civil authority.

According to court filings, insurance companies including the Co-operators General Insurance Company and Intact Financial Corp. have denied business interruption claims in part because the coverage requires physical loss or damage to the property, which they argue the presence of a virus on the property and government orders restricting operations don't count towards.

The class action certified on Aug. 20 by Justice Edward Belobaba against the group of insurers is separate from other class action lawsuits certified last month against the Canadian subsidiary of UK-based Aviva plc.

Aviva, which faces class action lawsuits led by a windows company, a branch of the Royal Canadian Legion and a denturist, has been singled out because it offers more coverage related to situations like the pandemic than the other 14 insurers being sued.

According to court filings, unlike the others, it specifically offers coverage for business income loss caused by restricted access to the property because of government orders related to an outbreak of a contagious or infectious disease, as well as coverage for negative publicity.

In an affidavit, Aviva's chief technical underwriter said the restricted access policy isn't covered by provincewide shutdown orders, and the negative publicity clause doesn't cover losses arising from global pandemics. Aviva Canada said in a statement that it is sympathetic to the difficulties caused by COVID-19, and has supported commercial customers with a variety of short-to-medium term relief measures, but that its coverage doesn't extend to the current pandemic.

Intact Financial Corp. said it wouldn't comment because the case is before the court, while Co-operators did not respond to a request for comment.

Uber proposes benefits fund pool for Canadian delivery drivers

Uber Technologies has proposed a plan to create a benefits fund pool for all app-based ride-hail and food delivery drivers in Canada

In a company blog post published Monday, Uber proposed a “Flexible Benefits Fund” that would be enabled by provincial governments and managed by the gig economy industry for delivery and rideshare app-based platforms. All platform companies participating in the fund would provide data on worker hours and earnings, Uber suggested, then the organization running the fund would tell each platform the exact amount they need to provide to the fund to cover their share of their workers’ total benefits.

Workers can use their benefits from the fund for a range of purposes, Uber proposed, including health and dental benefits, life insurance, RRSP contributions, and educational expenditures.

Uber has invited discussions with other gig economy companies, adding that the benefits fund was part of a recent submission to the Ontario government.

Uber’s proposal comes weeks after the Ontario Superior Court certified a $400 million class action lawsuit against the ridesharing company. The complaint argues that Uber’s couriers meet the definition of employees and are thus entitled to minimum wage, vacation pay and other premiums – but Uber still treats them as “independent contractors.”

Canada's economy unexpectedly contracts 1.1%; loonie weakens

Canada’s rebound unexpectedly stalled through spring and early summer. Gross domestic product fell at an annualized 1.1 per cent pace from April to June, Statistics Canada reported on Tuesday, down from a revised 5.5 per cent gain in the first three months of the year. Economists in a Bloomberg survey were anticipating a 2.5 per cent expansion. 

Economic growth also fell a further 0.4 per cent in July, according to a preliminary estimate.

The worse-than-expected result that may prompt analysts to reconsider how quickly the nation’s economy will be able to fully recover from the pandemic, heightening worries about growth just as the country braces for a fourth wave of Covid-19 cases. Bank of Montreal economists immediately cut their forecasts for 2021 growth, while the Canadian dollar fell.

The GDP report is also poised to become an election issue that could change the tenor of the campaign.

The pullback in the second quarter reflects a sharp drop in exports, driven in large part by chip shortages in the auto sector and other global supply chain disruptions. Housing was also a drag as Canada’s real estate market cooled after a pandemic-driven boom. On the quarter, investment in residential structures fell by an annualized 12 per cent, while exports plunged 15 per cent. 

The surprise weakness in July may also have been driven by supply chain snarls. Statistics Canada said the likely contraction during the month was led in part by manufacturing, as well as construction and retail trade.

The Canadian dollar pared gains after the GDP report and was down 0.1 per cent to $1.262 per U.S. dollar at 10:06 a.m. in Toronto, as some traders questioned whether the slump in activity will slow the Bank of Canada’s efforts to pare back emergency levels of stimulus in the economy. The central bank has already downsized its asset purchase program three times and was expected to move again as early as a policy decision next week. 

Increased use of HELOCs creating 'worrisome' trend: Equifax Canada

Record low interest rates are not only driving a big increase in mortgage loans, they’re also fueling a resurgence in Home Equity Lines of Credit (HELOC) - and that could become problematic, according to Equifax Canada. 

The credit monitoring and analytics company’s latest consumer credit trends and insights report found the number of new HELOCs jumped 56.7 per cent in the second quarter compared to a year earlier. 

“The HELOC trend is worrisome as often the payments are tied to a variable interest rate,” said Rebecca Oakes, assistant vice-president of advanced analytics at Equifax Canada, in a press release Tuesday. She’s concerned if interest rates rise sooner than expected, many homeowners could find themselves in financial trouble. 

Bank of Canada Governor Tiff Macklem has repeatedly stated the recent jump in inflation will be temporary but has also indicated interest rates could rise by the end of next year. 

“With many consumers now heavily leveraged and the potential for increases on variable rate mortgages and HELOCs, consumers may find themselves not in a position to pay back their debt obligations if interest rates rise. This can lead to higher insolvencies,” Oakes said. 

“In 2018 when interest rates went up, we saw a drop in credit card payments, especially among consumers with a HELOC. It also led to higher bankruptcies among older consumers with HELOCs,” she added. 

Along with HELOCs, Equifax Canada reported that new mortgage loans soared 60.2 per cent year-over-year in the second quarter, led by homeowners in British Columbia. It’s the biggest jump ever recorded for a single quarter, and was the main driver as total Canadian consumer debt hit $2.15 trillion in the second quarter, a three per cent increase from the prior quarter .

Mortgages have been a main driver of rising household debt, with data from Statistics Canada showing the total value of mortgages rose 1.2 per cent in June to $1.73 trillion – the fastest increase since 2007. 

Equifax found 90-day delinquency rates fell in the second quarter for mortgage and non-mortgage loans, down by 32.6 per cent and 28.6 per cent respectively, thanks to government income support and increased disposable income, but flagged an uptick in insolvencies. 

“Lower delinquencies are a good thing, however, insolvency volumes are higher this quarter than the lows of last year,” said Oakes. “We may see surprise insolvencies occur where consumers with no delinquency history on file and a decent credit score end up filing without warning.”

“We’ll continue to monitor how increases in inflation and decreases in government incentives impact consumer debt levels and insolvencies over the coming months,” she said.

Menu Prices at Restaurants Rise 3.1% in July

Menu prices at restaurants in Canada were 3.1% higher in July 2021 compared to a year ago. This represents the biggest increase since January 2019. By contrast, food prices at grocery stores rose by 1.0%.

By segment, quick-service restaurants reported a 3.3% increase in menu prices in July compared to a 2.9% increase at full-service restaurants.

The increase in menu prices is the result of higher overall operating expenses (cost of sales, labour, other expenses). A survey of Restaurants Canada’s members found that the foodservice operators are seeing significant cost pressures as the price of a number of key ingredients have increased dramatically. Seven in 10 restaurants reported a recent surge in the cost of fresh vegetables, cooking oil and beef. Higher prices for poultry and dairy are also having a negative impact on restaurants. 

For more information, click here for Restaurants Canada’s Q2 2021 Restaurant Outlook Survey.

Nova Scotia's new premier, cabinet sworn in

Nova Scotia's 30th premier and 18 cabinet ministers were sworn in Tuesday afternoon at a ceremony at the Halifax Convention Centre. Below is a list of the most relevant Ministers for CFA.  

  • Premier Tim Houston will also serve as President of the Executive Council, the Minister of Trade and the Minister responsible for Intergovernmental Affairs and the Office of Regulatory Affairs and Service Effectiveness.
  • Allan MacMaster will be the deputy premier and will also be the Minister of Finance and Treasury Board, the Minister of Gaelic Affairs and the Minister responsible for Labour Relations.
  • Michelle Thompson will become the Minister of Health and Wellness. She will also oversee a newly created Office of Health Care Professionals Recruitment.
  • Jill Balser will be the Minister of Labour Skills and Immigration and have responsibility for Apprenticeship. Brian Wong will lead a separate Department of Advanced Education.
  • Susan Corkum-Greek will be the new Minister of Economic Development.
  • Environment and Climate Change will be led by Tim Halman who has also been appointed Chair of Treasury Board.

Manitoba's Progressive Conservatives will announce interim leader Tuesday

Progressive Conservative MLAs will choose their interim leader and, by extension, Manitoba's next premier at a caucus meeting on Tuesday afternoon. The new leader will replace Brian Pallister who will resign on Wednesday morning.

The party will release the information at 6 p.m. after making the decision at a closed-door meeting that started at 2 p.m.

The new premier and interim party leader is only expected to assume these duties for two months. The PCs are holding a leadership race, with three candidates vying to contest the nomination so far, but a winner will not be crowned until Oct. 30.

Ontario still debating COVID-19 vaccine passport plan after first proposal rejected

The Ford government is still working on the details of a COVID-19 vaccine passport system for Ontario after an initial plan was rejected by cabinet on Monday. The system is expected to be announced in the coming days.

Last week, media reports said that Ontario intends to move ahead with some sort of proof-of-vaccination system, and that it could be revealed as early as today. While some Progressive Conservative cabinet members are opposed to a vaccine passport, the program will ultimately go ahead. 

Pressure has mounted on Ford's government in recent weeks to institute some sort of vaccine passport as the province navigates a fourth wave of the pandemic driven by the delta variant.

Many local medical officers of health, as well as mayors of some of Ontario's biggest cities and independent medical experts, have publicly joined the chorus for vaccine passports, saying a clear, effective provincewide system is needed to avoid confusion and curb the current wave.

Quebec's vaccination passport app now available for Android

Quebec's vaccination passport became available for Android phone users on Monday afternoon, only two days before the system goes into effect.

Users can find the app on the Google Play Store by searching for "VaxiCode."

The passport app has been on Apple's App Store since last Wednesday. 

Many non-essential businesses will start scanning vaccine passports on Sept. 1 but the province has put in place a two-week grace period for people and businesses to adapt.

Health Minister Christian Dubé stressed that a printed version or digital version of the QR code is also valid for those who don't yet have their QR code uploaded to the app, or who don't have a smartphone altogether. 

What Quebec’s vaccination passport means for people inoculated outside Quebec

On Tuesday, the government detailed how the system will impact non-Quebec residents. People who reside in another province or country will be able to show a printed proof of vaccination issued by the government or health authority from that region.

Proof of vaccination status from elsewhere will be accepted when combined with identification that proves place of residence. For example, a visitor from Ontario would show their vaccination document combined with an Ontario driver's licence. Or an international traveller could show their proof along with their passport.

Visitors do not need to register their vaccination status with the Quebec government, download the app or get a QR code. They'll just need paper proof of vaccination and a piece of ID.

The Quebec government accepts any vaccine recognized by the World Health Organization for the purposes of the provincial vaccination passport. As is the case with anyone vaccinated outside Quebec, you will need to register your vaccination status in order to receive a QR code.

New Brunswick decision on COVID-19 vaccine passports and mandatory masks within 3 weeks

The New Brunswick government will decide within three weeks whether it will introduce COVID-19 vaccine passports and reimplement mandatory masks in public spaces, says Premier Blaine Higgs.

Moderna's COVID-19 vaccine approved for 12- to 17-year-olds in Canada

Health Canada and the Public Health Agency of Canada said Friday that Moderna's COVID-19 vaccine is now approved for use in adolescents.

The Pfizer-BioNTech vaccine was approved for Canadians in early May for those aged 12 to 15. That vaccine was approved for those 16 and older in December 2020, the same month Moderna's shots got the go-ahead for Canadians over 18.

Moderna applied for authorization for administering it to youth in early June, citing a clinical trial of 3,700 youth in which none of the teens who got two doses developed a COVID-19 infection.

Health Canada took only a few weeks to approve Pfizer for youth, and has not explained why the Moderna review took more than two months.

Europe approved the Moderna vaccine for children more than a month ago. The United States has not yet authorized it for teenagers.

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