FROLITICKS

Satirical commentary on Canadian and American current political issues

Jun 18

Respective Roles and Governance of U.S. Federal Reserve Bank and the Bank of Canada

by bcurry

The Federal Reserve Bank (the Fed) is the central bank of the United States.  It manages the nation’s money supply and interest rates to achieve maximum employment and stable prices (a “dual mandate”), regulates banks to ensure financial safety, and processes financial transactions for the U.S.government.  The president cannot directly control the Fed, as it operates as an independent central bank designed to be free from short-term political interference.  However, the president does hold several key powers and avenues of influence over the institution.  The president’s formal powers include the ability to nominate the seven members of the Board of Governors, including the Fed’s chair and vice chair.  However, these appointments require Senate confirmation.  The chair and vice chair have only one vote each, as do each of the other governors.  Governors serve 14-year terms, which are intentionally staggered to span across multiple presidential administrations to insulate them from political cycles.  The limitations on the president include the fact that he has no say over the Fed’s interest rate decisions or its monetary policy.  These decisions are made by the Federal Open Market Committee (FOMC), which includes the governors and regional bank presidents.  Also, by law, the president can only remove a Fed governor or the Chair from their position on the board “for cause”.  This generally implies serious misconduct or neglect of duty — not simple disagreements over policy.  Nevertheless, as definitely in the case of Donald Trump, presidents can use public statements, social media, and speeches to critique or pressure the Fed to adjust interest rates, though these actions carry no legal weight. 

Kevin Warsh became the Fed’s current chair, after being confirmed by the narrowest margin in its history.  Nominated by Trump, Warsh was officially sworn in on May 22, 2026, succeeding Jerome Powell.  Warsh has promised “regime change.”  However, under the new chairman, Fed officials voted once again on June 17th to hold interest rates steady for the fourth consecutive meeting, leaving their benchmark lending rate at a range of 3.5% to 3.75%.  This was despite Trump wanting to have interest rates reduced, and the result of another significant monthly increase in inflation.  Instead, according to their latest economic projections, Fed officials hinted at a potential rate hike later this year to combat the latest inflation spike tied to the war with Iran.  Interestingly, during his first post-meeting news conference, Warsh announced task forces in several areas that are central to the broad conduct of monetary policy.

Similar to the Fed, Canada’s central bank is the Bank of Canada (Bank).  Like other central banks around the world, the Bank promotes economic stability and supports the financial well-being of a country and its citizens.  Unlike the Fed leadership, the Bank’s governor (currently Tiff Macklem) and senior deputy governor are appointed by an independent Board of Directors. The Board provides general oversight of the management and administration of the Bank with respect to strategic planning, financial and accounting matters, risk management, human resources, and other internal policies.  The Board is composed of the governor, the senior deputy governor and 12 independent directors appointed to three-year renewable terms by the Governor in Council (the Cabinet).  The Bank sets policy independently within an agreed-upon monetary policy framework, without any direct interference by the government of the day.  However, the Deputy Minister of Finance can participate in Board discussions, but cannot vote on any Board decisions.  The Bank’s Governing Council reaches decisions by consensus and sets the policy interest rate on eight fixed announcement dates each year.  Given the Bank’s independent mandate and governance, the Prime Minister has little or no control over its mandate and composition, and in particular the determination of monetary policy based on current economic data.

Hopefully, given the legislative and independent authority attributed to each central bank, they will continue to carry out their vital operations utilizing economic data provided by independent and expert resources, including those within each country’s financial community and provided by impartial and objective government sources.

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Oct 23

How Trump Continues to Denigrate Congress in His Push for Power

by bcurry

No one should be surprised as to how Congress, and in particular the Senate, have once again been denigrated by President Trump.  This was attempted in Trump’s first term, but not to the extent as witnessed to date under his second term in office.  If you don’t believe me, you might want to read The Betrayal by Ira Shapiro.  The author outlines in detail how Mitch McConnell, then the Senate majority leader, and the Senate Republicans gave into many of Trump’s policy demands during his first term.  Several episodes took place during the impeachment hearings against Trump at that time and during the selection and confirmation of Supreme Court judges, including Brett Kavanaugh.  Even the January 6, 2021, insurrection and mob attack on the Capital by Trump supporters did not cause the Republicans, who were outraged at the time like many Americans, to subsequently reduce their support for Trump.  Remember that on January 20, 2025, upon taking office, Trump granted clemency to all January 6 rioters, including those convicted of violent offences.  This even angered several Trump law and order supporters in the Republican Party, but most refused to comment publicly on the matter.

Supposedly, it is Congress that controls the government’s purse strings.  However, what is actually happening is that a Republican controlled Congress is simply rubber stamping Trump’s policies.  With the current federal government shutdown, the Trump administration has taken the opportunity to shift billions of dollars around to take care of its priorities during the shutdown with scant input from lawmakers.  Trump is once again ignoring Congress’s clear constitutional supremacy over the power of the purse.  Congressional Republicans have also been mainly silent as Trump has unilaterally imposed and threatened tariffs to achieve his own strategic, political and economic goals.  Despite the fact that the Constitution gives Congress chief responsibility for levying tariffs, the Republicans appear willing to simply wait until several cases against the tariffs are reviewed by the Supreme Court, which could take months.

The Trump administration most recently has taken upon itself to authorize the drone bombing of boats in international waters off both the Pacific coast and in Caribbean waters off the coasts of Venezuela and Colombia, alleging that they are drug smugglers.  Whether they are or not is not the issue.  The issue is whether such actions are legal or not under international laws of the seas and one which would normally need the consent of Congress.  These are not police operations, but are clearly extraterritorial military operations which could be deemed as hostile by the affected countries whose dozens of citizens have already been killed.

Only a few days ago, Trump appeared more willing to restrain Moscow in its war on Ukraine.  Once again sidestepping Congress, his administration announced new penalties on Russia.  However, Congress has always pressed for even more stringent measures against Russia.

These are only a few examples of how the current Trump administration is obviously attempting to enhance the powers of the president.  Democrats have been largely steamrolled by Trump and his Republican allies all year.  Democrats have had to rely on the courts to hold the line against illegal actions by the White House, a hope that has so far met with mixed success.  The matter is further exemplified by the fact that the Republican leaders themselves have made it quite clear that they view their role as subordinate to the president, saying they won’t open talks with their Democratic counterparts unless Trump allows them to do so. 

Nevertheless, one will find lawmakers in both parties who worry that the steady erosion of congressional prerogative they are witnessing daily could inflict permanent damage on the institution at the forefront of representative government.  All one can ask at this point in time is whether or not the damage has been done and whether this blatant acquisition of power and influence by Trump can be reversed in the future?  America needs to reinstate the constitution’s checks and balances critical to its democracy, or potentially face a more authoritarian future.

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Aug 29

Just Who Are These American People Supporting Trump Administration’s Policies?

by bcurry

I keep reading and hearing about the American public whom the Trump administration appears to listen to and who in turn supposedly lend their support.  Some have speculated that they are those who claim to be part of the so-called Make America Great Again (MAGA) movement.  However, the MAGA supporters still only represent a fraction of the Republican Party.  Based on recent polls in the U.S., which put Trump’s approval ratings at an all time low, it certainly doesn’t appear to include the vast majority of independent voters.  As for the “big, beautiful bill” recently passed by the Republicans, at the town halls held by Republican Congressional representatives the negative and furious reactions by their constituents don’t appear to be very favourable.  The majority of Americans are now also beginning to question the administration’s tariffs and immigration policies.  It would appear the emphasis on dealing with inflation, remembering Trump’s references to the high cost of “groceries”, has now taken a back seat to his other priorities.  This at a time when the real impact of high tariffs on imports from India and China have yet to be fully felt by American consumers.  Many Americans, particularly those in states bordering with Canada, are not happy with how the Trump administration is dealing with its northern neighbour and long time friend, ally and trading partner.

Prior and during the last election, there is little doubt that some Americans were concerned about numerous federal agencies, especially with respect to their credibility and trust wariness.  Instead of restoring their trust in agencies such as the Federal Reserve Board, the Centers for Disease Control and Prevention, the Bureau of Labour Statistics, the Federal Emergency Management Agency, and the Justice Department to name a few, we now see the administration attempting to dismantle and weaponize these independent bodies.  Trump is replacing their heads with politically loyal hacks with little or no expertise in leading or running such institutions.  By doing this, the administration argues that the ability of the President to exercise his hiring and firing policies ensures political accountability for them to the American people.  Again, who just are these American people?  While there are always ways to improve their operations, attacking independent bodies in this manner tends to undermine their important mandates which are intended to be apolitical and based on expertise and research-based objectivity.  No other administration in U.S. history has ever assailed these institutions in the way that the Trump administration is proceeding to try to bring them into line with his political thinking.  Furthermore, there is no clear evidence of any form of so-called “deep state” existing among independent bodies.

Of course, within the federal government, there are senior positions that each new administration will fill with its own politically motivated appointments, normally leaving the remainder of each department’s operations under the capable hands of career civil servants.  One can only hope that confirmed appointees are credible and experienced administrators in what ever mandate they will represent.  Unlike in Canada, the appointment of hundreds of senior administrators is left up to the President, resulting in a major turnover at the top with each new administration.  Generally, in Canada the bulk of senior federal officials are career bureaucrats with the applicable administrative capabilities, frequently serving under governments of varying political stripes.  For this reason, the Canadian public service is somewhat admired among democratic countries and often put forward as a good administrative example for governments.

There is little doubt that Trump was attempting to appease his base, in particular MAGA, by instituting his policies via many executive actions in his first hundred days in office.  Meanwhile, the Republican dominated Congress sat on the sidelines watching it all happening and has failed to address some of the more controversial executive orders, some of which most likely are unconstitutional.  So just who are these members serving at this time?  It certainly doesn’t appear to be their own constituents based on the resulting outrage being witnessed throughout the country, even in red states!

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Aug 24

How the Trump Administration Has Undermined the Justice System

by bcurry

There isn’t a day that goes by without some new revelation about the Trump administration’s interference in or misuse of the justice system.  The most recent abuse to surface was revealed when a federal judge ruled that Alina Habba, a Trump appointee, had been serving as New Jersey’s U.S. attorney without legal authority for more than a month.  The judge ruled that she is not currently qualified to exercise the functions and duties of that office in an acting capacity and she has no experience in criminal law.  At the time of her acting appointment, other potential reputable veteran prosecutors were already under consideration in the office of the U.S. attorney for the District of New Jersey.  The thing is that such moves used by the administration to keep Habba in charge of the New Jersey office after her interim tenure ran out have apparently been replicated by the Justice Department in several other U.S. attorney’s offices.  It has also be pointed out that since the legality of the appointment was being challenged, the questions had left the state’s district court system at a standstill for several weeks, delaying hearings, plea agreements, grand jury proceedings and at least one trial.

In the past few months, members of Trump’s Justice Department have repeatedly misled the courts, violated their orders and demonized judges who have ruled against them.  In the past, Justice Department lawyers long enjoyed a professional benefit when they appear in court. As a general rule, judges tend to take them at their word and assume they are telling the truth.  Now, because of the current inappropriate behaviour of Justice Department lawyers, legal experts say that the actions have resulted in serious doubts among judges about the department and those who represent it.  This doubt could ultimately have a more systemic effect and erode the healthy functioning of the courts.  In addition, this confusion and negative reaction has been further exacerbated by the fact the Trump administration has fired numerous veteran prosecutors at the department, apparently without cause and in some cases simply because they had been involved in past cases involving Trump.  As for the remaining prosecutors, their credibility and integrity is now being more frequently questioned by the courts.  A good recent example is where federal grand juries in Los Angeles have been refusing to indict many defendants whom prosecutors have sought to charge in connection with immigration protests.

Trump hypocritically had accused the Biden administration of “weaponizing” the Justice Department, when he in fact has gone even further do exactly the same thing, but in much more evident and worst ways in real terms.  The most recent example is where Edward R. Martin Jr., appointed by Trump last January as the interim U.S. Attorney for the District of Columbia, was tapped by the Justice Department to investigate the New York attorney general, Letitia James.  James of course was the person who successfully prosecuted Trump in the civil fraud case against him and his business, resulting in a finding that he altered his net worth for tax and insurance benefits — a blow to his real estate mogul image.  To date, James has not been formally accused of any wrongdoing.  In May, Trump withdrew Martin’s nomination to take the U.S. Attorney job permanently when it appeared that he would not be confirmed by the Senate.  Subsequently, Martin was quickly reassigned to Justice Department headquarters, where he holds four titles, including United States pardon attorney and director of the so-called Weaponization Working Group — a task force established to seek retribution against Trump’s past perceived political enemies.  Often, referred to as the Weaponization Czar, he is expected to sidestep Justice Dept. norms to expedite investigations.  It has been reported that over the past two months, Martin has been in charge of several investigations all at once and has quietly worked with federal prosecutors in multiple jurisdictions, including the Eastern District of New York, the Eastern District of Virginia and Maryland.  Again the persons were involved in cases making them Trump’s so-called political enemies.  It is also noted that Martin has virtually no experience overseeing investigations, or in compiling a case that successfully persuades a grand jury to bring an indictment.

All in all, these are just a few recent examples of how the Trump administration has attempted to weaponize the Justice Department, and in turn the justice system as we know it.  These scurrilous attempts will consequently represent a growing decline in the public’s credibility and trust when it comes to the courts and this particular federal institution.

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Jul 13

Unlike the American DOGE Initiative, Canada Can Better Tackle Government Cuts

by bcurry

The initiative led by Elon Musk in the so-called Department of Government Efficiency (DOGE) has turned out to be a major disaster with not much impact on the federal government’s overall debt.  It certainly is an example of what not to do for a planned Canadian government initiative to curt federal government spending and reduce its current debt.  Prime Minister Mark Carney has embarked on one of the most ambitious public spending reviews since former Prime Minister Jean Chrétien and his finance minister Paul Martin balanced the budget in the 1990s.  Carney’s government wants to cut operational spending by 7.5 per cent for the 2026-27 fiscal year, 10 per cent the following year and 15 per cent in 2028-29.  According to the CBC, the Institute of Fiscal Studies and Democracy at the University of Ottawa estimates that, when those areas are carved out, the government is targeting a pot of money that is about $180 to $200 billion of the $570 billion it will spend this fiscal year.  Some former senior government officials believe that this is doable, but with some caveats. 

First, rather than an arbitrary across-the-board cut, a realistic program review will look at whether the existing program continues to serve a real need, especially when it comes to public services.  Secondly, it’s mostly important to first determine where you cut — rather than by how much.  Thirdly, there may be means to cut operating expenses by looking for ways to employ new technologies, including those involving artificial intelligence and automation.  Fourthly, there is also room to cut the use of consultants and outside contractors, but doing so could cut off access to valuable expertise.  In addition, extra replacement training of public servants could occur, but would be an added cost factor.

Interestingly, Carney has said that there will be no cuts to transfers to the provinces for things like health and social programs, nor would he cut individual benefits such as pensions and Old Age Security payments.  Key programs rolled out by former Prime Minister Justin Trudeau’s government such as child care, pharmacare and dental care are also spared.  These of course are high cost, almost untouchable programs, with a great deal of the electorate’s support.

Unlike in the DOGE exercise, federal public servants in Canada have strong union representation across the public service and will require consultation with union officials during the review process.  The unions have already expressed concerns about potential cuts to the workforce, but recognize that the review must address this issue as it will be difficult for the government to avoid cutting staff because wages, benefits and pensions are such a large part of the operating budget.  As in past initiatives, some cuts can be made through attrition.  However, serious cuts would involve the removal of some positions, moving staff to other programs or retraining for other government jobs.  The unions will argue that any program cuts should not be at the expense of certain key services to the public.

Previous program reviews have been undertaken given a government’s mandate to respond to a national crisis, such as the servicing of a growing government debt.  Given that the most fundamental issue of the last Canadian election was Donald Trump’s attack on the current U.S.-Canada trade relations and our sovereignty, Canadians are much more open to suffering through cuts then they were five to 10 years ago.  Due to the DOGE methodology of arbitrary cuts to departments and agencies, the ramification of those cuts to important public services is just now being felt by Americans.  Canada does not want to incur the same public wrath that the Trump administration is and will continue to experience as a result of program and service cuts.  As well, serious errors were made in the DOGE accounting process, often overestimating the actual cost savings as a result of government cuts.  Canada does not want to repeat such mistakes and must offer an open and accountable process during any program review.

The one most important factor in my view from past experience in federal program reviews is that imposing across-the-board cuts can quickly paralyse the effective delivery of certain important programs, especially those which are regulatory in nature.  While a ten percent cut to a program’s budget may not seem to be much, for some agencies this may be enough to hinder or negate its effective program delivery.  Agencies and departments which enforce regulatory requirements, such as those in occupational health and safety, transportation, and the environment most likely would be greatly compromised.  In some cases, program delivery becomes so ineffective that one could argue that the program is better off simply not existing.  This becomes the conundrum that any program must entertain and could endanger public safety.

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Mar 30

U.S. Increasingly Moving Towards Police State

by bcurry

President Trump is obviously clamping down broadly on dissent using the tools of the federal government.  Now, the administration has put the pressure on universities themselves to crack down on student protesters.  Increasingly, for example, one is seeing that colleges are using surveillance videos and search warrants to investigate students involved in pro-Palestinian protests.  Some experts believe that it’s this new frontier in campus security that could threaten civil liberties.

In addition, it has been pointed out in the media that some colleges, such as the University of Pennsylvania, Columbia University, George Mason University, University of California, Indiana University Bloomington, and University of North Carolina to name a few, have had the university police obtain warrants to search personal property such as a student’s car, laptop or cellphone.  In most cases, no actual crime has been committed by the affected student.

Zach Greenberg, a First Amendment lawyer at the Foundation for Individual Rights and Expression, a free speech group, reportedly notes that university police have sometimes even cited social media posts to justify warrant requests.  But as he states, such posts are constitutionally protected speech, and he goes on further to stipulate that such campus police tactics could very likely chill free expression.  Furthermore, lawyers representing affected students argue that a college seeking a search warrant against one of its own students is not because that student committed a crime, but purely because in many cases a student attended a protest and was filmed at the protest.  In most cases so far, few students end up not even being charged.  In some cases, the university may simply threaten them with possible suspensions should they continue to participate in protests, including those that are peaceful.

In addition, for months now, President Trump has been threatening to deport foreign students who took part in last year’s campus protests over the Israel-Hamas war.  Apparently, investigators from a branch of Immigration and Customs Enforcement (ICE) have begun scouring the internet for social media posts and videos that the Trump administration could argue showed sympathy toward Hamas.  Curious indeed since ICE typically focuses on human traffickers and drug smugglers for possible deportation.  As in the recent arrest by ICE of Mahmoud Khalil, a young U. of Columbia graduate student with a green card living in New York, the government is using an old provision in the Immigration and Nationality Act of 1952 to argue that his actions during protests at Columbia University harmed U.S. foreign policy interests by fomenting anti-Semitism.  As of yet he has not been charged with an actual crime.  The Act was passed in the context of Cold War-era fears and suspicions of infiltrating Soviet and communist spies and sympathizers within American institutions and federal government.  Anticommunist sentiment was associated at the time with McCarthyism in the U.S., led by an administration aiming to push for selective immigration to preserve national security.  Since then, there have been very few cases where similar powers were cited in deportation proceedings under the Act.  Its current use would certainly be difficult to defend in the courts.

While some search warrants may be related to an ongoing campus vandalism investigation, few of the campus police seizures have actually resulted in charges being laid.  Indeed, without just cause I would argue that such search and seizure practices by campus police endanger free speech and the civil liberties of those affected university students.  As was the case in the 1930s Nazi Germany, today it’s students, but tomorrow it could be anyone; including those living, studying and working legally in the U.S.  This new reality certainly meets the definition of a police state.

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Mar 25

Electorate in Both U.S. and Canada Appears to be Very Disgruntled. I Wonder Why?

by bcurry

George H. W. Bush Senior, going into his bid for a second term, was frequently told that it’s all about the economy stupid!  The U.S. economy went into a recession in 1990; the unemployment rate rose from 5.9% in 1989 to a high of 7.8% in mid-1991; and the debt percentage of total gross domestic product (GDP) rose from 39.4% in 1989 to almost 46.8% in 1992.  By the presidential election in1992, many conservative Republicans’ support of Bush had waned for a variety of reasons, including raising taxes and cutting defense spending.  Americans were less concerned with his foreign policy successes (e.g. Persian Gulf War victory over Iraq) than with the nation’s deteriorating economic situation.  Thus, despite having once been a relatively popular president, he lost to Bill Clinton.

Today, the primary issue among voters continues to be the economy, and especially the high rate of inflation and high interest rates affecting people’s mortgages and the cost of loans in general.  Yes, there is low unemployment and more people are employed today than anytime since the pandemic.  However, unfortunately for Joe Biden, the average American is struggling on a daily basis to make ends meet, especially since average wages have not kept up with increasing inflation over the last few years.  Many people and businesses are still recovering from the pandemic, which has created a real sense of insecurity and a general malaise within the population.

Taking all of this into account, and that people are not happen with another Trump vs. Biden election, there is a general mistrust with governance.  The same can be said for in Canada where you have a Prime Minister, Justin Trudeau, and a party that has been in power for over nine years.  The opposition is continuously harpooning about the high cost of inflation and high interest rates that average Canadians are facing.  There is also a good amount of discord over the government’s intention to raise the national carbon tax this coming April, despite it being only one element of several policies aimed at tackling climate change.  However, right now, climate change has taken a back seat to the economy.  A federal election will very likely be called next year in Canada, and all the government can hope for is that the economy will improve and inflation will come down.

Overall, these are tough times for governing parties.  There appear to be no win-win situations.  Government deficits have been climbing steadily, partly in earlier response to the pandemic, with no end in sight.  Wars overseas in the Ukraine and Middle East are not helping.  Funds are being allocated to support the Ukraine against Russia, Israel’s military and the plight of Palestinian refugees in Gaza.  The situation has placed both the U.S. and Canada in a difficult situation given the evolving humanitarian crisis in both conflicts.  In terms of foreign policy, domestically it is a no-win and highly emotive situation for both governments in terms of supporting one side or the other particularly in the Israeli-Palestinian conflict.

In addition, stability in the energy markets is constantly under threat as a result of the sanctions against Russian oil and natural gas exports and the general unstable situation in the Middle East.  As a result, there has been a measurable direct or indirect impact in the form of rising costs for gas and heating fuel in North America.

There is little doubt that we live uncertain times.  There is also little doubt that voters are concerned with the cost of living and continuing hard economic times.  This bleak outlook does not bode well for President Biden and Prime Minister Trudeau.  The question then becomes whether their political opponents can take advantage of the situation?  I guess time will tell.

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Oct 6

Speakers of U.S. House of Representatives and Canada’s House of Commons Resign

by bcurry

Two interesting events happened in the last couple of weeks.  Both speakers of a Congressional and a Parliamentary body were forced to resign in unprecedented ways. 

On September 26th, Anthony Rota stepped down as House of Commons Speaker after inviting a former Ukrainian soldier who fought in a Nazi division to Canada’s Parliament during the recent visit of Ukrainian President Volodymyr Zelenskyy who delivered an address in the House of Commons.  Prime Minister Justin Trudeau made it clear that the Speaker’s mistake was deeply embarrassing for the House, Canada and the Ukraine.  Rota, a Liberal Party Member of Parliament, was pressured by his party and members of the opposition to immediately resign, something very rare in Canada’s parliamentary history.

In the U.S., the House of Representatives voted on October 3rd to oust Kevin McCarthy, a, a vivid rebuke of his leadership and an escalation of the civil strife within the Republican Party.  The so-called band of eight Republicans who rejected McCarthy, most of whom are Republican Party member, as Speaker of the House.  It was the first such removal in American history members of the hard-right Freedom Caucus, were opposed by 210 of their fellow GOP representatives, all of whom voted to keep the Speaker in place.  McCarthy had aligned with the Democrats in the House to pass legislation allowing the government to continue operating until next November, thus preventing an imminent shutdown of federal government services and much of its employee compensation.  What is particularly disconcerting is the current provision which allows any one Representative to call a vote in order to replace a sitting Speaker, as was done in this case by Representative Matt Gaetz of Florida.

In the case of the Canadian Parliament, the Speaker’s resignation was unfortunate but was quickly resolved through the quick selection and appointment this week by House members of a new Speaker, one Greg Fergus who became Canada’s first Black Canadian Speaker of the House of Commons.  His independent role as Speaker, although he is a Liberal Party Member of Parliament, is to maintain order in the House and direct the daily operations of his office.

On the other hand, the House of Representatives has yet to select a new Speaker from the majority Republican Party.  The Speaker’s removal has only deepened the body’s dysfunction, leaving the House rudderless so-to-speak, and with no clear path to effective leadership.  Although a government shutdown was narrowly avoided over the past weekend, another looms next month.  Future assistance to Ukraine as it fends off a Russian invasion is also at stake.  McCarthy has declared that he will not run again for the position and has not endorsed a would-be successor, leaving Republicans to scramble to find a viable candidate.  There are a lot of concerns among experts about the actions of the fringe elements of both parties, and their potential negative impact on the House functioning and the possibility for compromise agreements as to budgets and the functioning of the state.  They have pointed to the troubled tenures of previous Republican speakers of the House such as John A. Boehner and Paul D. Ryan, both of whom struggled with stiff resistance from their right flank.  Indeed, a fundamental role of the House Speaker is to attempt to pursue conciliatory measures between the two parties through negotiations and on-going discussions.  Unfortunately, it appears that the parties themselves have grown weaker because they are increasingly controlled by those on the fringes, as exemplified in this case.  Moderates in both parties have expressed their concerns, but apparently to no avail. 

The increasing failure of Congress to function in an orderly fashion and to represent the interests of all Americans has placed democracy in a dangerous situation.  The on-going haphazard saga of the annual Congressional budgetary review and votes is clearly unworkable under these circumstances.  The sooner that the House can select a new Speaker, the sooner the House can hopefully get back to democratic governance.  Let’s hope for the sake of all Americans and democracy that this will happen in a quick and sensible manner!

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Apr 26

Why the Fraser Institute’s Interpretation of Public Sector Stats in Canada is Misleading

by bcurry

When we think of government employment and operations, we tend to think of employees working away in government offices — i.e. some huge hidden bureaucracy.  Back in June 2015, the Fraser Institute released a report which noted that the public sector share of employment starting in 1992, declined from 26.1 percent to 22.3 percent by 2003.  Subsequently, it also noted that there had been an increase, with a peak of 24.4 percent reached in 2010 and then a slight decline to 24.1 percent by 2013.  As a result, persons looking at the report would immediately use such information to highlight that one out of four jobs in Canada are in government at different levels: federal, provincial and local.  The fact of the matter is that this perception is somewhat misleading depending on which definition of public sector activity one is using.  They then allude to U.S. stats which suggest that one in eight jobs is in the public sector. This comparison is misleading given the differences in public sector definitions between the two countries and the various activities which employ greater private sector resources in the U.S., such as in higher education and health care.

In Canada, besides public administration, public sector entities are found in the form of numerous government business enterprises (GBEs), active in various industries such as utilities (e.g., hydroelectricity), retail trade (e.g., liquor boards and cannabis stores), transportation (e.g., ports), finance (e.g., deposit insurance), leasing (e.g., convention centres) and recreation (e.g., nature parks).  For example, because of universal health care and health insurance in Canada, the vast majority of medical services are publicly funded, and health practitioners are deemed to be part of the public sector.  In addition, colleges and universities are primarily publicly funded.

Subsequently, the large size of the general government in Canada is primarily because of extensive social protection programs combined with the universal health care and public education systems.  In 2022, Statistics Canada reported that the expenses in 2021 of the 6,135 public sector units (as defined by the agency) amounted to 48.6% of the total gross domestic product (GDP), with consolidated general government expenses alone representing 44.9% of GDP.  These stats would place Canada’s public sector share of the economy in the same allocation as countries such as Great Britain, Sweden and Norway for example.

There is no doubt that the nature and range of industries in which the public sector is involved underlines its economic breadth and influence in Canada.  The public sector represents many workers who provide valuable services to Canadians, including health workers, teachers, firefighters, paramedics, hydro workers, park wardens, police officers, inspectorates, public transit workers, etc., etc.  As one can see, many public sector workers are employed in what are deemed as essential services.  To maintain these services, there has to be an adequate number of experienced and qualified public sector workers.  Wages and benefits have to be competitive with those offered in the private sector in order to attract and retain skilled workers, especially in the current period of labour shortages.

On the one hand, the Fraser Institute is known to be a pro-business entity and tends to take a more anti-government stance in its research and analysis.  On the other hand, in the most recent report released by Statistics Canada in 2021, it noted that public sector expenses (48.6% of GDP) saw a significant reduction from their unprecedented high levels reported in 2020 (58.8% of GDP).  Governments at all levels are attempting to reduce their annual debt levels, back to levels found prior to the pandemic.  It can be anticipated that public sector employment is most likely going to decline in post-pandemic years, particularly with the reduced need for certain services and programs introduced by governments during the pandemic.

To imply that public sector employment in Canada is somehow out of whack, is to ignore the importance of the role of governments in the country at all levels.  Given the scope of the Canadian public sector, the numbers are entirely reasonable and acceptable.

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Dec 21

Differences in Governance Systems in Canada and the U.S. Do Matter

by bcurry

Back in high school and in university we were introduced to the two systems of governance in Canada, Great Britain and the U.S.  Canada like the U.K is a parliamentary system, with the normal three levels of governance: the legislature, executive and judiciary components.  As a republic, the U.S. has a similar constitutional makeup, although how each of the members is selected varies greatly.  In Canada, the Prime Minister is selected by which party gets the most seats in the House of Commons.  The PM also sits in Parliament.  Sometimes, if a party doesn’t win the majority of seats to form a government, the party with the most seats can negotiate with another party to form what is referred to as a “minority government”.  Minority governments are tricky because they can be toppled by a “confidence vote” on critical motions such as a budget.  Canada currently has a minority government as a result of the last federal election in September 2021. The PM currently selects the members to Cabinet who are normally members of Parliament, unlike in the U.S. where the President selects Cabinet members who do not sit in Congress.

In the U.S., citizens vote separately for the President and for candidates to the House of Representatives and the Senate, often in what are referred to as “mid-term elections”.  Unlike in Canada where there are mainly five official parties, the U.S. only has two parties: the Democrats and the Republicans.  As a result, Congress can often see a split in control between the House of Representatives and the Senate, as is the case now with the Republicans controlling the House and the Democrats the Senate.  In addition, there are those members who are independents.  The Canadian Senate on the other hand is made up of appointed members (by the Governor General on the PM’s recommendation) who now do not have any party affiliation.  Compared to the American Senate, the Canadian Senate does not have much power, especially when it comes to financial matters such as the budget.  It examines bills referred from the House and can recommend amendments which the governing party can accept or ignore in the final reading before parliament.  While committee hearings before the U.S. Senate can make or break policies or federal appointments, the Canadian Senate’s committees can simply provide reports on selected subjects which the Government most often ignores and get shelved.

Appointments to the Supreme Court are a whole other matter.  In the U.S., such appointments are highly politicized and depend on which party the President and Senate members come from.  In recent years, the majority of Supreme Court justices have been appointed under Republican regimes, resulting in a prevalent conservative court.  In Canada, on the other hand, Supreme Court appointments are more or less apolitical and made to reflect regional, ethnic and affirmative action considerations.  Frankly, given recent decisions by the American Supreme Court (e.g. Roe vs. Wade), I must say that I prefer the more independent Canadian version when it comes to appointing jurists.

There will always be debates over which system is better.  The fact of the matter is that both have their benefits and flaws.  One major concern with the American system is how the President is elected and the role of the “electoral college”.  For example, in the case of Donald Trump, he had smaller percentage of the popular vote than Hillary Clinton and yet won the election.  In both countries, it is especially important to win certain urban and rural areas in order to be politically successful.  For this reason, parties target certain key states in the U.S. and certain key provinces in Canada.  One major difference is how candidates in the election process are funded.  In the U.S. there is no end to the hundreds of millions of dollars that candidates can gather from such sources as Super PACs (political action committees).  For example, this year’s midterm election was expected to set a new spending record, with over $9 billion being raised. This is significantly higher than the previous record of $7 billion, which was set in 2018.  In Canada, contributions to candidates are far less and are regulated by controls enforced by an independent agency, namely Elections Canada.

To change the current governance systems in both countries would require significant constitutional amendments which don’t appear to be on the horizon anytime soon.  I would suggest, maybe just maybe, the time is right for governments to re-examine the governance processes in light of our histories and the continuing changes in both societies.

Canada Conservative Political Groups Elections Federal Election Federal Government Federal Government Judicial System Presidential Election 2020 The Senate U.S. Primaries US US Politics

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