Trudeau must reassess China relations

Significance The timing of the release just days after an inconclusive election in Canada appears coincidental but, with campaigning now over, the newly returned Liberal government under Prime Minister Justin Trudeau is preparing to re-evaluate its relationship with China. Impacts China will draw the conclusion that strongarm tactics, including arbitrary detention of Canadian citizens, will work against Ottawa. There is a risk that distrust of the Beijing government may spill over into abuse of Canada’s Chinese diaspora. The Biden administration will remind Trudeau of the favour done by not requiring Canada to hand Meng over to US authorities.

Significance The Liberal government of Prime Minister Justin Trudeau is beginning its third term with an emphasis on post-pandemic issues. While there was little new in the speech, which mostly signalled a continuation of existing policies, more action is likely on environmental and Indigenous reconciliation issues. Impacts New legislation will underpin the equality of the French language with English in federally regulated workplaces. Reform of the Broadcasting Act to cover online streaming services will require them to generate more Canadian content. Substantial increases in the foreign aid budget are likely, as are new diplomatic efforts in the Indo-Pacific region. Promises of renewed investment in defence are likely to be downgraded given the emphasis on social spending.


Significance Prime Minister Stephen Harper has resigned as leader of the Conservatives after his party took second place with 99 seats. The election results restore a degree of political stability by producing the second successive majority government in Canada, following the shaky minority Harper governments between 2004 and 2011. Impacts A Liberal government will likely boost infrastructure spending and tax high-wage earners. Trudeau may bring a more activist approach to the Paris climate talks, improving the chances of an international agreement. Harper's departure will likely see a moderation of Canada's support for Israel and a greater focus on multilateralism abroad.


Significance Meanwhile, China continues to pressure Canada to release detained Huawei executive Meng Wangzhou. Prime Minister Justin Trudeau’s Liberal government has yet to decide whether to allow Huawei to build Canada’s 5G network. Impacts Canadian exports to China will suffer further as Beijing takes additional retaliatory measures. Trade overtures to China are dead for now; the economy will remain oriented towards US, European and Trans-Pacific Partnership countries. Ericsson and Nokia are well-placed to solidify their position in the Canadian as well as other Western markets.


Subject Trudeau government's climate policy and politics. Significance Canada's Liberal government under Prime Minister Justin Trudeau is sending mixed signals on climate policy. Canada ratified the Paris climate accord on October 5, following the government's conditional decision on September 27 to approve a controversial natural gas liquefaction and export facility in British Columbia. Meanwhile, Trudeau has upset federal-provincial relations by announcing that a federally mandated price on carbon will come into effect by 2018. Impacts Canada's regulatory approach may create opportunities for firms focused on upstream emissions reductions. Blockage of export-orientated energy infrastructure could build political pressure for approval of internal projects. Provincial elections in 2018 could be an early indicator of the Trudeau government's ability to retain electoral support. China will be closely watching Trudeau's ability to push through pipeline projects, with diplomatic and trade implications.


Subject Pharmacare and drug pricing in Canada. Significance Canada’s federal government announced changes to pharmaceutical drug pricing regulations on August 9, aiming to lower prices and enhance transparency around confidential discounts and rebates offered to public and private buyers by drug firms. The changes show Prime Minister Justin Trudeau’s Liberal government preparing to push to implement recent recommendations for a national, single-payer system of public pharmacare after October’s election. Impacts International pharma firms will reduce their engagement with Canada’s market, launching fewer new drugs and reducing R&D. Canadian pharma firms may expand their offerings of generic drugs. Insurance companies will have to realign their business models to adjust to the emerging system of universal public coverage. If the Conservatives win the election, they are unlikely to continue with these healthcare reforms.


Significance Canada’s Liberal Prime Minister Justin Trudeau is preparing to welcome a more predictable and stable partner in Biden than outgoing Republican President Donald Trump. However, Biden is also expected quickly to cancel the Keystone XL pipeline, cutting another lifeline to Canada’s oil industry and creating some strain in Canada-US ties. Impacts Improved Canada-US ties will persist even if Trudeau loses the next federal election to Conservative Erin O’Toole. Canada will re-engage militarily with UN peacekeeping and NATO deployments. Trudeau will encourage Biden to end US prosecution of Meng Wanzhou, allowing Canada to release her; Biden may agree. Canada’s border with the United States will open in stages as COVID-19 recedes. Ottawa will push Biden to end ‘Buy American’ procurement policies, with little success.


Significance The authorities went ahead with the arrest of Nika Melia, leader of the opposition United National Movement (UNM), on February 23 even after the prime minister resigned in protest. Georgian Dream's actions have caused concern in Western capitals that approved its election victory when the opposition cried foul. Impacts The crisis is a setback for the government's stated plan to apply for EU membership in 2024. There is growing talk in the United States about individual sanctions targeting Ivanishvili and his associates. Political turmoil will harm hopes of foreign direct investment and the imminent Anaklia port tender.


Significance As many as a dozen lockdown parties are now alleged to have been held at Downing Street, significantly damaging Johnson’s support among the public and his Conservative Party. His position as party leader and prime minister is gravely threatened. Impacts Johnson’s domestic troubles, coupled with rising economic concerns, increase the chance of an agreement with the EU over Northern Ireland. Disillusionment with Johnson, opposition to net-zero and culture wars open the door for Nigel Farage’s Reform Party to revive its appeal. Rising inflation threatens to undermine consumer confidence and slow the economic recovery over the coming year.


Significance The assassination follows months of political turmoil and rising gang violence and comes just weeks before elections, scheduled for September 26. Interim Prime Minister Claude Joseph, who has taken charge of the country, said yesterday that measures were being taken “to guarantee the continuity of the state and to protect the nation". Impacts Further political assassinations would exacerbate unrest. The Dominican Republic has closed its border, fearing a migrant surge; the situation will bolster public support there for a border wall. The UN Security Council meets today and may authorise emergency action in Haiti; any substantial redeployment, however, would take time.


Significance His death was announced a day after the March 6 legislative election results showed the ruling Rally of Houphouetists for Democracy and Peace (RHDP) secured 137 out of 254 contested seats. Bakayoko’s death has opened up a race to succeed President Alassane Ouattara at the end of his third and final term in 2025. Impacts Ouattara will likely hand-pick his successor again and seek to spearhead the RHDP’s 2025 campaign. An emboldened opposition will seek to exploit the government’s failure to stem widening economic inequalities. A new prime minister will struggle to create jobs and alleviate poverty to stem public anger and boost his popularity.


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