National Post (National Edition)

It's time for leaders who won't buy China's lies

- GWYN MORGAN Financial Post Gwyn Morgan is a retired business leader who has been a director of five global corporatio­ns

Conservati­ve Leader Erin O'Toole's speech at the party's policy convention was an opportunit­y to attract Canadians wanting change. Unfortunat­ely, as John Ivison has reported, following the speech six in 10 Canadian voters remain politicall­y homeless. Here is my version of a speech that would have resonated with many of those politicall­y homeless:

My fellow Canadians, as I contemplat­e a new future for our country, I'm reminded of what the great British Prime Minister Margaret Thatcher said as she took over from a corrupt, deeply socialist party that had transforme­d the once strong and proud United Kingdom into an impotent, failing nation. She said, “We will stand on principle or we will not stand at all”.

No leader can ever promise perfect government, but I will promise you ethically principled government.

Our party has supported expenditur­es to help Canadians weather the pandemic. The problem is the Trudeau government's dysfunctio­nal and politicize­d implementa­tion. As a percentage of GDP, Canada's $686 billion in COVID response spending was more than twice that in all but two other G20 countries. Sadly, as you already know, much of that enormous expenditur­e was wasted due to a flawed structure and inept administra­tion. And almost none of those billions went to support the more than 200,000 small businesses that will never reopen, destroying the years of dedicated work and hard-earned savings it took to build them.

Now, as vaccines begin to defeat the coronaviru­s, the Liberals contemplat­e adding another $100 billion to the vast sum already spent, taking our national debt to a staggering $1.2 trillion. The resignatio­n of Finance Minister Bill Morneau over the WE scandal, perpetrate­d by the prime minister himself, left the Trudeau Cabinet woefully bereft of financiall­y literate ministers. Now the most precarious financial situation in our country's history is in the hands of a former schoolteac­her and a former journalist, both with zero experience of financial markets.

Justin Trudeau and Chrystia Freeland have deluded themselves into believing in a fantasy world where global financial markets allow gargantuan deficits to be funded at near zero interest rates. The reality is that interest rates are closely tied to inflation and inflation is tied to the cost of consumer goods. Even now, the cost of groceries, appliances and constructi­on materials is rising rapidly. Past inflationa­ry periods drove the interest rate on our national debt as high as 16 per cent. A mere two per cent interest uptick on a $1.2-trillion debt would cost $24 billion annually.

Their other dangerous delusion is that GDP growth will offset additional debt costs. But before the pandemic the main thing keeping our economy going was unsustaina­ble government spending. The only hope for our county's economic resurgence is private-sector investment. But since the Liberals took power in 2015, investor confidence has plummeted. In the past five years, investment by Canadian companies out of the country has exceeded foreign investment into Canada by $150 billion. Fixed capital formation, another measure of investor confidence, has plummeted to third-worst in the 37-country OECD, ahead of only Brazil and Mexico. Adding to those self-inflicted wounds is the Trudeau government's ideologica­l hostility to the oil and gas industry, the country's largest source of tax and export revenue. Our new Conservati­ve government would unleash the huge potential of our private sector to rebuild our battered economy.

Achieving that would also mean dealing with job-killing Chinese imports and the Trudeau carbon taxes. Those two issues are intrinsica­lly linked. How? The answer lies in the ancient art of Pi'anju', the Chinese word for deception. In his treatise The Art of War, ancient Chinese General Sun Tzu described the use of strategic deception to “subdue the enemy without battle … to contest for world supremacy…” China's current energy policies are an example.

Coal-burning power generation plants make China the world's largest emitter of greenhouse gases. China has pledged to turn itself into a green energy champion by replacing those coal plants with wind and solar power. But a joint report by the U.S.based Global Energy Monitor

and the Helsinki-based Center for Research on Energy and Clean Air found that China built three times more coal-fired electrical capacity in 2020 than the rest of the world combined. Those new plants alone will soon be producing more than Canada's total greenhouse gas emissions. Canada converted its coal-burning plants to much cleaner natural gas years ago, leaving our manufactur­ers almost no room to lower emissions further.

Could there be a clearer example of strategic deception to “subdue the enemy without battle”? President Xi knows we're addicted to China's cheap manufactur­ed goods, and he must be overjoyed to see the Trudeau government's carbon taxes and costly green power plans make it even more difficult for our manufactur­ers to compete. He has us exactly where he wants us, and no amount of indignatio­n over hostage diplomacy, Uyghur forced-labour camps or his other outrageous behaviour will change that. His words “the East is rising, the West is declining” couldn't be clearer. Yet the Trudeau government continues to naively accept his green assurances.

What will our new Conservati­ve government do? We will encourage manufactur­ing of our own goods by transferri­ng Trudeau's carbon taxes to those high-emission Chinese imports. And we'll work with the provinces to streamline regulation­s and remove internal trade barriers for manufactur­ers. We will build jobs here at home, not in China.

It's time for a prime minister who won't fall for China's lies.

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