September 9, 2021

Election Update

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On the campaign trail – Day 26

By Scott Munnoch, Temple Scott Associates

Advance polls open tomorrow and voting day is only 11 days away. The election campaign is in the homestretch and the outcome continues to be in doubt.

It’s been some time since the election campaign was still a statistical tie this late into the game but such is the position Canadians find themselves in today. Nanos overnight tracking poll has the Conservatives at 32.6% and the Liberals at 30.6%. The margin of error is 2.8%, 19 times out of 20. These numbers are not new.

Almost from the beginning, the difference between the governing Liberals and the Opposition Conservatives have been interchangeable - literally changing the lead on an almost daily basis. So, what does this mean on the day the leaders will have a chance to speak to a national audience in the only English language debate of the campaign?

The debate begins tonight at 9:00 pm EDT.

In short, look for Liberal Leader Justin Trudeau to be aggressive with both guns aimed at Opposition Leader Erin O’Toole. O’Toole on the other hand, will most likely maintain his calm and steady demeanor as he continues to introduce himself to Canadians who didn’t know who he was just three weeks ago. NDP Leader Jagmeet Singh will get a passing reference while Green Leader Annamie Paul has managed to make herself irrelevant in the campaign and will almost certainly be the only Leader not to win his/her own seat. Bloc Leader Yves-Francois Blanchet has a place on stage but will only serve as an inconvenience to the others in a debate that many Quebecers dismiss.

No single issue has risen to the forefront in this campaign. Both leading parties have now released fully costed platforms. And while there are policy differences, such as how to implement a national day care program, there is little difference on the costing side except for the Conservative claim that they will balance the budget in 10 years. The Liberals have made no such promise.

Tonight, the Leaders will try to define themselves as the best person to lead our country out of the pandemic. Tonight, the Leaders will try to differentiate themselves from each other, likely on leadership alone. Today’s Nanos numbers show that 28.1% of Canadians believe Justin Trudeau would make the best Prime Minister while 27.5% believe O’Toole is the better choice. What is notable here is that Trudeau’s lead has effectively vanished from a 20+ percentage lead at the start of the campaign.

Justin Trudeau is fighting for his political life. He needs to make a difference tonight or his future will be very much in doubt. As the campaign draws to a close, there will be few opportunities and little time to make a difference. Voters will be deciding if the election was worth it and does the government deserve another chance. Or do they need to look at the new guy, whose numbers are now on a par with Trudeau for being the best Prime Minister in the group.

A Liberal win with a small minority, or the status quo, will only prove that this campaign was not necessary, proving the point being made by all other Party Leaders. A Conservative minority will also be seen as a Trudeau loss based on bad judgement and ineffective leadership, especially during a pandemic. Either one of these scenarios will almost certainly lead to a Liberal leadership contest before the next election.

Stay tuned – political observers are going to love the next 11 days……

By the Numbers (as of September 9, 2021)

Courtesy of the CBC Poll Tracker

Note: Bracket indicates change since previous CFA Election Update

The Latest Polling

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

Odds of Winning

What it means

After nearly three weeks of positive momentum for the Conservatives at the expense of the Liberals, the margin between the two parties has narrowed. The Liberals remain slightly favoured to win the most seats. The New Democrats are in third and are poised to pick up seats. The Bloc Québécois is holding steady at sub-2019 levels of support. The PPC has seen its support rise, while the Greens have dropped.

The Liberals are favoured to win the most seats, though a minority government headed by either the Liberals or the Conservatives remains far more likely than a majority government formed by either party. The NDP stands to pick up seats and could alone hold the balance of power. The Bloc is likely to finish fourth in the House of Commons, while the Greens could also lose a few seats. The PPC is not projected to win a seat.

The Conservatives lead throughout Western Canada but their support has dropped in the Prairies. The party is second in Ontario and Atlantic Canada and third in Quebec. The Liberals lead in Ontario, Quebec and Atlantic Canada and have gained support in the Prairies. The New Democrats are second throughout Western Canada, though their numbers have dropped in Atlantic Canada. The Bloc is holding second place in Quebec, while the Greens are in fourth only in B.C., as the PPC has moved ahead of them in every other region of the country.

Conservatives come out with costing

Earlier this week the Conservative Party released the costing of its platform, which is called the “Canada's Recovery Plan”. O'Toole had been facing increased pressure to produce the specifics ahead of this week's debates and the opening of advance polls on Friday.

Conservatives had said they were waiting for analysis from the Parliamentary Budget Officer (PBO) before releasing the details and, earlier in the campaign, put the blame for the delay on Trudeau's having called a snap election

The PBO costing says Conservatives will spend $52.5 billion in new spending over the next five years, with no return to balanced budgets in that period. O'Toole maintains he'll balance the budget within a decade. By comparison, the Liberal platform unveiled last week promised $78 billion in new spending over five years with no path back to a balanced budget.

One of the top commitments O'Toole has made during this campaign is to inject $60 billion into the health-care system over the next 10 years. It's a pledge that O'Toole has repeatedly invoked while trying to beat back Liberal attacks that he would, as prime minister, threaten Canada's public health system. he PBO costing says the proposed Conservative boosts to health transfers "would only amount to $3.6 billion in new spending between now and 2025-26."

Green Party releases Election Platform

Without holding a formal platform launch featuring party leader Annamie Paul, the Green Party of Canada has quietly released a series of largely uncosted promises for the 2021 election campaign.

The platform proposes a new slate of social programs, such as universal pharmacare, dental care, an affordable child care plan and free university on top of the cancellation of all student debt.

While cost of the platform has not been analyzed by the Parliamentary Budget Officer, the platform estimates that the cost of a free university education would be $10.2 billion a year. 

The Greens are also promising to create a universal long-term-care system that would be governed by national standards of care under the Canada Health Act. 

The system would be funded directly by the federal government through a new stream separate from federal health transfers to provinces and territories called the seniors' care transfer. 

The Greens are also proposing to introduce a guaranteed livable income that "would provide every Canadian with a basic revenue source, ensuring that people can cover basic expenses such as food and accommodation." The program would be based on what is required to have a "livable" existence in each part of the country. The platform says that this would alleviate the pressure on provinces to provide programs such as welfare, freeing up provincial budgets to focus on the rising cost of health.

The plan would also call for an increase of Canada's emission reduction commitments under the Paris agreement — which  currently sit at cutting emissions 40 to 45 per cent below 2005 levels by 2030 — to a reduction of 60 per cent over the same time period. 

The Green platform says the party can do this with a series of measures that will shut down the fossil fuel industry in Canada, including: ending the extraction of all fossil fuels in the country; cancelling all new pipelines, including the Trans Mountain pipeline; cancelling all new oil exploration projects; and ending the leasing of federal land for fossil fuel production while retiring existing licenses, banning fracking, and ending fossil fuel subsidies. 

The platform makes a series of other proposals, including to:

• Declare housing affordability and homelessness a national emergency and immediately appoint a federal housing advocate.
• Invest in the construction and operation of 50,000 supportive housing units over 10 years.
• Build and acquire a minimum of 300,000 units of deeply affordable non-market, co-op and non-profit housing over a decade.
• Allocate $10 billion to post-secondary and trade schools.
• Decriminalize possession of illicit drugs for personal use.
• Conduct an immediate review of the RCMP role in policing municipalities and reserves and identify areas for "detasking" police and reducing police spending.
• Ban and condemn the practice of medically unnecessary surgeries on intersex children.
• Ban and condemn the practice of conversion therapy, in all its forms. 
• Develop and implement carbon border adjustments to ensure Canadian businesses do not face unfair competition from polluting jurisdictions.
• Expand VIA Rail to a rail and bus system.
• Replace one-third of Canada's food imports with domestic production, bringing $15 billion back into the economy. 
• Call on the Pope to apologize on behalf of the Roman Catholic church for its role in residential schools
• Ban the development of new nuclear power.

Click here to read the full Green Party platform

Other News

Bank of Canada holds key interest rates steady in cautious approach to economic recovery

The Bank of Canada kept its key interest rate target on hold Wednesday as it warned the fourth wave of the pandemic and supply bottlenecks could weigh on the economic recovery.

The central bank held its target for the overnight rate at 0.25 per cent, what it calls the effective lower bound, and said it will also maintain its quantitative easing program by buying bonds at a target pace of $2 billion per week.

"The governing council judges that the Canadian economy still has considerable excess capacity, and that the recovery continues to require extraordinary monetary policy support," the bank said in its decision.

Last week Statistics Canada reported that the country's gross domestic product — the total value of all goods and services sold — declined in the second quarter.

The central bank said is continues to expect the economy to strengthen in the second half of the year, though the fourth wave of the COVID-19 pandemic and ongoing supply-chain issues may cause problems for Canada's recovery.

The Bank of Canada also repeated its commitment today to hold its trendsetting rate at near-zero until the economy is ready to handle an increase in rates, which it doesn't expect to happen before the second half of 2022.

The central bank noted that inflation remains above three per cent as expected, boosted by base-year effects, gasoline prices, and pandemic-related supply bottlenecks.

However, it said the factors pushing up inflation are expected to be transitory, but their persistence and magnitude are uncertain and will be monitored closely.

"Wage increases have been moderate to date, and medium-term inflation expectations remain well-anchored," the policy statement says.

The Bank of Canada's next interest rate decision is scheduled for Oct. 27, when it will also update its outlook for the economy and inflation in its fall monetary policy report.

"The announcement contains little new information for anyone who has a mortgage or is considering getting one in the near term," said RateHub.ca co-founder James Laird.

"Anyone who currently has a variable rate mortgage can expect their rate to remain unchanged until at least the second half of next year. Anyone shopping for a fixed rate mortgage should get a pre-approval as this will hold today's rates for 120 days."

Bank of Canada vows to hike rates before reducing bond holdings

The Bank of Canada released guidance for the first time on how it plans to eventually reduce monetary stimulus, saying it will first raise interest rates before curbing its holdings of government bonds.

In a speech Thursday a day after a stand-pat decision, Governor Tiff Macklem provided details on what he called the central bank’s “monetary policy for the recovery.” Macklem reiterated the bank intends to bring its bond purchases to a roughly neutral pace where holdings and stimulus levels remain stable, and keep it there for a “period of time” before it begins withdrawing extraordinary support from the economy. And when policy makers start paring back that stimulus, the first move will be to increase the central bank’s policy interest rate rather than reducing bond holdings, Macklem said. 

“When we need to reduce the amount of monetary stimulus, you can expect us to begin by raising our policy interest rate,” Macklem said in remarks prepared for a virtual speech to the Quebec chamber of commerce.  “What this all means is it is reasonable to expect that when we reach the reinvestment phase, we will remain there for a period of time, at least until we raise the policy interest rate.”’

The Bank of Canada has been using two major tools to keep borrowing costs low: maintaining its main overnight policy rate near zero and buying up hundreds of billions of government bonds from investors to keep longer-term borrowing costs in check.

The central bank has already bought about $336 billion (US$266 billion) in Canadian government bonds under its asset purchase program, also known as quantitative easing. It started buying $5 billion a week initially but has since tapered those purchases three times to bring it to the current target of $2 billion a week.

Raising interest rates while shrinking bond holdings at the same time threatens to be too strong of a stimulus withdrawal.

The roadmap laid out by Macklem is consistent with what economists and markets have been anticipating -- a final taper later this year to bring net purchases of bonds to about zero, followed by a first rate hike later in 2022. Swaps trading suggests that investors are pricing in a 100 per cent chance of a hike over the next 12 months. Three hikes over the next two years are fully priced in, which would leave Canada with the highest policy rate among Group of Seven economies.

Support for vaccine passports grows, seven-in-ten Canadians now support it in public spaces

About two-thirds of Canadians support vaccine passports for variety of scenarios according to a recent survey by the Angus Reid Institute.

Canadians prefer sticks over carrots to encourage the unvaccinated to get the jab. Three-quarters (77%) say provincial governments should use regulatory measures to increase vaccination, while one-in-three (33%) say governments should use incentives.

One-in-five vaccinated Canadians (19%) believe those who refuse to show proof of vaccination at a public place, and refuse to leave the premises, should be arrested and charged with a crime. The largest group (44%) would prefer that the person be escorted off the premises but not punished further, while 29 per cent would have them fined.

While most vaccinated people across the country are split on the question of whether or not those who refuse the vaccine should receive the same access to medical care as the vaccinated, two-thirds of vaccinated Atlantic Canadians believe everyone should receive the same priority of treatment.

Interestingly, the survey found that support for proof of vaccination in public spaces is now a majority opinion in both Alberta and Saskatchewan, where Premiers Jason Kenney and Scott Moe have denounced the idea. In fact, 54 per cent of Albertans now support proof of vaccination in public spaces, up from just 40 per cent in late July.

The online poll by the Angus Reid Institute surveyed 1,709 Canadians from Sept. 3 to Sept. 6 on vaccine passports and incentives, among other issues.

Nova Scotia to require proof of vaccination for non-essential activities

Nova Scotia announced Wednesday that proof of full vaccination will be required to participate in non-essential activities beginning Oct. 4, such as going to restaurants, bars, concerts, movies and fitness facilities.

For children 11 and under, proof of vaccination won't be required because they're not eligible for COVID-19 vaccinations. Children who attend these events with a fully vaccinated individual will be allowed to participate.

Nova Scotia joins several other Canadian provinces and territories that have already implemented or plan to roll out vaccine passports, including the Yukon, B.C., Manitoba, Ontario, Quebec, P.E.I. and Newfoundland and Labrador.

Nova Scotia also announced Wednesday it will enter phase five of its reopening plan on Sept. 15, which is when 75 per cent of the population is expected to be fully vaccinated. Houston said Wednesday that 72 per cent of people have received two doses of COVID-19 vaccine.

Phase five will see the elimination of mandatory indoor masking requirements and physical distancing requirements.

Who is and is not recognizing the National Day for Truth and Reconciliation as a provincial holiday

Legislation passed by the federal government in June recognized Sept. 30 as a federal statutory holiday, making it a paid day off for federal workers and employees in federally regulated workplaces. As a federal statutory holiday, it is a designated paid holiday for federally regulated employees. That means people who work for the federal government or in workplaces such as banks, the post office or Via Rail are entitled to have the day off, or receive holiday pay if they do work.

The Ontario government will not be making National Day for Truth and Reconciliation a provincial holiday.

Nova Scotia will annually recognize Sept. 30 as Truth and Reconciliation Day beginning in 2021. Provincial government offices, public schools and regulated child care will be closed. Businesses will have the choice, as they do on other occasions, to remain open.

Prince Edward Island will recognize September 30 as National Day of Truth and Reconciliation. This fall, Premier Dennis King's government will be introducing an amendment to the Employment Standards Act to officially recognize the date as a provincial statutory holiday.

The government of the Northwest Territories announced that its public servants, including teachers will also observe the holiday.

British Columbia has advised provincial public-sector employers to honour the day. In B.C., many public services will operate at reduced levels, but most schools, post-secondary institutions and some health sector workplaces and Crown corporations will be closed.

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