Stoltenberg to Canada: Pony up

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Thanks for reading Ottawa Playbook. Let’s get into it.

In today’s edition:

→ JENS STOLTENBERG‘s message for Canada on defense spending

→ PABLO RODRIGUEZ and the Trudeau government take on Meta

→ MARY NG is on the phone from Mexico before an annual USMCA check-in

DRIVING THE DAY

WORD FROM BRUSSELS — It’s five sleeps until NATO leaders gather for a high-stakes summit in Vilnius, Lithuania. Canada will face persistent, awkward questions about failing to spend the alliance’s targeted 2 percent of GDP on defense. It’s getting more awkward by the day. BEN WALLACE, the U.K.'s defense secretary, was the most recent ally to jab Ottawa for the under-spend.

— Worth noting: There was no talk of funding increases in a “readout” of a Wednesday convo between NATO Secretary-General JENS STOLTENBERG and Prime Minister JUSTIN TRUDEAU.

— Listen up, Canada: POLITICO’s LILI BAYER sat down Wednesday with Stoltenberg, the alliance honcho who just signed on for another year in the role.

Bayer asked Stoltenberg if he had a message for Canada on the eve of Vilnius. His full response:

“My message is to Canada, as to all allies — that we need to deliver on what we agreed in Wales in 2014, and then we need to deliver on what we will agree at the Vilnius summit next week.

“And I expect that the pledge we’ll make together in Vilnius next week will be more ambitious, where we will refer to 2 percent not as something we should strive to move towards, but we will refer to 2 percent as a minimum.

“And then, of course, I expect all allies to deliver and meet those commitments. And on Friday we will publish new defense spending figures, which will confirm … there’s a fundamental shift. You have to remember before [spending] went down, now we are going up. And it is substantial. And more and more allies are either at 2 percent or moving very fast towards 2 percent.”

The not-so-veiled message: No more excuses.

BETTER LATE THAN NEVER — Construction has resumed on a battery plant in Windsor seen as crucial to federal and provincial ambitions to lure automakers to Ontario.

Stellantis and LG Energy Solution agreed to a deal after mulling a revised offer from Ottawa and Queen’s Park. The auto giant had slammed the brakes — sorry for the pun — on construction after Ottawa delivered an even more generous subsidy package to Volkswagen’s planned battery plant in the same region.

Ontario’s economic development minister, VIC FEDELI, told CBC News the revised deal is worth up to C$15 billion in production incentives for the companies. “This is like a performance incentive or a tax break,” he said. “It’s not a cheque per se.”

WEST COAST: CLOSED — “The best deals are made at the bargaining table.”

That’s Labor Minister SEAMUS O’REGAN‘s mantra when a labor dispute boils over. O’Regan was at the table in Calgary when two warring sides of a messy railway work stoppage hashed out a deal in March 2022. He watched earlier this year as more than 100,000 public servants walked picket lines.

Now he’s in Vancouver, where port workers walked off the job on July 1. Today marks the sixth day of a strike that involves more than 7,000 workers. The British Columbia Maritime Employers Association claims its members move more than C$500 million in goods every day, accounting for 16 percent of Canada’s annual traded goods.

O’Regan’s Liberal government hasn’t always deferred to the bargaining table. Back in 2021, then-labor minister FILOMENA TASSI passed — “with a heavy heart” — back-to-work legislation for port workers on the other side of the country in Montreal.

But this government is loath to wield a heavy hand. The pressure is on federal mediators to help broker a deal between the BCMEA and the International Longshore and Warehouse Union.

— Is it enough? DENNIS DARBY, the president and CEO of Canadian Manufacturers & Exporters, is calling for a federal intervention.

Darby wants the feds to pass a law that declares transportation infrastructure, including ports and railways, essential — and limit the ability of workers to use the economic pain of strikes as leverage in negotiations.

“Ultimately, the government needs to impose a different approach,” Darby told Playbook. “We think something like mandatory binding arbitration is the only way to go — especially for these really significant entry and exit points for goods to Canada.”

Why not hammer out a deal, even if it’s painful? “We understand the importance of collective bargaining, but maybe collective bargaining doesn’t always have the ultimate answer be a strike,” says Darby.

Cue the hollers from union halls across the country, where labor is leverage.

— The painful impact: Darby worries about two major consequences.

→ Reliability: “It hurts our image as a reliable partner in this whole supply chain, where we’re trying to tell, especially in the U.S., ‘we’re your reliable nearshore partner. Come to us because you can count on us.’ Well, these kinds of things hurt that in terms of our reputation.”

→ Inflation: “In the short term it could be inflationary, if suddenly companies are trying to get their shipments rerouted, or they’re paying storage fees — we know companies that have got containers sitting in the Port of Vancouver, They’re going to sit in there five days, that’s going to cost them money.”

— What’s next: Likely not back-to-work legislation. Parliament has risen for the summer, and Darby — a longtime observer of labor disputes that disrupt supply chains — pegs the odds of the government calling everyone back a “longshot.”

TODAY'S HIGHLIGHTS


— Prime Minister JUSTIN TRUDEAU is in Lac-Mégantic, Que., where he’ll attend an 11 a.m. commemorative mass to mark 10 years since the deadly rail disaster

— Deputy PM CHRYSTIA FREELAND is in Vancouver. She’ll tour an early learning and child care center. At 1:45 p.m. local time, Freeland will meet with Premier DAVID EBY. Later, they’ll hold a roundtable discussion with housing stakeholders and experts. Provincial housing minister RAVI KAHLON will join.

12 p.m. Emergency Preparedness Minister BILL BLAIR and Health Minister JEAN-YVES DUCLOS give a wildfire season update. Liberal MP JULIE DZEROWICZ and chief public health officer THERESA TAM will join.

HALLWAY CONVERSATION

THE THREE AMIGAS — Trade Minister MARY NG flies to Cancun today for the third annual meeting of the USMCA’s Free Trade Commission. Ng hosted last year’s confab in Vancouver. This year, she heads south to meet U.S. Trade Representative KATHERINE TAI and Mexican Economy Secretary RAQUEL BUENROSTRO.

Playbook got on the horn with Ng Wednesday in Mexico City. She looks forward to “geeky” stuff, including reports on supply chain resiliency and the inclusion of women-led businesses in continental trade. We also asked about a thorny auto irritant. Spoiler alert: the trade minister held her cards close to her vest.

This Q&A has been edited for length and clarity.

What are your priorities as you walk into two days of meetings?

I’ve affectionately coined this now the Three Amigas. They picked it up in year one, they didn’t quite pick it up last year. So I’m saying it again.

It’s our third year of the Free Trade Commission. I think this is one of the features of the newly negotiated CUSMA that has modernized it to good effect.

Here’s why I think it’s important. Last year, the three of us asked a committee to be set up to dive into the work of trade flows, especially during a crisis or an emergency. We just lived through a pandemic where we saw tremendous disruption, and therefore we were making sure that we had a committee within the context of CUSMA and ensuring that there was trade flow in an efficient way.

What are you hoping to bring home in concrete terms?

The concrete thing I always want to talk about is how we continue to advance and maintain this extremely important trade relationship between Canada, U.S. and Mexico.

If you look at the agreement, it is by far the most successful in the world. We do almost C$2 trillion in a trade between our three borders — C$215 million an hour. It’s nearly 2 million jobs that are supported in Canada through CUSMA.

What Canadian businesses and what Canadian workers expect of me is to make sure that I’m always standing up for Canadian interests, and to work with my trading partners, where one out of six jobs in Canada is dependent on trade. They count on me to keep this trading relationship active and robust, because predictability and stability is what they are looking for from us. And that disagreement [with trading partners] continues to work in the way that it’s been negotiated and envisaged to work.

It’s been several months since a USMCA panel ruled in favor of Canada and Mexico in a dispute with the U.S. over auto rules of origin. We’re still waiting for an American response to that ruling. Will you raise that in meetings?

This is an issue that is on the top of my desk, and which we have been working with the United States on. The auto sector is just so important to the Canadian economy. We’ve been building cars together with the U.S. for over 100 years and deliberately through a very integrated supply chain, over the last 50 years starting with Auto Pact.

You’ve seen us do the work together in terms of how we build out that electric vehicle supply chain between Canada and the U.S. We are working to create both stability and certainty with our trading partners in the U.S. and Mexico, but also together with the industry.

The rules-based trade that is the architecture of this free trade agreement and how we value it, how we comply with it, is something that’s really important to me. And I know it is also shared in terms of its importance with respect to my colleague in the United States. I believe you can do that, while at the same time continuing to work to create stability and predictability, which is ultimately what the auto sector is looking for.”

For your radar

FACEBOOK FIGHT — The federal government has suspended all advertising on Facebook and Instagram, the latest blow-up in a series of public disagreements between Meta and Ottawa fueled by legislation meant to siphon a portion of corporate profits into Canadian newsrooms.

The Liberal Party that runs the government, however, is still advertising on Facebook. If that sounds awkward, it’s because it is.

The feds spent C$11.4 million on Meta platforms in 2021-22, the most recent year for which data is available. When Heritage Minister PABLO RODRIGUEZ called a press conference Wednesday to announce that his government planned to deprive the tech giant of (potentially) millions in revenue, reporters asked if his party caucus would follow suit.

“Members could look at what they do,” he told PAUL WELLS. “They could also be inspired by what their government does.”

Later, Rodriguez supplied a sharper distinction. “The government is one thing. The party is another,” he told the Post’s CHRIS NARDI.

— Ad count: The Liberals have coughed up C$18,217 on 1,302 Facebook ads in the past 90 days, according to the official stats.

— Meta v. Canada: Rodriguez accused Meta of being uncooperative in the weeks following the passage of Bill C-18, which will eventually force social platforms to compensate news organizations for even linking to their content.

Meta and Google have each signaled their intention to block Canadian news content, a dramatic response to the new law that would have a significant impact on how and where Canadians find and consume journalism online.

Rodriguez was resolute on Wednesday: “Guys, it’s clear. Status quo, not working.”

— Good cop, bad cop: Google has struck a more conciliatory tone behind closed doors, Rodriguez said. The minister has met with company representatives within the past week, and more tête-à-têtes are on the books. His take: “We believe we have a path forward.”

Rodriguez insisted his government can address the company’s demands in the coming months through the regulatory process.

The message: Google, good. Meta, bad.

— Choice words: Rodriguez piled on the adjectives when describing the tech giants’ influence on Canadian society. “They’re superpowers. They’re huge. They’re rich, powerful. Lots of big lawyers. They can be intimidating. But are we going to let ourselves be intimidated? We can’t. If governments and politicians can’t stand up against that kind of bullying and intimidation, who will?”

Speaking about it later in the afternoon, Prime Minister JUSTIN TRUDEAU said Canada is part of a global fight. “Canada is really the frontline right now,” he said. “Both the different tech companies are pushing back hard against Canada, but I can tell you, we’re going to continue to stand strongly.”

The Macdonald-Laurier Institute’s AARON WUDRICK, no fan of Trudeau, called the PM’s rebuke a “campaign speech” designed to “sharpen a political wedge.”

— Counterpoint: “The Canadian media sector stands to lose millions of dollars with lost links, the cancellation of dozens of existing deals, and a bill that might not generate any new revenues,” wrote University of Ottawa prof and persistent Rodriguez critic MICHAEL GEIST.

— Meanwhile in Quebec: Premier FRANÇOIS LEGAULT said Quebec would suspend advertising on Facebook until Meta resumes talks about the implementation of the online news act. Quebecor had made a similar announcement earlier Wednesday.

MEDIA ROOM


— CBC News EIC BRODIE FENLON helps readers navigate the next phase of the platforms’ battle with Ottawa: “Canadian news is starting to vanish from Instagram. Google is next. Here’s how to find CBC as that happens”

— The Star’s TONDA MACCHARLES reports on Cabinet shuffle speculation.

— From The Narwhal: Oilsands giants pushed feds to delay and weaken emissions cap rules

— RICHARD RAYCRAFT writes for CBC that, in a first, the RCMP has charged an Ottawa man with terrorism and hate propaganda offenses that police said advocated “violent far-right ideology.”

— YVES FAGUY writes for the Canadian Bar Association’s National Magazine about how media cuts are hurting coverage of justice in Canada.

— Finally, today: Where does the real power lie in Westminster? It’s a question our London colleagues put to policy and politics reporters in Brussels, London and Paris to compile the inaugural POLITICO Power 40 list for Westminster.

And here’s POLITICO’s Power 40 Brussels … and Power 40 Paris.

PLAYBOOKERS

Spotted: THREADS, with 10 million users in seven hours.

Ottawa Mayor MARK SUTCLIFFE, catching up in Paris with Ambassador STÉPHANE DION … KRISTIN RAWORTH, celebrating the release of a mandate letter in Alberta … Green MP MIKE MORRICE, reaching out to constituents on Reddit.

PM Trudeau, pleading with TAYLOR SWIFT to please book some Canadian dates. Public Safety Minister MARCO MENDICINO joined the army of retweets.

At Ottawa Lawn Summer Nights, a fundraiser for Cystic Fibrosis Canada: KATE MALLOY, GREG MACEACHERN, DAVID COCHRANE, PAMELA FRALICK, GEORGE WAMALA, PASCAL CHAN and ASHTON ARSENAULT. Hill Times reporter STUART BENSON took home the door prize.

Former premier JASON KENNEY with a new gig, senior adviser for tech startup Eventcombo.

Birthdays: HBD to former Manitoba premier BRIAN PALLISTER and former Harper Cabmin JEAN-PIERRE BLACKBURN. Bloc Québécois MP ALAIN THERRIEN also celebrates.

Movers and shakers: LAURA LEBEL, a senior policy adviser in the Prime Minister’s Office until last week, recently joined the office of MARC GOLD, the Government Rep in the Senate, as director of policy.

ROCCO ROSSI announced his intention to step down as head of the Ontario Chamber of Commerce, effective next January.

MINA ATIA joins Crestview Strategy as a Halifax-based consultant.

Media mentions: RICHARD MADAN is leaving CTV News after more than 13 years — a victim of massive cuts across the network and slashing of foreign bureaus.

Ex-CTV reporter MICHEL BOYER has started a new role as senior director of communications for the Tourism Industry Association of Canada.

PROZONE


If you’re a subscriber, don’t miss our latest policy newsletter: Trending in Canada: Showdown with tech giants.

In other Pro headlines:

— The long road to Biden’s electric car dreams

— ‘Long overdue’: Yellen visit could reopen U.S.-China economic dialogue

— U.S. keeps mum on its ideas for reforming WTO dispute settlement

— Matt Gaetz proposes end to cannabis testing for military

— After Discord leak, Pentagon to tighten procedures for classified info

TRIVIA


Wednesday’s answer: PIERRE-MARC JOHNSON was the 24th premier of Quebec, serving from Oct. 3 to Dec. 12, 1985.

Props to CHIP SMITH, ROBERT MCDOUGALL, PATRICK ST-JACQUES, SHAUGHN MCARTHUR, GERMAINE MALABRE, JOHN DILLON, STEPHEN HARRIS, BRANDON RABIDEAU, NANCI WAUGH and DAN FONDA.

Today’s question: On this day in history, who said: “We must thoughtfully work hard towards the promise of a better tomorrow. I believe we can build the hopeful future in a way that is respectful of what has happened in the past.”

Send your answer to [email protected]

Want to grab the attention of movers and shakers on Parliament Hill? Want your brand in front of a key audience of Ottawa influencers? Playbook can help. Contact Jesse Shapiro to find out how: [email protected]

Playbook wouldn’t happen: Without Luiza Ch. Savage, Sue Allan and Emma Anderson.

CORRECTION: A photo caption in an earlier edition of Playbook featured an incorrect launch date for the Threads app.