Defence, global warming and mortgages: how federal politics touched us this week

If Trudeau was upset by the controversy, he didn’t show it on May 4, also known as Star Wars Day (‘May the 4th,’ get it?), when the notoriously nerdy PM showed up to meet his Irish counterpart wearing colourful chaussettes featuring C3PO and R2D2.

But the week wasn’t all military bickering and mismatched sock banter — substantive discussions took place on defence spending, controlling greenhouse gas emissions and the destabilizing effects of the Toronto housing market.

Here are three ways federal politics touched us this week:

DEFENCE SPENDING

When pressure to resign has a cabinet minister squirming in his seat every day during question period, it’s time for a government to “change the channel” and distract the media and the public by making big, unrelated news.

Sajjan did so Wednesday by offering a sneak peek at a forthcoming blueprint for overhauling the country’s defence policy. Months of analysis found previous governments had starved many core defence programs of basic funding, leaving the Forces unable to carry out their daily jobs with confidence, he told a defence-industry gathering.

Sajjan has not said yet how the government plans to fill this funding “hole.” The needs, in some cases, appear to be immediate. But his funding rhetoric suggests the government is looking at long-term funding that won’t put a dent in the fiscal framework.

The policy review, expected later this month, will likely provide some answers — and also discuss how the government plans to deal with the perennial problems of crumbling ships and fighter jets, and the election promise to bolster peacekeeping efforts.

CARS ON THE ROAD TO PARIS

Number crunching this week shows that even if Canadians took every car they own off the road, the country would still not be anywhere close to reaching the emissions targets the Trudeau government agreed to in Paris last year.

The feds committed to cutting emissions to 523 million tonnes a year by 2030. In 2015, however, the level was 722 million tonnes — down just 0.7 per cent from a year earlier.

Getting to 523 would require dramatic change. Environment Minister Catherine McKenna points to Ottawa’s climate change accord with the provinces as a catalyst for meaningful reductions. Boosts for public transit, clean technology and carbon sinks, along with getting rid of coal-fired electricity, could provide the rest.

Others say meeting Canada’s targets will be next to impossible as long as new pipelines are encouraging oil production, some provinces cling to coal, and the cross-country effort remains too feeble to reach 200 million extra tonnes a year.

HOMES AND INSTABILITY

The Bank of Canada and successive finance ministers have warned for years about overheated housing markets in Canada’s largest cities. A bursting bubble, they warned, would destroy wealth in Canada’s key urban economies, spook investors and destabilize financial institutions.

Now, Home Capital, a Toronto-based alternative mortgage lender, has run into substantial trouble and has had to arrange for a high-priced $2-billion lifeline from a pension fund in order to maintain liquidity.

The jitters around that institution and the housing market in general are taking a toll on the Canadian dollar. Many questions are swirling about whether Home Capital’s problems could spread. Bank shares are down, and Equitable Group Inc., a Home Capital competitor, is bracing for trouble.

Finance Minister Bill Morneau, for his part, doesn’t seem worried.

Morneau, who oversees regulators of the financial services sector. told the Commons that the system is working as it should, and that he sees no link between Home Capital’s problems and overheating in the housing market.

Heather Scoffield, Ottawa Bureau Chief, The Canadian Press

by Canadian Press

Defence, global warming and mortgages: how federal politics touched us this week

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