Canada in 2021: A Look at the Top Issues of the Year

Michael Kovrig with his wife, Vina Nadjibulla, upon arriving at Pearson International Airport in Toronto on Sept. 25, 2021, after being released from prison in China. The Canadian Press/Frank Gunn

Here’s a rundown of some of the main issues of the year that passed as we enter 2022.

Pandemic, Policies, and Division

The low severity of the Omicron variant despite its high transmissibility gave cause for optimism on the cusp of turning the year after the initial scare of its discovery in South Africa in November.

Nevertheless, when considering the year as a whole, the more than 15,000 COVID-19 deaths in 2020 almost doubled in 2021, with Canada closing the year with over 30,000 deaths.

Vaccinations, which began to arrive in early December 2020, became more widely available as criticism of the federal government in its pace of obtaining vaccine supply and of the provinces in their progress on vaccine distribution continued. By mid-year, there was enough to administer full doses for all who wanted them.

A woman receives a COVID-19 vaccine in Montreal on March 1, 2021. The Canadian Press/Ryan Remiorz

In tandem with the public health crisis, pandemic policies dominated every aspect of life.

As cases began to ease, some restrictions would be lifted, only for more to be brought back periodically as cases crept up again.

The restrictions were partly driven by concerns over inadequate hospital capacity and projections of rising cases. A study by the Fraser Institute in late 2021 reported that, despite spending more on health care than most other high-income countries with universal coverage, Canada’s health system ranks poorly compared to other OECD countries when it comes to hospital bed availability, number of doctors, wait times, and medical technologies.

Good news emerged for Canadian snowbirds late in the year as the United States finally opened up its border to vaccinated travellers in November, months after Canada opened its border for Americans.

In a controversial move, federal and provincial governments introduced vaccine mandates encompassing many essential facets of life, including employment and transportation, as well as entertainment and leisure. This came despite comments by federal government officials in 2020 that vaccines likely wouldn’t be mandatory.

During the federal election, the issue of vaccine mandates and other pandemic policies became campaign issues, with some parties denouncing certain segments of the population holding different views, as polls showed growing divisions in the country.

A Leger poll in September showed that more than three-quarters of respondents who are vaccinated against COVID-19 said they felt a growing animosity toward those who are unvaccinated. Another survey in the same month by Maru Public Opinion showed that 77 percent of Canadians find the country more divided than it was before the Sept. 20 election.

The year ended with more pandemic restrictions being introduced due to higher case counts, although hospitalization and death cases were low compared to other times during the year.

Economy

From lockdowns to reopenings, the Canadian economy continued to heal in 2021. In some ways, such as in terms of regaining jobs lost, the economy returned to pre-pandemic norms. It saw good momentum until Omicron hit, and now, due to renewed restrictions imposed on the public, economists are dialling back their estimates for early 2022 growth. However, one Bay Street bank estimates that the economy grew 4.5 percent in 2021.

An oil pump jack pumps oil in a field near Calgary in a file photo. Todd Korol/Reuters

The mining/oil and gas industry has shown the strongest growth over the past 12 months, at 18.6 percent, according to the bank. A vital part of Canada’s economic growth comes from exports, and oil and gas is one of the country’s most important products. With the price of U.S. benchmark oil rising from below US$50 a barrel to over US$80 for a short period, Canadian oil producers finally had some good news.

Canada’s labour market has seen a remarkable bounce-back in jobs recovered; however, it still faces about 1 million job vacancies. Businesses are finding it hard to hire qualified workers, and analysts say there are significant mismatches between what employers are looking for and what skills job-seekers have to offer. The result is trending in the direction of higher wage costs for less qualified people, which results in lower productivity.

Election, Legislation, and Provincial Relations

The biggest political event of the year, the Sept. 20 election, brought little change to the composition of the House of Commons, while giving the Liberals another minority government and new faces in some government departments.

But the campaign trail and wedge issues brought more lasting trends in Canadian politics.

A private member’s bill crafted by Tory MP Cathay Wagantall in the last Parliament to ban sex-selective abortion was used by the Liberals to depict Conservatives as wanting to repeal Canada’s abortion laws. It soon became evident that the Conservative leadership wanted to distance the party from the issue and indeed any abortion-related matters. Still, a handful of Conservative MPs have voiced concerns at events held outside Parliament about the Liberals’ plan to strip pro-life pregnancy centres of their charitable status.

In the new Parliament, the Conservatives also initiated the fast tracking of the conversion therapy bill, which had been used by the Liberals to paint Tory MPs as supporters of the practice. In the previous Parliament, some Tory MPs had asked for clarifications to be added to the bill’s definitions to ensure conversations between parents and children aren’t criminalized, and Justice Minister David Lametti had said expanding the ban to adults would not be constitutional. However, the bill was expanded in scope to include adults and was passed in the new Parliament without debate or discussions in either the House or the Senate.

A person holds an Elections Canada voter information card after receiving it in the mail on Aug. 31, 2021. Sean Kilpatrick/The Canadian Press

The Conservatives also backed down from their initial opposition to a requirement for MPs to present COVID-19 vaccination proof before being allowed into the House of Commons, despite concerns that the requirement infringes on members’ parliamentary privileges.

After the election, the Liberals again avoided forming a coalition, choosing instead to reach agreements with different parties on a case-by-case basis to pass legislation introduced by their minority government. The Liberals and the NDP joined forces to pass a motion to continue hybrid sittings of the House, against the wishes of the opposition Conservatives and Bloc Québécois, who wanted in-person operations.

The push to reach net-zero emissions by 2050 accelerated in 2021 with a number of initiatives including federal legislation, such as Bill C-12 passed in June that sets five-year national emissions reduction targets. The Liberals announced a host of new climate change policy initiatives after winning the election, with more in the works for future years. They include an end to subsidies that help oil and gas companies expand outside the country by the end of 2022, and a plan announced by Environment Minister Stephen Guilbeault to mandate auto dealers to sell electric vehicles.

Federal pandemic aid continued in 2021, with the Liberal government getting the approval of Parliament—at 5 p.m. on Dec. 16, just before it recessed for the holidays—for another $7.4 billion, which was later revealed to actually cost $11.9 billion.

Among the most contested pieces of legislation was Bill C-10, introduced late in 2020 to regulate online streaming services. Opposition parties fiercely criticized the bill out of concern that it would result in regulating online content and curtail freedom of speech.

Bill C-10 died when Parliament was dissolved for the election. But the Liberals campaigned on reviving the proposed legislation, along with a host of other legislation intended to regulate speech, such as laws against “hate speech” online.

During the short period between the election and when Parliament resumed, the Liberals tabled a number of proposed pieces of legislation. One was Bill C-3, prompted by COVID-related protests at hospitals, which adds a Criminal Code offence for anyone who acts “with the intent to provoke a state of fear” to prevent someone from obtaining health services or to impede health professionals or their assistants from doing their jobs. Another was Bill C-22, which reduces mandatory minimum sentences for many drug and weapon offences, including certain violent gun crimes.

In December, the federal government issued a formal apology to those impacted by sexual misconduct in the Canadian Armed Forces. The scandal has seen a number of top brass expelled from their roles, with some facing charges through the courts.

In the same month, Ottawa allocated $40 billion to compensate First Nations children harmed by the situation on reserves, and also to reform the child-welfare system. The broader topic of the welfare of indigenous children was front and centre throughout the year, with the discovery of unmarked graves on sites of residential schools said to belong to children, while more detailed examinations are pending.

Prime Minister Justin Trudeau and Minister of Environment and Climate Change Steven Guilbeault hold a press conference at COP26 in Glasgow, Scotland, on Nov. 2, 2021. The Canadian Press/Sean Kilpatrick

The $40 billion spending is contingent on Ottawa and child-welfare advocates reaching an agreement over compensation the Canadian Human Rights Tribunal has ordered the federal government pay First Nations children and their parents or grandparents. The tribunal ruled that the children suffered as a result of the government’s inadequate funding for child and family services in their communities, saying it resulted in families being separated.

Provinces opposed to the federally imposed requirement for a carbon tax were dealt a heavy blow in March after the Supreme Court of Canada said Ottawa has the constitutional right to impose carbon prices on the provinces. This leaves Bill C-69, legislation imposing more regulation and review processes on major projects such as pipelines, as Alberta’s only legal challenge against the federal government.

In June, MPs passed a motion to acknowledge Quebec’s right to unilaterally change the Constitution to declare the province a nation and acknowledge French as its only official and common language. Saskatchewan Premier Scott Moe said in November that he wants a “nation within a nation” status recognition for his energy-rich province and to have more autonomy on issues such as taxation, after the federal government announced a plan to cap oil and gas emissions.

Federal politicians ended the year with the hot potato of Quebec’s Bill 21 banning the public display of religious symbols for government employees, after a teacher was removed from her position for wearing a hijab. Federal party leaders have declared their disdain for any discrimination, while at the same time being careful not to risk losing any Quebec votes.

Canada-China Relations

The good news of 2021 was the release of Michael Kovrig and Michael Spavor after close to three years of imprisonment in China—Beijing’s retaliation over the arrest of Huawei executive Meng Wanzhou in Vancouver on a U.S. extradition request in late 2018.

But little is known about what went on behind the scenes, why the United States relented on its request to have Meng extradited, and what the implications are for future attempts at hostage diplomacy by the Chinese Communist Party (CCP).

Huawei Technologies chief financial officer Meng Wanzhou returns to a court hearing following a lunch break in Vancouver on Aug. 18, 2021. Jennifer Gauthier/Reuters

In a year-end interview with Global News, Prime Minister Justin Trudeau said that the CCP plays democracies against one another to see them compete for access to economic opportunities in China, noting that like-minded countries should mount a “united effort” against Beijing.

These comments by Trudeau on communist China were stronger than any he had made in the past. Compared to the early days of the Liberal government, a soft stance became increasingly harder as Beijing arbitrarily detained Kovrig and Spavor and applied a host of import blockages, delivering major blows to certain sectors of Canada’s economy. Nevertheless, Trudeau and his cabinet abstained from voting on a House of Commons motion in February recognizing Beijing’s persecution of Uyghurs as genocide. Despite that, the motion passed with the unanimous approval of all MPs who voted.

David Mulroney, a former Canadian ambassador to China who has been critical of the Trudeau government’s approach to the Chinese regime, said the prime minister’s year-end comments are a start but cover only “about 5% of the problem,” while pointing out it’s not clear what Canada’s China policy is going into the new year.

“Now let’s hope he reflects this in policies, appointments, and partnerships that advance the national interest rather than imperil it. His target for 2022?” Mulroney said in a tweet.

Conservative Sen. Leo Housakos suggested in a tweet that if Trudeau “means what he says,” he should ban Huawei from Canada’s 5G network.

Canada is currently the only country in the Five Eyes intelligence alliance that hasn’t banned or planned to phase out Beijing-linked Huawei’s infrastructure from its 5G network.

Ottawa also still maintains its $256 million commitment to China’s Asian Infrastructure Investment Bank.

Canada decided to send athletes to the Beijing 2022 Winter Olympics but joined allies including the United States in a diplomatic boycott of the Games over China’s human rights abuses.

The issue of Beijing’s interference in Canada was highlighted during the federal election as MPs who were vocal against the CCP’s human rights and interference records found themselves targets of misinformation attacks, resulting in losing their seats in some cases.

“We believe that the timing and content of narratives indicate the likelihood of a coordinated influence operation targeting Chinese-Canadian voters,” says a Dec. 1 report by DisinfoWatch.

To the disappointment of China watchers in Canada and diaspora groups such as Alliance Canada Hong Kong, the Conservative Party said in December that it won’t be pushing for the resumption of the Canada-China special parliamentary committee. Despite that, foreign affairs critic Michael Chong insisted that his party still maintains its strong stance on China’s aggressions and human rights violations.

Canada ended the year without an ambassador to China after the incumbent Dominic Barton resigned from his post and joined Rio Tinto, an Australian multinational mining corporation with major operations in China. Prior to his diplomatic post, Barton was an executive with managing consulting firm McKinsey & Company who had dealt heavily with China. During his term as ambassador, he frequently called for closer ties between Canada and China.

Barton was the second consecutive ambassador to China who was on very friendly terms with the Chinese regime. The ambassador he succeeded, former Liberal MP John McCallum, was fired from his post for publicly stating his wish for Meng to be released.

Canada-US Relations

Despite predictions of a less turbulent Canada-U.S. relationship due to closer ideological alignment between the Biden administration and the Trudeau government, things got off to a rocky start after President Joe Biden cancelled the Keystone XL pipeline project on his first day in office.

U.S. President Joe Biden meets with Canadian Prime Minister Justin Trudeau in the Oval Office of the White House, Nov. 18, 2021, in Washington. AP Photo/Evan Vucci

Heads turned in Canada when Biden told Australian Prime Minister Scott Morrison in a one-on-one meeting in September that the United States “has no closer or more reliable ally than Australia.” That special status had previously been reserved for Canada.

Biden’s remarks came just days after the United States, Australia, and the UK announced a new alliance, dubbed AUKUS, centred on acquiring nuclear submarines, from which Canada was left out.

More thorny issues arose toward the end of the year as the Biden administration imposed a number of protectionist measures injurious to Canada’s economy.

These include U.S. duties on Canadian softwood lumber imports, as well as the Biden administration’s plan to provide US$12,500 in incentives for Americans to buy electric vehicles made in the United States with unionized labour, putting Canadian-made EVs at a disadvantage.

On the issue of Enbridge’s Line 5, which crosses into the United States and which Michigan wants shut down, some good news emerged for Canada in November when the White House said it was not considering shutting down the pipeline. Meanwhile, Enbridge’s legal challenge with Michigan continues making its way through the courts.

2021 also brought good news for Enbridge’s Line 3, which carries crude oil from Alberta to Wisconsin. The company cleared legal hurdles initiated by environmental activists and completed the rebuild of the pipeline.

Inflation and Cost of Living

Ending the year 2021 and going into 2022, inflation became one of the biggest concerns for Canadians as various factors led to persistent rapidly rising prices for food, shelter, and transportation.

Policy-makers were quick to call the phenomenon “transitory,” meaning that they expected it to dissipate before too long. Instead, for eight straight months, consumer prices rose faster than the Bank of Canada’s 3 percent upper limit for the inflation target range. The central bank’s primary responsibility is targeting 2 percent for inflation.

A women leaves a grocery store using plastic bags in Mississauga, Ont., in a file photo. The Canadian Press/Nathan Denette

Supply chain disruptions have been singled out as the primary reason for the higher inflation. Some economic pundits also point to the extraordinary support measures extended to households and businesses amid the pandemic, as well as rock-bottom interest rates that stimulated demand—especially for goods.

The carbon tax has been less widely discussed given the bigger supply-side bottlenecks, but it’s nevertheless an incremental cost for farms and other businesses that has contributed to rising prices. At the same time, oil supply proved inadequate and oil prices rose significantly, adding to the cost of producing many goods.

At the end of 2020, inflation was just 0.7 percent per annum, but November 2021’s inflation rate was 4.7 percent—the highest in 18 years.

Heading into 2022, the Bank of Canada is expected to start raising interest rates to cool inflation. The central bank expects inflation to fall to its target level by the end of the year.

Infrastructure

Devastating floods in B.C. in November led to the tragic loss of four lives, but fortunately nowhere near the hundreds of lives lost during the heat wave that hit the West in the summer. The two events caused similar levels of loss of livestock life, estimated at around 650,000 for each.

A man drives a boat down a flooded road in Chilliwack, B.C., on Nov. 16, 2021. The Canadian Press/Jonathan Hayward

November’s torrential rain caused landslides, demolished ailing dikes, and washed out highways, temporarily cutting off access to roads and the Port of Vancouver, Canada’s largest port. The weather event served as a reminder of Canada’s dire infrastructure needs.

A 2017 report by the Boston Consulting Group showed that Canada’s infrastructure investment trailed other OECD countries from the mid-1970s to 2005, and since then has been playing catch-up, with an estimated infrastructure deficit of between $110 billion and $270 billion.

Sports

By all accounts, soccer was a success story for Canada in 2021.

Canadian women have long been among the strongest in the world, and in 2021 they captured their biggest prize—an Olympic gold in Tokyo.

The Canadian men’s soccer team also held its own in its attempt to qualify for the Qatar 2022 World Cup. At a little over midway in the final qualification tournament, Canada currently sits in first place after beating mighty Mexico in Edmonton’s blistering cold of November. Qualification plays resume in late January.

Damian Warner reacts after winning the gold medal for the decathlon at the 2020 Summer Olympics in Tokyo on Aug. 5, 2021. AP Photo/Matthias Schrader

Leylah Fernandez became the latest Canadian sensation to make a splash on the world stage when she defeated three top-five players en route to the 2021 US Open final.

The Tokyo Olympics saw Canadian sprinter Andre de Grasse win gold in the 200 metres and bronze in the 100 metres. Damian Warner captured the heart of Canadians after winning gold in the decathlon and breaking an Olympic record. Swimmer Penny Oleksiak, 21, became Canada’s all-time most decorated Olympian after she won three medals at the Tokyo Olympics, bringing her total Olympic medal count to seven.

The Montreal Canadiens reached the Stanley Cup final, but what might be most remembered is how they came back to beat the heavily favoured Toronto Maple Leafs in the seventh game after losing three of the first four games.