The next edition of the Ottawa Report is scheduled to be sent on Monday, February 3, 2025.
Latest News
A Government in Crisis
“But did thee feel the earth move?”
– For Whom the Bell Tolls, Ernest Hemingway
Finance Minister Chrystia Freeland’s shocking resignation from Cabinet on the day of the Fall Economic Statement (FES) has created an almost unprecedented degree of political instability into the Parliament of Canada. It isn’t the first time that Liberal finance ministers have orchestrated their exits from cabinet. John Turner wrote his resignation letter to Pierre Elliott Trudeau on September 9, 1975. Paul Martin “was resigned” on June 2, 2002. Both went on to become Prime Minister. Neither departed on the day that an FES had been scheduled. Nor when financial markets were already open. Nor before a broader shuffle.
Trudeau picked an unnecessary fight with Freeland at a time when it was critical to stabilize the government’s stewardship of fiscal, economic, and trade policy to meet the 25 percent tariff threat by President-Elect Donald Trump; promote economic competitiveness; protect the economy from a historically low exchange rate; and take a united, Team Canada approach to defending Canadians’ economic interests.
The timing of Freeland’s announcement further destabilized the government, alarmed financial markets, and slowed down the implementation of actions designed to help Canada regain its footing at a uniquely challenging time, unnecessarily exposing Canada to further risk. Trump now has more opportunity to obtain further acquiescence out of a fragile Canadian government. The Canadian dollar is weaker. And the Cabinet meant to serve Canadians is in pieces.
Those harmed most by the news are Canadians, along with the businesses and investors who employ them. The chasm between a flailing government and the people it is intended to serve is now in full view. With both its frailty and self-interest on full display, the government is unlikely to preserve the confidence of the House let alone its own caucus. Although the prime minister faces no immediate confidence vote, his options for continuing are limited.
While Stephen Harper was in a precarious position when the Liberals, New Democratic Party (NDP), and Bloc proposed forming a government to replace him in December 2008, this new example seems worse, since it was mostly self-inflicted by the Liberals.
Trudeau must now walk an even finer line than his predecessor. He can prorogue the House and seek time to regroup before an election, test the confidence of the House and prompt an early election, or resign to allow for a leadership race to replace him. Either way, his legislative agenda seems to have reached a halt and his government’s capacity to deliver initiatives that appease the opposition is in tatters.
Now more than ever organizations need to look forward, engage the opposition more eagerly, and—where their interests are dependent on policies that advance the shared interests of North America rather than the sole interests of the US—they should seek sector-wide initiatives to directly engage with US lawmakers and advocate for closer cooperation across our open borders. Especially since it is doubtful any FES initiatives will be implemented.
Prorogation? (“Though this be madness, yet there is method in it.”)
– Hamlet, William Shakespeare
The best move available to the prime minister to avoid a non-confidence vote and a highly disadvantageous winter election to prorogue Parliament, or to end the parliamentary session. This would protect the government from a vote of non-confidence and give the prime minister time to establish a new cabinet and direction for that cabinet under the cloud of Freeland’s resignation.
A new parliamentary session could open at a time of the government’s choosing in 2025, but an election would still have to occur no later than October 2025. A prorogation would end the parliamentary session and all the government legislation before the House of Commons would die. With the Conservatives and NDP unlikely to support government, prorogation may be the only way for the Liberals to prevent a snap election.
The government could come back with a Throne Speech, a budget, an election platform (and a new leader?) for the spring of 2025. In the meantime, important legislation would die on the order paper, i.e.: C-63, the Online Harms Act; C-26 (Critical Cyber Systems Protection Act); C-27 (Digital Charter Implementation Act); C-65 (Electoral Participation Act); and C-33 (Strengthening the Port System and Railway Safety Act).
Parliamentary Business
The Fall Economic Statement
The Fall Economic Statement (FES) indicated that the deficit for 2023-2024 is now estimated at $61.9 billion, up from the Spring Budget 2024 estimated of $40 billion. This is said to be due to in part to “higher-than-anticipated provisions for contingent liabilities relating to development in Indigenous claims currently being negotiated with parties or that are before the courts, and, provisions for presently unrecovered loans and benefits from support delivered during the COVID-19 pandemic.”
While it is important to remember that it is unlikely that the FES will pass, there are some measures of interest to public works:
- The 2024 Fall Economic Statement announces that through existing funding allocated under the Canada Housing Infrastructure Fund’s $5 billion provincial and territorial stream, the federal government will fund:
- The Winnipeg North End Sewage Treatment Plant in Manitoba by providing $150 million over four years, starting in 2026-2027; and,
- The Iona Island Wastewater Treatment Plant in Metro Vancouver, British Columbia, by providing $250 million over five years, starting in 2025-2026.
- The 2024 Fall Economic Statement proposes to provide $31.6 million over three years, starting in 2025-2026, to conduct feasibility studies for the two-kilometre federal and Ontario portions of the Gatineau-Ottawa tram project. This funding builds on the joint investment with Quebec and means the federal government has now put forward the funding required to complete feasibility studies for the proposed tram’s entire 24-kilometre route.
- The 2024 Fall Economic Statement also announces the government’s commitment to an additional multimodal bridge over the Ottawa River to further improve transportation connectivity in the National Capital Region. This commitment for the project known as the “Eastern Bridge” enables the next phase of planning, including the impact assessment, design, preliminary site preparation, and a procurement strategy. Following Corridor 5, the Eastern Bridge will become an important piece of transportation infrastructure that will optimize public transit networks and eliminate truck traffic in congested downtown cores, in turn, boosting economic growth in downtown Gatineau and Ottawa, accelerating commutes, and making active transportation safer.
Federal Funding Awarded
Council Established for National Infrastructure Assessment
On December 3, the Government of Canada announced the new Canadian Infrastructure Council, an expert advisory body that will deliver the country’s first-ever National Infrastructure Assessment (NIA). The NIA will support Canada’s long-term infrastructure planning and decision-making by compiling data and evidence and conducting the research and analysis needed to make informed investments that will serve Canadians well into the future.
Public Funding for Water Projects in Newfoundland and Labrador
On December 5, the Government of Canada announced that the Town of Holyrood and 10 other municipalities around Conception Bay received a total infrastructure investment of over $16.8 million from federal, provincial, and municipal governments. These projects include the installation of a new watermain and water treatment facility in Holyrood. The full list of projects can be found in the attached backgrounder.
Federal Funding for Ottawa’s Bronson Centre
Funding through the Green and Inclusive Community Buildings program will support essential upgrades to Bronson Centre’s Ottawa’s after a total investment of more than $8 million from the federal government and the Centre itself. The modernized facility will better support the 30,000 people who use its services monthly, including Ottawa’s arts and cultural communities.
Transit Funding for Kings, Nova Scotia
On December 6, Kody Blois, Member of Parliament for Kings–Hants, alongside Dave Corkum, Mayor of the Municipality of the County of Kings and Chair of the Kings Transit Board of Directors, announced over $5.1 million in funding for public transit infrastructure in Annapolis, Kings, and Digby counties through the Baseline Funding stream of the Canada Public Transit Fund (CPTF). This funding, which will be delivered over 10 years from 2026 until 2036, will help advance key improvements to the Kings Transit Authority’s public transit system.
Federal Disaster Recovery Funding to British Columbia
On December 6, the Hon. Harjit S. Sajjan, Minister of Emergency Preparedness, announced payments of over $148 million to the Province through the Disaster Financial Assistance Arrangements (DFAA) program to assist with response and recovery costs associated with the wildfires in 2022 and 2023 and the floods in 2023. When a large-scale natural disaster happens, the Government of Canada provides financial assistance to provinces and territories through the DFAA program. Through this support, the Government of Canada covers eligible disaster response and recovery expenses that have been submitted by the province or territory and that exceed what they could reasonably be expected to bear on their own.
Community Infrastructure Funding for Alberta
On December 12, the federal and provincial governments announced that they are investing more than $24 million to improve local community infrastructure across seven Alberta municipalities. The Town of Okotoks and Foothills County will receive funding to improve the water supply by constructing a sub-regional system that will capture raw water from the merging of the Bow and Highwood rivers. This funding will support water pipelines throughout the region, ensuring a more reliable source of water for residents and economic growth for the town and county. The full list of funding is available here.
Federal Disaster Recovery Funding to Nova Scotia
On December 12, the Hon. Harjit S. Sajjan, Minister of Emergency Preparedness, announced payments of almost $67 million to Nova Scotia through the Disaster Financial Assistance Arrangements (DFAA) program to assist with response and recovery costs associated with the wildfires in 2023, the extreme rainfall and flooding in summer 2023, and storm Dorian in 2019.
$20 Million in Federal Funding for Gingolx Harbour
Critical disaster mitigation infrastructure upgrades are planned for Gingolx Harbour, the largest harbour within the Nisga’a First Nation territory, after an investment of nearly $20 million from the federal government. Gingolx Harbour faces increasing risks from stronger storms and rising sea levels, which could result in catastrophic damage to the harbour and the sea crafts that use it. This investment will extend and elevate the existing breakwater infrastructure to fortify the shoreline against major storms, create a protected channel for boats within the harbour, and decrease the rate and amount of silt building up from the Nass River. Controlled water flow and levels of silt will reduce negative impacts on fish spawning habitats, the surrounding banks, and Indigenous commercial and private boats.
Transit Funding for Rural Nova Scotia
On December 12, the federal government announced it is investing more than $2.7 million through the Rural Transit Solutions Fund (RTSF) to support 12 rural transit projects across Nova Scotia. For Pictou County Transit, Minister Sean Fraser and Mayor Nancy Dicks announced $136,761 to purchase a vehicle that will help them expand service to Trenton, Westville, Pictou, and Pictou Landing First Nation. The other 12 projects include improvements to rural transit services, new vehicles, and supporting infrastructure including bus shelters and stops and charging infrastructure for zero-emission vehicles.
