Political Rises and Falls and Headline Makers in 2023: Year in Review

Prime Minister Justin Trudeau shakes hands with NDP Leader Jagmeet Singh as Conservative Leader Pierre Poilievre looks on, at an event in Ottawa on Jan. 30, 2023. The Canadian Press/Adrian Wyld

As attention finally shifted away from the pandemic, 2023 saw everything from the rise and fall of political fortunes, to consequential pieces of legislation being introduced or passed, to a heightened focus on Chinese interference, and much more.

Here’s a look at some of the major news items in the year.

Political Rises and Falls

The Conservatives ended 2023 with a wide margin in the polls against the governing Liberals as Pierre Poilievre continued to gain momentum in the spotlight, focusing on cost-of-living issues and policies centred on the economy.

On Dec. 24, polling aggregator 338Canada put the projection of seats for the Tories, if a federal election was called today, in majority territory at 191 compared to 83 for the Liberals.

Still, a lot can happen between now and when an election is actually called. This likely won’t be until 2025, thanks to the confidence-and-supply agreement between the Liberals and the NDP. However, the agreement is non-binding, and the possibility of a 2024 federal election can’t be completely ruled out.

Amid speculation about Prime Minister Justin Trudeau’s fortunes and whether he still has the backing of his party given the dwindling support, he has insisted that he is not going anywhere and that he still has “a lot to offer.”

For the NDP, passage of the dental care legislation and progress toward the pharmacare legislation in 2024 were considered wins, getting two of the priorities the fourth-place party wanted under the agreement.

Alberta Premier Danielle Smith gives the state of the province address in Edmonton on Oct. 25, 2023. The Canadian Press/Jason Fransson

At the provincial level, Danielle Smith’s United Conservative Party (UCP) held on to its majority in Alberta, while her renewed government pivoted from focusing on pandemic-policy reconciliation to boosting efforts to counter federal policies and legislation deemed to infringe on the province’s jurisdiction.

In Manitoba, the NDP defeated the incumbent Progressive Conservatives who had enjoyed two consecutive majority governments since the 2016 election.

Ontario saw the provincial NDP choose MPP Marti Stiles as its new leader, while the provincial Liberals chose Mississauga Mayor Bonnie Crombie to lead them into the next election.

In British Columbia, meanwhile, the newly rejuvenated Conservative Party of B.C. chose former cabinet member John Rustad as its leader. The party overtook the official opposition BC United (formerly the B.C. Liberals) in popular support in polls.

At the municipal level in Ontario, John Tory quit as mayor of Toronto in February amid revelations that he’d had an affair with a former staffer, ending his nine-year tenure as mayor of Canada’s largest city. Former Toronto city councillor and former NDP MP Olivia Chow took the position after winning the election in June.

Alert to Chinese Interference

The explosive intelligence leaks starting in late 2022 about the Chinese regime’s interference in Canada’s elections continued into 2023, with both the public and opposition parties demanding scrutiny to reveal the extent of the interference.

Among the reports were revelations that the Chinese Communist Party (CCP) funded at least 11 federal candidates in the 2019 election, and that Beijing favoured the Liberals to win the 2021 election and ran interference campaigns against certain Conservative candidates who had been outspoken against the CCP’s rights abuses. It was also revealed that the communist regime had supported individuals to donate to the Trudeau Foundation in anticipation of Justin Trudeau’s rise to power.

The reports also alleged that former Liberal MP Han Dong, former Ontario cabinet minister Michael Chan, and former Ontario Progressive Conservative MPP Vincent Ke had inappropriate ties to Beijing. All three deny the accusations. Nonetheless, Mr. Dong and Mr. Ke left their parties amid the allegations.

In May, Canada declared Chinese diplomat Zhao Wei persona non grata following revelations that he had been involved in targeting Conservative MP Michael Chong’s family members in Hong Kong.

David Johnston, Independent Special Rapporteur on Foreign Interference, appears as a witness at the Procedure and House Affairs Committee on Parliament Hill in Ottawa on June 6, 2023. Sean Kilpatrick/The Canadian Press

Former Ontario cabinet minister Michael Chan in a file photo. Becky Zhou/Epoch Times

The governing Liberals initially resisted calls by the opposition parties to initiate a public inquiry into China’s alleged widespread interference in Canada. Instead, the Liberals assigned former governor general David Johnston as special rapporteur to probe the issue.

Amid opposition calls for Mr. Johnston’s removal due to his past ties with the Trudeau family, the former governor general announced his resignation in June. Following his resignation, the government relented in its resistance to holding a public inquiry into foreign interference.

The inquiry is set to begin its initial hearings on Jan. 29, 2024. Already, it has come under criticism by diaspora human rights groups for giving Mr. Han and Mr. Chan full standing, which allows them access to classified information and the ability to question witnesses. The groups raised concerns that some Chinese diaspora may worry about their safety and be afraid to step up. As well, the Tories want the same standing in the inquiry as the government under the ruling Liberals, since the Conservative Party was the subject of Beijing’s interference. However, the judge overseeing the inquiry has denied that request and rejected the human rights group’s concerns.

The past year saw numerous other cases of Chinese interference against Canada’s interests, including the flying of spy balloons over the United States and Canada, aggressive interception of Canadian and U.S. planes and ships in the Pacific by Chinese jets, and more revelations about secret Chinese police stations operating on Canadian soil.

State of Foreign Affairs

The year ended with Foreign Affairs Minister Mélanie Joly rushing to issue a statement in late December clarifying that the government considers Hamas to be terrorists. The statement followed a widely circulated Dec. 18 video recording by a senior Hamas leader praising Canada for voting on Dec. 12 to adopt a U.N. resolution calling for “a sustainable ceasefire” in the Gaza Strip. Hamas leader Ghazi Hamad said the move was “in the right direction to our isolation [of] the fascist Israeli government globally.”

Canada’s vote diverged from its long-standing position of supporting Israel at the United Nations.

In September, Ottawa reaffirmed its “unwavering support” of Ukraine, noting it has committed $9.5 billion in aid to the country since Russia started the war in 2022.

In the Indo-Pacific, Canada has faced roadblocks in nurturing closer partnerships with China’s rivals, including India, which Ottawa had identified as a “critical partner” in its long-awaited strategy for the region launched in late 2022.

Relations between Ottawa and New Delhi took a nosedive in September after Mr. Trudeau accused India of having a role in the killing of a Sikh separatist leader on Canadian soil. Trade negotiations between the two nations were subsequently put on hold.

Prime Minister Justin Trudeau walks past Indian Prime Minister Narendra Modi as they take part in a wreath-laying ceremony at Raj Ghat, Mahatma Gandhi's cremation site, during the G20 Summit in New Delhi, on Sept. 10, 2023. The Canadian Press via AP/Sean Kilpatrick

Meanwhile, Canada is excluded from trade talks related to the Indo-Pacific Economic Framework, a 14-nation group announced by U.S. President Joe Biden in May 2022. The talks were announced during the Asia-Pacific Economic Cooperation summit in San Francisco in November.

Canada did, however, see its standing upgraded to a strategic partnership with the Association of Southeast Asian Nations (ASEAN) in early September.

But it remains shut out of the AUKUS security partnership, which includes Australia, the UK, and the United States. It’s also not a participant in the Quadrilateral Security Dialogue, a Pacific alliance made up of Australia, Japan, India, and the United States.

Parents Push Back on Gender Ideology

The year saw a big pushback on the teaching of sexuality and gender ideology in schools, which is now often weaved into daily learning. Some provincial legislation and protests have also pushed back on school policies stipulating that parents must not be told if a child is transitioning genders at school.

New Brunswick’s government made a landmark policy change effective in July saying parents must be informed and must give consent. Saskatchewan followed suit. While Ontario’s leadership expressed support for parental consent, it hasn’t followed with legislation, and many schools have continued with a policy of secrecy.

Many parents across the country kept their children home from school during Pride Month celebrations in June, and for many other LGBT days of celebration now peppered throughout the school year.

People hold signs during the 1 Million March for Children demonstration supporting parental rights, in Ottawa on Sept. 20, 2023. The Canadian Press/Sean Kilpatrick

In September, the 1 Million March 4 Children demonstration drew thousands of protesters and counter-protesters nationwide and gave momentum to an ongoing parental rights movement.

Religion in the Public Square

2023 saw continued attempts to curtail freedom of religion in the name of diversity and inclusion.

At the federal level, the Canadian Armed Forces implemented a new policy ahead of Remembrance Day stipulating that its chaplains cannot say prayers during public functions. The policy was framed around the principle of state neutrality and the more novel but ubiquitous concept of diversity and inclusion.

The policy, in essence, says that since prayer or religious symbols can offend non-believers, they shouldn’t be uttered or displayed. After pushback from within the ranks and from the Conservative Party, the military allowed prayers on Remembrance Day for this year and said it would review the policy.

For its part, the Canadian Human Rights Commission didn’t attack prayer but stated in a discussion paper that the Christmas holiday is an “obvious example” of “systemic religious discrimination” and blamed Canada’s “history of colonialism.”

The characterization drew a rebuke from the House of Commons, which voted unanimously on a motion to “denounce” the commission’s stance. A similar motion was also passed in the Quebec legislature.

A Canadian Forces chaplain conducts a memorial wreath dedication held by members of the United States Coast Guard International Ice Patrol at a Titanic memorial service in Halifax on April 15, 2010. The Canadian Press/Andrew Vaughan

But while Quebec defended the Christmas tradition, it shut down a religious event in a government-run venue, alleging that the organizing group is anti-abortion. The B.C.-based group has filed a lawsuit, alleging a violation of constitutional rights.

At the municipal level, in the name of diversity and inclusion, the City of Moncton decided to cancel the traditional lighting of the Jewish Menorah and erection of the nativity scene in front of city hall. Amid backlash, however, the city reversed course and allowed the displays.

$200 Billion for Climate Action

Budget 2023 included more than $80 billion in clean energy subsidies. When Environment Minister Steven Guilbeault announced the investment, he said it brings the federal spending on climate action to $200 billion.

Thus far, that investment has been heavily focused on the electric vehicle industry—a move some, including the International Monetary Fund, have questioned because of the quick pace of technological change.

Big-ticket spending on EVs includes over $20 billion on battery plants in Ontario and billions more proposed for one in Quebec. The plant being constructed in Windsor, Ont., received flak for planning to bring in some 1,600 foreign workers instead of hiring locals.

While subsidies may have a sunset date built in, history has shown that the government often ends up supporting subsidized industries indefinitely.

Environment Minister Steven Guilbeault outlines the details of his plan to eventually phase out the sale of gas-powered vehicles in Canada, in Toronto on Dec.19, 2023. The Canadian Press/Frank Gunn

The United States recently offered up US$369 billion in clean energy subsidies, and there’s been much talk in Canada about competing with that to attract green business.

But such competition will only fuel a “subsidy war that will make investors rich and distort trade in coming years,” economist and University of Calgary professor Jack Mintz told The Epoch Times.

Climate Policies and Jurisdictional Wars

Toward the end of 2023, Canada joined nearly 200 countries at the U.N. COP28 climate summit in Dubai to commit to transitioning away from oil, gas, and coal by 2050.

The year saw the oil- and gas-producing provinces of Alberta and Saskatchewan often clashing with the feds over their climate-change policies, which the two provinces see as an infringement on their jurisdictions.

Court decisions in 2023 favoured the provinces, with the Supreme Court of Canada saying the federal Impact Assessment Act—dubbed by former Alberta Premier Jason Kenney as the “no more pipelines act” due to the regulatory burden it placed on energy projects—is largely unconstitutional, while a Federal Court ruled that a cabinet order to classify plastic products as toxic was “unreasonable and unconstitutional.”

But the federal government is proceeding with further announcements on the oil and gas sector, including introducing caps on emissions from the oil and gas sector. Alberta and Saskatchewan say this amounts to limiting the production of natural resources, which is their jurisdiction.

(L–R) Alberta’s United Conservative Party Leader Danielle Smith in Calgary, Alta., on May 29, 2023. (The Canadian Press/Jeff McIntosh); Federal Minister of Environment and Climate Change Steven Guilbeault rises during question period in the House of Commons on Parliament Hill in Ottawa on May 17, 2023. (The Canadian Press/Spencer Colby); Saskatchewan Premier Scott Moe at a press conference at the provincial legislative building in Regina on Oct. 27, 2020. The Canadian Press/Michael Bell

In November, Ms. Smith’s government invoked the Sovereignty Act to oppose Ottawa’s new Clean Electricity Regulations, which require electrical grids to be net-zero by 2035, something the premier says will jeopardize grid reliability in Alberta.

Saskatchewan Premier Scott Moe, meanwhile, has said his province will be stopping federal carbon tax collections on home heating. This follows the feds’ refusal to provide the same carbon tax exemption they applied to home heating oil to natural gas. Since the latter is the primary fuel used for home heating in the Prairies, while heating oil is primarily used in the Atlantic provinces, the exemption is seen as being preferential and putting the other provinces at a disadvantage.

Also in December, the federal government announced a plan to mandate the exclusive sale of electric vehicles by 2035 in a phased approach. Ms. Smith has also opposed this measure, saying it’s not practical for Canada.

Cost-of-Living and Interest Rate Woes

Canadians continued to struggle with cost-of-living issues in 2023.

A November survey by Ipsos showed that half of Canadians say they are staying at home to save money, while a third say they are spending less time socializing with friends. About 20 percent said they are experiencing social isolation or loneliness because of higher interest rates and inflation.

Meanwhile, the rise in interest rates and mortgage payments is top of mind for many Canadians as their mortgages come up for renewal.

Interest rates in the broader economy take some of their cues from the Bank of Canada, which, after raising its policy rate by 4 percentage points (400 basis points) in 2022, began 2023 with one more hike of 25 basis points to 4.5 percent. The central bank said it would pause on further hikes to assess the impact of cumulative rate increases.

But this gave the green light for economic activity—most notably in the housing market—and the central bank felt it was necessary to raise rates again in June and July. The rate has been on hold at 5 percent since then.

A man checks an apple while shopping at a grocery store in Toronto in a file photo. Reuters/Carlos Osorio

Inflation has been on a downward trend throughout 2023, aside from a slight uptick in the summer. The effects of the bank’s aggressive rate hikes are slowing down economic activity, but the high interest rates were criticized for contributing to inflation through higher mortgage interest costs—which were growing at over 30 percent per annum.

But as 2023 wraps up, financial markets are in rally mode, believing there will be no more rate hikes. The Bank of Canada is maintaining a bias toward hiking, but markets expect 2024 will see multiple rate cuts as the economy continues to soften. Mortgage rates topped 6 percent after the two summer rate hikes, but started coming down in December.

State of the Economy

Inflation began the year at 5.9 percent—much higher than its 2 percent target and emblematic of an overheating economy that had not yet digested all the interest rate increases of 2022.

Expectations of a recession were high during 2023—on a per capita basis, one is underway in Canada—and the economy continued to slow, but unemployment didn’t spike. In fact, the labour market had significant labour shortages earlier in the year and wage gains are one component that continues to add to inflationary pressures. Negotiations between the Quebec government and several public-sector unions resumed after the Christmas break and an unlimited walkout may occur in the new year unless an agreement is reached.

One component the Bank of Canada singled out for keeping the economy afloat was the rate at which government spending grew. On the fiscal side, Ottawa’s 2022 fall fiscal update had projected a small surplus of $4.5 billion by 2027–28, but Budget 2023 in March saw spending shoot higher with deficits as far as the eye can see. The feds are contending with higher interest costs for their borrowings, which limits what they can spend on other priorities.

The Canadian dollar was generally weaker in 2023 than in 2022 due to the prospects of higher interest rates in the United States. But when the U.S. Federal Reserve Board chair in early December signalled the end of rate hikes, the loonie strengthened.

Finance Minister Chrystia Freeland rises during Question Period in Ottawa on Dec. 12, 2023 The Canadian Press/Adrian Wyld

Oil was very volatile in 2023, depending on how OPEC+’s production cuts were being digested. Oil had a remarkable run in the third quarter but an influx of supply from non-OPEC producers early in the fourth quarter briefly sent West Texas Intermediate below US$70 a barrel. Oil analysts expect more volatility in 2024. Canada’s energy stocks are roughly flat year-to-date after a stellar 2022.

The Housing Crisis

Canada is amid an ongoing housing crisis. With soaring immigration—a population of now 40 million—and high interest rates, housing affordability is as bad as it’s ever been. Experts call for purpose-built rental units to be prioritized, and Ottawa has been touting its deals to build housing with various municipalities in recent months. But supply can’t keep up with demand.

The feds have a goal of building 1.5 million new homes by 2031—a target that many say is unattainable.

The housing market is very quick to adjust to interest rates. Household debt levels continue to be extremely high. Thus, sentiment is souring in the housing market, especially in Ontario and British Columbia where house prices are the highest. Home prices and sales are on slight cooling trends nationally and are looking to stabilize.

Home builders also face challenges building homes due to high labour and input costs. In the spring, housing starts fell to their lowest level in three years. Ottawa decided to remove the GST for purpose-built rentals, a move welcomed by the industry.

A construction worker shingles the roof of a new home in a housing development in Ottawa in a file photo. The Canadian Press/Sean Kilpatrick

In the global context, the housing market is still among the most vulnerable due to elevated debt-to-income ratios and weak balance sheets. The Canadian consumer is not as healthy as its U.S. counterpart, for example.

Higher Immigration

The year saw the population grow at historic levels. In the third quarter of 2023 alone, the population grew over 430,000, something not seen since 1957.

Facing growing questions as to whether housing can keep up with the influx, one answer from the government has been that newcomers are needed to build the new homes. Data released by Ottawa in December shows that only 1.6 percent of new immigrants to Canada in 2022 were in the skilled trades category for construction.

Meanwhile, an increasing number of Canadians believe immigration levels are too high amid housing and health-care shortages.  A fall 2023 survey by Environics Institute for Survey Research showed that 44 percent of Canadians think immigration levels are too high, compared to 27 percent last year.

The Liberal government has maintained its immigration level targets which would see Canada welcoming 500,000 new permanent residents by 2025. Updated figures released in November this year indicate no new increase in 2026 with a target of 500,000.

This stabilization, and a recent measure making it harder for international students to come to Canada, suggests the government is starting to take stock of the housing dilemma it’s facing.

Internet Regulation

The Liberal government passed two major pieces of legislation to reshape the information environment this year.

Despite opposition from web giants Meta and Google to the Online News Act (Bill C-18), which compels them to compensate Canadian media outlets for news content linked on their platforms, the government pressed ahead.

In response, Meta decided to block news content for users in Canada on its platforms, while Google eventually reached a deal it was asking for. Under the agreement, Google will provide news outlets $100 million annually, which is $72 million less than the government was seeking through the act.

The government also revamped the Broadcasting Act through Bill C-11, to adapt legislation to the modern era of streaming platforms and to regulate the related services.

Under the legislation, the Canadian Radio-television and Telecommunications Commission (CRTC) is currently considering whether to impose a tax on online platforms to support flailing broadcasters.

Pascale St-Onge, Minister of Canadian Heritage, rises during Question Period on Parliament Hill in Ottawa, on Nov. 24, 2023. The Canadian Press/Spencer Colby

There have also been concerns the government wants to regulate podcast services, with those making over $10 million in revenue needing to register with the CRTC. But the CRTC says it won’t regulate podcasts and the information is being collected only if it becomes “needed” down the road.

The feds have yet to table their promised “online harms” legislation. Critics have expressed concern about the restrictions the pending legislation may place on freedom of speech.

Ballooning Federal Contracts

The year started with revelations that federal contracts awarded to consulting firm McKinsey have skyrocketed since the Liberals took power in 2015.

Given that then-head of the firm Dominic Barton had chaired the government’s Advisory Council on Economic Growth and was subsequently appointed as Canada’s ambassador to China, opposition parties raised concerns of favouritism toward McKinsey.

This led to Mr. Barton appearing before a House of Commons committee and declaring “I’m not a friend” of the prime minister, although he did mention attending a private dinner at the deputy prime minister’s residence.

Interest in the McKinsey file fizzled out, though it emerged that the company had served as a secretariat for the advisory council and had scored contracts with the Canada Infrastructure Bank after the council recommended the Crown corporation’s creation. “It seems a bit incestuous,” said Bloc Québécois MP Xavier Barsalou-Duval during a committee meeting.

It didn’t take long for the media and MPs to realize that it’s not only McKinsey that had benefited from increased federal contracts.

Analysis of government records shows that while McKinsey has been awarded over $117.6 million since 2015, Deloitte received almost $1.3 billion. PricewaterhouseCoopers over $966 million, Accenture over $325 million, KPMG over $326 million and Ernst & Young over $181 million.

The Parliament Buildings are seen over the Alexandra Bridge in Ottawa on Sept.7, 2022. The Canadian Press/Adrian Wyld

Then-Treasury Board president Mona Fortier defended the spending during a committee meeting, saying it’s justified by the government’s “very ambitious agenda.”

Aside from the issue of ballooning contracts and allegations of favouritism, the House of Commons also looked into whistleblower allegations of fraud and misconduct by companies involved in developing the ArriveCan application. Both the RCMP and the auditor general are investigating, hence Canadians can expect more insight into the matter in the coming year.

Taxpayers also lost nearly $300 million invested in Quebec COVID-19 vaccine-maker Medicago, which halted operations in February. Ottawa had earlier given the company $150 million in an advanced purchase agreement, and $173 million to build a plant and for R&D.

The government subsequently told Medicago it didn’t need the doses, and the World Health Organization also said Medicago’s vaccine would not receive emergency use approval due to tobacco giant Philip Morris International having a stake in the company. Of the $323 million invested, some $40 million has since been recovered from parent company Mitsubishi, and intellectual property and other assets are being transferred to a new Canadian company.

Speakers in the Spotlight

The Speaker of the House of Commons, who plays the role of referee as opposing politicians trade barbs and accusations, is not often at the centre of controversy.

But former Speaker Anthony Rota took a fall for having invited a World War II veteran of a Nazi unit in Ukraine to the House for the Ukrainian president’s address. Upon stepping down a few days later, on Sept. 27, Mr. Rota became the first Speaker to resign in 66 years.

House of Commons Speaker Greg Fergus appears as a witness at a meeting of the Standing Committee on Procedure and House Affairs on Parliament Hill in Ottawa on Dec. 11, 2023. The Canadian Press/Sean Kilpatrick

Liberal MP Greg Fergus was elected by MPs as the new Speaker, and it didn’t take long before he got in trouble. Speakers are supposed to be non-partisan, but Mr. Fergus made a partisan video message in the Speaker’s robe and within his chamber.

The Conservatives and the Bloc Québécois demanded his resignation, but the ruling Liberals and the NDP instead asked for disciplinary action and another apology, rather than removing Mr. Fergus from the Speaker’s chair.