Life in Canada

Canada Changed the Election Rules So It Could Negotiate the TPP

The Canadian government found itself in a tough spot when Prime Minister Stephen Harper called an election right in the middle of Trans-Pacific Partnership talks, a hugely controversial international trade deal that’s so far been discussed in secret.

Past election rules would have made it difficult for the government to continue negotiations until a vote was held, since the “caretaker” phase of elections the government is now in prevent it from doing things like signing a deal that could result in an overhaul of the country’s copyright law.

So the government again changed rules.

For the first time, the Privy Council Office (PCO) released updated guidelines that describe how government officials should act during the caretaker period. Why now? Well, rather suspiciously, the document contains a section seemingly tailor-made to allow the government to continue trade negotiations during an election—and according to a representative from the PCO, the new guidelines were indeed crafted especially for this election, and for just the TPP.
“It has been clear for months that the TPP negotiations could overlap with Canada's fixed election date, and that questions would arise,” Raymond Rivet, director of PCO corporate and media affairs, wrote Motherboard in an email. “As such, it was decided to add some clarity in this edition of the guidelines.”

“It is definitely a tricky position for Canadian negotiators to be in"

Notably, while the government is free to continue negotiations, the PCO rules state that a treaty cannot be ratified until after the final vote has been counted on election night. What this means is that, whatever happens during negotiations, when a government is formed after the election, whether or not the TPP stands will be up to them. While all three major parties have come out in support of the agreement, they disagree on key details.

“It is definitely a tricky position for Canadian negotiators to be in,” Liberal member of parliament and party trade critic Chrystia Freeland said in an interview. “Being in a caretaker government puts them in a more complicated position.”
And the political stakes are high. If Harper comes out on top in negotiations, pundits believe it will cement his persona as a leader that’s strong on trade. NDP leader Tom Mulcair has resorted to calling the Prime Minister “weak” and “vulnerable” during talks.

When asked by reporters on Monday whether the government would sign a TPP deal during elections, Harper replied, “We will make sure, should there be a deal, we will get the best possible deal for this country,” according to a transcript provided to Motherboard by a Conservative Party spokesperson.

But ratification, although prevented by the PCO’s election rules, is actually the last step before a treaty can go into effect, according to University of Ottawa policy researcher Michael Geist. Before that, there’s signing, which the rules don’t explicitly ban. But it’s unclear whether even that can be done.V
“Once the agreement is signed, it’s not that you’re bound by anything; you’re only bound by a treaty once you’ve ratified it,” said Geist. “But signing signifies that you largely agree with the agreement and have an intention to ratify. It’s sometimes described as the difference between becoming engaged and becoming married.”

The Canadian economy shrank again in the second quarter, putting the country in recession for the first time since the financial crisis, which of course accoring to our Governmant did not happen with no bailout and now with a plunge in oil prices taking a toll as business investment fell and inventory accumulation slowed.

Gross domestic product contracted at an annualized 0.5 percent rate in the second quarter, Statistics Canada said on Tuesday. That was better than forecast, though revisions showed the first quarter's contraction was steeper than first reported.

Two consecutive quarters of contraction are typically considered the textbook definition of a recession. The confirmation of a modest recession is likely to figure heavily into the election campaign as Canadians head to the polls next month.

Some economists and members of the Conservative government have argued that such a definition is too narrow and that other economic measures should be taken into account, such as unemployment, which has remained relatively subdued.


Encouragingly, the economy grew in June for the first time in six months, suggesting the recession may be short-lived. While the price of oil and other natural resources have weakened since June, many expect non-commodity Canadian exports to benefit from a strengthening U.S. economy.


The Canadian dollar pared losses after the data. [CAD/]
"Despite the technical recession materializing, it does look like the Canadian economy is jumping back, is rebounding strongly in the third quarter," said Derek Burleton, deputy chief economist at Toronto-Dominion Bank.

The last time Canada was in recession was in 2008-09, when the U.S. housing market meltdown triggered a global credit crisis.
In the second quarter, Canadian business investment sank by an annualized 7.9 percent as spending on non-residential structures, machinery and equipment fell. Inventory accumulation slowed by C$4.91 billion ($3.74 billion).

Activity in the goods-producing industries declined 2 percent on a quarterly basis, with a 4.5 percent drop in the mining, quarrying and oil and gas extraction component. But a rebound in that same sector helped the economy perk up by a better-than-expected 0.5 percent in June.

Following the data, traders saw a slightly lower probability the central bank will cut rates again next week. The Bank of Canada has cut interest rates twice this year in an effort to revive the economy. BOCWATCH
"They'll wait and see how the third quarter's unfolding to get more information," said Burleton. "But it does look like the weakness in the first half is in the rear view mirror."