Canada in Deep Doggy Doo

Oh Canada Your Deep in Doggy Doo

Dear reader, I first sent this out Friday. Just past Canada Day and there is a lot of optimism and national pride, but the reality paints a much more grim picture. I promise I will end with some positives. American's on on holiday today and their markets are closed where about 80% of Canada trading volume comes from, so a good day to focus on Canada.

Ironically despite all the negatives of what Trump will do, his influence aside from tariffs is actually causing changes in Canada that are very beneficial. I will get into some as we go along but first.

'Do as I do, not as I say'

As you know, one of my favorite cliche. We have all kinds of government talk to buy Canadian and restore the Canadian economy but what governments just did is ludicrous, buying and supporting China's massive navy build up.

The Canada Infrastructure Bank is providing a $1 billion loan to BC Ferries (largest Ferry operator in North America) to purchase ($4B plus) four new vessels from a Chinese state-owned shipyard, a move that has sparked concern among federal and provincial politicians alike. The liberal government has also given BC Ferries about $37.8 million in support. Of course the Liberal government critized the deal, but like I say, just talk.

BC Ferries is a provincial government entity so it is tax payers dollars going to China. B.C. Opposition Conservative Leader John Rustad has called the vessel deal a national security issue. “China’s money laundering, China’s fentanyl, & China’s election interference have all hurt BC & Canada,” he said in a social media post on June 11. “This is a national security issue–moreover, BC cannot give China billions of BC tax [dollars] that should be going to OUR BC workers.” To be fair, Canada does not have more capacity to build vessels, Seagate in B.C. Is heavily booked but it points out the lack of maritime investment to expand in Canada.

The B.C. Government is heavily compromised by the Chinese and so is Carney's Liberals. Finally, after 6 years behind the U.S., Industry Minister Mélanie Joly, announced quietly on late Friday of a long weekend (hoping not to be noticed) in a social media post that Ottawa had ordered Hikvision to cease all operations in Canada and close its business in the country over national security concerns.

For years, Canadian government agencies used surveillance cameras made by Hikvision. They were used within the RCMP, the CBC, Transport Canada, the Bank of Canada, and even the Military Police Complaints Commission. The Liberals only admitted to using these cameras a year ago and now they’ve finally banned them.

Hangzhou Hikvision Digital Technology Company Ltd. and is partly owned by the Chinese regime. Its latest annual report, published in April 2025, lists the China Electronics Technology Group Corporation (CETC) as the company’s “actual controller.” CETC is a Chinese state-owned military industrial group with an “explicit role” in developing technology for China’s People’s Liberation Army, according to Washington-based defence policy think tank the Jamestown Foundation. A subsidiary of CETC is Hikvision’s largest shareholder. The U.S. Commerce Department in October 2019 placed Hikvision on a trade blacklist.

This is probably a result of Trump's security pressure on Canada and a positive for Canada.

More China influence and drug money laundering. A Transparency International report slams Canada for failing to close loopholes that allow homes to be owned through shell companies, trusts and nominees. The report shows almost half of Vancouver’s 100 most expensive houses were bought using shell companies or other methods that obscure the identity of the owners. This is about China drug triads laundering money. An example is 4833 Belmont that was bought in 2016 for $31.1 million to a student, most likely a nominee for the true ‘beneficial’ owner, the report says.

It is very sad and 3^rd world stuff when the 7^th largest industry in Canada is money laundering. With U.S. pressure, if Canada actually clamps down on this it will hurt the economy. In 2024 Canada's TD Bank was fined $3 billion in the U.S. for drug money laundering. This could just be the beginning.

And more yet. The Canadian subsidiary of China’s biggest bank repeatedly broke the law by failing to review risky clients, report suspicious transactions and respect police production orders despite multiple warnings from FinTRAC about its faulty financial-crime controls, according to the regulator’s findings in confidential documents reviewed by The Globe and Mail. Industrial and Commercial Bank of China Ltd., the world’s largest bank by assets, is a Chinese state-controlled financial institution headquartered in Beijing. For the past 15 years, ICBC has operated a Canadian subsidiary called Industrial and Commercial Bank of China (Canada).

And Lubin Wang, 51, former head of ICBK, the Canadian subsidiary of the state-owned Industrial and Commercial Bank of China (ICBC), filed a lawsuit in the Ontario Superior Court of Justice for wrongful dismissal earlier this year, alleging he was pressured to scale back or abandon efforts to comply with Canadian regulations. Wang says he was instructed to “ignore” Canadian law and “circumvent” Canadian regulators, alleging he was fired for not following these directions.

Recession is Here

Canadian economic output contracted in the most recent monthly report. GDP fell 0.1% in April, with 8 out of the 20 sectors recording a decline and May anticapated to be about the same. This is below expectations—the agency anticipated 0.1% growth, while the consensus estimate was flat. April, originally reported as 0.1% growth, saw an upward revision to 0.2% in this report. These numbers roughly balance to bring GDP in line with the consensus estimate.

The two sectors of the best growth were finance and insurance +0.5%, the banks monopoly and the insurer rip offs. The other was the public administration +0.6%, more bureaucrats. Manufacturing plummeted -1.8%.

In April, manufacturing sales dropped 2.8 per cent and wholesale sales fell 2.3 per cent from March, according to Statistics Canada, significantly worse than analysts' expectations of a 2-per-cent and 0.9-per-cent decline. Statscan said.

Shortly after Liberals secured another minority government, a credit rating agency says the spending plans outlined during the campaign will put pressure on Canada’s credit profile. The spending promises made by Prime Minister Mark Carney point to “considerable fiscal loosening that would exacerbate already expanding fiscal deficits,” Fitch Ratings said in an April 29 note. The government will not be able to spend the country out of recession and this crazy deficit spending will for certain put upward pressure on inflation and interest rates.

The Liberal April 2024 budget projection was a $20 billion deficit. Think Tank C.D. Howe Institute now estimates 4 times that at $78 billion average yearly deficit under the Carney Liberals. They estimate over $92 billion for 2025/2026.

Canada's Insane EV Mandates are Hitting Reality

The EV sales mandate requires 20 percent of all new light-duty vehicles sold in Canada to be zero-emission as of next year. The target rises annually to 100 percent by 2035. The most recent data from Statistics Canada shows EVs accounted for 7.53 percent of all new vehicles sold in Canada in April. As EVs became more prevalent, their faults and limitations were revealed. It is just stupidity to push these in Canada when almost half of the year is a cold climate that curtails their performance.

Canadian Vehicle Manufacturers’ Association CEO Brian Kingston joined the CEOs of Ford Canada, Stellantis Canada and GM Canada in a meeting with the prime minister Wednesday in Ottawa. They are pointing out it is impossible to meet these goals, especially as EV sales have plummeted in Canada and the U.S. Another issue that nobody talks about is these EVs are all toxic waste, they have not figured out how to recycle or dispose of the lithium batteries.

The Liberal party’s election platform promised to look at ways to “reintroduce a purchase incentive worth up to $5,000.” This will only be more wasteful spending and adding to debt. Let consumers buy what they want. Some day, maybe the technology will improve for EVs or something better comes along like DynaCert's emission reduction technology. That is a real solution but is being shunned by government because it does not align with their EV mandates.

Also the environment ministers of Alberta and Ontario sent a letter to Ottawa ahead of a July 2 and 3 conference between provincial and federal leaders in Yellowknife asking for the repeal of a number of Trudeau-era federal climate rules they say are slowing Canada’s economic growth.

On E waste, just an astonishing fact. About 16 million cells phones are thrown out each day. It is all toxic waste and that number is growing. This is the real pollution problem, not burning oil&gas.

And more on the Canadian government interfering with oil&gas with their climate agenda. The extent of how far they are going and corruption is hard to believe.

The Globe and Mail reported that an office created by the Trudeau government to crack down on abuses by Canadian corporations abroad has been without a permanent head for more than a year. Energy and mining companies hope it will be abolished. The federal government launched the Canadian Ombudsperson for Responsible Enterprise (CORE) in 2019, calling the office the first of its kind in the world. It is tasked with probing allegations of human-rights abuses and environmental harms by Canadian companies operating overseas in the mining, oil and garment sectors.

Complaints have been filed to CORE, including one concerning Calgary-based Reconnaissance Energy Africa. Lawyer James Yap and a team spent six months putting together a 187-page complaint, filed to CORE last April, alleging human-rights violations in Namibia, filed by two organizations -- one in Namibia, and the other the International Human Rights Program at the University of Toronto's faculty of law. The complaint alleges that the oil exploration activities of Calgary's ReconAfrica have damaged homes, harmed subsistence crops and destroyed land without the consent of local communities. Of course this is all BS, but shows how far and corrupt the Trudeau government was to promote their climate change BS. Even at the expense of decent Canadian companies.

If you think this Carney government will approve any pipelines, it really is a pipe dream.

Canadians Can't Afford Gold, only to sell.

Gold has already overtaken the euro as the second largest asset after the US dollar in global central banks. In a few months, it will be the largest asset. Canada is totally out of the loop and is the only G20 country with no gold reserves.

In May, Canada's trade deficit with the world decreased to $5.9-billion (Canadian) from a record $7.6-billion (Canadian) in April, providing a brief sense of optimism for exporters. Sadly, the drop was largely driven by soaring exports of unwrought gold, silver, and platinum. Excluding these metals, Canada's trade deficit actually widened to $10.3-billion (Canadian).

This would be unrefined gold from mines and it would seem the Canadian mint does not have much demand. Even more discouraging is Canadians could not buy much and it ended up as exports to sell. More wealth leaving the country and very sad the lack of Canadian buying.

Positives

Canada Defense Reality

There has been a lot of talk and promises from the Carney government to repair and boost Canada's military. It is in really bad shape and another thing that was basically forced by Trump. While Carney's announcements sound good to increase defense spending, a lot of it is accounting tricks. He is counting money given to Ukraine as defense spending for Canada and is raising the pay levels in the military to increase spending. This is probably needed and might help recruiting.

Just include the Coast Guard budget. The government is planning to include $2.5 billion it spends on the Canadian Coast Guard in its NATO spending this year, about 60 per cent of the agency’s total budget. Canadian Coast Guard isn't armed beyond some 7.62mm machine guns. Not even naval auxiliary force capable.

What Canada military really needs is repaired and new equipment. Canada has four submarines acquired used in the 1990s. They are old and not operational most of the time. There is talk of new submarines but that would be 2035 at the earliest.

The Department of National Defence said in its Departmental Plan for 2025-26 that it now plans to achieve 90 percent operational readiness and its equipment serviceability targets for the army and navy by the end of March 2032. In the previous year’s report, the department planned to meet the targets by March 2025. When it came to maritime key fleets that were able to meet training, readiness, and operational requirements, that number was at 46 percent compared to the target of at least 60 percent. For land and aerospace assets, the serviceability results were at 49 percent compared to the target of at least 70 percent.

The military was neglected for so long, it will take a long time to revive. Canada is a long ways off just to have the trained personnel to operate and maintain equipment. It will take a decade to get there if it happens at all. More talk, lets see what happens.

Another positive is Ottawa has been essentially compelled into overturning policies it was defending only a short while ago. The latest example is the decision to abolish the Digital Services Tax (DST) on June 29, two days after Trump said he was cancelling all trade talks with Canada over the issue. The DST, which applies to foreign and domestic businesses earning online revenues from services offered to Canadians like marketplaces and social media, came into force last year and applied retroactively to 2022. The payment deadline was June 30 of this year.

The tax, would have hit companies like Amazon, Google, Meta, Uber and Airbnb, imposing a 3% levy on revenue from Canadian users. It was expected to bring in an estimated $7.2 billion over five years and the first payment is retroactive to 2022.

Given the delicate situation, this should have been cancelled months ago, it was an unfair tax against the U.S. and was really dreamed up by the Trudeau government to put a positive spin on their media censorship policies . It targeted U.S. companies only, not European or Tik Tok. A June 11th letter signed by 21 members of Congress from both sides of the aisle complained to have the tax halted, saying that first payment will cost U.S. companies $2 billion US. They said U.S. companies will pay 90% of the revenue Canada will collect from the tax. It took a last minute threat by Trump to put an end to it. The Carney government should have known and acted sooner, at least looking positive in the final outcome. This does not look like Carney is the right guy to deal with Trump.

Finally, LNG Canada Ships Its First Cargo. As signalled in our last week’s report, the $30 billion LNG Canada project loaded its maiden LNG cargo from Kitimat, Canada’s first ever export of liquefied natural gas, with the Shell-chartered Gaslog Glasgow LNG carrier heading towards Incheon, South Korea

Finally Some Drug and Fentanyl Crackdown.

There are a number of other examples, but it just proves Trump was right about Canada's Drug trafficking and there is still a lot more to do. Again, this was forced by Trump.

The often quoted low number of fentanyl seizures at the border was just by border officials, it never included that seized by RCMP, local police and the DEA etc., that was headed to the U.S. This is what a month long program did

“Launched as part of Canada’s Border Plan, Operation Blizzard was a month-long, cross-country surge operation to intercept fentanyl and other illegal drugs in postal, air cargo and marine containers,” the CBSA said.

“During the operation, border services officers examined shipments, with a special focus on mail, air freight and sea containers going to the United States.”

Fentanyl seizures accounted for 116 of the drug busts made between Feb. 12 and March 13, the agency said. Of the 1.73 kilograms intercepted by border officers, more than 1.4 kilograms were intended for the United States. The majority of the fentanyl was discovered in British Columbia, Alberta, and Quebec. The Drug Enforcement Administration (DEA) says that 2 milligrams of fentanyl is a lethal dose in most people. That works out to almost 500,000 deaths per kilogram of fentanyl,

Officers also seized a total of 148 kilograms of methamphetamine with an estimated street value of $500,000 at Vancouver International Airport this year.

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