Paramilitary, guerrilla groups threaten coal mining unions in Colombia

Staff Writer | January 14, 2024 | 

Colombian authorities from Norte de Santander meet with coal miners. (Image by the Norte de Santander Provincial Government, X.)

Coal mining unions operating in northern Colombia demanded protection from local, regional and national authorities as they are a permanent target of armed groups demanding bribes.


During a meeting with civilian, military and police authorities, the Coal Mining Association (Asocarbonor), the Association of Cokers of Norte de Santander (Asocoquizadores) and the Sardinata Miners Association (Asomisar) noted that 70,000 families have been affected by the threatening actions of the illegal groups. They say that in addition to coal miners and truck drivers carrying ore, company executives, and people working in hotels, restaurants, and oil and gas operations, among others, have been victimized.

There are about 100 coal mines in the area, particularly in the Sardinata municipality, whose economy relies on the production of the fossil fuel.

“We are being intimidated by people with small and large guns who operate in areas that have traditionally been occupied by the Armed Revolutionary Forces of Colombia (FARC) and the National Liberation Army (ELN). This has prevented us from returning to work in the new year,” the miners said during the meeting. “This not only affects the finances of thousands of families that rely on mining for work but also pushes us to break contractual obligations, which has devastating effects on the economy.”

In addition to asking for protection from the authorities, the unions called on the armed groups to stop extorsioning them.

Coal, together with oil, is one of Colombia’s main sources of revenue.

 

Statistics Canada says manufacturing and wholesale sales rose in November

The Canadian Press

Statistics Canada says manufacturing sales rose 1.2 per cent to $71.7 billion in November, helped by higher sales in the chemical subsector as well as gains in primary metal and machinery groups. 

Sales of chemical products rose 6.6 per cent, while sales of primary metal products gained 4.0 per cent and machinery sales increased 4.3 per cent for the month. Sales of motor vehicles fell 4.0 per cent.

In constant dollars, manufacturing sales rose 1.6 per cent in November.

In a separate report, Statistics Canada said wholesale sales, excluding petroleum, petroleum products and other hydrocarbons and excluding oilseed and grain sales, grew 0.9 per cent to $82.5 billion in November.

Wholesale sales rose in four of the seven subsectors, led by the motor vehicle and motor vehicle parts and accessories subsector which gained 3.3 per cent and the building material and supplies subsector which climbed 1.8 per cent.

In volume terms, wholesale sales, excluding petroleum, petroleum products and other hydrocarbons and excluding oilseed and grain, rose 0.6 per cent in November.

Statistics Canada began including the oilseed and grain industry group as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from its monthly analysis until historical data are available for proper monthly and annual analysis.

This report by The Canadian Press was first published Jan. 15, 2024.

 

Bone-chilling cold is testing power grids from Texas to Alberta

Brian Eckhouse and Naureen S. Malik, Bloomberg News

An Arctic blast that’s sweeping through North America is heightening the risk of blackouts. With more cold still in the forecast, electric grids from Texas to Alberta will continue to be under strain and some power prices have surged. 

In Texas, which is facing one of its biggest grid tests since deadly winter blackouts in 2021, power demand on Sunday from homes and businesses is expected to hit a winter record of more than 75 gigawatts — and then later in the week possibly set an all-time record. The state’s grid operator asked people to conserve electricity use for Monday morning and warned of a power capacity shortage between 7 a.m and 9 a.m., “which causes a risk” of an energy emergency event, according to a notice Sunday evening. 

Still, state officials have said they aren’t anticipating a grid emergency.

In Washington State and Alberta — where more than one million people saw Calgary temperatures at noon local time below minus 20F (-29C) — utilities and grid operators have been making pleas for consumers to conserve energy.

Already, more than 250,000 U.S. homes and businesses were without power Sunday late afternoon, with outages concentrated in Oregon, Michigan and Pennsylvania, according to PowerOutage.us, a website that tracks utility outages.

Cold can hobble electric grids in two ways. First, the teeth-chattering temperatures prompt people to crank up their heat, sparking a demand surge. At the same time, the extreme conditions can also mean that energy supplies get disrupted as freezing weather can cause temporary shut downs or production curbs.

A natural-gas storage facility that can serve 25 per cent of the peak energy needs of the Pacific Northwest shut down unexpectedly on Saturday, triggering conservation alerts from local utilities. The facility was in the process of coming back online Sunday, according to a notice.

POWER PRICES JUMP

On Friday, U.S. natural gas futures settled at the highest in more than two months amid the weather concerns. One bright note is that U.S. inventories are well stocked as demand for the heating fuel had been dampened by relatively mild winter weather until now.

Power prices, meanwhile, are surging in some places. 

The U.S. Pacific Northwest had the highest prices Sunday, with spot power trading in the afternoon around US$1,000 a megawatt-hour near Seattle and Portland, Oregon. That’s about ten times higher than the day-ahead price for the same time, according to data from the California Independent System Operator.

For Texas — during the tightest period on Monday — the average grid price of electricity on the state grid rose to $1,072 a megawatt hour for supplies secured in the day-ahead market Sunday, from about $79 a day earlier, Ercot data show.

Texas is a particular focus because the current blast is one of the few freezes to hit the state since an extremely cold system in February 2021 killed more than 200 people and left millions blacked out for days amid failures in the state’s power and natural gas infrastructure.

The Electric Reliability Council of Texas, or Ercot as the state’s main grid operator is known, had previously set a wintertime demand record of 74.5 gigawatts during a cold snap in December 2022. It recorded an all-time high of 85.5 gigawatts in August, which will likely be challenged by this week’s freeze.

The Texas grid will be most strained on Monday and Tuesday mornings, when recent estimates showed demand just matching or exceeding supplies starting around 7 a.m. These forecasts are volatile. Power usage is currently expected to climb to almost 83.6 gigawatts on Jan. 15 and then to an all-time high of 85.9 gigawatts the next day. 

Texas, known for its blazing hot summers, has never set an all-time demand record in winter.

“Anytime we get these cold shots in Texas, the electric grid is going to be in heightened alert,” said Tyler Roys, a senior meteorologist at AccuWeather Inc. “What makes it trickier this week is there’s going to be ice across central and eastern Texas.” He expects the ice to start Sunday afternoon and extend into at least midday Monday.

Texans awoke Sunday to freezing temperatures that promises to drive up power demand through at least Tuesday. The Dallas area is projected to see highs of about 20F on Sunday, 25F on Monday and 28F on Tuesday, before rebounding to 43F on Wednesday, according to the U.S. National Weather Service.

Ahead of winter, Texas Governor Greg Abbott and Ercot Chief Executive Officer Pablo Vegas said reforms in the aftermath of the 2021 freeze would ensure sufficient electric supply. But some critics of the operator have contended the reforms tacked on billions of dollars in costs without meaningfully boosting reliability.

Power generators “have never been as prepared for a winter event as they are today, including having a secondary source of fuel available,” Abbott said on Friday. 

With assistance from Elizabeth Elkin, Ruth Liao and Mark Chediak.

 

Citigroup to cut 20,000 roles in Fraser's bid to boost returns

Todd Gillespie, Bloomberg News

Jan 12, 2024

Citigroup Inc. said it will eliminate 20,000 roles in a move that will save it as much as US$2.5 billion as part of chief executive officer Jane Fraser’s quest to boost the Wall Street giant’s lagging returns.

Firmwide expenses are expected to drop to a range of $51 billion to $53 billion over the medium-term, Citigroup said, without clarifying the exact timeframe. In the meantime, though, the firm expects to incur as much as $1 billion in expenses tied to severance payments and Fraser’s broader overhaul of the bank. 

Costs for the year should be in the range of $53.5 billion to $53.8 billion — a decrease from the $56.4 billion the firm spent in 2023. 

The outlook for cost savings helped mask a disappointing fourth quarter, when Citigroup’s fixed-income traders turned in their worst performance in five years as the rates and currencies business was stung by a slump in client activity in the final weeks of the year. Revenue from the business slumped 25 per cent to $2.6 billion.

“The fourth quarter was very disappointing,” Fraser said in the statement. “Given how far we are down the path of our simplification and divestitures, 2024 will be a turning point.”

Fraser in September initiated the biggest restructuring of Citigroup in decades as she seeks to improve the bank’s returns. She has said the moves will allow the bank to eliminate bureaucracy, slimming it down from 13 management layers to just eight. 

Fraser has also said the overhaul would help her boost a key measure of profitability known as return on tangible common equity to at least 11 per cent by 2027 at the latest. She reiterated that medium-term guidance on Friday. 

The 20,000 roles that Citigroup will eliminate include jobs cut as part of the restructuring as well as dismissals that would have occurred anyway.

Citigroup’s quarterly results swung to a $1.8 billion loss, or $1.16 a share. That included a number of one-time items, including a $780 million charge tied to the severance the bank offered to employees impacted by the restructuring. The company also recorded a $1.7 billion charge to operating expenses in the quarter to cover a special assessment to replenish the Federal Deposit Insurance Corp.’s coffers after a series of bank collapses last year.

 

Civilian staff for Canadian military bases in Ontario and Quebec on strike over wages

The Canadian Press

Nearly 500 civilian workers on Canadian military bases in Ontario and Quebec began a strike today over wages and job security.

The Public Service Alliance of Canada and the Union of National Defence Employees say members hit the picket lines as of 6:30 a.m. Eastern time this morning.

The strike will affect Canadian Forces bases in Kingston, Ont., Montreal, Ottawa, and other cities.

PSAC national president Chris Aylward says members are taking job action to get the collective agreement that they deserve.

The union says employees in the Non-Public Funds agency are paid significantly less than workers doing similar jobs in the core federal public service, and they have been without a contract since 2022

The workers deliver food, recreation, community and financial planning services to military members and veterans. 

This report by The Canadian Press was first published Jan. 15, 2024.

Bombardier scores win with U.S. army after being shut out of Canada bid

The Canadian Press

The U.S. army says Bombardier Inc. has won a contract to supply up to three Global 6500 business jets for conversion into a spy plane prototype.

The announcement comes barely a month after the Canadian government rejected Bombardier’s pitch for an open bid to replace the air force’s aging patrol planes, with the contract going to American rival Boeing Co. in a sole-source deal.

The Montreal-based jet maker has touted the Global 6500 as the basis for a fully-fledged surveillance aircraft it hopes to start rolling off the line in the early 2030s.

Bombardier’s agreement with the Pentagon includes one jet with options for two more, which would be installed with signals intelligence equipment, screen banks and other electronic systems under a new aerial reconnaissance program known as HADES.

Figures were not disclosed, but the nearly $75-million list price of a new Global 6500 means a three-plane purchase could top $224 million, with delivery of the first set for Oct. 1.

In November, Defence Minister Bill Blair called Boeing’s P-8A Poseidon planes “the only choice” for Canada, given their submarine-hunting technology, ready availability and interoperability with NATO allies' military gear.

This report by The Canadian Press was first published Jan. 10, 2024.

 

Majority of Canadians support banning non-compete clauses: Angus Reid survey

Jordan Fleguel , BNN Bloomberg

Just over half of Canadians support a ban on non-compete clauses in employment contracts, according to the newly released results from a survey on the issue.

Non-compete clauses, commonly found in competitive industries such as technology and finance, bar employees from working for their employer’s competitors for a period of time after leaving the firm.

The practice has been criticised for impeding labour mobility, and a survey conducted by the Angus Reid Institute has found that 52 per cent of Canadians would support banning non-compete clauses altogether. 

Ontario is currently the only province that restricts the inclusion of non-compete clauses in work contracts, after passing legislation that banned all forms of the practice in 2021.

Angus Reid’s survey, published Thursday, found that 27 per cent of respondents said they oppose a ban on non-compete clauses, while 20 per cent of people said they weren’t sure.

“Advocates for non-compete clauses suggest that they are needed to prevent competitors from gaining an unfair advantage when hiring recently departed employees from rivals,” Angus Reid said in a press release on the findings.

“This argument is more popular among Canadians older than 54 but does not rise higher than 32 per cent among any age and gender grouping.”

Support for banning non-compete clauses nationwide was highest in Ontario and British Columbia, the survey found.

METHODOLOGY

The Angus Reid Institute conducted an online survey from Aug. 25-29, 2023, among a representative randomized sample of 2,023 Canadian adults who are members of Angus Reid Forum.

For comparison purposes only, a probability sample of this size would carry a margin of error of +/- 2 percentage points, 19 times out of 20. Discrepancies in or between totals are due to rounding. The survey was self-commissioned and paid for by ARI

Review your rights before signing paperwork during a layoff: Employment lawyers

Jan. 11, 2024.

 

CANADA

Severe weather events threaten to drive insurance premiums higher: experts

Rosa Saba, The Canadian Press

The escalating risk of severe weather events is one of several factors putting pressure on insurance companies and potentially increasing premiums for consumers, experts say.

Extreme weather losses, inflation and reinsurance costs have all helped drive insurance premiums higher in recent years, said Craig Stewart, the Insurance Bureau of Canada’s vice-president of climate change and federal issues.

Severe weather caused more than $3.1 billion in insured damage in 2023, the bureau said, making it the fourth-worst year on record for insured losses.

"This grim statistic highlights the financial costs of a changing climate to insurers, governments and taxpayers," the bureau said in a release.

The Okanagan and Shuswap-area wildfires in B.C. cost $720 million in insured damage, the bureau said, while severe summer storms in Ontario and spring ice storms in Ontario and Quebec cost a combined $670 million.

Rising building costs for materials and labour have also contributed to higher premiums over time, Stewart said.

"As we build more and more homes to address the affordability crisis, ironically, what we're seeing is that materials and labour costs are going up," he said — "because of inflation, but also because of increased demand."

Globally, 2023 was the hottest year on record, according to European climate agency Copernicus.

Extreme weather events like wildfires and storm surge flooding tend to result in a higher volume of insurance claims, Ratehub.ca vice-president of insurance Matt Hands said in a statement.

"Climate change, along with the natural disasters, such as wildfires and flooding, continue to hit the insurance industry hard," he said. "The insurance providers will need to balance these losses on their books, potentially leading to a rise in premiums for everyone."

Canada is warming faster than the rest of the world and its insured losses are also growing faster than the rest of the world, said Nadja Dreff, senior vice-president and head of Canadian insurance at Morningstar DBRS.

Despite this, the underwriting profitability of Canadian insurers has held up pretty well in recent years, she said, "especially if you compare it to some of the global reinsurance players who have been absorbing the brunt of these extreme weather losses."

But alongside severe weather losses and mounting costs to rebuild, there’s a third major factor influencing premiums: reinsurance, which is essentially insurance for insurers.

Canada is a higher-risk area for reinsurers than many other parts of the world, Stewart said.

For some regions, particularly Alberta and B.C., "reinsurers have raised their premiums for insurers operating in those areas," he said.

"Insurers have absorbed part of that cost. But they also have passed on those increased costs to home insurance policies."

In response to a "drastic rise" in reinsurance prices in 2023, insurers raised their thresholds for reinsurance to rein in costs, Dreff said.

"It may differ company to company, but in general, what we've seen is that insurers have been buying less reinsurance," Dreff said. "In other words, reinsurance kicks in at higher levels of claims."

That means the insurers would have to absorb more of their claims — a trade-off with potential consequences that depend on how the year goes, she said.

According to a Morningstar DBRS outlook report published in December, premiums rose in 2022 and 2023 in the low-single digits.

Dreff expects premiums will continue to be pushed higher this year.

However, higher interest rates have improved investment outcomes, helping partially mitigate higher costs that might otherwise be passed on to consumers, she said.

Insurance costs are just one piece of a larger puzzle: the rising cost of living that Canadians have been grappling with for several years.

Climate risk, population growth and macroeconomic conditions support premium rate increases, but "they may prove to be more and more difficult to execute over time," according to the Morningstar DBRS report.

"After years of rapidly increasing prices on a range of goods and services, consumers are finding it more difficult to absorb additional costs, including that of insurance, amid their growing concerns related to the cost of living."

No one event drives up premiums, said Stewart, noting that a survey of insurers after the summer fires found no change in availability or affordability of wildfire insurance coverage. Instead, insurance pricing is driven by trends over time, he said.

Fire insurance is a core part of home coverage and highly unlikely to become unavailable, he said.

But escalating losses and revised risk modelling mean that many Canadians can’t access flood insurance, the bureau said in its report

The government has committed to a national flood insurance program, but progress on that has stalled, said Stewart.

"We are urging the federal government to put that program in place as soon as possible."

This report by The Canadian Press was first published Jan. 12, 2024.

CANADA

Housing crunch prompts efforts to stabilize immigration levels: federal ministers

Nojoud Al Mallees, The Canadian Press

Now Showing

Housing Minister Sean Fraser and Immigration Minister Marc Miller say the federal government is working to stabilize the number of people entering the country every year as housing pressures mount.

The Canadian Press reported Thursday on internal documents from 2022 showing Immigration Department employees warned their deputy minister that a major increase in immigration could affect access to housing and services.

The federal government ultimately decided to increase the number of permanent residents Canada welcomes each year to 500,000 in 2025 — nearly double the amount from 2015.

In a joint statement Friday, the Liberal ministers are defending the decision to boost immigration levels, arguing immigration supported Canada's post-pandemic recovery. 

"Had we not increased immigration post-pandemic, the economy would have shrunk. Businesses facing an acute labour shortage would have closed. The social services Canadians needed, including in health care, would be further delayed or even more difficult to access," the statement said. 

But Miller and Fraser also say housing pressures have pushed the government to adjust its immigration targets as well as temporary resident admissions.

Miller decided to level out the number of permanent residents coming to Canada at 500,000 for 2026, the same number as 2025. 

The Liberal government also made changes to the international student program to address issues around fraud and the cost-of-living challenges. 

The Liberal ministers say the federal government is ready to take more action if post-secondary institutions don't ensure international students' housing needs can be met. 

"We expect learning institutions to only accept the number of students that they are able to house, or assist in finding off-campus housing. We are prepared to take necessary measures — including significantly limiting visas — to ensure that designated learning institutions provide adequate and sufficient student supports as part of the academic experience," the statement said. 

Conservative Leader Pierre Poilievre, who has been heavily critical of the Liberals over their housing policies, said Friday that the government should calibrate its immigration policy to match the pace of homebuilding in the country.

"Common sense Conservatives will get back to an approach of immigration that invites a number of people that we can house, employ and care for in our health care system," Poilievre said. "Obviously, you need to build homes if you're going to bring in people. And right now, we're not building enough homes."

This report by The Canadian Press was first published Jan. 12, 2024.

Government was warned two years ago high immigration could affect housing costs

Nojoud Al Mallees , The Canadian Press

Federal public servants warned the government two years ago that large increases to immigration could affect housing affordability and services, internal documents show. 

Documents obtained by The Canadian Press through an access-to-information request show Immigration, Refugees and Citizenship Canada analyzed the potential effects immigration would have on the economy, housing and services, as it prepared its immigration targets for 2023 to 2025. 

The deputy minister, among others, was warned in 2022 that housing construction had not kept up with the pace of population growth.

"In Canada, population growth has exceeded the growth in available housing units," one slide deck reads. 

“As the federal authority charged with managing immigration, IRCC policy-makers must understand the misalignment between population growth and housing supply, and how permanent and temporary immigration shapes population growth."

Immigration accounts for nearly all population growth in Canada, given the country's aging demographics. 

The federal government ultimately decided to increase the number of permanent residents Canada welcomes each year to 500,000 in 2025, a decision that drew considerable attention and scrutiny. It means in 2025, Canada will welcome nearly twice as many permanent residents as it did in 2015.

The document reveals federal public servants were well aware of the pressures high population growth would have on housing and services. 

"Rapid increases put pressure on health care and affordable housing," public servants warned. "Settlement and resettlement service providers are expressing short-term strain due to labour market conditions, increased levels and the Afghanistan and Ukraine initiatives."

Housing affordability has now become a political liability for the Liberal government. The Conservatives have gained considerable momentum over the last year as the party pounces on affordability issues, while avoiding the issue of immigration in particular. These pressures have forced the Liberal government to refocus its efforts on housing policy and begin to address the spike in international students with new rules.

Recent data shows Canada’s pace of population growth continues to set records as the country brings in a historic number of temporary residents as well, largely through international student and temporary foreign worker programs.

The country’s population grew by more than 430,000 during the third quarter of 2023, marking the fastest pace of population growth in any quarter since 1957.

Experts spanning from Bay Street to academic institutions have warned that Canada's strong population growth is eroding housing affordability, as demand outpaces supply. 

The Bank of Canada has offered similar analysis. Deputy governor Toni Gravelle delivered a speech in December warning that strong population growth is pushing rents and home prices upward. 

Public opinion polls also show Canadians are increasingly concerned about the pressure immigration is putting on services, infrastructure and housing, leading to waning support for high immigration. 

The Liberal government has defended its immigration policy decisions, arguing that immigrants help bring about economic prosperity and help with the country's demographics as the population ages. 

However, amid the heightened scrutiny of the Liberal government's immigration policy, Immigration Minister Marc Miller levelled out the annual target at 500,000 permanent residents for 2026. 

The documents from 2022 note that Canada's immigration targets have exceeded the recommendations of some experts, including the Century Initiative, an organization that advocates for growing the country's population to 100 million by the end of the century.

However, attention is now shifting from these targets to the steep rise in non-permanent residents. Between July and October, about three-quarters of Canada's population growth came from temporary residents, including international students and temporary foreign workers. 

That trend is raising alarms about the increase in businesses' reliance on low-wage migrant workers and the luring of international student by shady post-secondary institutions. 

During a news conference on Thursday, Finance Minister Chrystia Freeland said immigration is an economic and social strength for the country, but acknowledged housing needs to keep pace. 

"For immigration to work as a Canadian economic strategy, we have to make sure housing supply keeps up," Freeland said. "And I do think we have to be sure that our immigration system is working as intended."

Freeland said there's work to do when it comes to the international student program specifically and referenced some of the policy changes the immigration minister brought in to tighten up the program's rules. 

Mikal Skuterud, an economics professor at the University of Waterloo who specializes in immigration policy, says the federal government appears to have "lost control" of temporary migration flows. 

Unlike the annual targets for permanent residents, the number of temporary residents is dictated by demand for migrant workers and international students. 

He also notes there is a link between the targets for permanent residents and the flow of temporary residents.

"To the extent that you increase permanent numbers, and migrants realize the way you get a PR is to come here as a temporary resident ... then migrants are incentivized to kind of come and try their luck," he said.  

Skuterud, who has been a vocal critic of the federal government's immigration policy, says the benefits of high immigration have been exaggerated by the Liberals. 

He said that starting around 2015, when the Liberal government was first elected, a narrative developed in Canada that "immigration was kind of a solution to Canada's economic growth problems." 

And while the professor says that narrative is one that people like to believe, he notes higher immigration does little when it comes to increasing living standards, as measured by real GDP per capita. 

Public servants at IRCC are in agreement, the released documents suggest. 

"Increasing the working age population can have a positive impact on gross domestic product, but little effect on GDP per capita," public servants noted. 

This report by The Canadian Press was first published Jan. 11, 2024.

 

Canadians give Trudeau low marks for housing affordability in poll

Laura Dhillon Kane, Bloomberg News

Two in three Canadians say Prime Minister Justin Trudeau’s government is doing a poor job of introducing policies to make housing affordable, according to a new poll.

The survey by Nanos Research for Bloomberg News suggests a flurry of announcements from Trudeau’s Liberals in the past six months haven’t resonated yet with Canadians, who are struggling with rental inflation at a 40-year high and ballooning mortgage interest costs.

Trudeau appointed a new housing minister, Sean Fraser, in July amid sagging poll numbers. Since then, the government has unveiled hundreds of millions of dollars for cities to speed up building dense housing, cut the federal sales tax on new rental construction and introduced new measures to  discourage short-term rentals such as those provided on Airbnb Inc.

“The fact that only two per cent score the Liberal housing initiatives as very good and another six per cent good indicates there are few that have confidence in these policies to make housing more affordable,” pollster Nik Nanos said.

Residents of Ontario and the western provinces were more likely to say that the Trudeau government was doing a poor or very poor job on housing affordability than Atlantic Canada or Quebec. Those under 55 were also more likely to give the Liberals poor marks than older Canadians.

Nanos also asked respondents to rank solutions that would make housing more affordable. More than a quarter said building more public housing was the most important solution, while about 17 per cent each put reducing immigration and cutting mortgage rates at the top of the list.

Fewer Canadians ranked the government’s existing policies — such as speeding up local approvals on development — as the top way to make housing more affordable.

The poll didn’t ask about Fraser’s December proposal to create a catalog of preapproved designs to accelerate homebuilding, inspired by a similar postwar program. It also didn’t assess the level of blame Canadians assign to provincial or municipal governments, which hold significant levers on housing supply.

The survey is the latest indication that the high cost of living is harming Trudeau politically. Most polls put the Conservative Party ahead of Trudeau’s Liberals by about 10 points, though a federal election isn’t expected before 2025.

Nanos polled 1,006 Canadians by phone and online between Dec. 27 and Dec. 29. The findings are considered accurate within 3.1 percentage points, 19 times out of 20.

Trudeau botched immigration surge, Canada's top bank economists say

Danielle Bochove, Bloomberg News

Canada’s current immigration policy — among the most open in the world — is now causing economic damage and needs to be reconsidered, according the country’s top economists.

Prime Minister Justin Trudeau’s decision to dramatically increase immigration — and allow a flood of temporary workers and international students — without providing proper support has created a laundry list of economic problems, including higher inflation and weak productivity, chief economists at Canada’s biggest banks said Thursday during a wide-ranging panel discussion in Toronto.

“Frankly I’m surprised we screwed it up because we sit in such a privileged position in Canada,” Beata Caranci, chief economist at Toronto Dominion Bank, told a packed audience at an Economic Club of Canada event. 

Unlike many other countries, including the U.S., Canada is not dealing with poorly controlled flows of migrants across its land borders and has had time to think about the implications of its policies, Caranci said. “We designed our own policy, we put it in place, we implemented it, and we still screwed it up.”

Canada accepted about 455,000 new permanent residents in the year to Oct. 1 while bringing in more than 800,000 non-permanent residents, a category that includes temporary workers, foreign students and refugees. With a population growth rate of 3.2 per cent, it’s growing faster than any Group of Seven nation, China or India.

While there are annual targets for permanent residents, there is no cap on international-student permits and the government has made it easier for employers to hire temporary foreign workers

. 

‘POPULATION TRAP’

“I’ll put it bluntly: We’ve fallen into the population trap,” said Stéfane Marion, chief economist at National Bank of Canada. An increase in the standard of living is no longer possible because “you don’t have enough savings to stabilize your capital to labor ratio.”

Faced with a backlash over housing costs, Trudeau has acknowledged a need for changes. His immigration minister, Marc Miller, has pledged to make it harder for colleges to boost foreign enrollment without providing adequate housing or services. Still, the government is under pressure to maintain high immigration levels as older workers retire and the fertility rate falls.

While the federal government is trying to encourage more rental housing construction along the way, “the numbers just don’t add up,” said Avery Shenfeld, chief economist at CIBC Capital Markets. “I’m a bit surprised that the government is moving fairly slowly on this. I think there’s some urgency to bring these numbers of students and temporary workers into better balance with the arithmetic of our homebuilding strategy, because the two are working at cross-purposes.”

The problem is worsened in provinces that have restricted funding to post-secondary institutions, forcing the schools to make up the lost revenue with international students, Shenfeld said. The result is community colleges with “branch plants” full of international students in Toronto office buildings, he said. “It’s just really a tuition-making machine.”

None of the economists suggested Canada should shift to a restrictive immigration policy, rather that it be more deliberate about matching the inflow of people to what the country can handle.

Canada has tended to rely on immigration to stanch complaints from businesses about their difficulty hiring, several economists said. While that’s understandable, “in a way we made it too easy for businesses to hire,” said Jean-Francois Perrault, chief economist at Bank of Nova Scotia. He pointed to the U.S., which has much tougher immigration policies and higher productivity. “Immigration policy made it cheaper to bring people in rather than investing.”

Disastrously weak productivity and housing affordability are the biggest challenges facing the Canadian economy, said Douglas Porter, Bank of Montreal’s chief economist, and strong population growth is clearly a factor for both.

There are other factors at play, of course. A lack of innovation and business investment have weighed on Canadian productivity for decades, said Craig Wright, chief economist at Royal Bank of Canada. He said soaring rents aren’t just caused by immigration pressure — high house prices and interest rates are pushing permanent residents out of home ownership into rental housing.

A Desjardins Securities Inc. report this week found that if Canada were to shut the door to temporary residents right now, real gross domestic product would drop and the recession would last twice as long. 

That leaves the Bank of Canada in a difficult spot and explains why it will have to cut rates in 2024, Caranci said, even though housing costs are still forcing inflation above its two per cent target. She expects the central bank will start to shift its communication — and remind markets that inflation is about breadth and they are not solely responsible for shelter inflation.

“If they don’t do that, you absolutely get into a recession scenario and potentially a hard recession scenario,” she said.

With assistance from Erik Hertzberg and Laura Dhillon Kane