Orange crush, meet orange crash. Barring some sort of divine political intervention, Jagmeet Singh’s NDP is heading towards its worst election result of the 21st century — one that could be highlighted (or lowlighted, perhaps) by Singh losing his own seat. In hindsight, his decision not to pull the plug on Parliament last fall may go down as the biggest blunder in Canadian political history.
If Canadians elect a majority government, as seems most likely right now, the federal NDP will have four years to replace Singh and rebuild the party. If it wants to contend for real political power in the future, it ought to prioritize something in its next leader that has been manifestly lacking in its current one: economic literacy.
The Singh NDP has, after all, been conspicuously indifferent to concepts such as job creation and economic growth. Instead, it has been relentlessly focused on how Canada ought to divide up its existing economic pie, and whether Galen Weston Jr. in particular deserves such a large slice of it. The result has been an erosion of the party’s support among blue-collar voters, with most fleeing to Pierre Poilievre’s Conservative Party of Canada and its promise of lower taxes and bigger paycheques.
This vulnerability became particularly evident once Justin Trudeau, another leader with a less-than-enthusiastic approach to economics, left office. With Mark Carney in office and a more explicitly pro-growth agenda on the table, Singh’s NDP started hemorrhaging voters from both flanks, with the party’s older supporters suddenly flocking to the Liberal tent.
There wasn’t much Singh could do here once the election was called, but his policy proposals — such as they are — have only served to confirm his key weakness. The idea of creating “Victory Bonds”, for example, ignores the fact the federal government is not actually having trouble raising money in the bond market, as it did during World War II. If anything, it’s the opposite, with the Trump administration’s chaos making Canada’s bonds seem more attractive. That helps explain why the Department of Finance launched a five-year US$3.5 billion global bond in March — one that saw an order book of US$13.9 billion, which indicates significant excess demand for the product.
Then there was Singh’s position on the so-called “corporate landlords” he blames for the rental crisis in Canada. He promised to implement national rent control — an area that falls under provincial jurisdiction — and crack down on “corporate landlords and their predatory practices.” Alas, this would almost certainly stifle investment in new rental construction that’s required to actually reduce prices in a meaningful and lasting way. In Austin, Texas, for example, a city with its share of corporate landlords has seen rents fall 22 per cent from the peak in 2023 — and that despite continued immigration from other parts of the United States. Why? A massive increase in its housing supply.
It’s not just the NDP that needs to raise its economic game. The Green Party, which continues its long flirtation with political relevance, is no better on this front. Mike Morrice, the Green MP for Kitchener-Centre, told CBC’s The House that “the federal government just wasted $34 billion building a pipeline that will never have an economic return.”
This is verifiably false, as University of Calgary professor Trevor Tombe explained in a recent analysis of the project. “Despite the cost increases,” he wrote, “it’s not a stretch to see a scenario where this pipeline is worth more than the $4.5 billion that Canada bought it for back in 2018.” That’s before taking into account its impact on the royalties and corporate taxes these oil companies pay. “The entire cost of the pipeline is more than compensated for by higher GDP after only a few years of operation,” Tombe writes. “Not a bad return.”
Indeed. Acknowledging these inconvenient truths about the economics of pipelines or the realities of rent control doesn’t mean progressives have to abandon their priorities. It doesn’t mean surrendering to the market or yielding to the capitalist imperative. It just means trying to understand how they work and crafting ideas and arguments that actually take them into account.
Progressives can, and should, still care deeply about climate change, affordable housing and any number of other issues that aren’t automatically aligned with the priorities of the business elite. They just need better arguments to make their case — and to avoid using ones that make them look like they either don’t understand economics or don’t care to understand them. At a time when economic uncertainty and anxiety abounds, that’s a very dangerous place for a political party or movement to live.
If they need more convincing, they can just look at the Liberal Party of Canada’s remarkable resurrection under Mark Carney. His 2021 book Values is, after all, largely about exploring the tension between markets and society and finding ways to use the former in service of the latter. His knowledge of markets and capitalism make him both a more reliable source and a more effective critic. It may well lead him to a majority government in two weeks' time — and the NDP to political ruin in the process.
Comments
Singh is out of touch with reality, but this is not to say Singh's ideas are all that bad, he lacks explanation of how they will get paid for without increasing taxes. Singh spends too much time with the blame game than how something could be solved.
Quote: "Pierre Poilievre’s Conservative Party of Canada and its promise of lower taxes and bigger paycheques"
Poilievre's idea to lower taxes and bigger paycheques comes at a cost of reduced healthcare and education is the typical conservative operand. But with all his latest promises, he neglects to explain how his party would pay for them all and yet lower taxes and bigger paycheques at the same time. Just a desperate smoke screen to win votes and not likely to ever deliver on any of the promises he makes.
Fawcett: "Carney's knowledge of markets and capitalism make him both a more reliable source and a more effective critic. It may well lead him to a majority government in two weeks' time — and the NDP to political ruin in the process."
Does anybody believe the Fiberals running on their economic record would have surged ahead of Poilievre's Conservatives without Trump?
Fawcett's conclusion does not hold up. Carney's technical knowledge of markets and command of capitalism is not the main draw. Canadians fear Trump and dislike Poilievre more than they esteem Carney and the Liberals. Most Canadians know next to nothing about Carney. Canadians are flocking to the Liberals due to the Trump effect — and the perception that Poilievre's Conservatives are maple MAGA. The Conservatives will tear things down, not build things up.
On general competency and personal and academic merit, no contest between Carney and Poilievre. The former speaks in paragraphs, the latter in three-word slogans. Poilievre has spent his entire career as an attack dog.
The Liberals are the safe port in the storm.
Likewise, the NDP's downfall is not because they fail to understand economics. The federal NDP has never embraced or appealed to corporate Canada, Bay Street, and crony capitalism — under any leader. Singh's problem is he has no fire. To be effective, the NDP need to be loud and proud.
In the current storm, progressive voters are fleeing the sinking NDP tugboat for the safety of the Liberals' ice breaker. Trump is the iceberg, and Poilievre is the reckless captain of a leaky oil tanker under the MAGA flag heading straight towards Trump.
Interesting analogies, Geoffrey.
Let's hope the icebreaker is nuclear powered and doesn't need refueling for a long time, and is as big as any other icebreaker out there to weather the years of bergs and storms to come.
"these inconvenient truths about the economics of pipelines"
Of course, the real inconvenient truth about the economics of pipelines — and the fossil fuel industry in general — is that producers and consumers use the sky as a free dump. The fossil-fuel industry remains viable and hugely profitable ONLY because producers and consumers are permitted to externalize most of the climate, environmental, and health costs. The real costs of fossil fuels are prohibitive. Which is why we have to get off them.
Producers and consumers download these costs of fossil fuels to the public purse, the environment, and future generations. Voodoo economics. The market is rigged in favor of fossil fuels. Climate change represents the biggest market failure in history.
Price in those costs, end the free ride, make polluters pay — and the fossil fuel industry, including its pipelines, cease to be viable overnight.
"Trans Mountain expansion's pipe dream marred as overruns drive up cost of exporting oil to Asia" (Bloomberg News, Jul 11, 2023)
"Set to become a $20-billion taxpayers’ headache and an expensive option for exporters
"Trans Mountain was touted as a way to broaden buyers of Canadian oil and break energy dependence on the U.S. when Prime Minister Justin Trudeau’s government bought the system from Kinder Morgan Inc. 5 years ago for $4.5 billion. Since then, repeated delays and construction setbacks have seen project costs more than quadruple to $30.9 billion, challenging the economics of the pipeline and undercutting Canada’s push to diversify oil exports.
"'The economics of this project don’t make sense because the financial benefit is not there,' said Robyn Allan, an independent economist who has published reports critical of the project.
"Trans Mountain announced interim tolls for its expanded pipeline in June and is seeking approval from Canada’s energy regulator so the line can start operating as early as January. Only part of the cost increases for the expansion can be passed on through higher tolls, with proposed fees already too high for oil producers to make a sufficient profit, Allan said.
"That means taxpayers may be left to bear a roughly $20-billion writedown, according to Morningstar Inc. analyst Stephen Ellis."
Tally the costs of a major tanker spill off B.C.'s coast. Or a massive explosion and fire at Burnaby Terminal. What dollar figure does Fawcett, Tombe, and their neoliberal economics textbooks put on B.C.'s resident killer whales?
"Tally the cost of a major tanker spill off the coast."
Exactly. Trevor Tombe's report seems to rely on assumptions that there will be no spills. However, if even a moderate spill occurred in Boundary Pass, the lawsuits will be international in scope. In addition, he probably didn't account for the incremental erosion of fossil fuel demand by renewables over the next decade. The Ember organization pegs the 'intrusion' of renewables into world energy build out at 40%.
"Or a massive explosion [or fire] at the Burnaby Terminal."
The Burnaby Fire Department has already warned about the dire consequenses of a major fire at the Burnaby Mountain tank farm. It would be one of the worst disasters to hit Metro Vancouver.
Was going to work on a long winded rebuttal, here, but instead I'm just gonna say that Max needs to stop pretending, and come out of the closest as a die-hard Conservative.
And no-one who is peddling supply-side "economics," as Max has done repeatedly, has any credibility on the subject of economic literacy.
Given the urgency of the energy transition and rising climate costs, what are the opportunity costs of government subsidies for — and outright purchase of — pipelines and other fossil fuel infrastructure? What is Canada losing by not investing those dollars in renewables, energy-efficient housing, and public transit?
Max Fawcett talks down to progressives because we "don’t understand economics".
To clarify, we don't understand or accept neoliberal economics that props up destructive industries, especially when they are reaping windfall profits. Profits that they use to obstruct and delay the energy transition. An economic system that funnels public dollars to subsidize profitable and in this case largely foreign-owned corporations. Socializing the costs and privatizing the profits. In obvious violation of free-market principles that the proponents of corporate welfare claim to espouse.
That's the point that Max and his fellow travellers miss.
And what the NDP types miss is the current economic, systemic realities "out there." And how you can't do a bloody thing unless you win power, again, within the current systemic reality of FPTP.
Which is why the most talented people in the current economic, systemic reality, people like Carney, CHOOSE the Liberal Party, NOT the NDP, when they want to contribute to the management/tweaking or even transformation of said economy.
Not sure of numbers here, but isn't it interesting that voters lateral move under duress is to the CPC? Since I think we mostly regard the NDP as fellow progressives, maybe they should examine what THAT means about their "proud" identity.
I'd say the lack of adaptability is what the two parties have in common.
I had a conversation in Victoria with a lawyer who had recently left the NDP Party to join the Liberals, and when asked why he said he was tired of having to "dress down." Hmmm...
TP wrote: "And how you can't do a bloody thing unless you win power, again, within the current systemic reality of FPTP."
Ahistorical. The NDP do not have to win to exert a positive, progressive influence on government.
As decades of progressive measures under minority Liberal governments demonstrate.
We need a strong alternative and truly progressive voice that speaks for the public interest, not the corporate interest.
That's what the NDP can provide.
Dru Oja Jay: "Wielding the Balance of Power" (The Breach, Aug 20 2021)
"Liberal minorities with a strong NDP presence have, historically, created some of the biggest openings for social movements to make major gains.
"This type of minority historically sets a unique dynamic into play, with Liberals clamoring to regain popularity, and the NDP forced to maintain a principled stance.
"The minority is a key leverage point for progressive movements. While those movements don’t have the power to push the NDP into a majority, the difference between a Liberal majority and a minority is often just a few thousand votes in key ridings – most of them in urban centres.
https://breachmedia.ca/wielding-the-balance-of-power/
See article for list of NDP achievements.
Oilsands expansion enabled by new pipelines like TMX blow Canada climate targets out of the water. Canada will continue to fail to meet its climate targets for decades.
If TMX is a sound investment, as University of Calgary economics professor Trevor Tombe argues, the pipeline revenues more than offset the costs of Canada's climate failure.
By extrapolation, globally the revenues from new fossil fuel infrastructure more than offset the costs of global climate failure.
We know this most definitely not to be true. The economists discount the costs of climate change. A profound disconnect between our economics and reality. The fundamental problem.
Our economic calculus is simply wrong. Our economists — and scientifically/economically illiterate pundits — are in denial. They do not explicitly deny climate change, but they refuse to acknowledge its implications.
The marriage of petro-progressivism with neoliberal economics and corporate welfare dooms us to climate disaster.
No matter how hard they try, no government or oil promoting economist has ever addressed Scope 3 emissions, which is where most of the emissions occur.
Fawcett's not really wrong that the NDP needs more economic literacy. Which doesn't mean they should think like Mr. Fawcett, because he doesn't understand economics either. The thing is that most modern NDP politicians have either accepted, or pretend in public to have accepted, core neoliberal mainstream economic ideas. But the fact is, these ideas are bankrupt, and the scholarship that originated them was always intertwined with propaganda, finding and funding ideas that best advanced the interests of the very rich.
An NDP without enough knowledge to challenge these ideas and advance more factual explanations is an NDP caught trying to advance the interests of ordinary people within a framework designed to block exactly that, unable to understand why everything good they want to do turns out to be "economically impossible".
In actual historical experience the NDP have accomplished several North American impossibilities as a minority partner with the Liberals. Universal national healthcare insurance, a national pension plan, and today's childcare, pharmacare and dental plans come to mind.
The biggie -- healthcare -- came to being under the persuasive leadership of Tommy Douglas who initated it as premier of Saskatchewan during a period opponents were decrying provincial bankruptcy. What actually happened? Douglas ran 21 successive balanced budgets and fair tax reform even with an expensive new program.
In some respects a Liberal Democratic federal government will provide the best balance between competing interest that refect the majority of the population's preferences. I would prefer a coalition, not a loose minority government.
Don't I recall Max saying he grew up in a housing co-op? Strange he should suggest predatory corporate landlords are the supply side solution to Canada' s high rents and overheated housing markets. The national housing programs of the 70s and 80s, through their support of co-operative housing, created thousands of affordable homes for low and moderate income households who had the same security of tenure as homeowners. What's wrong with a revival, Max?