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    The Morning Brief - 11.28.18

    Posted by Bruce Carson on Nov 29, 2018 7:53:57 AM


    Economy—Issues Management—Storm Clouds Continue to Gather: Alberta Oil Patch Update; GM Oshawa Plant Closure, What to do?


    Issues Management

    It has been written in this space numerous times over the past few years that most governments can deal with one crisis quite effectively and perhaps even two simultaneously if one is major and the other not so much, but put a third major crisis on the table and government, regardless of how competent, has difficulty coping. It’s more complicated than Whack-a-Mole, but not by much.

    During the NAFTA 2 negotiations the Trudeau government was well served by the team established to address issues as they arose. However other matters that emerged during the negotiation period seemed to be handled with insufficient preparation in question period. Damage control or issues management by government has a rhythm to it and if followed strictly and carefully, government should be able to shut down the problem within one or two news cycles. While the 24 hour news cycle is the enemy of those trying to stomp out issues, it can also be their friend as new issues crop up on almost a daily basis.

    The rhythm starts with gathering all of the facts; this is the crucial stage as unless all the bad stuff is known, one is operating with at least one hand tied behind one’s back. Once all of the facts are known then the next phase involves determining whether the matter is a crisis or just one of many minor issues sent by the issue Gods to trouble issue managers. If it is a full scale crisis then one looks for solutions; solutions which can be implemented immediately that won’t make the problem worse.

    Once a course of action is agreed upon then it is vital that those carrying out the strategy do not waiver or improvise, adding more information which drags the matter into a new light for another couple of days instead of stifling it and snuffing it out.

    The Trudeau government right now faces two major issues that must be dealt with immediately without making them worse and an issue which is simmering right now but may reach the boiling point before Friday. The two major issues are the price differential in the oil patch caused by lack of access of oil to tidewater. The second is the announced closure by General Motors of its plant in Oshawa.

    The third matter which is simmering is the signing of the USMCA scheduled for Friday, November 30, at the G-20 meeting in Argentina. There are still unresolved issues with the text which have to be dealt with before it is signed and then the other issue is who will sign it and where. Hovering over this discussion could be feelings that GM with its plant closures in the U.S. and Canada is gaming the new system and the USMCA will not stand in the way of what GM wants to do. Finally the steel and aluminum tariffs remain in place when it was anticipated by Canada and Mexico that these would be lifted by the time of the signing ceremony and incidentally is the side-letter on autos agreed to by the parties, which protects Canada and Mexico from punishing tariffs on autos and auto parts ready for signature? This is a lot to juggle and get right between now and Friday.

    Leaving the signing of the USMCA and those attendant pressures aside, the Alberta oil patch issue was front and center in Calgary yesterday with Finance Minister Morneau speaking at the Chamber of Commerce. Today and tomorrow, Alberta Premier Notley will be giving speeches in Ottawa and Toronto on the issues facing her province. The closing of the Oshawa GM plant took a new turn yesterday as Unifor leader Gerry Diaz thrust himself into the conversation vowing to fight to keep the plant open. 

    Alberta Oil Patch Update; Finance Minister Morneau at the Calgary Chamber of Commerce

    For the second time in six days Calgarians took to the streets, this time outside the Telus Convention Centre, demanding that a pipeline be built. The organizers have promised to do this with every Liberal cabinet minister who comes to Calgary to give a speech, at least until work begins again on the Trans Mountain line.

    Going back to issues management, a Calgary audience does not want another “I feel your pain” speech or be told of the issues that the federal government is dealing with in Oshawa. As Calgary Mayor Nenshi said yesterday Albertans have dealt with an Oshawa closing every month since the oil price downturn started and the price differential started to grow. They also don’t want to hear that the federal government understands the situation and that’s why it bought the existing Trans Mountain pipeline and the right to twin it. All Albertans want to know is that there is an opportunity to build the pipeline but the federal government has ordered work to be stopped until the two consultations are completed. Albertans want it built!

    So for the second time in six days a member of the federal cabinet addressed a gathering at an event hosted by the Calgary Chamber of Commerce and had nothing concrete to offer. The best that can be said is that the oil by rail door may be slightly open.

    Today and tomorrow, Premier Notley in Ottawa and Toronto will give the speech that Morneau should have given, offering some ideas of interim measures to address the supply glut and getting oil by rail to tidewater.

    Will there be a response from the federal government and will meetings with ministers take place on the same scale as they did yesterday when some members of Trudeau’s cabinet met with Unifor’s Gerry Diaz to discuss Oshawa?

    GM Oshawa Plant Closure; What to do Next?

    Before Diaz arrived on Parliament Hill yesterday it seemed that Prime Minister Trudeau, his ministers and Ontario Premier Doug Ford had settled on a narrative that would address the needs of those whose jobs would be coming to an end when the plant runs out of product to produce at the end of next year. There was general agreement on extending EI payments and retraining course eligibility for those laid off. Innovation Minister Bains in an interview with Vassy Kapelos said that if GM had proposals to bring forward in relation to the Oshawa plant, the government would listen. It seemed both the federal and provincial governments were resigned to the closure and were concentrating on the needs of the affected workers.

    This was not the plan that Diaz wanted to discuss. While we don’t know what was said in the meeting with Trudeau and his ministers, we know from Diaz that as far as he is concerned that Oshawa plant will not close anytime soon. His theory is that if Oshawa goes, all of GM’s holdings in Canada will follow. He wants to see a joint Canada-U.S. solution which would see the U.S. with Canada’s support put tariffs on cars built in Mexico and exported to the U.S. This he believes will stop GM from implementing its global restructuring at least in Canada and the U.S.

    This he argues will get GM’s attention and no doubt would get the attention of the new president of Mexico as well.

    Diaz said that the prime minister did not see the Oshawa plant closing as a fait accompli. Diaz did not set out what he believed were next steps for Trudeau, except that the prime minister was going to call President Trump.

    The prime minister did not attend question period yesterday but answers by Innovation Minister Bains on the plant closure reflected the previously agreed upon talking points about helping workers with EI and retraining.

    The issue for today for the Liberals, with the prime minister in question period will be whether to change to a more combative stance with GM to satisfy Diaz or maintain the existing lines dealing with helping displaced workers. Once that change is made, it will be difficult to walk it back.

    And in addition to questions on the plant closure, no doubt there will be questions that arise out of Notley’s speech to the Canadian Club in Ottawa.

    To Come 

    --today, Premier Notley is in Ottawa to address the Canadian Club

    --today, at the request of Conservative Party leader Scheer, leaders from the NDP. Green Party and Bloc will meet this afternoon in the prime minister’s office to discuss measures to support French Canadians

    --November 29, PBO releases a report entitled “Costing Irregular Migration across Canada’s Southern Border”

    --November 29, Premier Notley is in Toronto to address the Board of Trade

    --November 30, GDP numbers for September and the third quarter to be released

    --November 30-December 1, G-20 meeting in Argentina at which the USMCA is to be signed

    --December 3-13, COP 24 convenes in Poland

    --December 3, OPEC meeting to deal with output

    --December 5, Bank of Canada deals with interest rates--bc

    Topics: Morning Brief

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