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politics briefing newsletter

Good morning. We start with an item from our finance reporter Bill Curry:

Finance Minister Bill Morneau is meeting this morning with private sector economists in Toronto for a final check-in before he and his cabinet colleagues decide on what to include in the 2019 budget.

Some of the bank economists have already said they will urge the minister to aim for smaller deficits, in spite of the temptation to spend big in an election year.

Some economists have also cautioned Ottawa against moving too aggressively toward deficit reduction because that could hurt the economy at a time when Ontario and other provinces are already in restraint mode.

Conservative Finance Critic Pierre Poilievre, who has repeatedly chastised Mr. Morneau for breaking the Liberal Party pledge to balance the books by 2019, says he rejects the claim that balancing the federal books is a risky move.

“I don’t buy the argument that because Ontario is up to its eyeballs in debt that the federal government needs to add more debt,” he told The Globe and Mail. “It doesn’t make any sense at all. The fact that provincial governments are bursting with debt is an argument for the federal government to show more responsibility. There’s only one taxpayer, so if that taxpayer is in debt at a provincial level, the solution is not to make him in more in debt at the federal level.”

Mr. Morneau said this week that his 2019 budget will focus on housing for millennials, seniors issues, pharmaceutical prices and skills training.

On housing, NDP Leader Jagmeet Singh called this week for Ottawa to bring back 30-year amortization periods for insured mortgages. The Globe reported earlier this month that the Canadian Homebuilders’ Association said it sees “positive signals” from the government that such a move will be in the budget.

This is the daily Politics Briefing newsletter, written by Chris Hannay in Ottawa. It is available exclusively to our digital subscribers. If you’re reading this on the web, subscribers can sign up for the Politics newsletter and more than 20 others on our newsletter signup page. Have any feedback? Let us know what you think.

THE LATEST ON SNC-LAVALIN

Michael Wernick, the Clerk of the Privy Council and Canada’s top public servant, gave remarkable testimony at the House of Commons justice committee yesterday about SNC-Lavalin and what happened – or didn’t happen – between the Prime Minister’s Office and Jody Wilson-Raybould when she was minister of justice.

Mr. Wernick confirmed Globe reports that Ms. Wilson-Raybould had had many meetings with him and others about the possibility of giving the Montreal-based construction giant a deferred prosecution agreement, which would allow the company to avoid criminal prosecution.

But Mr. Wernick characterized those meetings as “lawful advocacy” and not inappropriate pressure.

“I conveyed to her that a lot of her colleagues and the Prime Minister were quite anxious about what they were hearing and reading in the business press about the future of the company, the options that were being openly discussed in the business press about the company moving or closing,” he told the justice committee. “So I can tell you with complete assurance that my view of those conversations were within the boundaries of what is lawful and appropriate.”

Mr. Wernick started off his testimony by saying he was worried about his country – but not about the matters before the committee. Instead, Mr. Wernick said, he was worried that heated political rhetoric would lead to someone being killed on the campaign trail. He also criticized what a Conservative senator said at a pro-pipeline rally on Parliament Hill this week, a demonstration that also included some members of xenophobic groups.

John Ibbitson (The Globe and Mail): “In blunt, sometimes confrontational, testimony before the House of Commons justice committee, Mr. Wernick confirmed most of what The Globe and Mail had previously reported, and in seeking to prove no pressure had been applied, appeared to prove instead that plenty of pressure had been applied.”

Globe and Mail editorial board: “[Mr. Wernick] surprised by using his appearance to deliver a remarkably spirited defence of the government – one far more full-throated, even partisan, than anything offered by anyone in government, including Prime Minister Justin Trudeau.”

Christie Blatchford (National Post): “Wernick didn’t explicitly say this, but a reasonable reading of the whole of his testimony is that to his knowledge, and he has a firm grasp of most files, Wilson-Raybould didn’t suffer any undue influence or intimidation – nothing that, as a capable minister, she shouldn’t have been able to handle.”

TALK TO THE GLOBE’S REPORTERS

The so-called SNC-Lavalin affair has dominated Parliament Hill this month and led to the resignations of a cabinet minister and the Prime Minister’s right-hand man. Learn the story behind the story today by hearing from the intrepid team of Globe reporters who broke the story. Robert Fife, Steven Chase and Sean Fine will hold a teleconference with Globe and Mail subscribers today at noon ET. To participate, you must register in advance here.

IN OTHER NEWS...

Canada’s ambassador to the United States, David MacNaughton, says he expects U.S. tariffs on steel and aluminum will be cancelled any day now. “I don’t want to go into great detail, but I think we’re going to resolve this matter soon,” Mr. MacNaughton said.

A former Canadian diplomat to Venezuela says the humanitarian crisis in the country is only getting worse. “The handyman at the embassy had a daughter who was born prematurely and there wasn’t enough medical supplies to keep her in incubation and she died at five weeks,” Ben Rowswell told The Globe, after testifying at a parliamentary committee yesterday.

Vivian Bercovici, who was appointed by Stephen Harper as Canada’s ambassador to Israel and subsequently dismissed by Justin Trudeau when the Liberals came into power, is now suing the government, saying she was abused by bureaucrats who didn’t support her in her role as envoy.

The Parliamentary Budget Officer says the federal government will be spending billions of dollars less on benefits for disabled veterans.

And two more NDP MPs have decided not to run for re-election this year. Marjolaine Boutin-Sweet and Anne Minh-Thu Quach – both of Quebec and both elected in the Orange Wave of 2011 – say they are leaving the House to focus on their personal and family lives. They join nine other New Democrats who already left the House or said they won’t run for re-election.

Denise Balkissoon (The Globe and Mail) on Conservative Leader Andrew Scheer: “Here’s another issue the CPC and its Leader are going to have to clarify between now and Oct. 21: How exactly they feel about the far-right. Intolerant, anti-immigrant and anti-LGBTQ sentiments have been pushed into mainstream politics in the United States and all over Europe and are most certainly bubbling here. They aren’t issues to be ignored, or evaded.”

Linda Trimble (Policy Options) on Jody Wilson-Rabould: “The saga unfolding around former Liberal cabinet minister Jody Wilson-Raybould has been characterized as many things – evidence of the old guard that still pulls the levers in Ottawa, of the over-centralization of power in the PMO, and of hypocrisy in the Liberal government’s promises of reconciliation and feminist government. But it is also fundamentally about gender and power – about shaming and silencing. It’s about who is expected to keep quiet and whose voices are heard.”

Andrew MacDougall (Maclean’s) on the whole situation: “Trudeau is clearly not in control of events. But somebody is, and that somebody is…Jody Wilson-Raybould. Indeed, when you beam the SNC mess through the Wilson-Raybould lens, everything snaps into focus. As one wag in London said to me the other day: right now, Ottawa has gone all House of Cards because Jody Wilson-Raybould is going all Frank Underwood.”

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